Has travel retail lost its touch with Gen Z?

Airport duty-free sales have failed to keep pace with air traffic since the pandemic. This is one of the conclusions of a study by consultancy Oliver Wyman, based on a survey of 3,825 travellers and industry executives. While passenger numbers rose by 7% between 2019 and 2025, overall duty-free revenue was flat (-0.2%) over the same period, though the sector still has promising prospects.

This underperformance masks pronounced regional disparities, according to data from the ‘Global Travel Retail Pulse’ report. The Asia-Pacific region, for example, is $7.6 billion short of initial forecasts. Average sales per traveller there fell by 22% to $7.56, even though passenger traffic grew by 6% in this market.

Europe, meanwhile, is generating a $3.1 billion surplus. The European market is benefiting from a 14% rise in spend per passenger, reaching $9.89, underpinned by infrastructure investment, the affluent profile of travellers and the return of duty-free shopping following Brexit.

North America, the Middle East and South America, meanwhile, report deficits of $0.9 billion, $0.6 billion, and $0.2 billion respectively.

Outside Asia-Pacific, perfumes and cosmetics have emerged as a key growth driver. Average sales per passenger stand at $1.74, having increased at an average annual rate of 4.3% since 2023. By contrast, fashion and accessories have declined (-1.7%) to $1.32 per passenger.

Similarly, wines and spirits have edged down (-0.3%) to $1.06. Tobacco, by contrast, is performing well, with revenue per traveller estimated at $1.07, representing annual growth of 6%.

The challenge of younger generations

However, purchasing behaviour is changing rapidly with the emergence of new consumer groups. Millennials and Generation Z will account for 81% of air travel-related spending by 2035. Generation Z travellers make 1.7 times as many journeys as baby boomers, yet spend 10 minutes less in the boarding area.

These young consumers appear less interested in traditional airport shops, with only 19% preferring this channel to the high street or shopping abroad, compared with 49% of older travellers. Product quality tops their selection criteria (64%), ahead of price (51%) and brand trust (43%).

Conversion potential now largely depends on the discovery of new products. Almost all of these young travellers (96%) say they have discovered brands in airport retail areas. Nearly half of them (49%) make a purchase immediately after this discovery phase.

“Travellers are increasingly seeking out novelty, whether emerging brands, airport exclusives, products with a strong local flavour or regularly refreshed collections that give them a reason to return,” explains Pierre-Alexandre Koch, partner at Oliver Wyman. “Product trials, demonstrations, immersive experiences and storytelling help turn a simple browse into a genuine experience.”

These figures will inform how airport retail operators adapt their retail spaces to meet this appetite for novelty. And this, the document points out, can be achieved in particular through immersive design, exclusive product ranges and, above all, transparent pricing.