Page 7 - CiR - State of the Nation 2018 - Sampler

Rather than being a threat to Travel Retail (in terms of average spend) LCC passengers present a sizeable future for retailers and operators
...but they do need a separate vision to unlock their spend
© Counter Intelligence Retail
“Low-cost has seen a significant increase in passengers, so we need to really deliver what these passengers are expecting. We have different commercial concepts that will accelerate sales based on low-cost passengers...maybe the average spend per passenger will drop but we believe these passengers will be a big contributor to the companies sales”
Difference in Japanese LCC average spend vs regular airline PAX, by category
Companies need a specific LCC strategy to attract a passenger that, historically, is much less likely to spend big in a single transaction. Their value, however, comes in being specifically targeted with promotional campaigns or innovative means to drive incremental spend. Japanese LCC passengers –
Julián Diaz, Dufry CEO (May 2018)
Tobacco
are over-indexing their spend by +$154. Confectionery
$10.27
$153.89
$46.99 -$8.90
versus Japanese travelling on-board a regular carrier –
www.counterintelligenceretail.com
Beauty their motivators and drivers to purchase. Alcohol
$200 $100 $0 -$100 -$200 -$300 -$400
This is invaluable for airline retailers to understand
Difference in Total Duty Free Avg. $ Spend on "LCC" trips vs "Regular" trips
Japan
$0
$50
$100
$150
$250 $300 $350 $400
$450 $500
Source: CiR Global Segmentation Study
Chapter 4 Operator & Carrier Dynamics 7
UK Germany Spain
France Norway
Russia
India
USA
S. Korea Mexico
Thailand China
$200
Average $ Spend on "LCC" trips
Difference of Avg "LCC" Spend vs Avg "Regular" Spend