I often see these high end boutiques like Gucci or Chanel at airports. Why would someone who can afford those brands buy them at the airport instead of buying it in the city?
I think sometimes those stores don’t actually make money. It’s advertising to a captive audience who’s bored and looking for something to do. Maybe they don’t buy anything there, but maybe they put a pin in it for the next birthday/anniversary gift.
Agreed. Wall Street Journal just had an article on "The Louis" in Shanghai, which is a giant Louis Vuitton ship-shaped store that they built. It's attracting a lot of photoseeking tourists. It cost them a ton of money to build and may not be in and of itself profitable, but it's essentially a very expensive (and likely very effective) giant ad.
When a single one off Super Bowl ad price is $7-$8mln, why not instead put it into a permanent consumeristic monument if it will come from the same marketing budget.
This. Outside of maybe the duty free situations, the true wealthy actually make appointments and shop in their private back rooms. And then super wealthy have stylists who bring clothes to them.
But these shops love to go in high traffic spaces to sell to "future" customers. Selling the idea of buying luxury = success is effective marketing.
Person gets a big bonus, they might end up in Louis Vuitton or Cartier.
And it works. I had no idea most of these brand names were until the mid 90s shopping "plazas" starting bringing them in. They used to be more of a Rodeo Drive thing, which I never went too.
I agree but these stores aren’t targeting the “true wealthy”, they don’t usually have the pricier high-end items at the airport stores, the stores are pretty small and they usually carry accessories and other items people usually would buy as a gift or “entry level” luxury items
Its sales tax avoidance. You get a massive discount for buying at an airport.
There's a huge pile of consumers that exist between working everyday joes and the mega rich that can afford private shopping. No sales tax on a 300 dollar purchase is a big enough inducement for even millionaires.
6 figure earning suburban dads stocking up on scotch and cologne, with no sales tax and import duty its almost buy 4 get 1 free, or Asian tourists that have huge import dutys on watches and clothing in their home countries.
I’m poor by these standards but I also don’t consider Gucci a luxury brand? It’s like middle class luxury. Truly just boredom. Now, Hermes at the airport - also boredom but I have no idea who’s buying that.
Yeah like I’m not flush enough to be buying expensive handbags or jewelry but some good local chocolate or wine at the duty free shop is super handy when you’ve had a busy trip and the markups aren’t terrible when you factor in taxes and convenience.
I once asked a former Aer Rianta (Iriah Airport agency) executive about this.
His first comment was that the tax advantages when the airport shop is able to offer duty free sales are quiet considerable.
His second shop was that many fliers are essentially a captive market as they are stuck airside and unable to go elsewhere. The majority of high end brands are happy to write off the losses from an airport shop as a market expense.
The tax can be high for residents of countries other than the US. Sweden has a 25% VAT, so duty-free when departing from Sweden is considerable compared with somebody flying out of Houston.
Last time I was bored in an airport in Germany I compared prices, and buying duty-free perfume in the airport was more expensive than buying the same product in regular stores with 19% VAT. Maybe it works out for products with extra taxes like alcohol or cigarettes, but for pure VAT I doubt you're saving any money in modern airports
Yep, I've made the same comparison while walking around the airport in Dubai for four hours. Watches and sunglasses could always be had cheaper at home in Sweden (including 25 % VAT) compared to in Dubai. Totally pointless.
Personally for me, all prices even on duty free etc are still much higher than local ones. The only things i ever bought were like water or some food, but souvenirs or things like that are 5x more expensive on airports than outside
1.) they're kind of hoping some bored traveler who isn't really price sensitive makes an impulse purchase. international travelers, as a generalization, tend to be more flush with cash than the general population at a random shopping mall
2.) on some cases, the tax situation can make it more attractive than purchasing back at their foreign home, even with airport pricing. for example, some countries have very stiff import/sales/excise taxes on alcohol and tobacco, so those are often a large part of duty free stores
And also people on the go who have no time to go shopping for stuff like this in their normal life. But now they are forced to wait for 2-3 hours for their flight? Perfect time to make purchase.
yep, people underestimate how busy the average first class business traveler can be, that 2-3 hours is likely one of their only downtime they have for the day(they often work on the flight)
That’s what a lot of people overlook, my company doesn’t pay for me to fly business class because they like me a lot. If I am flying to Europe for work, it’s an overnight flight and 90% of the time I have meetings right after I land. So they want me well rested and have a quiet place (I.w my business class cubicle) to prep for my meetings.
The secret to handling jet lag well is to have a really fucked up sleep pattern to begin with, so you're already used to operating on too little sleep to begin with.
IMO the jet lag is less bad if your flight is really comfortable, so someone who habitually flies business class might not have as much of an issue with it
When I do longer international flights as soon as I get on the plane I switch my time zone and try my best to sleep on local time. Some melatonin and a comfy lay back seat make it easier. When I wake up I'm often doing pretty ok on rest and then I try to go to bed at a normal local time. By the time I wake up on local time I'm pretty much set
You have to take a morning flight from the US. If you take an afternoon / early evening flight you land at 8 then have meetings at noon and you are totally boned for the all night work dinner thing.
Number 2 is the key thing here. These are called Duty Free shops for a reason, as they stuff they sell isn't taxed. Most of the things they sell are high import tax or tariffed items, so they're actually more affordable to buy in these stores. In most countries/states you have to have an international boarding pass to buy in them.
Yes, the saving on duty is a marketing ploy. What they don't mention is that they jacked up the underlying price anyway so the net saving is often nil.
Is the Chanel and Gucci store duty free? I’m not sure. I’ve only ever seen the duty free stores and it’s not typically a clothing store. Are they also duty free?
Yep, they’re effectively super-targeted shoppable ads for a very high-value demographic in a captive audience situation. In a world where few people buy high fashion magazines anymore and people with money don’t expose themselves to streaming ads (and where the Dior perfume ad would feel odd next to the Skyrizi), it’s a stronger strategy than ever. (It’s also why you see the giant premium perfume advertisements everywhere in international terminals.)
I think there's also the people who wouldn't normally go to a Chanel store or buy a Dior purse. They'll go into airport stores because they're less intimidating and then end up buying a lipstick or perfume because it makes them feel fancy but is still at a relatively accessible price point. Makeup and small goods comprise a significant portion of a luxury brands sales and I think is also part of the corporate strategy. The clothes and purses carry a certain cache that makes people want to buy the perfume and makeup.
