CANNES, France – Headwinds and tailwinds preserve converging and buffeting the journey–retail business because it navigates confused seas.
The $70 billion-plus retail channel, led by fragrances and cosmetics, is on the entrance line of geopolitical and socioeconomic change, together with swiftly shifting shopper demographics, needs and shopping for patterns.
“You’re sitting proper on the nervous system of globalization,” mentioned Rudolph Lohmeyer, senior companion at Kearney Foresight, addressing attendees on the opening of the TFWA World Exhibition & Convention. That occurred in Cannes from Sept. 28 to Oct. 2 and was fittingly themed “Discover New Horizons.”
“There isn’t a doubt that we’re in a second of profound dysfunction,” mentioned Lohmeyer, who foresees it lasting three to 5 years.
“We’re as an business dealing with robust tensions — geopolitical headwinds and commerce points,” Philippe Margueritte, president of TFWA, underlined in his keynote speech. “Enterprise uncertainty is the worst poison for all of us. It delays investments, impacts our groups and — extra importantly — impacts the patron spending. What’s plain is that we’re all affected and should adapt strategically.”
Quite a few key journey retail fundamentals stay robust, nonetheless, together with individuals’s innate intuition to journey and discover. Air passenger numbers are due to this fact anticipated to double within the subsequent 20 years to 18 billion yearly.
“What’s thrilling for us as an business is that this stays one of the certified customers you could goal, as a result of these are those that have the disposable earnings to journey internationally,” mentioned Matthew Growdon, president, Asia-Pacific and journey retail worldwide on the Estée Lauder Cos. “We get to talk to them in an atmosphere which is usually fairly elevated — stunning retail environments.”
Nevertheless it’s not assured that such an increase in footfall will equate to development in travel-retail spend.
“One of many greatest classes post-COVID is the decorrelation between the passenger development and the retail gross sales development,” mentioned Margueritte. Between 2019 and 2024, passenger spend has declined at a compound annual development price of 4 p.c, whereas from 2023 to 2024, it’s estimated to have dropped 5 p.c, a current Kearney research reveals.
“What we thought was purely conjunctural begins to be structural in our enterprise,” Margueritte mentioned.
He due to this fact referred to as for a retail revolution.
“Quite a lot of effort is now being made to create a stronger sense of place, extra pleasure, extra hybrid propositions,” the manager mentioned.
“As a result of the atmosphere has modified, it has pressured us and all within the business to actually reinvent the wheel right here,” mentioned Olivier Dubos, senior vice chairman and common supervisor of journey retail worldwide on the Estée Lauder Cos. “In a manner it’s good, as a result of we’re constructing a way more sustainable development platform for the long run than earlier than, when it was actually concentrated across the Chinese language.”
Margueritte believes synthetic intelligence brings a rare alternative. To wit, he invited to the stage Ameca, a humanoid robotic powered by AI and developed by Engineered Arts. With a modern feminine kind, facial expressions and darting eyes, she fielded questions in English, French and Mandarin.
Ameca, the humanoid robotic powered by AI.
Photograph by Jennifer Weil/WWD
“The slower development in retail gross sales in comparison with passenger numbers is attributed to a number of components,” Ameca mentioned. “That is as a result of finish of post-pandemic revenge shopping for, rising inflation, unfavorable trade charges and financial slowdowns, notably in China. Moreover, excessive airfares have negatively impacted discretionary spending, regardless of passenger volumes rebounding.”
Compounding woes, vacationers do not stay captive audiences in airports like earlier than.
“The time individuals spend on the airport is shorter,” mentioned Valentina Colombo, managing director of Bulgari’s fragrance enterprise unit. That’s due largely to extra streamlined check-in processes. At present versus 2019, dwell time in Asia-Pacific airports has dropped from 60 minutes to 44 minutes, for instance.
Cell telephones are journey retail’s biggest competitor. Total, 75 p.c of passengers’ downtime in airports just isn’t spent buying. But information signifies that 45 p.c of customers say in-store experiences drive purchases. That proportion is even larger for Gen Z and Millennials, creator and shopper professional Bobby Jones mentioned throughout the opening convention.
“How will we make journey retail extra partaking than the scroll?” he mused. “Extra significant than the low cost? And notably for a brand new era of youthful vacationers, who’re on the lookout for completely different experiences, who’re anticipating extra.”
