Over the past year I have heard several people in the travel retail sector grandly refer to their business as the ‘sixth continent’, to underline just how important the channel has become to the drinks industry.
I suppose it makes a nice change from calling it a ‘shop window’. People used this term for years – often, I suspect, as a sly way of saying travel retail was a triumph of style over substance, an expensive marketing exercise rather than a proper sales channel.
It’s true that travel retail has grown in importance – it’s now a £40bn business encompassing airport shops, ferries, cruise lines, airlines and border stores. The growth of air travel over the past decade has been nothing short of astonishing. A record 3.3bn passengers caught a flight last year and all the forecasts suggest that growth curve is going to continue climbing year on year.
All those extra passengers have got the duty free cash tills ringing as never before. Duty free now accounts for 11% of Chivas Brothers’ total annual sales volumes, for instance, while global travel retail is the second most important market for both Absolut vodka and Johnnie Walker whisky.
The ‘sixth continent’ it may be, but I still feel this business has to overcome significant challenges if it is to fulfil its potential. Congestion and continuing security legislation are two of the most pressing issues. For instance, last month I took a silly o-clock low-cost flight from London Gatwick. It was slap bang in the peak summer holiday travel period so I guess I was asking for trouble.
The zigzagging queues for bag drop off and security were positively frightening. Yet what was worse to my mind was seeing travellers desperately trying to cram their toiletries, liquid medicines and cosmetics into see- through plastic bags.
The restrictions on passengers taking liquids, aerosols and gels (so-called LAGs) in their hand luggage have been in place since 2006 when a terrorist plot to blow up a US-bound aircraft with liquid explosives was uncovered. Despite the fact that nine years have elapsed new screening technologies to detect liquids have not proved themselves effective enough to be rolled out to airports. Consequently, we still have this crazy situation where passengers worry about whether their tube of toothpaste, contact lens fluid or bottle of water will be taken away from them.
Yes, I know the rules have been relaxed to allow duty free liquid purchases to be carried in hand luggage provided they are in tamper-evident, transparent plastic bags, but how many passengers, especially those who travel infrequently, actually know this? Due to the exhausting screening process and the tightening of hand baggage rules by the big low-cost carriers, it was no surprise for me to see a lot of travellers walking straight through Gatwick’s enormous World Duty Free store without buying a single thing.
I keep hearing at airport retail conferences how more and more passengers are good news for the business. Yet unless we sort out the basics, such as shortening the queues, processing travellers through security quickly, less invasively, and yes, without confiscating innocuous bottles of water, we can’t expect people to be too bothered about buying anything.