Events such as the World of Wines & Spirits (WOWS) not only attract connoisseurs and collectors, but also enhance the airport's standing as a premier destination for buyers
The global travel retail industry is navigating an era marked by significant technological advancements and evolving consumer preferences. As the market continues to rebound, often surpassing 2019 traffic, retailers are leveraging innovative strategies to enhance customer engagement and streamline operations. The integration of AI and digital tools has become a cornerstone, offering personalized travel experiences and facilitating seamless shopping. This trend is particularly evident with AI-driven recommendations for dining, accommodations and activities, which are gaining popularity among travelers globally.
Sustainability has emerged as a critical driver, influencing both product offerings and consumer behavior. The industry is witnessing a shift towards eco-friendly practices, with companies focusing on reducing packaging waste and utilizing recyclable materials. The emphasis on sustainability is also reflected in the growing premiumization of product categories, where value over volume is becoming a dominant theme. High-end offerings, such as prestige spirits and premium wines, are experiencing robust growth as consumers are willing to invest more in quality and sustainable products.
Influence on overall spend
High-value purchases and cross-category buying are pivotal to the travel retail spirits market, and spirits have a significant impact on the overall shopping basket due to their high price points and premium nature. Paul Hunnisett, ARI Global Head of Buying for Liquor, Tobacco, Confectionery, and Souvenirs, emphasizes this dual benefit: “Spirits as a category have a significant impact on the overall shopping basket in travel retail. Spirits often have a high price point; therefore, shoppers who purchase spirits often contribute to higher overall basket spend as they are drawn to premium and exclusive products. These consumers tend to cross-category purchase as well; their propensity to explore and indulge in niche or exclusive spirits can often lead to additional purchases from complementary categories such as gourmet foods, chocolates, or even non-food categories such as beauty or accessories,” he says.
Gwyn Sin, Vice President of Airside Concessions at Changi Airport Group, addresses the significance of premium spirits in contributing to overall sales growth, stating: “The demand for premium and super-premium spirits will continue to grow as consumers increasingly value high-quality exclusive products.” At Changi Airport, a concerted effort to provide an extraordinary shopping and tasting experience sets it apart as a premier destination for discerning spirits buyers and travelers.
Significant spirits trends
White spirits are growing in popularity. Hunnisett observes increased interest in these spirits: “We are seeing growth in tequila and rum, albeit from a smaller base,” he says. “This is driven by the popularity of white-spirit cocktails alongside an increasing consumer interest in premium and diverse spirit offerings.” The increasing demand for these spirits is indicative of a broader shift towards diverse and premium spirit offerings in the travel retail market, particularly in the context of innovative cocktail culture.
Travel retail exclusives, always popular, are becoming increasingly so. Sin says, “We also anticipate a rise in the popularity of travel retail exclusives offering unique items not available in domestic markets.” This demand for exclusive products reflects a broader market trend where exclusivity and uniqueness are highly valued. Changi Airport Group, in collaboration with Lotte Duty Free and leading brands, has been proactive in offering such travel retail exclusives, enhancing the overall shopping experience for travelers.
Retailers are leveraging the trend toward exclusivity to differentiate themselves and capture the spirits buyer’s attention. Hunnisett says, “Our strategy on Irish whiskey has seen us develop new opportunities with our ongoing range of world exclusives such as the recently released Redbreast Cuatro Barriles Edition.” By focusing on world exclusives and niche categories, ARI creates a unique and much-desired offering in the spirits category that sets the retailer apart. This strategy is complemented by tailored and bespoke offerings in various locations, ensuring that the product mix resonates well with local and international consumers alike.
Innovative concepts like the robotic bartender at Lotte Duty Free flagship stores at Terminals 2 and 3 and the interactive wine sommelier at the Terminal 3 outlet capture the traveler’s attention
Capturing the spirits buyer
Hunnisett emphasizes the importance of understanding and anticipating consumer needs: “At ARI we work closely with our global insights team to ensure that we are anticipating consumer needs and demands, so that we are always striving to exceed them.” This approach enables the retailer to create a product mix that resonates with the diverse preferences of its customers.
