Airlines should do more to boost duty free sales
To push sales of duty free products during the credit crunch, airlines and suppliers are working more coherently to cater directly to traveller tastes, says a sector expert.
Speaking with Aviation Business during the Middle East Exclusive event in Dubai last month, Channel Exhibitions chief executive Justin Boutros, said the effects of the financial crisis had created a new market trend. “In first and business class more is made of promoting duty free products because the traveller is more likely to buy. In coach or economy, the passenger is less likely to buy any products because they are travelling on a budget.
“But we are seeing a trend emerging of suppliers coherently working with airlines to tailor their products directly to the tastes and needs of
Boutros explained that in comparison, duty free sales outstripped the domestic market but figures had been impacted by a drop in sales. “Duty free sales have been hit by the economic crisis, but sales are still higher in terms of growth than the global domestic market.”
However, Boutros revealed that new suppliers to the market were cashing in on the economic crisis. “Established suppliers seem to be consolidating at this time. But new suppliers are not holding back and the credit crunch doesn’t matter to them. The entry level costs are less at the moment compared to boom time so they are taking the opportunity to enter the duty free market.”
Top selling duty free products are tobacco and perfumery, but new categories are predicted to emerge. “Traditional luxury brands, like jewellery, will continue to hold strong, but a growing category is electronic products and airport retailers are investing in this area,” Boutros said.
“A lot of electrical suppliers are specialising in supplying to airports and understand the duty free market at a much more sophisticated level than ever before,” he added.
Duty free suppliers are asking the region’s hotels to sell tax free products to guests.
According to sources of Aviation Business, duty free suppliers would like to see outlets similar to those aboard cruise liners being included in hotels to help boost sales.