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Why Luxury Retailers Love Airports

Luxury retail brands are busy opening stores in airports, eager to capitalize on a captive audience with ready money and a little time to kill.

Sydney Airport Terminal 1 shopping

The world's top fashion brands opened 33 new stores in airports between 2016 and 2018, The Wall Street Journal reports, citing data collected by Savills. The brands are following the money: Retail sales in airports rose by 7% in 2018, according to Bain & Co.

The trend dovetails with the increase in tourism around the world. The United Nations' World Tourism Organization reports that international tourist arrivals totaled more than 1.3 billion in 2018, up 7% from the year before, the largest increase in a decade.

Moreover, total international tourism spending gained 5% year-over-year in 2018. Airports are keen to get a slice of that pie by encouraging luxury retailers to locate in their facilities.

"We particularly need luxury retail, which is one of the key drivers of growth in the retail business — combining a brand narrative and experience with the significant price advantages of the duty-free area," Aeroporti di Roma General Manager Gianluca Littarru told Luxury Highlights, which is published by luxury goods company Kering.

Another strategy that luxury brands are pursuing to catch the attention of airport travelers involves pop-ups that offer a variety of experiences, such as whiskey tastings, fragrance samples and virtual reality demonstrations.

One recent example: a Tiffany & Co. pop-up at New York's JFK Airport, whose distinctive blue box drew attention to the retailer's new fragrance, Tiffany Eau de Parfum.

“Shopping has always been a big part of the travel experience, and now retailers and food and beverage companies alike are finding ways to capitalize on the captive audience waiting for their flights," Michael Hirschfeld, JLL's National Retail Tenant Services Group co-lead, wrote in JLL's Real Views.

Experience-driven pop-ups are likely to remain a core strategy for launching new products and building brands, Hirschfeld said. Some airport pop-ups are quite specific in their target audience. 

Last summer, Jing Daily reports, Saint Laurent Beauté launched a pop-up store at Los Angeles International Airport specifically for Chinese travelers. Among other things, the event kicking off the pop-up featured a place to customize one’s YSL lipstick with stickers and an engraving service.