Also sales can happen! I mean it depends on the country and store but I got my Longchamo le pliage at 40% off in Seoul airport which was nice. It was a limited edition with stars and it had a nice body strap which is rare to find.
I used to travel a lot for music, and it's a regimented life with very little spare time. But once they drop you off at the airport you have three hours to just walk around. I always used to buy my wife something really nice, jewelry, a silk scarf, a watch, cosmetics. So I really appreciated having something like a Hermes inside the terminal.
Otherwise it was like "Oh you were in Vienna, what was it like?"
"I saw the parking lot behind a concert venue and spent about 12 hours in a dressing room."
In addition to a lot of these comments, there’s also marketing. These shops are essentially a billboard for millions of passengers from all around the world.
Marketing! Purely anecdotal, but this is how I found my favorite perfume that I've been wearing daily for over 15 years. I had a delayed flight, and I was bored and tried out a bunch of perfumes at one of those stores. I would have never would have done that otherwise in my normal life.
In the watch community this is a known. Buy the watch, ship the box home, wear the watch on the flight. Grey market sell it immediately if you don’t care for it.
Heck for a long time with a Rolex you could buy it, and make money in most of the EU thanks to VAT.
Honestly Rolex is in a different category from your run of the mill LV, Fendi, and Prada stores because those goods don’t have any scarcity (artificial or not).
It’s a little different for Rolexes, because people will go out of their way to see if they get lucky on their favorite stainless steel sub or GMT.
While I also thought most folks knew that duty free can apply to a lot of goods, I don't think you deserve all of your downvotes for asking a good faith question.
On THIS subreddit, of all places. What are we doing, people?
I knew plenty of Asian businessmen going back home to their wives and not having the time to shop while on their travels. Easiest for them was to buy something luxurious in the airport on the way back home.
I assume (and this may be an error) that these shops exist mostly for travelers who realize that they have forgotten to purchase a gift for a loved one and need a quick, high value present to bring back to them when a Hudson News mug with the city name won’t cut it.
Some of us have long layovers in international airports and the shopping variety is very welcomed. I’ve bought luxury goods on sale that made it a great deal for me. Singapore, Hong Kong, Tokyo-HND are great for shopping.
Transpacific flights are way more abundant now but back when Narita was the international hub for Asia (and Haneda was pretty much domestic only) the duty free area at Narita was absolutely insane. You’d see people dropping $20k like it was nothing and the volume of cigarettes they sold must have necessitated at least a truck a day of just cigarettes moving through the place.
Growing up, my dad had frequent business trips to India, and he'd always bring us gifts, and once he came back with some nice Indian jewelry for my sisters, and a big thing of European Chocolate for me since he forgot about a gift for me until he had a layover in Berlin on the way back
I have bought a Burberry purse for my wife at duty free coming back from Paris. I was traveling for work and didn’t have time to shop for her bday later that week. It was there and cheaper than buying in the US with the import duties so it was cheaper and convenient.
I bought AirPods out of one of those airport vending machines. I forgot my headphones, I had wanted AirPods for a while… yeah they were charging too much, but I was at the airport waiting for a long flight so it was the right place, right time for them to overcharge because they can.
As someone else said "duty free". A lot of countries have limits on the value of goods that you can bring into the country after going on vacation. You can't just go and buy a $50k item in a country with zero taxes and then carry it on the airplane back home. Your home country wants its cut.
I bought a tie at an airport Brooks Brothers once because I realized I had forgotten a tie, and I was going to need one at my first stop after arrival.
Sometimes the deals are different/better than regular company stores.
My gf got a luxury bag at the airport on sale for cheaper than a regular company store would do. The airport store was basically a franchisee of the brand and their stock management was different than a regular store. Whereas a regular company store might do a limited sale on a seasonal item and then send it to their outlet, the airport store had their own inventory management and would just discount higher to move out of season items.
I bought a Hermes scarf at the airport in Paris. We had been casually looking for one on our vacation and didn’t see any we liked. In the airport they had a much wider selection.
Different countries get different colors and styles of things also. So I always stop in to see what they have that I can’t get at my usual boutiques at home.
People who have money and or aren’t bothered by credit card debt who like for people to see logos on their stuff.
Why “at the airport”? - they’re bored on layovers with time to kill or they forgot to bring a bag or phone or scarf or whatever item it is that they’re buying.
Those shops are mostly showrooms for brand awareness. They are there to connect the brands with the pleasant atmosphere of travel/high-end/fun/business/whatever you associate with airports.
It depends what sort of "luxury" goods you mean. My wife buys most of her perfume at duty free shops and many of those might be considered "luxury" brands. She is pretty savvy though and know what the prices will be outside the airport and in different airports, so will not just buy because they are there (some "duty free" shops are actually more expensive than shops in lower tax countries for instance)
Fragrance shopping is great at duty free because there’s so many testers and the salespeople aren’t aggressive. They don’t have to worry about theft because people in airports are rich, they don’t steal.
Captive audience? I know that I'll browse when my flight is delayed. Someone in the same situation with more money might buy something on impulse, especially if they are drunk from 9 am airport booze.
When I went to India and my USD translated to a lot of money, I would buy stuff the local people wouldn’t buy at the airport just because I could. I imagine some rich traveler to America is doing the same.
It’s a numbers game. People who fly can afford to fly. You’re putting your store in a very high traffic area that is basically preselecting middle class and wealthy people. Poors don’t even get in the door.
Yeah, maybe people that didn’t want to carry extra things on their trip might like the convenience of getting it at the airport at the end. I don’t really understand that whole world of luxury goods, but that’s my guess.
The goal isn't only to sell stuff. These brands make money from their image, not their products. Airports users are mostly upper-middle class people, and having a flashy storefront there builds a perception of luxury and opulence just out of their reach. The airport locations may not be profitable directly, but they ensure that people recognize their products and drive up their value. The actual buyers will be making their purchases in large volumes behind closed doors.
convenience is a big factor. duty free pricing can also make some products cheaper than in regular retail stores, especially for travelers crossing international borders
Some high end brands have fixed prices per currency (i.e. all merchants offer the item at the same price). Buying some items at the airport without taxes can be a bit of a discount for some people.
Also, you might feel more comfortable about the authenticity of an item when buying it from a branded airport location versus from a local general retailer.
