June 19 2024  |  Associations

On location: Day one at ASUTIL 2024 in Bogotá

By Laura Shirk in Bogotá, Colombia


Following a welcome from Secretary General Carlos Loaiza-Keel, the 2024 ASUTIL Conference opened with a session on the state of the duty free and travel retail industry in Latin America. Despite facing various challenges, the region has demonstrated a sense of resilience with new opportunities continuing to emerge. Loaiza-Keel explained from facing illicit trade and custom allowances to the collecting and sharing of data, the industry has to create a professional map in order to navigate both threats and opportunities. He also shared ASUTIL novelties including the launch of an ESG task force with a specific panel on the topic to create awareness among members of the association.


Drawing on data from m1nd-set, he also shared the top 10 airports for international departures in 2024 across Latin America and Caribbean. The top three: Cancun Airport at 10.9 million PAX, Tocumen Airport at 9.8 million PAX and Mexico City International Airport at 8.6 million PAX. On the cruise side, the segment experienced a record year in 2023 and its capabilities in forecasting is also on the rise.


ASUTIL President Enrique Urioste detailed the present attractive market with long-term growth prospects. He shared the beauty category in Latin America is expected to drive growth by +10% CAGR (compound annual growth rate) between 2023 – 2028 across all sub-categories. Also, the confectionery category in the region is expected to grow by a CAGR of 5.1% with chocolate and savory snacks as the fastest growing sub-categories. The 2024 market size is predicted to reach approximately US$55 billion and US$82 billion in 2028. “I don’t see a reason why we should not be optimistic,” said Urioste.


Plus, Duty Free World Council President Sarah Branquinho outlined efforts to further safeguard the industry against illicit trade in connection to the sale of tobacco. According to Branquinho, travel retail will be under an “intense microscope” by the World Health Organization, which is seeking opportunities to eliminate tobacco revenue in duty free stores. “We must continue to protect ourselves; unfortunately, we’ll continue to face unfair accusations,” she said. However, despite being attacked, travel retail has come to define success in the industry and knows that growing “solid data” will help to defend itself against regulations.

Keynote address: orchestrating business success


Next, renowned author, composer and orchestra conductor Iñgio Pirfano took the stage to deliver the first keynote address of the conference. During the session “Operating Business Success,” Pirfano shared his thoughts on effective leadership and the importance of ongoing assessment in order to improve both as an individual and in a group. Comparing shop floor team members to symphony orchestra players, he reiterated that creating a collaborative environment and inclusive spirit that motivates a group is key to the success of any project. "A successful leadership model demands respect for people," he stated.


Following the morning’s welcome and keynotes came workshop presentations on topics important to our industry.

Commercial evolution: digital strategy and consumer loyalty

Staying competitive requires embracing new technologies and strategies, with a strong emphasis on consumer loyalty. This was the focal point of the “Commercial Evolution” session at the ASUTIL Conference in Bogotá, featuring insights from Valeria Yglesias, Chief Commercial Officer at LifeMiles, and Vijay Talwar, Chief Commercial Officer at Avolta.


Valeria Yglesias outlined the essentials for creating an attractive loyalty program, emphasizing the importance of connecting with clients, keeping proposals simple and transparent, personalizing offers, and providing multiple options at different price points and emotional levels. She noted that 81% of loyalty members are likely to continue doing business with a brand, and 80% of consumers desire a stronger emotional connection with brands, achievable through digitalization and gamification. Yglesias highlighted the significance of omnichannel presence to remain relevant throughout the consumer lifecycle and pointed to Patagonia's “Better Than New” program as a model for engaging the new generation of consumers.


Vijay Talwar discussed the transformative ABC's of the industry: Airports, Brands, Customers, Digital, Entertainment and Flexibility. He stressed the urgency of reinventing travel retail and duty-free stores, given that by 2027, over 70% of travelers will belong to Gen Y or Gen Z.


Talwar highlighted the need for experiential stores, an omnichannel approach, technological disruption, and personalization. He predicted that AI adoption in retail would rise from 40% to 80% within the next three years, emphasizing the importance of a customer-centric approach where stores serve as sources of entertainment, increasing dwell time and likely spend.

The future of the beauty sector in travel retail

The beauty sector in travel retail, a significant contributor to global sales, is poised for a future shaped by sustainable practices, personalization and technological advancements. This was the key takeaway from a panel discussion moderated by Peter Mohn, CEO and founder of m1nd-set, featuring Pablo Cobian of Shiseido, Diego Artola of Coty, and Yennifer Abreu of Essence Corp.


The panel explored the travel habits of Gen Z, who prioritize travel spending and seek new destinations, frequent travel, personalized value-added experiences and sustainability. Gen Z's preference for inclusivity, diversity and hassle-free experiences was highlighted, alongside their reliance on human interaction and peer reviews. This generation does not differentiate between online and offline experiences, making a seamless integration of both essential for retailers.


Key expectations for Gen Z travelers include personal well-being, immersion in local culture, and social media engagement. Hyper-personalization, involving individualized regimens and expert opinions, is crucial. Performance indicators for Gen Z beauty shoppers show a high footfall conversion and purchase rate, with perfumes being the most purchased category.

The panel concluded that the beauty category is expanding beyond traditional skincare and cosmetics to include well-being and nutrition. Retailers face the challenge of evolving quickly to meet the demands of educated consumers, as the travel retail market often lags behind the domestic market in adapting to these trends.


Digitalization, experience-driven marketing, sustainability, and personalization were identified as the primary drivers for future success, with examples like Maui Jim's trial
availability at TFAP illustrating innovative approaches to engaging
consumers.

This session provided valuable insights into how brands and retailers can stay current with the rapidly changing landscape of the beauty category in travel retail, ensuring they remain competitive and relevant in an evolving market.

REGION Americas
Copyright 2024 DutyFree Magazine. All rights reserved. Privacy Policy Sitemap