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CIR

Beauty in travel retail – more than skin deep

The beauty segment in duty free and travel retail is the biggest by far – and continues to outpace growth from other products segments. In 2017, beauty’s share of the market was twice as big as the nearest category of wine and spirits, and its growth rate was almost +20% (according to data from Generation Research).

As such, beauty has very deep roots and remains the core category of the channel. Travel retailers around the world rely on it as a base revenue stream.

In this context, duty free and travel retail analyst Counter Intelligence Retail has surveyed the DF&TR market to find out how the beauty category can maintains, or even increase, its strong momentum.

Among all product groups, CiR found that beauty has the third highest average spend in travel retail at US$144. While this is well behind the luxury categories of Jewellery & Watches, and Fashion & Accessories, the volume of visitors going into beauty areas is much greater due to the relative price accessibility of prized brands. The names most looked for were Chanel, Estée Lauder and MAC.  

“About 40% of travellers actively visit a duty free or specialist retail store while in the airport, with almost half going on to browse the beauty category. Of those browsing beauty, almost two thirds go on to make a purchase,” said comments Garry Stasiulevicuis, Founder and President of CiR. “That is a high conversion rate and reflects the sizeable demand that is being seen for the category.”

High average spends from Asia Pacific travellers

The strongest demand is coming from Asian markets. The CiR study shows the highest levels of conversion and average purchasing is from Asia Pacific nationals. These travellers spend significantly more in the category even though their conversion rate, while high, is only slightly more than the global average. 

The lowest levels of conversion come from Middle Eastern and African nationalities, yet their average spending in the beauty category is also higher than average.

“Clearly Asia Pacific and Middle East and African travellers are willing to spend more for beauty products,” says Stasiulevicuis. “If travel retailers can raise the conversion rates for Middle East and African travellers in particular, they will be onto a winner in terms of increasing their beauty revenue.”

Key behaviours offer opportunities

Other top-line takeways from the The Beauty Shopper Review 2018 include the following:

– Female fragrance is the most visited and purchased beauty sub-category, but the highest conversion rate is for Cosmetics

– Well-known brands like Chanel and Estée Lauder drive beauty purchasing although, interestingly, in men’s skincare and fragrance the two leader brands do not appear anywhere among the top four favourites in the women’s sub-categories

– Over half of beauty buyers tend to purchase their regular brand, but attractive pricing and samples influence non-regular brand purchasing, with almost one in 10 buying a brand for the first time

– Just under half of beauty buyers are willing to purchase a more expensive item than they would normally buy domestically, indicating the trading-up potential that exists in duty free.

The Beauty Shopper Review 2018 from CiR contains many more insights and trends about the changing shopping habits in this high-growth product segment within the travel retail market. In-depth data can also be found on the following:

- Arrivals duty free shopping behaviour

- Trends in the beauty sub-sectors from male skincare to female fragrance

- Purchase drivers for beauty based on region

- Global traveller trends and forecasts.

The Beauty Shopper Review 2018 is based on research conducted online from a nationality representative panel – with all respondents having travelled in the last 12 months. The total sample size was 22,741 interviews, of which 8,002 were beauty visitors.

For further information: Please contact StephenH@counterintelligenceretail.com

Other top-line takeways from the The Beauty Shopper Review 2018 include the following:

– Female fragrance is the most visited and purchased beauty sub-category, but the highest conversion rate is for Cosmetics

– Well-known brands like Chanel and Estée Lauder drive beauty purchasing although, interestingly, in men’s skincare and fragrance the two leader brands do not appear anywhere among the top four favourites in the women’s sub-categories

– Over half of beauty buyers tend to purchase their regular brand, but attractive pricing and samples influence non-regular brand purchasing, with almost one in 10 buying a brand for the first time

– Just under half of beauty buyers are willing to purchase a more expensive item than they would normally buy domestically, indicating the trading-up potential that exists in duty free.

The Beauty Shopper Review 2018 from CiR contains many more insights and trends about the changing shopping habits in this high-growth product segment within the travel retail market. In-depth data can also be found on the following:

- Arrivals duty free shopping behaviour

- Trends in the beauty sub-sectors from male skincare to female fragrance

- Purchase drivers for beauty based on region

- Global traveller trends and forecasts.

The Beauty Shopper Review 2018 is based on research conducted online from a nationality representative panel – with all respondents having travelled in the last 12 months. The total sample size was 22,741 interviews, of which 8,002 were beauty visitors.

For further information: Please contact StephenH@counterintelligenceretail.com