m1nd-set: mixed outlook for travel retail revival in Europe

The travel retail sector across Europe can expect mixed prospects in-store as shoppers begin to travel again in light of the Coronavirus pandemic, reports the latest m1nd-set shopper behavior report.

The report from the industry consumer insights research agency was finalized the last week in August, only days after quarantine rules were enforced in the UK and as Manchester Airport, the country’s third largest airport, announces the imminent closure of T2 yet again.

However, despite the unprecedented traffic declines across Europe over the second quarter and uncertain times ahead, the news is not all ‘doom and gloom,’ according to m1nd-set.


Europeans intend to travel

The research queried Europeans who have traveled internationally in the past 12 months and a number of encouraging findings emerged on the intent of Europeans to travel internationally again. The study also revealed positive insights on how European travelers will behave in the duty free and travel retail stores once international travel resumes.

The impact the Coronavirus pandemic has had on departing passenger numbers across the continent, as expected, is devastating. Major European hubs London Heathrow, Amsterdam Schiphol and Paris Charles de Gaulle, the top 3 airports for departing passengers in Q2 2019, all lost between 94% and 96% of passengers compared in Q2 2020. Departure traffic among the leading airport countries showed similar declines, with the UK falling from first to second position between Q2 2019 and the same period this year.

Although 72% of Europeans say COVID has had an impact on their intended travel frequency, this is still lower than the global average (81%) and the lowest among all other world regions, says m1nd-set. Less than one fifth of European travelers say they will reduce their travel (business and leisure combined) as a result of the global pandemic. Business travel will be the least affected for Europeans, with less than one in ten travelers planning to reduce their work-related international travel. COVID-19 will have a greater impact on leisure travel, as 45% of Europeans say their leisure travel plans will be affected, compared to a global average of 30%, 21% among Asia Pacific travelers and 25% among travelers from the Americas.

A significant percentage of Europeans – 70% –say they do not plan on changing their purchasing behavior for spirits — significantly higher than the global average of 56%. And 74% of Europeans say they will not change their shopping of Gifts and Souvenirs, compared to only just over half of all travelers globally (53%).

Expect lower in-store spend

Despite the positive news on purchase intensions, spend levels are likely to be impacted among European travelers when shopping in duty free and travel retail on future international flights. Those European travelers who will shop or spend less in the duty free shops, says they will divert their spend instead to physical stores at home, online and downtown duty free shops.


Peter Mohn, CEO & Owner at m1nd-set, stressed the need for retailers to rethink their digital marketing and e-commerce activities: “As we have underlined several times in the past, the current trends and shift to online spending are a major call to action for the travel retail sector to upgrade its online strategy. This is essential for both the e-commerce offer and digital marketing activities to prospective customers – passengers and consumers while they are in the process of booking or searching for travel.”

According to m1nd-set, it will be vital to ensure the airport shopping experience is front of mind and part of their planned shopping during their next international trip. The research agency argues however that in order to achieve this effectively and successfully, there will need to be significant changes to the way stakeholders market to consumers.

Mohn continued, “While data-sharing has been taboo among travel retail stakeholders until now, the Coronavirus has forced all companies across the industry into a corner. The current pandemic may be the catalyst to a more collaborative approach and real partnership model where airlines and airports – and more importantly, their commercial partners – finally start working together to drive travel retail revenues, where all parties benefit.”

The report made its calculations using m1nd-set’s Business 1ntelligence Service (B1S) traffic tool, based on traffic data from IATA.