Who buys suitcases at an airport? Especially airside. It seems like a tiny number would replace broken bags or need somewhere to pack things they’ve bought in duty free, but in general it just doesn’t make any sense
There a certain class of people who are both sufficiently attractive enough and compliant enough, while being of unremarkable character, to where life is on easy mode. They are fully bought into the consumerist project, lack any introspection, and exist in this world content. The circumstances to which they were born give them sufficient income to spend money recklessly, while having neither the funds nor the ambition to be truly wealthy. They are effortlessly charmed and they move through life with the ease of their amorphos nature.
I think they are the ones. The ones who can thive in this society because they never look to nor feel to strong about anything.
Impulse buyers, foreigners looking to take advantage of the tax free on high cost items. If you’re wondering why purchase luxury goods at the airport and not the boutique in the visiting country, the VAT is already excluded when buying at airport shops, so no need to take the added step of filing the paperwork and tracking receipts- it’s a worthwhile convenience for some. Also luxury stores in some cities can have long lines just to get in, while the airport ones don’t. Airport retail stores are highly profitable, they’re able to capture a market that would have otherwise escaped them: last minute shoppers, ppl that didn’t make it to their city store, impulse buyers etc
I was in the market for a tote bag for a while and bought a high-end British brand at LHR knowing it's cheaper in the UK than the US and I could save on tax/tariff.
A lot of wealthy people don't live near luxury stores. Pretty much most of Africa, large parts of eastern europe, most of India, the center of the USA, an so on, all have to fly to see luxury goods in person. Sometimes they take shopping trips, but sometimes they just have a layover in a big city and can shop there too.
so they don't have to pay tax since they're buying them at the duty free store
personally I won't buy anything at the airport, as the price is usually jacked up higher than what I'd get at a store that is elsewhere in town, and the tax I'd have to pay their is negligible. Only time I MIGHT buy something is if it is something that I can't easily get back home
On my last international trip my bags were lost by the airline immediately. We had 2 hours in Madrid to get clothes before going to the middle of nowhere for a 10 day tour with no place or time to stop and buy a wardrobe. It was very painful.
When you're trapped without anything better to do than shopping, the price may seem not that bad. Factoring in taxes, it might even be good prices.
And then there's the actual luxury articles that are limited in numbers and that you can't just pick up on every high street. Here it makes perfect sense to sell them at the airport, since it's convenient for the buyer to get to and pick it up.
Examples are a 600k USD whiskey sold in Istanbul or a 25k Euro bottle of wine in Frankfurt.
As someone mentioned above it’s usually impulsive. I was walking through the airport in Doha and saw some Dior shades I liked. Previously I had been looking for a nice pair of clear frames for the vacation I was about to go on so these were perfect . I also saw that they were on sale for like $500 so I bought them and went on my way.
Because that is the only time some couples get for shopping together. Imagine a hectic week of packing, perhaps some mini arguments in between, and general stress of everything. Now you are at the airport. Wife seems a bit mad. Why not buy her something and be done with the arguments.
Or, your wife gave you an ultimatum about your business travel. She big mad. How about a nice purse as a gift, and we cool again.
Some brands are priced differently depending on where you buy them. For example, Ferragamo was like (depending on the model) at least hundreds of euros cheaper in Europe than in the US. Then you have the VAT perks.
I usually buy my Cuban cigars at the airport when I’m en route back to the states. I don’t always have time when I’m traveling to specifically go and pick out cigars when I’m with the family. Easy to pop in at the airport and bang it out and I don’t think I have to declare them if they’re purchased at the airport, could be wrong on that though but I never do.
And watches like Rolex are sometimes difficult to track down and I’ve been on the waitlist for the one I want for a few years now. I’ll pop in and see if they have one and if they don’t need a purchase history I’d absolutely get it there to skip the wait, although usually they don’t.
Bags and cologne/perfume and other stuff. I usually will get a bunch of gifts for family or friends back home when I’m at the airport. I’m already through security and don’t need to carry a bunch of bags all around with me the rest of my trip. They’re the same exact stores as the ones anywhere else, just in a more convenient location.
The only "luxury" item I buy at airports is allocated whiskey. Many airports have at least one or two bottles of whiskey that you can't find on a normal liquor store shelf. Yeah, there's gonna be a markup, but there's gonna be an even bigger markup on the secondary whiskey market so pick your poison. Case in point- I was in Honolulu last winter on a short layover and was strolling through a Duty Free and saw they had The Balvenie 18yr Pedro Ximenez Cask for the same price as it was going for on the secondary market. Balvenie 18PX is an amazing Scotch, and it's very hard to find. Two bottles made it into my carry-on.
They’re often more expensive at the airport, especially fragrance. I think some want to treat themselves aa part of their holiday, or consider it a souvenir. I worked near Aberdeen for a while and did buy an occasional bottle of whisky after taste testing at the airport.
The duty free only applies to the country you’re in, you may have to pay a duty when you arrive at your destination. I’ve considered buying a watch at LHR before, but did the math and I wouldn’t have saved any money.
Another reason is that many luxury brands have popular items that are either rarely in stock or only sold to repeat customers with a lot of prespend. Sometimes you have a better shot at getting those items in the airport boutiques. It's not as easy for scalpers to get access to airport stores and many stores also relax their policies on what a new customer can buy, since they can't really expect regular repeat customers.
I buy random stuff at the airport that I have been wanting anyway but it’s nice to not pay the tax when traveling internationally.
Sometimes bottles of alcohol are also cheaper because there is no tax and I like to have quality alcohol at home. If you are flying out of the country the alcohol is made in, the bottles can be cheaper because there is no tax or import fee and they make a nice gift/souvenir. You have to be careful because sometimes they can actually be overpriced at the airport, but a lot of the time it still ends up cheaper if you are familiar with the pricing.
For some heavy business travelers, for whom time is a sensitive matter, it's really practical. If you think about it, it's really logical to have those at airport where the really high net worth individuals have time to spend.
In the case of the euro vs US dollar, it’s cheaper to buy luxury goods in Europe than in the USA.
If you buy at the airport you don’t have to mess with getting the VAT tax refund - so you skip the hassle of having to queue up to get your refund at the airport if you buy say, a Chanel bag, at the store in Paris. Often the queue to get the VAT tax refund can be so long you might have to skip it if you don’t have enough time at the airport.
