Plane Sailing: Why airports are the fastest growing physical retail channel

Retail | 12.02.2020

Airport Retailing Today

This report into the retail offering at airports around the world looks at part of the retail sector that is booming in spite of well-publicised travails on the high street. In recent years airport retailing has changed from a channel which may have been considered as an afterthought, to one which is recognised as a strategic location by some of the world’s leading brand owners and retail organisations.

Air travel continues to grow globally, with more of us travelling in this increasingly small and more connected world. Environmental issues are high on the world’s agenda and airports find themselves in the middle of the conversation given the high impact flying has on CO2 emissions. ‘Flygskam’ or ‘flight- shame’ has officially become a movement in Sweden. However, they were one of only a few countries in Europe to have seen a decrease in the number of people taking flights in the early part of 2019. In fact, according to the International Air Transport Association (IATA), airlines carried 4.4 billion passengers on scheduled services, an increase of 6.9 per cent since 2017, representing an additional 284 million trips.[1]

The relative affluence of air travellers compared to the average shopper has always been high. This has been added to by a significant and growing volume of international passengers, 22,000 pairs of cities were connected by direct flights in 2018, an increase on 1,300 year-on-year and double the number of cities (10,250) connected in 1998.[2] This means that travel locations provide retailers with an opportunity to put their brands in front of tens of millions of potential consumers.

Airports have made significant investments in their commercial areas over the last ten years, creating modern, premium environments to attract new brands and grow the appeal of the retail offer to an increasingly sophisticated and international customer base. The results show around the world in new and transformed departure lounges offering incredible architecture, experiences and an extensive choice of retailers, brands and products. A key advantage of airport shopping is that customers will be physically present as they are primarily there to take a flight and so will interact with these experiences in person, unlike the high street where customers can increasingly choose whether to interact on-line or in-store. Digital advancements in airport shopping can only enhance the overall experience and simplify the purchasing process – not replace it.

For international travellers, shopping for luxury brands is a favourite pastime and the airport departure lounge has become another opportunity for them to enjoy their hobby. This trend is reflected in the impressive growth of luxury brands in a sector that has performed well across the board. The Data Circle reported in May 2019 that the total global travel retail market grew by 9.3 per cent to US$76 billion in 2018, with spending in the beauty and luxury categories in particularly driving the growth. According to Bain & Company’s figures, luxury sales in airports grew by 7 per cent in 2018, with only online sales outpacing luxury purchases in airports.

The beauty category remains the largest market in airport retailing with over 35 per cent of the total travel retail market and is continuing to grow strongly. Airport retailing is so important to beauty and cosmetic brands that many now launch products first in an airport, followed by department stores or high street locations. The importance of airport retailing was illustrated by Estee Lauder’s 2018 results, where it disclosed for the first time that sales from airports globally outstripped sales from US department stores.

Retailers are increasingly reporting that their most important and commercially successful stores are now located in airports or train stations. WHSmith is one example of this. While the high street business struggles, the travel retail business is thriving and driving growth across the company as a whole. WHSmith reported in April 2019 that within its travel retail arm, sales rose by 18 per cent and profits increased seven per cent compared to its high street business, which saw revenue fall by one per cent. This is why WHSmith has turned its attention to ensuring these stores represent the very best of its business and is embarking on a significant global expansion in travel locations.

Securing space in airports however, is extremely difficult and competition is fierce. Retail space in airports will always be constrained, with demand often outstripping supply in the most commercially attractive airports. Many airports are regenerating their terminal facilities and commercial spaces to expand their retail offer and capitalise on the increased demand, commercial potential, and to accommodate the needs of the major retailing groups.

Short contract pop-up stores have also become commonplace in airports. These spaces offer an alternative for brands wishing to expand or take their first steps in travel retail, especially when store opportunities are limited. Pop-ups enable airports and brands to test customer reaction in a low risk fashion while also refreshing their retail offer on a more frequent basis.

The brands and retailers most successful at securing space are those which can show a tailored approach to travel retail and really understand the intricate nuances of trading in airports compared to downtown locations. Retailers that use airports as flagship locations and offer airport passengers exclusive products and store experiences to rival the very best downtown stores are more likely to secure space than retailers who simply want to open just another store.

Gone are the days when airport stores were the poor relation of their downtown counterparts

Simon Black, executive director and head of travel retail, Harper Dennis Hobbs




Top 10 European Airports for Shopping



Copenhagen and Heathrow airports are joint winners in our analysis of the best airports for shopping in Europe, although for very different reasons.

Copenhagen Airport’s passion and vision to create a sense of place through the careful selection of retail and brand partners is a feature of the airport that really stands out to us and sets it apart from the other European airports. The airport has curated a brand and product mix which celebrates modern Scandinavian style and tastes with sought-after internationally recognised brands, and always aims to ensure there is a shopping opportunity for everyone. It’s no surprise that the airport has won the ACI Airport Service Quality (ASQ) best airport for shopping in Europe seven times.

