Chanel and Rolex will each open a boutique at Incheon International Airport Terminal 1 in September, under Hyundai Department Store Duty Free’s licence, Incheon International Airport Corporation (IIAC) confirmed to The Moodie Davitt Report.
Chanel will open a 400 sqm luxury fashion and jewellery store, while Rolex will open a 212 sqm luxury watch store in the terminal.
The latest luxury developments at Incheon were discussed by IIAC Director of Duty Free Management Sung-Bin Im during Thursday’s TFWA Asia Pacific Hainan Special Edition virtual conference. He made his remarks on a panel that also included presentations on the future of luxury from Lagardère Travel Retail Chief Commercial Officer China Sabrina Wang and Lacoste Travel Retail Director Asia-Pacific Erin Lillis.
Im said that the openings of high-end luxury stores was an “impressive” signal despite the impact of the COVID-19 pandemic, which saw total duty free sales fall from a high of US$2.53 billion in 2019 to US$590 million in 2020, with passenger traffic down by around -80% from 71 million to 12 million.
Im highlighted the rise of luxury sales at Incheon over the past two decades. In 2001, duty free fashion sales were worth US$67 million, a figure that reached US$689 million by 2019.
He said that there remained strong demand for luxury at the airport, including among Korean consumers. He highlighted the opening last December of a premium children’s fashion store, to meet increasing demand for “gold kids’ products” as an example of diversification in the luxury category.
Also, Gentle Monster Eyewear opened its latest store concept last month at Incheon in a larger area and better location, he said.
Im also said that IIAC planned to be more flexible and adaptable in its partnerships, noting that it had reduced rents by -95% to many tenants to help them cope with the crisis.
He said that business partners were permitted to operate on flexible or shorter opening hours, and also saluted the impact of ‘flights to nowhere’ which had helped deliver some sales for the duty free business.
“These have provided oxygen for the airport duty free shops even if sales are small,” he said. Since these flights began, luxury has accounted for 63% of sales.
Looking ahead, Im said that the mission of the airport would be to create omnichannel purchasing opportunities, combining online and offline, the chance to pre-order and pre-pay along more product trial.
“Who is the consumer of the future and how do we remain relevant? Millennials are digitally savvy, always connected, tasteful individualists, who need content that is relevant. They do not just want one more shopping channel but also convenience, communications, data, information. For luxury, this does not mean that the store becomes less important. Touch, feel, sense, emotion will remain and you cannot get those online so the purchasing experience in-store is important,” said Im.
Under an updated plan for Terminal 2, art and culture will be blended with luxury, he added, with IIAC foreseeing K-Pop experiences and artist collaborations as key features, as it aims to create a “a new paradigm” for the airport space.
“We aim to create a luxury landmark where consumers can enjoy new experiences,” he said.
(Source: Moodie Davitt Report)