I bought $200 headphones once in a place inside security and when they broke the only store from that chain in my country that had that model was the same one so I had to wait until someone else was flying to be able to return them 😂
Every plane you or I get on has a section at the front full of people willing to pay ~ 3 to 10 times what we do for the exact same utility but in greater comfort. That 10-15% of airport clientele are the target market for these stores. We are the target market for the magazine shop and the fast-food restaurant.
In Europe/NA we generally enjoy very low tariffs/taxes on just about everything we want to buy. Check out an electronics store, car dealerships, luxury goods stores in many non G7 countries and you'll see prices on high end imports are far higher than what we would pay in the West. Duty free at an airport is often far cheaper for people from these countries.
(adding as an edit) The people in point 1 who are flying business class or fly a lot don't often have a ton of free time. They are often high performers with full schedules. Having them sit around for an hour plus past security is a huge chunk of time for them to kill where they can do some shopping to save time or alleviate boredom.
My MIL purposely waits until she’s traveling internationally to buy those name brand luxury wallets or handbag at a duty free (tax free) airport location.
If you’re traveling internationally — being able to shop tax free has huge cost savings if you were already planning to buy that Gucci or Chanel purse at, let’s say, a local mall. Her locality tax is 10%.
It's just purely marketing. When you're out and about and traveling, they want you to see their brand so you continue to associate it with luxury and out of the ordinary day to day.
Bread and butter for airlines is business travelers. Some of them are flying somewhere for work every few weeks. Some of those people have a lot of money, and not a lot of spare time. So they're prone to grabbing gifts or just impulse purchases when they see them, and aren't very price sensitive.
Just to add, I think some places see it as a loss leader, or rather, essentially an advertisement. Let people see it in person, put their hands on it, and buy it later either online or in another location
A lot of it is for the duty free aspect. I worked at a mall on the Buffalo/Niagara Falls border. Canadians would come with empty suitcases, go on shopping sprees and fill them pretending they were luggage to pay our prices and avoid duties on the goods.
I’m not sure of the target audience, but I know a lady who is one of the marketing leads at Chanel, and she told me that these airport shops are among the locations that bring in the most revenue for them.
My husband is into watches (Rolex specifically). It’s hard to get a Rolex these days as you have to get yourself on a list with a dealer and actively spend with the shop to get offered a watch which comes into store. In airports, it’s a free for all so if they get a watch in stock then it’s first come first serve. Not sure if it’s the same with other brands like Hermes which have a similar system.
Sometimes the airport Rolex boutiques will have exclusive watches with no waitlist, unlike the ones in major city centers. You fly home $45K lighter lmao
I do. I know why I like and I know the price. Often it’s cheaper at the airports due to being duty free (although you need to declare it). Also there are a large number of designer in a small area, something that isn’t always available.
I think some of these clothing stores are catering to those who didn’t have time to pack or shop or the event (like business meeting, funeral, etc.) they are traveling to. Or their checked Luggage got lost and the airline is reimbursing them for emergency clothing until their luggage is found.
Two main audiences, people who are trying to avoid paying high sales tax in their home country, and people who need a gift for the folks back home.
I think sometimes those stores don’t actually make money. It’s advertising to a captive audience who’s bored and looking for something to do. Maybe they don’t buy anything there, but maybe they put a pin in it for the next birthday/anniversary gift.
Agreed. Wall Street Journal just had an article on "The Louis" in Shanghai, which is a giant Louis Vuitton ship-shaped store that they built. It's attracting a lot of photoseeking tourists. It cost them a ton of money to build and may not be in and of itself profitable, but it's essentially a very expensive (and likely very effective) giant ad.
When a single one off Super Bowl ad price is $7-$8mln, why not instead put it into a permanent consumeristic monument if it will come from the same marketing budget.
This. Outside of maybe the duty free situations, the true wealthy actually make appointments and shop in their private back rooms. And then super wealthy have stylists who bring clothes to them.
But these shops love to go in high traffic spaces to sell to "future" customers. Selling the idea of buying luxury = success is effective marketing.
Person gets a big bonus, they might end up in Louis Vuitton or Cartier.
And it works. I had no idea most of these brand names were until the mid 90s shopping "plazas" starting bringing them in. They used to be more of a Rodeo Drive thing, which I never went too.
I agree but these stores aren’t targeting the “true wealthy”, they don’t usually have the pricier high-end items at the airport stores, the stores are pretty small and they usually carry accessories and other items people usually would buy as a gift or “entry level” luxury items
Its sales tax avoidance. You get a massive discount for buying at an airport.
There's a huge pile of consumers that exist between working everyday joes and the mega rich that can afford private shopping. No sales tax on a 300 dollar purchase is a big enough inducement for even millionaires.
6 figure earning suburban dads stocking up on scotch and cologne, with no sales tax and import duty its almost buy 4 get 1 free, or Asian tourists that have huge import dutys on watches and clothing in their home countries.
I’m poor by these standards but I also don’t consider Gucci a luxury brand? It’s like middle class luxury. Truly just boredom. Now, Hermes at the airport - also boredom but I have no idea who’s buying that.
I would like 10% of the revenue from just scarves Hermès brings in at CDG airport.
A captive, affluent audience.
Yeah like I’m not flush enough to be buying expensive handbags or jewelry but some good local chocolate or wine at the duty free shop is super handy when you’ve had a busy trip and the markups aren’t terrible when you factor in taxes and convenience.
Avoiding sales tax and having favorable currency conversion rate. Net savings can be 20-30% off your luxury designer goods.
Yap, when I am on a very packed business trip and have 0 time to shop, I buy my wife stuff at the duty free.
It also might not be available in their home country
I bought a pair of Bottega Veneta shoes at Heathrow. They were the last pair, in my size, in the whole of Europe.
Yes, I've also seen that some airports now add taxes, but I'm not sure.
I believe that is when folks sometimes fly domestically from an international terminal. They always scan your boarding pass
This is the answer
I once asked a former Aer Rianta (Iriah Airport agency) executive about this.
His first comment was that the tax advantages when the airport shop is able to offer duty free sales are quiet considerable.
His second shop was that many fliers are essentially a captive market as they are stuck airside and unable to go elsewhere. The majority of high end brands are happy to write off the losses from an airport shop as a market expense.
The tax can be high for residents of countries other than the US. Sweden has a 25% VAT, so duty-free when departing from Sweden is considerable compared with somebody flying out of Houston.
