Final week, Diageo gathered main figures from throughout the journey retail trade to discover how manufacturers can adapt to volatility, shifting traveller demographics and the rising demand for experience-led engagement.
Throughout the Tax Free World Affiliation’s (TFWA) Exhibition & Convention in Cannes, Diageo held an trade panel targeted on the theme ‘The way forward for journey retail: adapting to volatility and client change’.
Chaired by Andrew Cowan, managing director of Diageo International Journey, the dialogue introduced collectively main voices from throughout the sector, together with Hannah Tan, manufacturers director for The Moodie Davitt Report; Vijay Talwar, chief business and digital officer at Avolta; Peter Zehnder, head of world journey retail at Lindt and Sprüngli; and Julie Lassaigne, secretary basic of the European Journey Retail Confederation.
In his opening comment, Cowan famous that for all of the passengers that go by means of an airport, solely 12% go to the alcohol fixture, including that development will be recognized in abundance.
Addressing the largest alternatives to drive development in GTR, Tan famous there isn’t a different channel “the place manufacturers can join with such a various and dynamic viewers”.
She continued: “Up to now, airports have been merely transit hubs, however now they’ve change into locations inside themselves, and there’s lots of alternative with that. And that transformation isn’t taking place in isolation. It’s truly supported by numbers as effectively.
“So within the first half of 2025, UN Tourism mentioned there have been 690 million worldwide travellers, and that determine was up by 5% in the identical interval versus final yr. And it’s truly up 4% versus 2019 which, you already know, lots of people think about as a peak of journey.”
“However as that is taking place, these shoppers and travellers which are coming again, they’re not the identical folks that we have been catering to pre-pandemic, there’s a shift – particularly amongst youthful, Millennial and Gen Z shoppers – to maneuver away from retail transactions and materials purchases in direction of experiences.”
Tan famous that the way in which the trade has executed experiences has developed, creating many alternatives for the spirits sector.
She cited Diageo’s latest pop-up for Johnnie Walker Black Ruby at Paris Charles de Gaulle Airport, describing it as an “an unimaginable activation that was a one-off”.
She additionally famous “cross-category collaborations” throughout the journey retail channel corresponding to Royal Salute partnering with L’Oréal Paris Males Professional at Bangkok airport and Lancôme’s Café De La Rose idea at Hamad Airport, which blended a magnificence boutique with a patisserie.
“We all the time discuss liquid to lips, however there’s lots of alternative for manufacturers to assume outdoors the field, actually leverage the ecosystem we’ve got within the channel,” Tan defined. “Discuss to different classes, possibly discuss to F&B [food and beverage]. I can see possibly a future the place a spirits firm like Diageo companions with airport F&B to supply wine tastings or pairings or cocktail mixology masterclasses, to actually deliver that have into the airport and to make it possible for we’re stunning and delighting our passengers, particularly right this moment.”
Talwar emphasised the significance of execution over new concepts, highlighting the necessity for flexibility, loyalty programmes, and leisure to interact clients.
On the final level, he famous the significance of “stunning and delighting clients” by decreasing the stress of touring and offering leisure.
Bringing within the on-line area, Talwar highlighted that nobody is doing hybrid apps or good retailer expertise at scale.
“All of us discuss self-checkout, all of us discuss an app, all of us discuss loyalty, click on and accumulate, or reserve and accumulate, or no matter you need to name it,” he mentioned. “The truth is, all of those initiatives collectively are anyplace from 1% to possibly 10% or 15% of your corporation, and till it turns into 20%, 40%, 60% then I feel we will say we modify the shopper expertise, as a result of that consistency is what’s missing. In order that consistency will solely come from execution.”
Zehnder mentioned the significance of premiumisation and journey retail-exclusive merchandise in driving development, utilizing the instance of restricted version flavours that faucet into the newest traits, corresponding to Dubai chocolate.
Lassaigne emphasised the resilience of the journey and tourism trade and the significance of partnerships in creating higher experiences for travellers.
“We’ve got seen the unimaginable resilience of transport and of journey,” she mentioned. “Tourism nonetheless has a 3-5% visitors development by way of air visitors. Trying on the cruise trade, 10% visitors by way of development capability. So I feel we nonetheless have a pleasant future forward of us. I do know we hear lots of gloomy issues, however I feel by way of the place we’re as an trade, we’ve got all of the playing cards in our palms to play higher.
“As an alternative of specializing in what we will’t change – these exterior elements – we must always concentrate on what we will change. I feel the power of the trade is partnerships.
“It’s actually an trade grounded in partnerships that ought to permit us to have the ability to reply and create and be far more environment friendly and reactive than some other home market.”
Journey retail traits
When it comes to the largest traits that may form journey retail within the coming years, Zehnder famous the rising significance of recent nationalities, notably Indians, and the necessity to cater to their preferences.
Lassaigne emphasised the significance of embracing “change and chaos”, and the necessity to concentrate on what will be managed, corresponding to enterprise fashions and knowledge sharing.
In the meantime, Talwar mentioned the trade ought to shift it mindset from short-term to long-term development, specializing in untapped markets like India.
Talwar famous that in comparison with China, India has “been rising constantly and consistently over the past three years, 5 years, 10 years”.
He continued: “For our common buyer in a few of our largest airports, Indians spend greater than the Chinese language clients right this moment, proper? So the world has shifted. And we’ve got to shift with it.”
Tan pointed to how the trade has begun to shift away from capturing shoppers in shops and are wanting past the store ground.
“The largest problem is how can we seize the eye of attention-poor Millennial and Gen Z travellers? How can we cease them within the tracks, get them within the retailer? And I feel the reply truly begins approach earlier than they arrive within the airport. And that is the place social media-targeted promoting partnerships with on-line journey reserving platforms, ride-sharing apps like Uber, Seize can come into play.”
She highlighted the significance of out-of-home promoting to showcase airport pop-ups, and in-store data through a QR code that gives cocktail recipes or a playlist for the airplane.
Tan additionally cited the development of ‘treatonomics’ as shoppers proceed to hunt inexpensive indulgences throughout unsure occasions.
“To handle this, we’d like to have the ability to give one thing in our supply that hits each portion of the worth ladder, not simply to cater to the present clients we’re coping with, but additionally the brand new demographics, Indian travellers, the brand new range of travellers coming from Southeast Asia, for instance, in order that we’ve got a suggestion for everybody who comes into the channel.”
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