That’s very true for Gen-Zers, who will account for 30 p.c of vacationers worldwide in 2028.
Conversion was the recent subject on stage and all through the halls of the Palais des Congrès, residence to the TFWA commerce present, which drew 7,999 guests and 482 exhibiting model homeowners.
The stakes are excessive for the sweetness business, which in duty-free and travel-retail shops generated $11 billion, down 5.5 p.c, in first-half 2025 versus the identical prior-year interval, based on preliminary Technology Analysis information. Total, the channel rang up $36.2 billion, up 0.7 p.c in the identical timeframe.
“If we need to leverage totally this urge for food for journey and resolve the conversion subject that we’ve got, we have to reenchant this channel by bringing the extent of expertise up,” mentioned Emmanuel Goulin, L’Oréal’s outgoing president of journey retail, who launched his successor, Eva Yu, within the group’s tent throughout a press convention.
“The chance is what’s the proposition that we put in entrance of the patron that they’re desirous about, that can create the dwell time, whether or not it’s an expertise, the product assortment, the class, the model,” Growdon mentioned.
At TFWA, L’Oréal confirmed examples of the way it intends to show airports into leisure locations. On the Yves Saint Laurent kiosk, as an illustration, one might chill by listening to music by means of a headset then obtain the tunes by way of a QR code. The model additionally revealed some metropolis guides, created by native model ambassadors. There was display screen playtime involving a make-up look being tried on just about, and Libre girls’s scent being supplied in a 10-ml. journey dimension.
The Kiehl’s sales space featured its mascot Mr. Bones providing vacationers a skincare journey depending on their vacation spot. Kérastase offered its new hair and scalp station replete with a prognosis made with an AI-powered device, together with a hair well being rating, after which a scalp serum was utilized.
Kiehl’s sales space.
Photograph by Jennifer Weil/WWD
L’Oréal has over the previous yr reinvented almost all of its travel-retail unique provides and is mixing classes. With Qatar Obligation Free, for instance, it exported Lancôme’s Café de la Rose, in any other case solely discovered on Paris’ Avenue des Champs-Élysées, to the airport in Doha.
“It’s our responsibility, particularly for L’Oréal as a number one firm within the travel-retail sector and a pioneer on this business, to make sure that we handle to develop what we name a seamless, memorable buyer journey,” mentioned Baptiste Beau, common supervisor of L’Oréal Luxe, journey retail worldwide.
Executives agree an irregular macro context is changing into a brand new regular for journey retail, which makes it troublesome for superior planning. Agility is vital to shifting ahead.
The Estée Lauder Cos. has reorganized itself within the house, with two massive hubs now in Singapore to serve Asia and in London for the Western Hemisphere.
“We’ve taken assets out of our New York head workplace and put them into these nodes that may be extra centered on execution and people granular alternatives,” Growdon mentioned.
“We need to at all times acquire extra agility,” mentioned Antonin Carreau, world director of magnificence at Spanish travel-retail operator Avolta. “We’re remaining agile on pricing and assortment, to adapt to completely different dynamics, to foreign money fluctuations, to the tariffs, which we’re adapting to on a day-by-day foundation.”
Bulgari, for one, has not modified its provide chain or pricing for fragrances as a consequence of tariffs but.
In the meantime, regional laws preserve shifting, too, and competitors is intensifying general.
To be agile, resilient and for velocity to market, Avolta is strengthening collaborations with model companions, together with on the supply-chain aspect of the enterprise, to be regionally particular.
Taking a region-by-region stance is necessary.
“The dynamics in every of the markets are very completely different,” mentioned Britta Hoffmann, director of buying for perfumes and cosmetics at German travel-retail operator Gebr. Heinemann.
That features passenger combine, foreign money challenges, inflation and price of residing, amongst different native market points.
“Each area has a little bit of its personal problem,” Hoffmann mentioned.
Avolta has staged quite a few unique launches and pre-launches to achieve traction with regional vacationers.
“Now we have continued, due to the number of our geographies, to concentrate to localized collaborations that relate or join with a way of place,” Carreau mentioned, including these resonate properly with native customers plus vacationers touring to a particular vacation spot. “Now we have a worldwide class, methods and priorities, and the native adaptation of sure activations is totally necessary.”
