Sustainability in Global Travel Retail

The concept of the 3Ps (Planet, Profit, and People) is not a new concept in marketing terms, however since Covid turned the whole Global Travel Retail upside down, its relevance has massively increased.  Smaller brands and vendors operating in the travel retail industry and operating from one location may not realize the impact on their future sales possibilities.

At the MEADFA Conference in Bahrain in November 2022, the subject of sustainability was touched upon by big global travel retailers such as DUFRY, AER RIANTA, and LAGARDERE. As these companies are either publicly listed or partially owned by governments, their policies of sustainability will be taken very seriously and this can impact the range of products that are being sold in duty-free retail. If a retailer’s goal is to achieve a net-zero CO2 footprint by 2023 for example, the company will do at first everything that is in its direct control to achieve that, but secondly, it will also force its vendors to comply with that on very short notice. All the big retailers have by now formed internal teams globally to address these goals and action plans.

What does that mean?  Well, vendors with products that fit 3 criteria will get priority over others.

(a) PEOPLE – is your product helping a social cause, does your brand have the right reputation of paying fair salaries, does it support inclusion, and gender equality?

(b) PROFIT –  an often argued point between retailers and vendors is the margins, as Travel Retail operates from very expensive locations. That will remain. For vendors, there would be an advantage if your brand can show that it is not just about making profits. How flexible is your brand in absorbing price increases, do you contribute part of your profits to a social cause?

(c) PLANET – Biggest CO2 impacts are coming from long-haul flights. If your product needs to be flown in from one location where you produce it to the other side of the world, it would be a factor that gets (negatively) considered by retailers. Packaging, recycled items, natural materials usage, number of stocking points, etc could be other factors.

Sustainable products are the ones that fit the 3 criteria. And obviously, those are the ones that will be at the top of the list by retailers. As a consequence, there is a growing direction of LOCAL sourcing.  All of the big retailers are going to be /have already launched store concepts aligned with 3Ps in one way or another. The sector often got branded in the past as selling things people do not really need; that is changing now rapidly. The passenger traffic in the future will keep growing, it is how vendors/retailers change their offerings that will make the difference.

Do you want to know more about this? Do not hesitate to reach out to us.


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