Duty free shops charge up to 320% more, study finds

Dive Brief:

Airport-based duty-free shops are charging up to 320% more than what can be found on the street, according to a study from U.K. home credit lender Provident emailed to Retail Dive.
Provident looked at items like the most popular Swiss chocolate, spirits and perfume brands found at airport duty-free shops and uncovered prices way beyond what retailers sell them for at their everyday stores. The same pack of Swiss candy Toblerone, for example, was priced as much as 320% higher at one duty-free shop, Jack Daniels as much as 28% more expensive and Paco Rabanne men's cologne as much as 17% higher.
Spending in airports reached a global total of $38 billion in 2016, and that could grow another 27% and reach $49 billion by 2021, according to a report from GlobalData Retail last year. Retail storefronts account for a massive 83% of all spending in airports, according to that report.

Dive Insight:

Travelers stuck at the airport may be captive in a way, but these days they expect as much from their airport shopping as they do from shopping anywhere, according to an email earlier this year from FRCH Design Worldwide Senior Brand Strategist Kelsey Chessey. That calls for retailers and developers to focus on delivering compelling experiences, she said.

"This audience has time to kill and, especially when on holiday, is in the mood to spend," Maureen Hinton, group research director at Global Data Retail, said in a statement last year, noting that Singapore’s Changi airport offers not only traditional brick-and-mortar stores, but also more experiential opportunities like movies, videogames and spas.

If price points at duty free shops are too high, shoppers may be more likely to wander toward a run-of-the-mill mass merchant like Target or a compelling up-and-comer like Lug, opt for salon services or even dive into their own devices.

Airports are increasingly adding familiar retail banners like Target and local independents, according to FRCH Design Worldwide. Hudson Group, which runs several airport stores in North America, for example is now the exclusive airport retailer for FAO Schwarz. Luggage travel accessories retailer Lug, part of QVC 's stable of brands, in June opened its first store at the Baltimore-Washington Thurgood Marshall International Airport. The location features its characteristic vibrant colors and prints, with touchscreen kiosks that help customers try them out, and a "water station" that sells water bottles and provides free water to thirsty travelers.