The Estée Lauder Cos. has custom-made a few of its hero merchandise primarily based on location, similar to Superior Night time Restore with a New York theme.
Estée Lauder’s Superior Night time Restore with a New York theme.
Courtesy of Estée Lauder
Clarins is implementing a neighborhood technique, launching initiatives similar to an explorer assortment. Seventeen completely different nations’ units with associated illustrations might be launched this month, following a profitable pilot in Taiwan. These spotlight a location’s landmarks, nature or fruits, and can’t be bought wherever else.
“What we attempt to do is to attach extra with the emotional [side] of the patron,” mentioned Sandrine Tesniere, advertising director of worldwide journey retail at Groupe Clarins.
The corporate will proceed to create localized activations and campaigns, which faucet into gifting and self-gifting — and sense of place.
“The expertise needs to be native,” mentioned Katalin Berenyi, common supervisor of the Clarins model, including individuals need to dwell an expertise. “However they need to devour most likely much less and higher.
“Every thing is altering on this shifting atmosphere, and consumption is essentially altering,” she continued. “That is our important preoccupation: to know the place the actions are going and the way we will be the place the patron is the best way she or he needs to devour.”
Newness is vital to upping the wow quotient and luring customers into travel-retail shops. Heinemann executives have taken observe of the worldwide rise of Okay-beauty, as an illustration, and notice time is of the essence.
“As an alternative of simply a pattern and monitoring it, then possibly work on solutions, we have to have a look at it and develop a suggestion for it,” mentioned Hoffmann.
So in just some weeks, the operator negotiated with three Korean magnificence manufacturers — Laneige, Cosrx and Innisfree — which can be getting into its shops shortly. These will assist goal a youthful shopper, with lower cost factors, as luxurious skincare stays a more durable promote within the channel.
“Our retail ideas must be extra agile,” mentioned Hoffmann, who has an eye fixed on different rising classes, too, similar to wellness, well being and pharmacy manufacturers together with CeraVe and La Roche-Posay.
Kess at Heinemann.
Courtesy of Heinemann
Heinemann not too long ago introduced in German indie coloration cosmetics label Kess into the Düsseldorf Airport’s Check & Be taught space, the place new manufacturers are rotated in each three to 6 months. “It was tremendous profitable, one of many quickest [growing] make-up manufacturers from Day One,” Hoffmann mentioned.
At Heinemann, the posh area of interest perfume supply retains increasing, together with to the not too long ago opened Jeddah Airport in Saudi Arabia.
“Total, we see an increase of the area of interest perfume manufacturers — the haute parfumerie,” mentioned Carreau, including indie cosmetics manufacturers are additionally on the up. He famous one other space of alternative for the long-term is magnificence’s premiumization and personalization.
Avolta’s Haute Parfumerie idea.
Courtesy of Avolta
For Bulgari perfumes, the main target in journey retail is on key cities, defined Colombo. Bulgari might be refurbishing its areas within the Munich and Frankfurt airports within the subsequent few months, after a current revamp in Madrid.
“We’re in a journey of brand name elevation with Bulgari,” she mentioned. That features homing in on core merchandise and distribution.
“So fewer issues and higher,” Colombo mentioned.
The design for Bulgari’s perfume stand at TFWA nodded to the model’s lodge aesthetic.
Hair care is one other rising class on the travel-retail panorama. Oribe, which isn’t but within the channel, had a stand on the commerce present for the primary time. The model, which is now in 24 home markets in Europe, the Center East and Africa, is gaining important mass.
“It’s actually about studying, understanding the travel-retail aspect,” mentioned Clifford Mc Ewan, affiliate director of EMEA at Oribe. “For us, it’s a giant studying curve and understanding what that chance represents.”
That’s large — and complicated.
“Collectively, we’ve got to be a lot smarter now to steer the enterprise,” Hoffmann mentioned, talking of the channel at massive. Trying to the long run, she sees customers behaving in additional excessive methods, similar to searching for happiness or rest, excessive luxurious fragrances or lower-priced merchandise, as an illustration.
“Every thing which is within the center is tremendous robust,” Hoffmann mentioned, including all of this informs class improvement. “It is usually not simple as a result of, in fact, we will’t simply take the center out and solely work in extremes.”
