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“We are in an exceptionally fragile period of transition from one global order to another” In yesterday’s TFWA World Conference, Rudolph Lohmeyer, Senior Partner at Kearney and head of its National Transformations Institute, provided a sharp assessment of the current geopolitical and economic realignment. Rudolph Lohmeyer, Senior Partner, Kearney, Foresight Global Head, National Transformations Institute, Global Business Policy Council: “The central message is that we are in an exceptionally fragile period of transition from one global order to another. The volatility we are witnessing will intensify before it subsides as a new order emerges. Travel retail faces this transition first and most pervasively given its position in the nervous system of the global economy.” U nder the theme of ‘Explore New Horizons’ yesterday’s TFWA World Conference took stock of a changing world, considering what it means for travel retail. In a compelling address, Rudolph Lohmeyer, Senior Partner at Kearney and head of its National Transformations Institute, delivered a sharp assessment of today’s geopolitical and economic realignment. He explored the intersection of trade, investment, and statecraft – examining how shifting alliances, fragmented markets, and increasingly security- driven policy are reshaping the global landscape. For industries that have long depended on openness and cross-border movement – including travel retail – these shifts present both challenge and inflection point. Understanding them is no longer optional – it is a strategic imperative. “The central message is that we are in an exceptionally fragile period of transition from one global order to another,” said Lohmeyer. “The volatility we are witnessing will intensify before it subsides as a new order emerges. Travel retail faces this transition first and most pervasively given its position in the nervous system of the global economy. As always, disruptive change will generate extreme challenges and wholly new opportunities. Conflicts, trade barriers, and financial shocks will be enduring operating realities. The VIX Index, a leading barometer of global risk, has reset at an elevated level. At the same time, technology is set to reignite productivity and growth – and create new forms of resilience ¬– in those markets and segments positioned to harness it. Travel retail must move past the assumption of predictable flows. Instead, leaders must build the ability to anticipate change and navigate a world where routes, passenger mixes, and consumer sentiment can shift within weeks or even days.” Geopolitical shifts strike at the heart of the travel retail business model Shifting alliances, fragmented markets, and security-driven policies are driving a profound geopolitical reordering that is fundamentally reshaping how global commerce operates. This transformation goes beyond simple fragmentation. “Trade flows are being re-channelled through increasingly complex networks that reflect new geopolitical realities, security constraints, and the strategic imperative to reduce vulnerability to economic coercion,” Lohmeyer explained. “The scale of this shift is evident in the numbers: trade restrictions have tripled to more than 2,500 since 2018, affecting $887 billion worth of commerce in 2024 alone. What emerges from this turbulence is a pattern in which trade between regions is diminishing while trade within regions and geopolitical alignments deepens. The result is a global landscape that has become fundamentally more transactional and fluid, where resilience increasingly demands diversification of relationships and deliberate overlap in supply and value chains to navigate an environment where alliances can shift and access can be restricted with little warning.” For an industry fundamentally built on openness and cross- border mobility, these geopolitical shifts strike at the heart of the travel retail business model itself. “The challenges manifest in three critical ways,” said Lohmeyer. “First, direct exposure to conflict zones: around 25% of global travel retail sales ($18 billion) sit on high-risk corridors, particularly in APAC and the Middle East, where operations can be disrupted overnight. Second, the fragmentation Tuesday 30 September 2025 16 T F W A D A I L Y