Make no mistake about it, the sale of sunglasses at airports is big business with the latest data by Mindset-Generation data revealing that the category was worth $1.69 billion in travel retail sales worldwide in 2015.
Between 2005 and 2015, sunglasses has been the second fastest growing product category at a compound annual growth rate (CAGR) of +12%, only behind skincare, which is booming in Asia in particular.
That is very impressive growth from sunglasses, taking into consideration that the total fashion & accessories category grew at +8.7% CAGR and the total sector including all categories grew +7.5% CAGR over the same period. Airports represent the largest channel within travel retail for sunglasses.
Indeed, Mindset-Generation predicts that sunglasses will be worth $7.85 billion in travel retail sales by 2025, which points to consistently high growth for the category over the coming decade.
How will we achieve that growth? I firmly believe that travel retail needs a common category vision, a precise strategy and significant investment from all Trinity stakeholders. That’s investment in money, time and creative energy to get to the size the sunglasses category could be.
Airports have a very important role to play in responding to the growth trends and giving sunglasses the appropriate space and high-quality visibility that we require to maximise the potential, and in turn maximise non-aeronautical revenues for airports.
As the category leader and also an active category-growth partner, Luxottica is more focused on growing the overall category pie than fighting for the slices.
Uniquely, we are part of a group of seven of the leading sunglasses suppliers – De Rigo, Essilor, Kering Eyewear, Luxottica, Marchon, Marcolin and Maui Jim – that this year have developed a common category vision for travel retail, which we unveiled at the TFWA World Exhibition in October.
Vision 2020 is a roadmap for growth, bringing the category closer to new consumer trends, as well as promoting the latest category strategies specifically tailored to the shopper in global travel retail, and to airports in particular.
Vision 2020 is about making travel retail the expert channel for sunglasses. The shopping destination of choice for consumers when they want the best and most comprehensive shopping experience for sunglasses.
We want to differentiate the sunglasses category in travel retail compared to domestic markets and pure e-commerce, and elevate the category to an innovation leader in the channel. We want retailers to try things in sunglasses as a pilot for other categories, particularly in an omni-channel world.
Sunglasses as a pilot
Sunglasses can be the pilot category in travel retail, where retailers and airports trial new initiatives before rolling them out across all their categories.
I think sunglasses are perfectly placed to do this, as it is a category that appeals to all travellers and so inherently link to a travel lifestyle.
Personally, I would like to see every airport, airline, cruiseline and downtown complex audit the way they present the sunglasses category and develop bespoke strategies to drive growth, with clear and realistic targets – in partnership with their retailers and the leading brands in the category.
Multi-formatting strategy for travel retail
Luxottica firmly believes that the continued growth of sunglasses will be driven by the increased adoption of multi-formatting. This strategy revolves around executing the sunglasses category in different formats at different stages in the passenger journey through an airport, targeting varying shopper needs and behaviours.
This spans a sunglasses department in the main duty free shop, sunglasses in a brand boutique with the best mono-brand experience, and a specialist standalone sunglasses shop with definitive specialist service and the most extensive range and after-service support.
Then we have the last-minute and Arrivals stores for fast purchases – often of the best sellers – and pop-up promotional concepts, which bring additional tactical visibility and interaction for the category.
Pop-ups are also effective in increasing the visibility for the category in peak seasons such as summer months or promoting new technologies. We have the case studies and the best practices that demonstrate that this strategy drives incremental sales growth and does not cannibalise sales from one point of sale to another.
Within sunglasses departments inside the main duty free store, Luxottica is focussed on driving category penetration by sign-posting the category with an anchor brand; personalised merchandising of category icons such as Ray-Ban and Oakley.
This is taking place in airports in all regions and with most key retailer partners, and the sales uplift we see for both Luxottica’s brands and the total sunglasses category tend to be in the high double-digits.
Standalone sunglasses concepts such as Luxottica’s own sun retail brand, Sunglass Hut, are also a key component of multi-formatting at airports, and we have ambitious plans to grow the Sunglass Hut brand in airports worldwide.
Today we have 165 plus airport stores as part of a global network of over 3,300 stores and, in fact, six of the top 20 best-performing Sunglass Hut shops worldwide are at airports.
One of our biggest success stories for the brand has been the opening of a 76.5sqm flagship Sunglass Hut store at London Heathrow Airport’s Terminal 2.
Instrumental to this success was Heathrow Airport’s commitment to growing the overall sunglasses category across their four terminals. In an industry first, the airport – a pioneer in adopting the multi-format approach – set a spend per passenger target for the sunglasses category, and supported this with extensive on and off-airport marketing activity through its digital and CRM platforms to make the category more visible to passengers.
The results have been exceptional, and this particular store at Terminal 2 became one of Sunglass Hut’s top shops worldwide and the most productive specialty fashion & accessories store in the terminal in sales per square metre.
New space and innovation
Experiential activities will be a critical factor in the future growth of our category. This requires innovation from brands – maximising our creativity and ability to tell stories – combined with the exciting platforms that travel retailers and airports can provide.
I’d like to see retailers reward this innovation with longer-term promotional slots for the sunglasses category, meaning the investment can deliver a better return.
Sunglass Hut is doing some very cool work around point-of-sale in domestic markets which could likely make its way into travel retail in the future. In our London Soho flagship, for example, we have introduced a ‘Pop In Shop’, which changes quarterly.
Concepts have included a Ray-Ban artist series with the graffiti artist Mr Brainwash. Additionally, selected stores globally now have a Luxury Room, where we present our luxury collections in a destination shop.
Locations where this has been executed include 5th Avenue in New York, Miami, Cape Town and London – including Heathrow Airport Terminal 5, and more recently a Luxury ‘Bar’ in our Terminal 4 store.
Ultimately, our ability to deliver these kinds of innovations in travel retail is somewhat dependent on space limitations. Many airports want to focus solely on deriving the highest possible productivity from every square foot, sometimes at the expense of these customer-experience focused elements.
Going forward, the best way to make travel retail the expert channel is to better balance productivity with experience – even if the sunglasses category and/or Sunglass Hut, can deliver the productivity, we are a category that adds a return beyond the financial.
We bring payback on the emotion and experience of the passenger. This will shift consumer perceptions and deliver great rewards for all in the long-term. I also think innovation is not always about what consumers see in-store. For example, just as important are the fundamentals of retail such as supply chain.
For our part, our Stars Programme is built around an inventory management software platform that is designed to improve sales performance in areas such as product assortment, continuous product refresh, optimised stock levels and automatic stock replenishment.