Last time I was bored in an airport in Germany I compared prices, and buying duty-free perfume in the airport was more expensive than buying the same product in regular stores with 19% VAT. Maybe it works out for products with extra taxes like alcohol or cigarettes, but for pure VAT I doubt you're saving any money in modern airports
Yep, I've made the same comparison while walking around the airport in Dubai for four hours. Watches and sunglasses could always be had cheaper at home in Sweden (including 25 % VAT) compared to in Dubai. Totally pointless.
Personally for me, all prices even on duty free etc are still much higher than local ones. The only things i ever bought were like water or some food, but souvenirs or things like that are 5x more expensive on airports than outside
1.) they're kind of hoping some bored traveler who isn't really price sensitive makes an impulse purchase. international travelers, as a generalization, tend to be more flush with cash than the general population at a random shopping mall
2.) on some cases, the tax situation can make it more attractive than purchasing back at their foreign home, even with airport pricing. for example, some countries have very stiff import/sales/excise taxes on alcohol and tobacco, so those are often a large part of duty free stores
And also people on the go who have no time to go shopping for stuff like this in their normal life. But now they are forced to wait for 2-3 hours for their flight? Perfect time to make purchase.
Yup! Met a guy between flights who was buying gifts for his kids for when he returns because he spends 3-4 weeks traveling at a time.
yep, people underestimate how busy the average first class business traveler can be, that 2-3 hours is likely one of their only downtime they have for the day(they often work on the flight)
That’s what a lot of people overlook, my company doesn’t pay for me to fly business class because they like me a lot. If I am flying to Europe for work, it’s an overnight flight and 90% of the time I have meetings right after I land. So they want me well rested and have a quiet place (I.w my business class cubicle) to prep for my meetings.
How do you handle the jet lag though? That's my problem with flights to Europe (not so bad coming back to the US).
The secret to handling jet lag well is to have a really fucked up sleep pattern to begin with, so you're already used to operating on too little sleep to begin with.
Melatonin also helps a lot.
Personally, I fly back before I adjust to the time zone.
IMO the jet lag is less bad if your flight is really comfortable, so someone who habitually flies business class might not have as much of an issue with it
When I do longer international flights as soon as I get on the plane I switch my time zone and try my best to sleep on local time. Some melatonin and a comfy lay back seat make it easier. When I wake up I'm often doing pretty ok on rest and then I try to go to bed at a normal local time. By the time I wake up on local time I'm pretty much set
You have to take a morning flight from the US. If you take an afternoon / early evening flight you land at 8 then have meetings at noon and you are totally boned for the all night work dinner thing.
Who is overlooking this? It has nothing to do with the conversation.
Number 2 is the key thing here. These are called Duty Free shops for a reason, as they stuff they sell isn't taxed. Most of the things they sell are high import tax or tariffed items, so they're actually more affordable to buy in these stores. In most countries/states you have to have an international boarding pass to buy in them.
In my experience duty free being cheaper really depends on the country.
Yes, the saving on duty is a marketing ploy. What they don't mention is that they jacked up the underlying price anyway so the net saving is often nil.
And depending on the city it could be 10% or more! That's a fair bit of tax!
Is the Chanel and Gucci store duty free? I’m not sure. I’ve only ever seen the duty free stores and it’s not typically a clothing store. Are they also duty free?
often, yeah, they're a subset of a duty free store complex.
I also heard it essentially serves as a giant advertisement
Yep, they’re effectively super-targeted shoppable ads for a very high-value demographic in a captive audience situation. In a world where few people buy high fashion magazines anymore and people with money don’t expose themselves to streaming ads (and where the Dior perfume ad would feel odd next to the Skyrizi), it’s a stronger strategy than ever. (It’s also why you see the giant premium perfume advertisements everywhere in international terminals.)
I think there's also the people who wouldn't normally go to a Chanel store or buy a Dior purse. They'll go into airport stores because they're less intimidating and then end up buying a lipstick or perfume because it makes them feel fancy but is still at a relatively accessible price point. Makeup and small goods comprise a significant portion of a luxury brands sales and I think is also part of the corporate strategy. The clothes and purses carry a certain cache that makes people want to buy the perfume and makeup.
The store may also be considered a loss leader and exists purely for marketing and advertising purposes
Also sales can happen! I mean it depends on the country and store but I got my Longchamo le pliage at 40% off in Seoul airport which was nice. It was a limited edition with stars and it had a nice body strap which is rare to find.
So Angie K from Salt Lake City sad this during a recent episode. That she can buy two Cartier watches in Greece vs one in the states.
I used to travel a lot for music, and it's a regimented life with very little spare time. But once they drop you off at the airport you have three hours to just walk around. I always used to buy my wife something really nice, jewelry, a silk scarf, a watch, cosmetics. So I really appreciated having something like a Hermes inside the terminal.
Otherwise it was like "Oh you were in Vienna, what was it like?"
"I saw the parking lot behind a concert venue and spent about 12 hours in a dressing room."
In addition to a lot of these comments, there’s also marketing. These shops are essentially a billboard for millions of passengers from all around the world.
Marketing! Purely anecdotal, but this is how I found my favorite perfume that I've been wearing daily for over 15 years. I had a delayed flight, and I was bored and tried out a bunch of perfumes at one of those stores. I would have never would have done that otherwise in my normal life.
If they are traveling internationally they don't have to pay taxes on it, so it'll be cheaper than in the city.
I've heard of people buying luxury watches as a means of moving more than 10k cash internationally.
In the watch community this is a known. Buy the watch, ship the box home, wear the watch on the flight. Grey market sell it immediately if you don’t care for it.
Heck for a long time with a Rolex you could buy it, and make money in most of the EU thanks to VAT.
How do you ship the box home if you’ve already bought the watch at the airport?
There’s shipping centres at some airports. TSA found a cool jet lighter I forgot about. The guy let me ship it home
Rolex and other high end stores will do it for you.
I give the box to my wife. Or just wear it on the plane.
Watch community goons over boxes and papers when most never want to sell anyway.
I have 4 boxes out of all my watches. I wear them, get scratches on them, enjoy them etx
Given that someone at their destination will buy that watch full price?
Generally no, but even taking a 20% rinse is more appealing than alternative options
Some countries limit how much cash you can bring out. So if the choice is between bringing 10k max or 10k+ selling a 10k watch for 7k, it’s just a tax
I don’t think that is the majority of instances.
