Airport Duty Free Set to Embrace the New “Disrupters”

Perhaps it’s inevitable. As the airport passenger experience evolves, so will, along with it, the duty-free shopping experience. In late July, Collinson, a major London-based customer benefits and loyalty program provider, announced it was investing more heavily in a French start-up, Inflyter, an airport retail and duty-free ordering platform. In the same announcement, the company said it would also further invest in Grab, another leading airport e-commerce platform.

In its seeding of airport e-commerce “scale-ups” Collinson’s hope to deliver on its particular vision of the passenger airport experience. With or without much vision attached to those who invest in it, e-commerce will continue to develop as simply the logical new-age mediator of duty-free shopping.

According to the Global Airport Retailing 2017-2022 Report, global airport retailing sales reached $40 billion in 2017 and sales are projected to register a CAGR of 7.9% during 2017-2022, with sales forecast to grow by $18.4 billion to reach $58.4 billion by 2022.

Asia-Pacific will continue to dominate the travel retail market and produce the greatest growth over the next five years. It will grow by $10.8 billion to $27.6 billion, accounting for 63.8% of the incremental growth in the market between 2017 and 2022. Additionally, development of new and existing airports will add more retail space, which is a key factor contributing to growth in airport retailing globally.

With the onset of growing demand for online services, the retailers and operators are expanding their e-commerce presence. They are adopting various omni-channel strategies to reap the benefits of growing demand for online duty free purchases, especially among tech-savvy and time-conscious millennial travelers so they can engage with them before they even visit the airport. To provide an end to end shopping experience airports and operators have launched home delivery services for shoppers who buy from their sites or in the airport.

Research from airport experts and consultants points to an unmistakable trend: consumers are beginning to plan and (ideally) purchase duty-free goods before arriving at the airport. A large fraction of travelers is inclined to browse and buy duty-free items ahead of actual traveling (as it turns out, especially if they’re on the younger side, and especially if they’re Asian).

E-commerce solutions would save travelers’ time by confirming that their desired items are available, in-stock and ready for pickup. To that end, Inflyter specifically provides mobile order-ahead capabilities that readily connect with duty-free merchants’ catalogues.

Consumers can shop and pay for their purchases within the app. Then collect them easily via several options, whether they’re headed outbound or coming back. The app’s ability to improve travelers’ experience and convenience is clear. Less clear is the extent to which it will help retailers increase turnover and boost airlines’ and airports’ ancillary revenue.  

“The travel retail business is experiencing tremendous change as it comes to grips with increasingly digital passenger behavior and rapidly changing demands, such as pre-ordering and personalized experiences. Inflyter is a perfect fit for a growing need to engage passengers earlier in the journey, better understand their desires and to deliver goods and services in a way that’s timely and convenient for them,” commented Colin Evans, Collinson’s founder and chairman, in a statement.

Meanwhile, Collinson is set to fast-track development of other core products, such as Priority Pass. It views an innovative startup like Inflyter as an incubator driving joint R&D for Priority Pass as well as other products.

Its additional investment in Grab is justified because the app works with those of a growing number of airport operators, concession partners, airlines and airports.

The app’s function is to manage seamless airport take-out ordering — whether Grab works as its own proprietary app or one within an airline’s or airport’s app. Its peculiar benefits are clear: it will speed up the shopping and dining process, and increase basket value for concession partners.

The emerging presence of Inflyter and Grab come on the heels of Collinson’s recent investments in redefining the passenger experience in places like India and the U.S., especially in the growth of its Priority Pass.

There are stakeholders aplenty in the drive to customize business and leisure trips minutely — that is, to make such trips maximally into intelligent, personalized, enjoyable and profitable journeys.

Who are some of these stakeholders? The traveler, of course; airport operators, retailers and service providers; and even payment networks and banks, who can now use the airport experience to build brand and customer loyalty.