Digital engagement and omnichannel strategies play a crucial role in enhancing the shopping experience and attracting spirits buyers. Sin notes the significance of digital tools in meeting modern travelers’ expectations: “At Changi Airport digital tools such as mobile apps and online pre-order services and our e-commerce platform iShopChangi make it easy and convenient for customers to purchase items.” These tools provide a seamless and personalized shopping experience, allowing customers to browse and buy products effortlessly. Innovative concepts like Changi’s robotic bartender and the interactive wine sommelier further enhance digital engagement, making the shopping journey both engaging and informative.
Creating unique customer experiences is essential in attracting and retaining spirits buyers. Hunnisett highlights ARI’s efforts in this regard: “Keeping abreast of the latest consumer demands and working closely with our suppliers to create theatre instore and unique experiences for our customers.” This strategy involves developing new opportunities with world exclusives and creating an engaging retail environment that captivates customers.
Sin points to Changi Airport’s immersive shopping experiences as a key strategy: “Throughout the year we also partner with brands to roll out Changi-first pop-ups for various categories including spirits, which give customers the opportunity to be among the first to purchase limited-edition products.” These activations offer visitors an immersive travel journey with interactive games, tailored product recommendations by brand ambassadors, and personalized gifting options, enhancing the overall shopping experience and driving spirits sales.
Regional differences
Tailored regional strategies are vital for addressing the distinct preferences of consumers in different markets, says Hunnisett. He emphasizes the importance of customizing approaches based on regional nuances: “Trends differ significantly between regions and we work closely with our local suppliers and with our teams in each location to ensure that we offer the best mix for that region.” For example, in Ireland, ARI focuses heavily on Irish whiskey exclusives, appealing to both local consumers and international travelers seeking unique, high-quality products. This strategy leverages Ireland’s rich whiskey heritage and ensures that the sales and marketing activities are aligned with consumer preferences.
Enhancing regional offerings involves curating products that resonate with local tastes and cultural preferences. Hunnisett notes the success of locally produced spirits and wines in Cyprus Duty Free: “At Cyprus Duty Free the business has had superb success with its range of ‘own-brand’ locally produced spirits and wines – which delivers a very strong sense of place for travelers and gives a taste of local to visitors to the region.” Similarly, in Portugal, premium port has seen a surge in popularity. By collaborating with premium Port Houses, ARI ensures that the Portugal Duty Free locations offer an extensive range that provides shoppers with an authentic taste of Portugal.
Changi Airport’s approach includes leveraging digital tools and omnichannel strategies to cater to the preferences of modern travelers. With the strong momentum of global traffic recovery, Sin says Changi expects an uptick in spirits sales, particularly from the Chinese market. “To bolster the awareness of our offer to our target markets, we work with brands to run marketing campaigns and promotions to spotlight exclusive and rare items, as well as highlight the unique qualities of various products,” she says. This approach ensures that Changi Airport can effectively target its key markets and drive awareness of its unique offerings.
In collaboration with Lotte Duty Free and leading brands, Changi sets itself apart with its offerings of limited- editions and exclusives
Outlook and events
The future outlook for the spirits category in travel retail appears promising, driven by consumer demand for premium and exclusive products. Hunnisett sees a robust future for spirits sales, driven by innovation and consumer engagement.
Sin highlights the ongoing commitment to enhancing the shopping experience: “To grow Changi Airport’s reputation as a leader in the wines and spirits category we will be rolling out the third edition of the prestigious World of Wines & Spirits (WOWS) in October this year.”
This event, organized in partnership with Lotte Duty Free, will showcase a curated selection of premium and rare fine wines and spirits, featuring exclusive tastings and masterclasses led by industry experts. Such events not only attract connoisseurs and collectors, but also enhance the airport’s standing as a premier destination for spirits buyers. “Attendees can expect exclusive tastings, masterclasses led by industry experts, and unique opportunities to purchase limited-edition releases,” says Sin.
