A Luxury Retail Revival at Airports Around the World

456
Photo from Barron's

By Barron’s

When you walk into Berlin’s new Berlin-Brandenburg Airport, which opened last November after a US$7 billion construction over nine years, one thing you might not expect to see is the new Omega boutique, the Swiss luxury watch brand known for selling high-end wrist watches for roughly US$20,000.

It doesn’t fit with a city renowned for its graffiti, techno, and open-air parties. But with many shopping malls going bankrupt and closing across the world,, one of the few places left where luxury retail can truly thrive is in airports. Airport retail is expected to be a US$40 billion industry by 2027, according to a report by Allied Market Research. Perfume and cosmetics are expected to dominate (two-fifths of the global airport market) with wine and spirits secondarily.

“It’s clear that consumers still want to buy luxury goods, and this, along with the brands’ ability to adapt and innovate, is driving a return to growth in the market,” says Claudia D’Arpizio, a partner with Bain & Company, a luxury goods advisory firm Bain & Company, which recently released their spring study.

Yes, there’s the obvious e-commerce renaissance with online orders, but airports are in on that, too. With the sharp decline in travel during 2020, airports started bringing their retail presence online. Take London’s Heathrow Airport, which sells luxury products online at their Heathrow Boutique, including Burberry, Cartier, Rolex, and Estee Lauder. Milan’s Malpensa airport recently opened an online luxury boutique boasting over 2,000 products from luxury brands, which are available for passengers at pick-up points.

In Australia, the new BNE Marketplace from Brisbane airport is an online boutique selling a variety of luxury products, including bottles of Moët Champagne and Bose headphones. It was launched last April as an “e-commerce solution when our foot traffic was down by 98%,” says Rachel Bronish, Brisbane Airport’s media and corporate communications manager. “Our International Terminal, which had US$70 million worth of product, was no longer able to sell due to border closures.”

READ full story HERE.