Honestly Rolex is in a different category from your run of the mill LV, Fendi, and Prada stores because those goods don’t have any scarcity (artificial or not).
It’s a little different for Rolexes, because people will go out of their way to see if they get lucky on their favorite stainless steel sub or GMT.
But aren't the airport shops still a huge markup? So they'd be taking an unusually big cut to buy it there compared to a normal channel.
I think luxury goods like Rolex are a set price through any authorized dealers / boutiques.
People on vacation often like to treat themselves.
Mmmmhmm girl! Treat yoself!
Search for “duty free”
Isn't that just for alcohol?
Edit: Why am I still being down voted? I was asking an honest question, to which I didn't know the answer to.
While I also thought most folks knew that duty free can apply to a lot of goods, I don't think you deserve all of your downvotes for asking a good faith question.
On THIS subreddit, of all places. What are we doing, people?
Nope. All sorts of goods.
What else is in there?
Cigarettes, cologne/perfume, cosmetics, handbags and other designer goods, sometimes food items like candies and snacks
I try to buy most of my perfumes at the airport if possible. They are a lot cheaper!
Thank you for answering.
U can’t just go in duty free and buy stuff and leave tho. You have to be on an international flight I think.
in the US at least, yeah, any tax empty goods are delivered to you as you board the plane, thus ensuring they shouldn't stay in the country of sale.
I knew plenty of Asian businessmen going back home to their wives and not having the time to shop while on their travels. Easiest for them was to buy something luxurious in the airport on the way back home.
Bored rich people.
Busy businessmen or businesswomen who have no time for shopping in the city
I assume (and this may be an error) that these shops exist mostly for travelers who realize that they have forgotten to purchase a gift for a loved one and need a quick, high value present to bring back to them when a Hudson News mug with the city name won’t cut it.
Some of us have long layovers in international airports and the shopping variety is very welcomed. I’ve bought luxury goods on sale that made it a great deal for me. Singapore, Hong Kong, Tokyo-HND are great for shopping.
Transpacific flights are way more abundant now but back when Narita was the international hub for Asia (and Haneda was pretty much domestic only) the duty free area at Narita was absolutely insane. You’d see people dropping $20k like it was nothing and the volume of cigarettes they sold must have necessitated at least a truck a day of just cigarettes moving through the place.
Growing up, my dad had frequent business trips to India, and he'd always bring us gifts, and once he came back with some nice Indian jewelry for my sisters, and a big thing of European Chocolate for me since he forgot about a gift for me until he had a layover in Berlin on the way back
I have bought a Burberry purse for my wife at duty free coming back from Paris. I was traveling for work and didn’t have time to shop for her bday later that week. It was there and cheaper than buying in the US with the import duties so it was cheaper and convenient.
I bought AirPods out of one of those airport vending machines. I forgot my headphones, I had wanted AirPods for a while… yeah they were charging too much, but I was at the airport waiting for a long flight so it was the right place, right time for them to overcharge because they can.
As someone else said "duty free". A lot of countries have limits on the value of goods that you can bring into the country after going on vacation. You can't just go and buy a $50k item in a country with zero taxes and then carry it on the airplane back home. Your home country wants its cut.
I bought a tie at an airport Brooks Brothers once because I realized I had forgotten a tie, and I was going to need one at my first stop after arrival.
Sometimes the deals are different/better than regular company stores.
My gf got a luxury bag at the airport on sale for cheaper than a regular company store would do. The airport store was basically a franchisee of the brand and their stock management was different than a regular store. Whereas a regular company store might do a limited sale on a seasonal item and then send it to their outlet, the airport store had their own inventory management and would just discount higher to move out of season items.
I bought a Hermes scarf at the airport in Paris. We had been casually looking for one on our vacation and didn’t see any we liked. In the airport they had a much wider selection.
Different countries get different colors and styles of things also. So I always stop in to see what they have that I can’t get at my usual boutiques at home.
People who have money and or aren’t bothered by credit card debt who like for people to see logos on their stuff.
Why “at the airport”? - they’re bored on layovers with time to kill or they forgot to bring a bag or phone or scarf or whatever item it is that they’re buying.
People who don't want to pay 8% sales tax.
Only 8% for you? How lucky
Those shops are mostly showrooms for brand awareness. They are there to connect the brands with the pleasant atmosphere of travel/high-end/fun/business/whatever you associate with airports.
I bought a Mont blanc at the Dubai duty free. always wanted one. saw it. leveled up.
It depends what sort of "luxury" goods you mean. My wife buys most of her perfume at duty free shops and many of those might be considered "luxury" brands. She is pretty savvy though and know what the prices will be outside the airport and in different airports, so will not just buy because they are there (some "duty free" shops are actually more expensive than shops in lower tax countries for instance)
Fragrance shopping is great at duty free because there’s so many testers and the salespeople aren’t aggressive. They don’t have to worry about theft because people in airports are rich, they don’t steal.
Wealthy people.
Next question.
Even better, Wealthy people captive for a few hours in an airport terminal. Boredom + money
Captive audience? I know that I'll browse when my flight is delayed. Someone in the same situation with more money might buy something on impulse, especially if they are drunk from 9 am airport booze.
Last minute gifts, forgotten items, and boredom shopping would be my guesses. That discounts duty-free, which are their own sort of thing.
When I went to India and my USD translated to a lot of money, I would buy stuff the local people wouldn’t buy at the airport just because I could. I imagine some rich traveler to America is doing the same.
It’s a numbers game. People who fly can afford to fly. You’re putting your store in a very high traffic area that is basically preselecting middle class and wealthy people. Poors don’t even get in the door.
Also people who have leftover currency in the country they are leaving - these shops may accept it
Someone feeling guilty about their behavior on a business trip and grabbing something for the wife.
Yeah, maybe people that didn’t want to carry extra things on their trip might like the convenience of getting it at the airport at the end. I don’t really understand that whole world of luxury goods, but that’s my guess.
The goal isn't only to sell stuff. These brands make money from their image, not their products. Airports users are mostly upper-middle class people, and having a flashy storefront there builds a perception of luxury and opulence just out of their reach. The airport locations may not be profitable directly, but they ensure that people recognize their products and drive up their value. The actual buyers will be making their purchases in large volumes behind closed doors.
