BW Confidential - Issue #15 - September/October 2013 - (Page 64)

Travel retail Inflight sales: sector analysis credit: istock Strength in diversity While skincare offers the inflight beauty sector stability, new brands and niche products pave the way for diversity by Tina Milton A ccounting for 5.6% of duty-free and travelretail sales in 2012, the inflight sales market across all product categories is a relatively small one compared to its airport counterpart, which dominated the sector with 60.5% of sales last year, according to preliminary figures for 2012 from Generation Research. Beauty bucks the trend Duty-free and travel-retail sales increased by just 1.4% in 2012 to $2.77bn in the global airline sector. Yet airlines and concessionaires report that this year, inflight beauty sales are bucking the trends laid by the total market. Lufthansa Worldshop, a subsidiary of German airline Lufthansa, for example, witnessed buoyant beauty sales in 2013 compared to last year’s “already strong“ performance. Lufthansa Worldshop sales and marketing director Brigitte Wolf says: “The beauty category is always a strong seller. We make sure that there are novelties in each of the three seasonal inflight catalogues that are published each year. Talika Cream Booster, Bulgari Men Extreme Eau de Toilette and Roberto Cavalli Acqua are just 64 some of our highlights for the July 1 version of Lufthansa’s inflight shopping magazine.” Wolf notes a strong demand for beauty on all routes, especially those to Asia Pacific. She adds: “As of April this year, inflight retail products “ Hong Kong, in particular, has regained strength. Beauty, aside from fragrance, is far ahead of the overall growth on most of our customer airlines ” Inflight Sales Group managing director Tony Detter can be bought on numerous additional intraEuropean routes. This has been very successful.” Meanwhile, in the UK, inflight sales for low-cost and charter carriers have plateaued since their peak five years ago, according to independent inflight retail consultant Philip Hadden. He notes: “It was around this time that airlines became a lot more adventurous, offering a broader selection of skincare and color brands, rather than just tried-and-tested products, such as Touche Éclat. Since then, it has not really grown, mainly due to [economic] austerity measures.” Low-cost airline EasyJet reports that inflight retail sales, operated in partnership with Gate Total Solutions via its Boutique and Bistro catalogue, are trading well, with positive year-on-year increases. EasyJet inflight strategic partnership manager Sharon Huetson explains: “With continued focus on sales performance across Europe, and the development of our inflight range, we are seeing improvement in our European bases, and the UK continues to show a strong performance. Within the Boutique range, skincare and cosmetics is showing the greatest year-on-year improvement. Fragrances have generally seen a decline in sales, while beauty products have seen improved performance.” Growth has been cemented by favorites, such September-October 2013 - N°15 - BW Confidential

Table of Contents for the Digital Edition of BW Confidential - Issue #15 - September/October 2013

Cover
Comment
Contents
Update
Brand & retail news recap
Companies on the move
Take note Market facts, figures & trends
Best of BW Highlights from our e-publication
Launches The latest in fragrance, skincare & make-up
Interview Origins, Ojon & Darphin global president and gm Jane Lauder
Insight: Fragrance creation
Category overview
Industry views
Emerging markets
Consumer data
Role of the perfumer
Retail
Store strategy
Store concepts
Digital Beauty apps
Market watch: Chinese consumers
Overview
Shopping habits
Online sales
Radar A profile of six up-and-coming beauty brands
Travel retail: Inflight sales
Sector analysis
Channel innovations
Emerging markets Company profile: Marico
Packaging
Make-up analysis
Make-up innovations
Last word The Young Group’s Karen Young on industry trends and technology

BW Confidential - Issue #15 - September/October 2013