Have Passport, Will Shop

I don’t travel as much as I used to, especially internationally. Frankly, geopolitical turmoil, the hassle of airport security and the decisions the airlines have made about ticket prices, extra fees, baggage handling, meal service and cabin comfort – all seeming to want to make it as unpleasant as possible to fly in their planes – makes me wonder why anyone would want to get on a plane again and fly across the ocean.

But clearly, billions of people do, which is not hyperbole. According to the United Nations World Tourism Organization (UNWTO), there were 1.184 billion international travelers in 2015, more than ever before.

As we know, a lot of international travelers equates to a lot of duty-free shoppers. And, since the duty-free phenomenon exploded a decade or so ago, there’s one other thing we know: The duty-free retail sector has become increasingly aggressive and creative. Duty-free shops, once cramped little after-thoughts in international terminals and concourses, have now become some of the most pleasant, inviting and luxurious shopping venues in airports and passenger ship terminals around the world. The presentations by the world’s most luxurious brands rival what you’d see in the best department stores in the world’s most international cities.

But it’s not just airports and terminals anymore! Those same luxury department stores may be getting in on the duty-free action. Dave Scurlock, who is vp at the Seattle office of the international store design firm CallisonRTKL (Baltimore), told me recently about one of his firm’s latest projects, a new 163,000-square-foot duty-free venue in downtown Seoul, South Korea, that occupies the top five floors of the 12-story Shinsegae department store in Myeong-dong, Seoul’s busy retail and tourism district.

The expectation, says Shinsegae Duty Free CEO Sung Young-mok, is to attract 10 million foreign visitors “as soon as possible” to Myeong-dong and to “transform Seoul into a global metropolitan hub like Manhattan in New York and Ginza in Tokyo.”

The idea of attracting duty-free shoppers away from airports, usually led through the world’s large international cities by tour groups, is not necessarily new. The angle here is that the target is not just tourists on sightseeing sprees.

Scurlock says anyone with an international passport can shop at Shinsegae Duty Free. “The concept is aimed at the large expat populations living in big international cities like Seoul, Shanghai and Singapore,” he says. “These are people who travel a lot and desire the big international luxury brands that aren’t always available in the local shopping channels.”

Many affluent expats will shop at these store, Scurlock said, even if they’re not traveling. They’ll pay the duty to have the access to international brands and the luxury of the shopping experience.

Which puts a whole new spin on the idea of “duty-free,” doesn’t it?

As a journalist, writer, editor and commentator, Steve Kaufman has been watching the store design industry for 20 years. He has seen the business cycle through retailtainment, minimalism, category killers, big boxes, pop-ups, custom stores, global roll-outs, international sourcing, interactive kiosks, the emergence of China, the various definitions of “branding” and Amazon.com. He has reported on the rise of brand concept shops, the demise of brand concept shops and the resurgence of brand concept shops. He has been an eyewitness to the reality that nothing stays the same, except the retailer-shopper relationship.