Call me old fashioned, but I like buying things I need and/or want in person. Airports and my travel schedule give me that satisfaction.
convenience is a big factor. duty free pricing can also make some products cheaper than in regular retail stores, especially for travelers crossing international borders
Those are Duty Free shops. International travelers who would pay higher taxes when returning home with the items.
Some high end brands have fixed prices per currency (i.e. all merchants offer the item at the same price). Buying some items at the airport without taxes can be a bit of a discount for some people.
Also, you might feel more comfortable about the authenticity of an item when buying it from a branded airport location versus from a local general retailer.
The airports sometimes have unique pieces not available in retail stores
Who buys suitcases at an airport? Especially airside. It seems like a tiny number would replace broken bags or need somewhere to pack things they’ve bought in duty free, but in general it just doesn’t make any sense
There a certain class of people who are both sufficiently attractive enough and compliant enough, while being of unremarkable character, to where life is on easy mode. They are fully bought into the consumerist project, lack any introspection, and exist in this world content. The circumstances to which they were born give them sufficient income to spend money recklessly, while having neither the funds nor the ambition to be truly wealthy. They are effortlessly charmed and they move through life with the ease of their amorphos nature.
I think they are the ones. The ones who can thive in this society because they never look to nor feel to strong about anything.
Impulse buyers, foreigners looking to take advantage of the tax free on high cost items. If you’re wondering why purchase luxury goods at the airport and not the boutique in the visiting country, the VAT is already excluded when buying at airport shops, so no need to take the added step of filing the paperwork and tracking receipts- it’s a worthwhile convenience for some. Also luxury stores in some cities can have long lines just to get in, while the airport ones don’t. Airport retail stores are highly profitable, they’re able to capture a market that would have otherwise escaped them: last minute shoppers, ppl that didn’t make it to their city store, impulse buyers etc
Heather Gay
Came here to say this lol hahahahah
I was in the market for a tote bag for a while and bought a high-end British brand at LHR knowing it's cheaper in the UK than the US and I could save on tax/tariff.
Also don’t some passengers live in places where they can’t easily shop for luxury items, like designer bags, in person?
So they can really see them on the fancy airport shop.
A lot of wealthy people don't live near luxury stores. Pretty much most of Africa, large parts of eastern europe, most of India, the center of the USA, an so on, all have to fly to see luxury goods in person. Sometimes they take shopping trips, but sometimes they just have a layover in a big city and can shop there too.
Speaking from personal experience, extremely jet lagged business travelers feeling guilty for being away from home, buying gifts.
No tax
I once bought a pair of Bose quiet comfort ultra over the ear headphones at the airport.
But yea, fuck that, it seems stupid
so they don't have to pay tax since they're buying them at the duty free store
personally I won't buy anything at the airport, as the price is usually jacked up higher than what I'd get at a store that is elsewhere in town, and the tax I'd have to pay their is negligible. Only time I MIGHT buy something is if it is something that I can't easily get back home
Boredom
Duty free is a tax break on these items.
On my last international trip my bags were lost by the airline immediately. We had 2 hours in Madrid to get clothes before going to the middle of nowhere for a 10 day tour with no place or time to stop and buy a wardrobe. It was very painful.
Impulse shoppers with too much time and too little suitcase space
Business men who forgot to get a gift for their wife and/or mistress.
It’s easier to buy tax free at the airport than buy in the city and do the paperwork for tax back
Tax Free!!!
Up and coming young mobsters who forgot to buy their fiancé a gift in Naples.
They're there for 2 reasons:
People making impulse purchases out of boredom or last minute souvenirs.
Otherwise the Tax free store would just be a glorified liqour store.
Depending where your home is, the savings can be substantial.
When you're trapped without anything better to do than shopping, the price may seem not that bad. Factoring in taxes, it might even be good prices.
And then there's the actual luxury articles that are limited in numbers and that you can't just pick up on every high street. Here it makes perfect sense to sell them at the airport, since it's convenient for the buyer to get to and pick it up. Examples are a 600k USD whiskey sold in Istanbul or a 25k Euro bottle of wine in Frankfurt.
Tax free
I also thought the same thing - but I find myself just buying gifts at the airport. I mainly stick to things that have the same msrp at the airport
As someone mentioned above it’s usually impulsive. I was walking through the airport in Doha and saw some Dior shades I liked. Previously I had been looking for a nice pair of clear frames for the vacation I was about to go on so these were perfect . I also saw that they were on sale for like $500 so I bought them and went on my way.
Because that is the only time some couples get for shopping together. Imagine a hectic week of packing, perhaps some mini arguments in between, and general stress of everything. Now you are at the airport. Wife seems a bit mad. Why not buy her something and be done with the arguments.
Or, your wife gave you an ultimatum about your business travel. She big mad. How about a nice purse as a gift, and we cool again.
I bought a watch I was unable to purchase in the US at Doha during a layover. Sold it two years later for a profit.
Sometimes its convenient for me. Im a watch collector and im able to browse several brands on a layover.
Another reason:
Some brands are priced differently depending on where you buy them. For example, Ferragamo was like (depending on the model) at least hundreds of euros cheaper in Europe than in the US. Then you have the VAT perks.
I usually buy my Cuban cigars at the airport when I’m en route back to the states. I don’t always have time when I’m traveling to specifically go and pick out cigars when I’m with the family. Easy to pop in at the airport and bang it out and I don’t think I have to declare them if they’re purchased at the airport, could be wrong on that though but I never do.
And watches like Rolex are sometimes difficult to track down and I’ve been on the waitlist for the one I want for a few years now. I’ll pop in and see if they have one and if they don’t need a purchase history I’d absolutely get it there to skip the wait, although usually they don’t.
Bags and cologne/perfume and other stuff. I usually will get a bunch of gifts for family or friends back home when I’m at the airport. I’m already through security and don’t need to carry a bunch of bags all around with me the rest of my trip. They’re the same exact stores as the ones anywhere else, just in a more convenient location.
Ever been to Changi?
I thought about buying something at Brooks Brothers at an airport (not exactly luxury, I admit) because there’s no Brooks Brothers near where I live.
The only "luxury" item I buy at airports is allocated whiskey. Many airports have at least one or two bottles of whiskey that you can't find on a normal liquor store shelf. Yeah, there's gonna be a markup, but there's gonna be an even bigger markup on the secondary whiskey market so pick your poison. Case in point- I was in Honolulu last winter on a short layover and was strolling through a Duty Free and saw they had The Balvenie 18yr Pedro Ximenez Cask for the same price as it was going for on the secondary market. Balvenie 18PX is an amazing Scotch, and it's very hard to find. Two bottles made it into my carry-on.