The result is an airport offering a diverse mix of brands and products. Our local favourites include Danish fashion brand Wood Wood, the globally recognised toy brand Lego, and luxury liquorice from Lakrids. Copenhagen Airport also attracts brands from further afield.  Scandinavian gem Arket chose to open its only airport store at Copenhagen, and a shared affinity with Danish design saw British brand Paul Smith expand its direct airport retail operations here. Global luxury powerhouses Gucci, Hermes and most recently, Saint Laurent have also successfully opened their doors here as Copenhagen’s luxury market takes off.

The volume of retail space to passenger numbers at Copenhagen airport is one of the most generous in Europe and contributes to the airport’s success. The design of the airport, with the single roof terminal, helps optimise passenger dwell time as well as providing brands with access and visibility to over 80,000 passengers a day.

Heathrow has a well-established reputation for its shopping offer and has won the Skytrax award for Best Airport Shopping for a record breaking 10 years. What really caught our eye is Heathrow’s well established and customer-centric pricing policy – Heathrow guarantees customers will never pay more than the high street equivalent in any store, and in the majority of stores customers can enjoy a saving of as much as 20% on the down town price. In a world where customers are on the look-out for ‘rip-off’ pricing, this type of promise helps to create a reputation for airports as attractive places to shop/shopping destinations.

Heathrow is also known for being ahead of the curve in delivering world leading concepts and brands – it was the first airport to introduce restaurants by world leading celebrity chefs, the first to bring key luxury brands such as Prada and Tiffany to European airports, and has consistently delivered award winning, innovative concepts such as the Harry Potter store in T5.

Where Copenhagen has an edge over Heathrow is in terms of the breadth of product offer, mixing accessible offers like H&M and Flying Tiger with exclusive prestige brands. Heathrow stays very firmly within the luxury space and has a limited offer at a price point reachable to the average shopper.

Where Heathrow has the upper hand on Copenhagen is in terms of pricing – the products in the luxury stores may be more exclusive but the customer is guaranteed they are not paying more than they would down town, and in most cases are making a significant saving.


What does the future look like?


The future of airport retailing looks very positive.  Air travel is stronger than it has ever been and passenger numbers are forecast to increase dramatically over the next two decades with IATA predictions that airline passengers will double to 8.2 billion by 2037.[3]

All forecasts point to continued growth in the market as airports invest in the development of their terminal and retail propositions, and more brands focus on the channel, their store concepts and improving the product assortments available to passengers.  However, the availability of future retail space is unlikely to fully satisfy demand.

Technology is increasingly playing a key role in how passengers interact with an airports retail offer. With the high demand for retail space, we see both airports and retailers investing in ways to expand their product range beyond the confines of the traditional airport retail store.   Pre-ordering, reserve and collect and home delivery services enable retailers to widen their assortment and provide passengers with the opportunity to plan their airport shopping in advance of their journey through the airport.

This insight means it makes sense for retailers to build a strong global airport strategy so that they can move quickly when spaces become available giving themselves the best chance of winning tenders in an increasingly competitive market.

Further to this, a strong and flexible operational infrastructure is essential to support airport businesses. Brands can come unstuck if the complexities of trading in the unique environment of an airport are over looked.





 As a result of the positive economic climate in travel retail, and positive forecasts for air travel, airports are continuing to invest in their terminal facilities and commercial environments.

These investments present airports with opportunity to review their commercial offer both in terms of brand mix and product selection and the layout and design of space and store sizes.  Tapping into the zeitgeist of retail trends and changes in consumer behaviours and preferences is essential in curating a successful future airport shopping proposition.

Despite the anticipated growth in airport commercial space across a number of key European airport locations, demand and competition will be high and space will continue to be at a premium. The challenge for airports will be how they differentiate an offer often dominated by global brands and still balance the books.

Airports should seek new ways to engage with their customers and look for brands who are authentic, transparent and responsible, who can offer new and relevant services and experiences to their customers.



Travel retail experts at Harper Dennis Hobbs have developed the airport ranking based upon a number of metrics including:

  • The quantity of retail units per departing passenger (so that all airports, regardless of size, can be fairly ranked)
  • The range and breadth of the retail offer – the number of brands and retail categories on offer to the passengers.
  • The customer satisfaction of the shopping environment in the International Departure Lounge
  • HDH has included a metric on the price/value proposition of each airport.

Airports have been ranked as a whole. There will be some terminals which analysed in their own merit could rank higher than the airport as a whole.







Recent posts

More from the blog

Retail | 12.02.2020

COVID-19 – Impact on EMEA

COVID-19 – Impact on EMEA (July 2020)

Read more
Retail | 12.02.2020

Our Chairman David Harper shares his opinion with Property Week

Harper Dennis Hobbs chairman David Harper shares his opinions with Property Week on why the relationship between landlord and tenant has never been more important, …

Read more