Despite a robust rise in passenger volume, a $9 billion value gap is expected to emerge in 2023, indicating that the global travel retail sector is at a key turning point. Strategic imperatives for stakeholders to close this gap and future-proof the business are outlined in a new industry report called Revolutionising Travel Retail, published by customer experience consultancy CXG.
Global aviation traffic is expected to surpass pre-pandemic levels in 2025, reaching 9.9 billion passengers, and nearly tripling to 19.5 billion by 2042, according to data from ACI World that was referenced in the paper. However, the market as a whole shrank from $86 billion to $72 billion in 2023 as the average spend per traveler fell 15% from $19 in 2019 to $16 in 2023.
According to CXG, this drop is the result of lower customer experience standards in travel retail as opposed to domestic retail settings. Travel retail competitors only manage to provide extraordinary experiences 28% of the time, but domestic boutiques do so 50% of the time, indicating a lost chance to engage a captive audience.
The report challenges industry participants to reconsider travel retail as a hub for tailored experiences rather than a transactional area, given the anticipated surge in passenger volumes. The authors believe that immersive, customized, and culturally rich experiences are the key to the future of travel shopping.
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