May 27 2024  |  Industry News

m1nd-set reveals key customer segments in luxury shopping in global travel retail

By Wendy Morley

The m1nd-set research shows the differences between luxury and non-luxury shoppers in global travel retail 

Swiss-based research agency m1nd-set has released research revealing that males, younger shoppers and Asia Pacific consumers are the driving forces behind luxury shopping in global travel retail.

The study indicates that more than half of luxury shoppers (57%) are younger than 35 years old; Millennials make up 42% of luxury shoppers in travel retail, while Gen Zs account for 15% currently. According to the research, Gen Zs have started to purchase luxury goods much earlier than the Millennials. Among these younger Gen Z luxury shoppers in travel retail, men are more prone to purchase luxury goods in travel retail than women: 62% of luxury GTR shoppers are men and 38% are women.

According to m1nd-set, Asia Pacific travelers have the highest tendency to purchase luxury in travel retail. 47% shoppers from the region say they purchased luxury goods in travel retail on their last international trip. The Middle East & Africa is in second place with 40% of shoppers purchasing luxury goods. In Europe, 38% of travel retail shoppers say they purchase luxury goods, while in the Americas just over one third say they purchase luxury goods; 35% in North America and 34% in South America.

m1nd-set also clarifies the share of global travel retail shoppers who are luxury buyers

The research also provides a category specific analysis of the luxury shopping trends, demonstrating that luxury shoppers have a higher tendency to purchase all the main premium categories than non-luxury shoppers. Perfumes is the most popular category purchased with 42% of luxury shoppers, which is 4% higher than non-luxury shoppers. Fashion & Accessories follows with 38% purchasing the category 22% more than among non-luxury shoppers. Significant differences between luxury and non-luxury shoppers are also seen with the Skincare and Jewelry & Watches categories, where there is a 20% delta between the two customer segments: 34% vs 14% in Skincare and 25% vs 5% for Jewelry & Watches, 36% of luxury shoppers purchase Alcohol, which is 10% higher than other shoppers.

According to m1nd-set, there is a distinctly greater desire and quest for differentiation and exclusivity in their travel retail purchases among the luxury shoppers compared to non-luxury shoppers. More than two thirds of luxury shoppers say they want to purchase something different than what they usually purchase, which is 16% more than among non-luxury shoppers. Other purchase driver criteria, where significant differences can be seen between luxury and non-luxury shoppers, include destination purchases, the product not being available in their home country, familiarity with the brand and travel retail exclusives. The percentage of luxury shoppers who purchase exclusive items in the duty free shops is 31% higher than among non-luxury shoppers.

The research also shows a significant difference between luxury and non-luxury shoppers’ tendency to purchase products for the first time or products on promotion: 20% higher for first-time purchases and 16% higher for products on promotion.

Dr Peter Mohn, m1nd-set owner and CEO, said, “Luxury shoppers are not only attractive customer segments because of their average spend, but also because of their propensity to visit and shop in store. They have a higher tendency to visit the shops and purchase, which means their conversion rate is significantly higher than non-luxury shoppers. More than four out of ten luxury shoppers who visit the stores in travel retail actually make a purchase. This is more than double the rate among non-luxury shoppers.”

Mohn noted that conversion among luxury shoppers is more than 80%, compared to only 50% among non-luxury shoppers. “It’s important to understand what is driving this conversion and how shoppers are being influenced to purchase and we see a significant difference in behavior between luxury and non-luxury shoppers when looking at how they are influenced to purchase in travel retail,” he said. “More than eight out of ten luxury shoppers say the interaction with the sales staff influenced their purchase decision, which is 9% higher than among non-luxury shoppers. The difference is also significant with key opinion leaders on social media. 85% of luxury shoppers say they are influenced by KOLs they follow on social media, or livestream services, 15% higher than among non-luxury shoppers.

According to Mohn, the difference is greater still for sustainability and social responsibility. “More than seven out of ten luxury shoppers in travel retail say they would switch brands and opt for an alternative brand because of a brand’s commitment to social, political, or environmental causes. This is 21% higher than among non-luxury shoppers. Sustainable luxury, through the growing pre-owned luxury category, is still relatively recent in travel retail, but we expect it will grow significantly in the months and years ahead. Retailers in the travel retail sector will inevitably have to embrace the fast-emerging tendency and service this growing demand,” Mohn concluded.

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