BW Confidential - Issue #3 - September 2010 - (Page 42)

Travel retail Inflight sales On-board beauty takes a nosedive Fragrance’s sweet smell turned sour in 2009 as the category dramatically declined in the inflight market by Kevin Rozario A re inflight consumers falling out of love with fragrances? It looked that way in 2009 when women’s scents, the longstanding top category in airline sales declined by 12.8%. This made women’s cosmetics the number-one category on airlines, according to Sweden-based analyst Generation Research. All in all, total inflight beauty sales declined by 10% to $918.7m. The decline in fragrances was worse than that of sales in the airline sector overall, which shrank by 10.8% to $2.39bn in 2009. This, in turn, was far worse than the 6.8% decrease in the global travel-retail channel, which reported sales of $34.5bn. Is the price right? One of the problems in fragrance is price. At Virgin Atlantic Airways, handled by South Africa-based inflight concessionaire Tourvest, cosmetics have held steady, while fragrance has relied on price-driven offers. “In the fragrance sector there has definitely been a resistance to higher-priced items; while cosmetics and women’s fragrances kept their contributions the same as the year before, men’s fragrances lost market share,” says Tourvest Duty Free merchandise executive inflight duty-free sales Anthony Fletorides. “In the cosmetics arena we have tried to grow the lines which have worked for us by making more of a brand statement, while on the fragrance side we have tried to have better value offers,” he continues. Offering increased value and savings is still key to getting consumers to buy fragrance and increasing their overall spend in the inflight channel. “We encouraged credit: stock.xchng our passengers to buy large quantities with campaigns and savings; if the saving is high enough they are able and willing to buy higher-priced products,” says Thomas Cook Airlines Scandinavia Purchasing manager duty free/travel retail Niels Holmstrup Olsen. “In our part of the world, and with our kind of guests, the main buying parameter, besides convenience, is the price of the products compared with the normal shops. Therefore price and promotions have the biggest role in the future if we want to obtain better sales” he adds. Thomas Cook Airlines Scandinavia is among the top five airlines in the world for inflight sales and its beauty category in 2009 was up by 4%, less than the 7% increase seen across all product categories. As a chiefly holiday-based carrier, the airline’s 2.2 million passengers are extremely price driven. However, while fragrance inflight sales nosedived, demand for high-end cosmetics was greater in some cases, helping to stabilize the overall beauty business. Gyde Brix, September 2010 - N°3 - BW Confidential 42

Table of Contents for the Digital Edition of BW Confidential - Issue #3 - September 2010

Cover
Contents
Comment
Update
- Brand & retail news recap
- Digital digest
- 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
- O Boticário president Artur Grynbaum
Insight: luxury
- Category overview
- Pricing
- The internet
- Return to quality
Wellness
- The spa consumer
- Spa case studies
Retail
- New store concepts
Travel retail
- Inflight sales
Market watch: US
- Country overview
- Industry roundtable
- Retailing analysis
- Emerging retail channels
Radar
- Six up-and-coming beauty brands
Packaging trends
- Make-up innovations
Last word
- Inspiration&Creation founder Leïla Rochet-Podvin

BW Confidential - Issue #3 - September 2010