With a wide ranging career in travel retail that spanned sales, business development and marketing for premium brands in beauty, luggage/travel accessories and fashion accessories, Panos Argyros has experienced many ups and downs in the industry over the past two decades. The current COVID-19 pandemic has brought its own, unique challenges to the channel, however. TMI asked Argyros to assess the impact of the crisis and discuss how he sees a recovery emerging.
The year 2020 was probably the worst downturn since the Great Depression, in terms of magnitude, shock and time period combined. Headwinds to robust near-term growth include COVID-19 related lock- downs in early 2021, lingering consumer and business caution and rising public and private debt.
Yet, the reopening of economies and the availability of vaccines will gradually unleash a new wave of spending on travel and services. In 2020 we had a 4.2% decline, however, global world GDP is projected to increase about 4.6% in 2021. The US dollar is expected to weaken as a response for monetary accommodation and a widening trade deficit.
Supply and demand
The pendulum of supply and demand will keep shifting sides for a while and until it finds balance, fiscal volatility and rising inflation should be expected as a result.
Commodity prices rose sharply in the 2nd half of 2020 as the global economy re- bounded; these cost increases have started to directly affect supply chain, pressuring margins and leading to higher prices for finished goods in 2021.
In the Americas, DTC (direct to consumer), environment and sustainability will rise stronger than ever before. A weaker USD will drive demand in the U.S.
The EMEA region will show the slowest growth rates globally, and containment measures will continue to hinder the recovery in the first half of 2021. Fiscal support will not be enough for a fight against unemployment and bankruptcies. In addition, the euro will appreciate vs the dollar. Pre pandemic levels could be reached in early 2023.
APAC / China will see accelerated and strongest growth vs prior years. The rebound will be subdued compared to what we have experienced in the past, however.
Some people have called it “the lost year,” 2020 has been the most difficult year for the travel retail industry and 2021 will not be far behind it. Nevertheless, companies in the industry have acted with tremendous resilience during the most challenging time and should be applauded for the spirit, the effort and the results in what could be the most shocking year ever. Companies are planning for an increased 1st half, followed by a strong Q3 and accelerated growth in Q4 as a result of an ambitious global vaccination campaign.
Traditionally, TR has been following local market trends, lagging in experimentation and prioritizing profit and exposure over “the new consumer.” Home has always been a sacred and safe place for the consumers, and travel has always been business or fun. Now, it’s a unique opportunity to use TR as a canvas for the global citizen, find and adopt to brand and merchandising trends and utilize technology as part of the “contactless sale.”
Digitalization of the offering is again the single most important (and now urgent) element that the trifecta of airports, concessionaires and vendors have to nail and execute with excellence in 2021. This alone will change the name of 2020 from a “lost year,” to a “pivoting and spring forward year.”
Most recently, Panos Argyros was the VP Sales for Travelpro Products and Kor- res in North America. Panos has expanded distribution, increased revenue and profit, built strong teams and brand equity in all of the brands he has worked for –Clinique, Origins, MAC, Korres, Bijoux Terner, Travelpro. With established relationships with all of the major retailers and airport landlords, he is available to engage with select companies and assist their growth in Travel Retail.