Technology will be key in boosting duty-free shopping

Duty-free shopping was the brainchild of Irish businessman Brendan O’Regan, who worked at the country’s then struggling Shannon Airport during the late 1940s as a catering comptroller. In the space of less than a century, O’Regan’s concept moved from being a local initiative to becoming a $70bn business welcoming tourists in almost all airports around the world.

GlobalData’s Airport Technology writer Adele Berti looks at the future of duty-free shopping. Berti says: “Contrary to popular belief, duty-free products are not necessarily cheaper than those sold online or on the high street. Overall, there is no regulation obliging duty-free retailers to pass on tax savings to customers, so prices vary based on jurisdiction and shops, as well as the local tax structure.”

So why is duty-free shopping still so popular?
Maureen Hinton, group retail research director at GlobalData, explains: “Sometimes there are items that you can only get there, like limited-edition products. Duty-free is there at that stage where you are in a waiting mode, so it’s convenient because it fills that time, but it doesn’t necessarily mean it’s cheap. The convenient aspect of is that if you’re going on holiday and need a specific product, it’s easier and quicker to buy it at the airport than on the high street.”

“Operators are also introducing online orders that you can then pick up in-store at the airport. Another recent trend is that duty-free used to be when you were arriving at an airport, but now we are beginning to see more of it on departure.”

Technology will be key in improving customer experience, with solutions such as augmented reality (AR) and AI-powered robots already making their way to some airports.

Hinton concludes: “It’s all about the products and the experience you have with them and AR gives the opportunity to experience a product in a different environment.”

Tags: GlobalData