Common theory: these are planted by the local city commission to display a level of luxury and they most definitely lose money
Sometimes you find items that your local store might not have, like special releases in certain places.
I do sometimes, kills time and often slightly cheaper.
Captive market and people often make spontaneous decisions on holiday.
They’re often more expensive at the airport, especially fragrance. I think some want to treat themselves aa part of their holiday, or consider it a souvenir. I worked near Aberdeen for a while and did buy an occasional bottle of whisky after taste testing at the airport.
The duty free only applies to the country you’re in, you may have to pay a duty when you arrive at your destination. I’ve considered buying a watch at LHR before, but did the math and I wouldn’t have saved any money.
I like to shop at the duty free shop
Come to Oregon where there is no sales tax!
Rich people
Business travellers who had no time to shop during the work trip and only had a bit of time to kill at the airport before their flights.
Another reason is that many luxury brands have popular items that are either rarely in stock or only sold to repeat customers with a lot of prespend. Sometimes you have a better shot at getting those items in the airport boutiques. It's not as easy for scalpers to get access to airport stores and many stores also relax their policies on what a new customer can buy, since they can't really expect regular repeat customers.
I buy random stuff at the airport that I have been wanting anyway but it’s nice to not pay the tax when traveling internationally.
Sometimes bottles of alcohol are also cheaper because there is no tax and I like to have quality alcohol at home. If you are flying out of the country the alcohol is made in, the bottles can be cheaper because there is no tax or import fee and they make a nice gift/souvenir. You have to be careful because sometimes they can actually be overpriced at the airport, but a lot of the time it still ends up cheaper if you are familiar with the pricing.
For some heavy business travelers, for whom time is a sensitive matter, it's really practical. If you think about it, it's really logical to have those at airport where the really high net worth individuals have time to spend.
I buy luxury shit at duty free because taxes suck.
No taxes.
I always thought it was more of a brand positioning play. As if to say ‘look how globally significant we are’ as opposed to a sales channel.
i dont know but i found out my dad and stepmom are the kind of people who buy suitcases at the airport so clearly they’re hiding in plain sight
In the case of the euro vs US dollar, it’s cheaper to buy luxury goods in Europe than in the USA.
If you buy at the airport you don’t have to mess with getting the VAT tax refund - so you skip the hassle of having to queue up to get your refund at the airport if you buy say, a Chanel bag, at the store in Paris. Often the queue to get the VAT tax refund can be so long you might have to skip it if you don’t have enough time at the airport.
I bought $200 headphones once in a place inside security and when they broke the only store from that chain in my country that had that model was the same one so I had to wait until someone else was flying to be able to return them 😂
My MIL purposely waits until she’s traveling internationally to buy those name brand luxury wallets or handbag at a duty free (tax free) airport location.
If you’re traveling internationally — being able to shop tax free has huge cost savings if you were already planning to buy that Gucci or Chanel purse at, let’s say, a local mall. Her locality tax is 10%.
Luxury goods I can kind of understand, I often wonder about who buys suitcases at the airport.
It's just purely marketing. When you're out and about and traveling, they want you to see their brand so you continue to associate it with luxury and out of the ordinary day to day.
Bread and butter for airlines is business travelers. Some of them are flying somewhere for work every few weeks. Some of those people have a lot of money, and not a lot of spare time. So they're prone to grabbing gifts or just impulse purchases when they see them, and aren't very price sensitive.
Do guys who feel guilty for cheating on their wives during business trips buy the most perfume and jewelry at duty free shops? Maybe?
Just to add, I think some places see it as a loss leader, or rather, essentially an advertisement. Let people see it in person, put their hands on it, and buy it later either online or in another location
I bought a briggs and riley duffle, there was nowhere in my town to look at one and the store in LGA had one. I liked it so I bought it.
lots of people
A lot of it is for the duty free aspect. I worked at a mall on the Buffalo/Niagara Falls border. Canadians would come with empty suitcases, go on shopping sprees and fill them pretending they were luggage to pay our prices and avoid duties on the goods.
Forgot to buy gifts, killing time, duty free (tax free)
Because some people are visiting from countries where that stuff is more expensive due to import duties.
I do, cause its duty free
They don’t sell this stuff in my city.
I’ve always wondered who is buying at 7k Chanel bag at the airport?! lol
I found a bag that was only in an airport, sold out everywhere else.
If you're American, London Heathrow is often the cheapest place in the world to get Chanel products.
Can confirm.
I sometimes buy very specific skincare because it's actually cheaper and I used to travel back and forth a lot
Tax Free
I’m not sure of the target audience, but I know a lady who is one of the marketing leads at Chanel, and she told me that these airport shops are among the locations that bring in the most revenue for them.
Tax free is a hell of a drug.
My husband is into watches (Rolex specifically). It’s hard to get a Rolex these days as you have to get yourself on a list with a dealer and actively spend with the shop to get offered a watch which comes into store. In airports, it’s a free for all so if they get a watch in stock then it’s first come first serve. Not sure if it’s the same with other brands like Hermes which have a similar system.
To skip out on customs
Shopping is an activity that people enjoy and can be used to kill time in an airport.
Sometimes the airport Rolex boutiques will have exclusive watches with no waitlist, unlike the ones in major city centers. You fly home $45K lighter lmao
I bought a watch at the airport store, that was impossible to get in the city stores (checked in 6 cities in different countries).
I do. I know why I like and I know the price. Often it’s cheaper at the airports due to being duty free (although you need to declare it). Also there are a large number of designer in a small area, something that isn’t always available.
I think some of these clothing stores are catering to those who didn’t have time to pack or shop or the event (like business meeting, funeral, etc.) they are traveling to. Or their checked Luggage got lost and the airline is reimbursing them for emergency clothing until their luggage is found.
I bought in the Germany airport when I had a layover from another country. This way No VAT making the bag cheaper than US
Exit- also designer bags cost the same in all stores. It’s not more expensive to buy at the airport
People who are travelling with escorts
I could be as wealthy as Elon Musk and I still wouldn't be wasting money on dumb shit like this.
They're for affluent business travelers to take something home to their spouse after a morally questionable business trip.