Narita International Airport Corporation (NAA) has today (15 November) began selling perfume (overseas products only) in its Terminal 2 Fa-So-La arrivals shops, TRBusiness has confirmed.

Until now, liquor and tobacco were the only items available in the five arrivals stores at Tokyo Narita International Airport. As of today, the Terminal 2 stores offer various international perfume brands including Bvlgari, Chloe, Hermes, Prada and Salvatore Ferragamo.

Chihiro Oshima, Retail Operations Department, Marketing Division told TRBusiness: “Perfumes were introduced today in our Terminal 2 arrivals shops, but cosmetics remain unavailable. We are glad to finally be able to offer a new category in our arrivals stores.

“Discussions had been taking place with the relevant parties to add perfumes and cosmetics before the [arrivals shops] actually opened.”

REMAINING LOCATIONS

Introducing perfume products in the remaining arrivals shops is now the priority, according to Oshima. “We would like to introduce them in our other locations as soon as everything is ready. Currently, there is insufficient space in some of the stores so we need to rearrange the fixtures and fittings a little.”

The arrivals shops are spread across all three terminals with two 100sq m outlets in Terminal 2 (North and South), two 50sq m shops in Terminal 1 and one store in Terminal 3.

The T2 outlets opened in early September 2017, while the T2 south wing and north wing shops began trading on 1 December and 16 December respectively. The T3 shop opened on 15 November.

The stores themselves actually account for around 60% of Narita’s total duty free arrivals sales, helped by the fact all arriving passenger must pass by them. The T1 shops comprise around 30% of arrivals sales with the T3 shop accounting for the remaining 10%.

COSMETICS TO FOLLOW?

Pressed by TRBusiness as to when cosmetics could be added to the arrivals duty free product mix, Oshima said: “We already obtained permission from the relevant parties to carry perfumes as well as cosmetics, which could be added next. That said, we still need to negotiate with the brands to make this possible.”

Sales from arrivals shops are relatively small compared to revenue generated from departure stores, so the implementation of perfumes and perhaps even cosmetics will have little impact on overall sales.

The importance, however, of the introduction of these products must not be underestimated. “The important thing is that the new line-up will offer our customers additional shopping opportunities and convenience,” Oshima acknowledged.

SLOW START

She also confirmed to TRBusiness during a recent interview at the TFWA World Exhibition in Cannes, that sales across the airport’s arrivals shops were picking up after a slow start. “Arrivals sales between September 1 and September 15 2018, rose +85% compared to the same period last year.

“There was a slow start because Japanese and Chinese passengers were unaware of the concept. Gradually, they are becoming more and more aware and tobacco sales are now particularly high.”

Speaking exclusively to TRBusiness’ Asia correspondent David Hayes, Takumi Shimizu, Director of International Product Division I in NAA Retailing Corporation’s FaSoLa Shops Purchasing Department said he initially expected over 90% of arrival shop customers to be Japanese. “After opening the shops we see 75% are Japanese and 25% are foreign passengers and mostly Chinese.

“The nationality share of arrival purchases depends on flights. Some people buy expensive wines as personal souvenirs such as Bordeaux wines, which are over JPY 300,000 per bottle.”

According to Shimizu, Fa-So-La has designed its arrival shops with a ‘grab and go’ format in order to target arriving passengers looking to make a quick purchase from around 400 items displayed in each shop.

“Tobacco is 80% of our total arrival spend and liquor is 20%, so arrival shop spending is not so high.”

He added: “Japanese passengers are allowed two cartons of cigarettes, but foreigners are allowed four. Iqos is most popular in our arrival shops, but it’s just the Iqos e-cigarettes as the Iqos gadget is not dutiable. We cannot sell this in duty free arrivals.”

Increasing the number of items purchased by each customer in arrivals is the prime objective, according to Shimizu.

“Our expectation is ‘Plus One’ selling—tobacco is the main item but we expect customers to grab another item like liquor.”

Speaking of liquor, whisky is the top seller in this section. “Single malts sell in arrival shops while blended malts and Johnnie Walker sell in our departure shops, along with other brown spirits such as cognac.”

Tokyo Narita is not the only airport to open arrivals duty free shops. As reported, ANA Trading Duty Free Co Ltd was selected to operate three stores at Kansai International Airport, which TRBusiness understands opened in April. Arrivals duty free shops have also opened at Fukuoka and Chubu International Airports.

BACKGROUND

As well reported by TRBusiness, arrivals duty free was finally introduced in Japan at Tokyo Narita International Airport last September. The introduction of arrivals shops had been on the table for a number of years, but any move had been rejected by the government.

As attention turns to the 2020 Tokyo Olympics and plans are formulated to accommodate the inevitable increase in international travellers, the introduction of perfumes, cosmetics or indeed any other product category can only be positive for airport, retailer and most importantly consumers.