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Global Travel Flows and their Impact on Fashion

July 2019

The growing number of travellers worldwide has unlocked additional revenues for fashion players beyond their domestic core customers. Primarily driven by favourable pricing, shopping for fashion remains high on traveller’s agenda. Yet, deployment and growing sophistication of cross-border e-commerce is reshaping old-style travel flows and business operations. This report explores the role of travel and explores travel-centric strategies within the context of fashion.

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Key findings

The number of travellers keeps growing worldwide

  reach 1.5 billion trips by the end of 2019. Western Europe, home of world’s leading fashion capitals, remain the most important region in this regard, accounting for 37% of total arrivals.  Global inbound arrivals are expected to grow by 4% to

Shopping for fashion benefits from growing travel flows

As a result, expenditure on destination activities, and on shopping by international tourists in particular, is set to increase by 6% by the end of 2019, reaching USD276 billion.

   Currency fluctuations attract and dissuade likewise

    Currency volatility remains a major factor either encouraging or deterring consumers travelling to certain destinations and consequently, reshaping too expenditure on fashion items while abroad.

Chinese travellers rewrite western retail rules

  Newly created wealth in Asia Pacific, particularly in China, has been the major driver behind the booming performance of travel retail operators and the steady transformation of high end retailers in Western Europe and North America.

Retail reinvention to cater to a global audience

Predominantly across major fashion destinations, high-end department stores, luxury fashion specialists, and ever more off-price retailers, are driving a sizeable share of their revenues targeting primarily wealthy tourists.

Pricing, “daigou”, and cross-border sales

The main motivation to purchase fashion abroad remains favourable pricing. However, the well-established phenomenon of “daigou” and an increasingly sophisticated cross-border e-commerce landscape, is already rewriting current shopping travel trends and has the potential to disrupt these moving forward.

What’s next?

The combination of price harmonisation and the expansion of digital retail players operating across the world, is laying the ground for a truly global border free shopping landscape with pricing alone likely to take the back seat.

Introduction

Scope
Key findings

Travel Flows

Key performance indicators for travel flows
The number of travellers keeps growing worldwide
Fashion meccas among the most popular destinations
World’s fashion capitals benefiting from booming arrival numbers
China set to become the largest inbound market in the world
Improving the profile of fashion capitals in Asia Pacific
The role of currency fluctuations on travel flows
Seasonality redefined in a global context
Search for experiences also while abroad

SHOPPING FOR FASHION ABROAD

Key performance indicators for travel shopping
Shopping by international tourists on the rise
Luxury goods remains a major driver of demand
Designer apparel and footwear (ready-to-wear) rules
Non-luxury players are also benefiting from foreign demand
Global price disparities cement Europe as the world’s shopping hub
Duty free and travel retail operators cashing on the travel frenzy
Cross-border e-commerce empowers foreign demand for fashion
BorderX Lab: Cross-border mobile marketplace

Travel-Centric Initiaitives

Passenger-centric strategies spanning the whole value chain
Clothing brands tapping into travellers' needs
Gucci exploits the “travel retail only” formula
Airlines explore the partnership formula to boost revenue streams
From luxury sneaker concierges to designer “walk-out” wardrobes
WeChat Pay deployment at Schiphol airport
Harrods make over to further attract foreign spend
Shopping destination airports: Jewel at Singapore’s Changi

Travel-Centric Initiatives

Key takeaways
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