CANNES, France — Beauty products are going more mass and class in travel retail these days.
On the one hand, there’s a growing premiumization of the offer, as noted at the recent Tax Free World Association annual meeting here. A case in point is The Body Shop, which its executives said is to go through a shift in the next couple of months.
“There is a dramatic transformation of the brand,” said Mathieu Guichardaz, general manager travel retail for the label, explaining the look and feel of Body Shop packaging will be different, with more elegant codes and new shapes. “We will remain an accessible brand but with ‘premiumness’ in our product. It is still a small business, but there is a fantastic opportunity for growth in coming years.”
Until now, the L’Oréal-owned label has been mostly known for bath-and-body products.
“Skin care will represent more than 50 percent of the [brand’s] sales in 2020 in travel retail,” said Guichardaz during a press conference.
World Duty Free is bolstering its ultra high-end perfume offer in airports. The operator has, for instance, signed on numerous brands’ private collections and dedicated space to niche labels.
In Heathrow Terminal Four next year, World Duty Free plans to inaugurate a shop stocking only niche fragrances.
“We think the consumer is looking for a wider range of products, and it’s proven to be extremely successful,” said Antonin Carreau, global head of beauty at the retail operator.
For its part, Chanel began selling in Paris’ Charles de Gaulle Airport a 225-ml. No.5 extract, which is only available in the brand’s boutiques through advance order. It costs more than 2,000 euros, or $2,148 at current exchange.
“We have sold 12 of them already in one year,” said Jean-Guillaume Trouvin, managing director of export for the label, adding it’s key to showcase something properly and make people dream so they realize what they’re buying is quasi-unique.
Chanel was set to open in Singapore’s Changi Airport a lounge offering a concierge service for travelers that’s free of charge and located one floor above its commercial space.
On the other end of the scale, due to the rise in middle-class and low-cost travelers, there’s been a skewing toward lower-priced offers, too.
“We need to adapt our retail, service and price progressively,” said Carreau. “We do need to think about democratization of our ranges, trying to ensure also the good value perception of the products.”
DFS also plans to tweak some of its assortments as Hong Kong becomes less of a shopping mecca for Chinese from first- or second-tier cities and more for those from third- and fourth-tier cities.
“The level of brand awareness is really limited,” said Ariel Gentzbourger, senior vice president, general merchandise manager of beauty at the operator. “There’s a conversion issue there. It’s a bit like back to reality.”
Shiseido is launching its Anessa line, which is especially popular with Chinese and Koreans, as a mass-market brand in travel retail, as well as in Asian local markets.
“The value perception is definitely something we are working on with our partners, our retailers, with more visible savings, brands and offers,” said Elisabeth Jouguelet, marketing director for travel retail at Shiseido, who noted business is growing quickly for Aupres and other affordable brands.
Amid the wild shifts in the marketplace this year, the Estée Lauder Cos. sees a silver lining. Currency devaluations may have dampened the enthusiasm for the once deep-pocketed Russians, Brazilians, Indians and Chinese to travel, but there is good news.
“They tend to buy in the domestic market,” said Cedric Prouvé, group president of international at Estée Lauder Cos. Inc. “Right now our business in Russia and Brazil are doing really well — domestically. It’s growing in the high-double digits on a like-store basis.”
He said among the solutions to mitigate effects of today’s volatile marketplace “is to make sure our pricing strategies are in line around the world,” to protect pricing margins. Lauder has made increases in Russia and Brazil, where the devaluations are the most severe, “but we also are adjusting in other places,” explained Prouvé. “Our European business is strong, both domestically and travel retail, because of the weak euro. The Europeans themselves are buying locally because the euro is not worth as much when they travel. And there are a lot of tourists, especially Chinese.”
But reports out of the U.S. indicate that the Chinese business has dried up.
“They are a lot less visible because the dollar is strong,” Prouvé added. “But they are going to the U.S. They are not shopping as much.”
Such subtle changes in passenger flow are seen around the world.
“There’s a big shift from Hong Kong to Japan or Korea to Japan, where the yen is weak,” the executive concluded.