M1nd-set Generation has announced that leading business analytics expert Professor Alex Seret has joined the company as a consultant to work closely with the companies as the sales forecasting side of the business predicts a major recovery over the next nine years.

 

The appointment has been made in tandem with the Swedish-Swiss joint venture release of its 2025 forecast for the duty free and travel retail industry, which is predicting a compound annual growth rate (CAGR) of 6.8% over the next over the next decade – effectively doubling the industry’s current sales between now and 2025.

 

This new record result is expected, despite the now well-documented drop in global sales reported last year. This predicted growth is also 0.5% higher than the average level experienced over the previous two decades since the mid- nineties and will be achievable due to a number of external factors, according to m1nd-set Generation.

 

The company believes these will include an increased growth rate in the number of travellers from emerging countries and in international travel generally, along with ‘innovation from within the industry, improved marketing and premiumisation of the offer’.

 

MORE SOPHISTICATED PROJECTIONS

m1nd-set Generation believes that the improvement in its analytical tools to understand traveller behaviour and the means to target travellers at all stages of the journey through technological progress is another contributing factor for this positive projected growth.

 

 

In a statement, the companies said: “Traffic forecasts from IATA and other key sources estimate annual traffic to grow at between 4.1% and 4.2%. The industry growth forecast is estimated to surpass the traveller growth estimates due to price increases, inflation and the above-mentioned factors.

 

“Both the Middle East and Asia Pacific are predicted to achieve above average growth with CAGRs of 9.2% and 8.5% respectively. The Middle East will represent 11.7% of global sales (up from 9.4% in 2015), reaching US$14bn in 2025. The Asia Pacific region will grow from current sales of just over US$25bn to an estimated US$57bn, representing just under 50% of global sales by 2025.

 

“Europe, the Americas and Africa will all experience below average growth over the next decade. In terms of sales channels, ‘other shops’ such as border stores, port and cruise ship stores as well as downtown shops will see the fastest growth with a CAGR of 7.7% ahead of airports at 7.1%.

 

‘NEGATIVE GROWTH’ FOR FERRIES AND AIRLINES

“Ferries and airlines, however, are predicted to experience negative annual growth at -2.0% and -1.5% respectively between now and 2025.”

 

 

m1nd-set Generation predicts that that airports and other travel retail outlets will most likely shift their category focus in terms of space allocation in favour of non-core categories such as fashion and accessories and watches and jewellery, as they are now forecast to experience the fastest growth at 8.5% and 7.9% respectively.

 

Confectionery and beauty are also being tipped to show above average growth, while tobacco is expected to achieve around 3.1% sales progress per year over the next decade.

 

Commenting on the forecast Lindh says: “We are obviously encouraged to see the trends as it is clearly a high ROI industry and attractive to investors, which is also evident by the consolidation we have seen in the business in recent years. We hope the industry will sit up and take heed and address the areas that we have identified as underperforming.

 

‘UNIQUE DATA’

“This detailed data on hand is unique and the result of over 35 years of building trusting relationships with all stakeholders. We are extremely grateful to all those companies who contribute to this vital information bank to help us all to understand where the industry is heading and how it is affected by external events.

 

 

He added: “We look forward to a new era of enhanced industry research thanks to our partnership with m1nd-set and Professor Seret.”

 

m1nd-set owner and CEO Peter Mohn said: “We are delighted to welcome Alex on the m1nd-set Generation team as he will play a key role in our joint ‘Big Data’ service.

 

“This relationship will enable m1nd-set Generation to provide much improved data, enriched by our consumer insights, best in class air traffic forecasting and macro-economic data, which will help put the sales data trends and forecasts into a much clearer perspective.

 

“Sales data estimations and forecasting in travel retail is exceedingly different compared to the domestic market, due to its unique structure, dynamics and diversity, and we therefore think it is essential to continuously invest in providing the travel retail industry with the best and most precise possible data today and in the future.”

 

 

FULL FORECASTS ARE NOW AVAILABLE

Professor Alex Seret joins m1nd-set Generation as a consultant, specifically on the sales forecasting aspects of the business and holds a Ph.D. in Decision Science from KU Leuven University and is a Professor at the University of Los Andes in Santiago, Chile.

 

Generation CEO Fredrik Lindh commented: “The collaboration with Professor Seret brings a wealth of experience in business analytics, data science and quantitative marketing across different industries, including retail.

 

“Alex Seret is a recognised expert in analysing and forecasting data in ultra-complex environments such as ours where data is often missing. We look forward to his proficient perspective on the way we operate.”

 

Meanwhile, the full forecast report containing detailed analysis of each sub-section (per category, region and channel) is now available to Generation’s Best & Most subscribers. For more information, contact [email protected]