A continual subject stymieing journey retail is that information remains to be hardly ever shared amongst stakeholders. Actually shifting the needle necessitates a continuing information feed on site visitors, actualized traveler profiling and product supply. Shared dependable market information can assist construct business technique.
“This business has been working an excessive amount of in silos up to now,” Goulin mentioned, referring to the “journey pentarchy,” together with the model, retailers, airline, airport and digital ecosystem. “By activating this pentarchy in an environment friendly manner, you possibly can actually deliver the passenger expertise to the subsequent degree and make a distinction.”
He mentioned over the past 12 months that’s been put in movement by L’Oréal in Singapore, Doha, Buenos Aires and now in Heathrow, and it helps conversion.
Executives see robust alternatives within the Center East, in addition to in China, which remains to be struggling, encumbered by Hainan. That Chinese language duty-free buying island, which is negatively impacting skincare gross sales, stays an necessary market with greater than 100 million guests yearly.
“Individuals are touring to Hainan not solely to go within the buying malls and buy merchandise, together with magnificence merchandise, they need additionally to expertise issues,” Beau mentioned.
So, with retailer CDFG on Hainan, Lancôme opened a Domaine de la Rose, which provides an expertise of its property in Grasse, France, within the shopping center, as an illustration.
The Estée Lauder Cos. retains investing closely in Hainan, launching quite a few pop-ups there for its manufacturers together with Estée Lauder, La Mer and Jo Malone London’s newest Raspberry Ripple Cologne. The corporate has additionally geared up the shops with providers.
Clarins in Hainan.
Courtesy of Clarins
Different demographics are rising in journey retail.
“We’re seeing a giant rise of Indian vacationers now by means of varied corridors,” Growdon mentioned. Singapore is amongst them.
“We’re undoubtedly strengthening our capabilities in these rising nations,” mentioned Dubos.
Within the first half of this yr, magnificence travel-retail and duty-free gross sales within the Asia-Pacific area declined 13 p.c, Technology statistics present.
Chinese language vacationers don’t behave like they did pre-COVID, executives say. “There’s a whole lot of home consumption,” Growdon mentioned.
They preserve touring rather a lot in China and predominantly in Asia immediately. Visa-free group excursions from China to South Korea simply restarted.
“It’s too early to say what’s going to be the dimensions of the prize right here,” Dubos mentioned. “We’re undoubtedly doubling down on our management in Asia and China.”
The European magnificence travel-retail and duty-free market stays dynamic, up 7 p.c, with all magnificence classes registering beneficial properties and the most important enhance from fragrances, based on Technology. Inside that class, luxurious area of interest manufacturers are the winners.
Magnificence gross sales within the channel within the Center East and Africa zone have been up 10 p.c, led by fragrances, whereas within the Americas, the enterprise elevated 4 p.c. There, perfumes and skincare posted upticks, whereas make-up was down.
“Within the West, we’ve got been capturing a whole lot of alternatives, strengthening the partnership with the main gamers like Avolta, Lagardère or Heinemann,” mentioned Dubos. That included unique launches, for instance with Tom Ford.
The Estée Lauder Cos. additionally restarted its relationship with Obligation Free Americas and can open within the operator’s complete community by the tip of 2025.
Journey retail is burgeoning on cruise ships, unanchored to any particular geography and the place passenger site visitors is rising by 9 p.c year-on-year, to succeed in 37.7 million in 2025, based on the Cruise Strains Worldwide Affiliation.
“On this specific case, we’ve got repeat purchases,” Dubos mentioned. “A number of the most stunning ships are equal to probably the most stunning malls.”
Clarins simply opened a retailer on the Virgin Atlantic out of New York. It might embody spa providers sooner or later. “We’re exploring all of those alternatives,” Tesniere mentioned.
Journey retail holds many silver linings.
“Regardless of immediately’s exterior volatility and challenges, we do see a really robust resilience of the class,” Carreau mentioned. “And for ’25 and past, continued development forward.”
“The longer term is vibrant as a result of all the main KPIs are good,” Beau agreed.
A brand new period has dawned. “Journey retail is not in restoration,” Jones mentioned. “It’s in reinvention.”
