cannes_2024_TUESDAY_ISSUE

Value and personalisation, functionality and convenience Research shows that two aspects vital for attracting today’s travellers are value and personalisation. “When the cost of living pushes consumers to economise, value can be a powerful tool,” said Juul-Mortensen. “But beyond accessible pricing and promotional discounts, shoppers may also perceive value in qualities like functionality and convenience. Personalisation, on the other hand, resonates especially with younger travellers whose rising individualism and self-oriented lifestyles make customised products extra-appealing. These are just some of the conclusions from a new TFWA-commissioned study by Euromonitor International.” One part of duty free and travel retail finally starting to receive the attention it deserves is the cruise sector. Although smaller in passenger terms than air traffic, cruise lines attracted over 30 million people last year and are forecast to account for 40 million travellers by 2027. “Cruise passengers of course tend to browse duty free stores for far longer in total than airport passengers, typically visiting outlets several times during their stay onboard,” Juul-Mortensen explained. “Consequently, average spend levels are much higher than at airports. Brands are beginning to take advantage of the potential for immersive traveller experiences that cruise ships offer, also releasing cruise-exclusive products.” But what about the future for our industry as a whole? Where are we heading and how can we best meet the needs not only of today’s passengers but tomorrow’s too? Gen Alpha comprises all those born between 2010 and 2025, and although they are still young, there will eventually be around two billion of them, according to Pragma Consulting. “As the consumers of tomorrow, they will shape retail strategy for years to come,” Juul- Mortensen commented. “Pragma describes Gen Alphas as ‘the most digitally savvy generation yet’, with a technology device as much a part of their play as building blocks. Almost half of them have a tablet before the age of six, and over 60% own a smartphone by their 10th birthday. They view the world through YouTube, TikTok and Instagram, with influencers and their own peers central to their decision-making. Their use of the internet in all aspects of their life will affect store design, further boosting services like home delivery and click and collect.” Both Gen Z and Gen A are highly aware of social and environmental matters. They expect to see diversity and inclusion in the media and advertising they encounter. Their heightened climate consciousness makes sustainability a key criterion in their consumption choices. “Taken together, all these factors mean that brand experiences in duty free and travel retail must nowmove beyond core physical products to tell a story that is relevant to their consumers’ lifestyle,” Juul-Mortensen emphasised. “That is not easy in a market where retailers and brands have limited space, and where sales per square metre are closely monitored.” Unquestionably, brands lie at the heart of this industry. Without brands, there would be no duty free and travel retail. “Brands’ ability to innovate and entice is what drives our development, which is why events like this one are so important, providing an opportunity for brands and retailers to explore the best options for our industry to grow,” said Juul-Mortensen. “As an industry, we must remain true to the principles of duty and tax-free sales” As important as growing the industry, is defending it from heavy-handed or misguided legislation. “In tough economic times, governments are always looking to close tax loopholes,” Juul-Mortensen commented. “Our industry, which is often misunderstood by politicians, represents a tempting target. The most blatant example was the UK Government’s arbitrary removal of tax-free shopping in 2021, with the cancellation of VAT-free shopping for passengers leaving British airports and sea ports. Elsewhere, arrivals duty free has also come under government scrutiny recently. As an industry, we must remain true to the principles of duty and tax-free sales – sales to travellers departing on an international journey, and in some cases offering the alternative of purchase at a duty and tax-free store on arrival. We must remain vigilant, present travellers with a clear proposition, and provide no grounds for others to question our status.” Meanwhile, the World Health Organization (WHO) continues to look for reasons to abolish duty free tobacco sales, which are a core part of any duty free and travel retail range. “The WHO claims that duty free is a major contributor to illicit trade in tobacco,” said Juul-Mortensen. “We need to work together to champion our credentials as one of the world’s most trusted, transparent and secure supply chains, and clearly demonstrate our zero- tolerance approach to illicit trade. The declaration launched by TFWA and the Duty Free World Council here in Cannes last year includes a commitment to do business only with companies that have clear anti-illicit trade policies in place.” Juul-Mortensen concluded his last Conference speech before stepping down as President in December by paying tribute to colleagues at TFWA, and on successive Management Committees and Boards. “Duty free and travel retail is a marketplace that changes constantly, and TFWA must change with it. I firmly believe the Association is in good shape to do that, responding to members’ needs and providing the industry with a platform to prosper that is, 40 years on, still ‘by the trade, for the trade’.” TFWA President Erik Juul-Mortensen: “Duty free and travel retail is a marketplace that changes constantly, and TFWA must change with it. I firmly believe the Association is in good shape to do that, responding to members’ needs and providing the industry with a platform to prosper that is, 40 years on, still ‘by the trade, for the trade’.” Tuesday 1 Oc tobe r 2024 14 T F W A D A I L Y