Research from Swiss-based research agency m1nd-set reveals that more than half of luxury shoppers (57%) are younger than 35 years old. Millennials make up 42% of luxury shoppers in travel retail, while Gen Zs account for 15% currently. According to the research, Gen Zs have started to purchase luxury goods much earlier than the Millennials.
Among these younger Gen Z luxury shoppers in travel retail, men are more prone to purchase luxury goods in travel retail than women: 62% of luxury GTR shoppers are men and 38% are women.
In addition, Asia Pacific travelers have the highest tendency to purchase luxury in travel retail, reports m1nd-set: 47% of shoppers from the region say they purchased luxury goods in travel retail on their last international trip.
The Middle East & Africa is in second place with 40% of shoppers purchasing luxury goods. In Europe, 38% of travel retail shoppers say they purchase luxury goods, while in the Americas just over one third say they purchase luxury goods; 35% in North America and 34% in South America.
Luxury shoppers also have a higher tendency to purchase all the main premium categories than non-luxury shoppers, according to the research.
Perfumes is the most popular category purchased by 42% of luxury shoppers, which is 4% higher than non-luxury shoppers. Fashion & Accessories follows with 38% purchasing the category, 22% more than among non-luxury shoppers. Significant differences between luxury and non-luxury shoppers are also seen with the Skincare and Jewelry & Watches categories, where there is a 20% delta between the two customer segments: 34% vs 14% in Skincare and 25% vs 5% for jewelry & Watches. And 36% of luxury shoppers purchase Alcohol, 10% higher over other shoppers.
Desire for differentiation
There is a distinctly greater desire and quest for differentiation and exclusivity in their travel retail purchases among the luxury shoppers compared to non-luxury shoppers, confirms m1nd-set. More than two thirds of luxury shoppers say they want to purchase something different than what they usually purchase, which is 16% more than among non-luxury shoppers.
Significant differences can also be seen between luxury and non-luxury shoppers when it comes to other purchase driver criteria as well. These include destination purchases, the product not being available in their home country, familiarity with the brand and travel retail exclusives.
The percentage of luxury shoppers who purchase exclusive items in the Duty Free shops is 31% higher than among non-luxury shoppers, according to m1nd-set.
The research also shows a significant difference between luxury and non-luxury shoppers’ tendency to purchase products for the first time or products on promotion: 20% higher for first time purchases and 16% higher for products on promotion.
Importance of Luxury Shoppers
“Luxury shoppers are not only attractive customer segments because of their average spend, but also because of their propensity to visit and shop in store,” noted m1nd-set owner and CEO Dr. Peter Mohn.
“They have a higher tendency to visit the shops and purchase, which means their conversion rate is significantly higher than non-luxury shoppers. More than four out of ten luxury shoppers who visit the stores in travel retail actually make a purchase. This is more than double the rate among non-luxury shoppers.”
Mohn continued: “Conversion among luxury shoppers is more than 80%, compared to only 50% among non-luxury shoppers. It’s important to understand what is driving this conversion and how shoppers are being influenced to purchase.
“We see a significant difference in behavior between luxury and non-luxury shoppers when looking at how they are influenced to purchase in travel retail. More than eight out of ten luxury shoppers say the interaction with the sales staff influenced their purchase decision, which is 9% higher than among non-luxury shoppers,” he added.
“The difference is also signify-cant with key opinion leaders on social media: 85% of luxury shoppers say they are influenced by KOLs they follow on social media, or livestream services, 15% higher than among non-luxury shoppers,” he said.
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Sustainability influence
“The difference is greater still for sustainability and social responsibility,” Mohn added. “More than seven out of ten luxury shoppers in travel retail say they would switch brands and opt for an alternative brand because of a brand’s commitment to social, political, or environmental causes. This is 21% higher than among non-luxury shoppers.
“Sustainable luxury, through the growing preowned luxury category, is still relatively recent in travel retail, but we expect it will grow significantly in the months and years ahead. Retailers in the travel retail sector will inevitably have to embrace the fast-emerging tendency and service this growing demand,” Mohn concluded.
