Desired destination Duty Free Land: ‘Flights to nowhere’ generate KW1.62 million (US$1,450) regular shell out for Lotte Duty Free in March – The Moodie Davitt Report

SOUTH KOREA. Obligation cost-free browsing on so-identified as ‘Non-landing tourism flights’ or ‘Flights to nowhere’ created average profits of KW1.2 million (US$1,075) per passenger for Lotte Responsibility Absolutely free in the initial quarter of 2021, with the March figure climbing to KW1.62 billion (US$1,450), the retailer uncovered nowadays.

With outbound and inbound journey heavily limited by the pandemic, these kinds of flights have develop into a novel way for passengers to practical experience the pleasure of flight although also benefiting from obligation no cost allowances. Considering that Asiana Airways supplied the very first place-considerably less flight on 12 December, 7 airways have operated 75 flights to nowhere that have captivated about 8,000 travellers, Yonhap News Agency described now, citing the Ministry of Land, Infrastructure and Transport.

“As with abroad departures, duty free of charge purchases are accessible, and far more and additional passengers use it as an option for shopping,” Lotte Obligation Free of charge reported. “The unit price tag of passengers on a non-landing tour is three situations bigger than that ahead of the coronavirus. The tariffs imposed on excess [i.e. above the duty free allowance] can also be minimized by -30% (up to KW150,000/US$134) by voluntary reporting, so the stress is not higher.”

At this time, the obligation no cost restrict for each Korean national is US$600 (all over KW670,000), and passengers can get added tax- and obligation free gains up to a carton of cigarettes, 1 litre of alcohol underneath US$400, and a 60ml fragrance.

This graph demonstrates the extraordinary month-on-month income development produced by the ‘non-landing tourism flight’ thought. Click to enlarge.

Some 1,600 these kinds of travellers ordered from Lotte Responsibility Absolutely free in March, around 3 moments larger than in December 2020 when non-landing tourist flights very first started. March sales surged by +25% when compared to the previous month, pushed by large promotional exercise held in affiliation with the seven collaborating airways, Lotte Duty Totally free.

Attractiveness category dominates revenue although on the web share spikes

Cosmetics and fragrances had been Lotte Responsibility Free’s dominant category across all channels in the initial quarter, producing 45% of whole income, adopted by trend and leather with 29%, watches and jewellery at 12%, and liquor and cigarettes with 5%.

A Lotte Duty Free spokesman said, “Before Corona, cosmetics and perfumes were 35% of full profits of Korean customers, and watches and jewellery have been 5%. So we are promoting a ton of watches, jewellery, bags, sneakers etcetera.”

Online profits created 60% of Lotte Responsibility Free’s gross sales in the quarter, followed by downtown retailers with 36% and airport retailers at just 4%. The retailer’s withdrawal from its liquor & tobacco procedure at Incheon Worldwide Airport Terminal 1 in early March was a key variable in that low proportion. At this time, all flights for non-landing tourist flights are departing from Incheon Global Airport T1

Gen Z individuals represented some 50% of shoppers, though females accounted for 56% of purchasers.

The pandemic’s impression – and Lotte Obligation Free’s swift adaptation to it – can be found in the dominant share that online gross sales now stand for. In March 2019, when Martin Moodie interviewed Lotte Obligation Cost-free CEO Kap Lee, ecommerce represented 25% of the retailer’s gross sales, about double the share of five several years previously. For Q1 2021 the channel has climed to 60%. Click on to enlarge.

Ground breaking marketing and VIP constitution flights travel shelling out

In mid-March 2021, Lotte Obligation Cost-free hosted an occasion that made available first-come, first-served, non-landing tour tickets to major clients of the Myeong-dong downtown keep when obtaining extra than US$550 of items. The Air Busan flight that departed from Incheon on April 3 and 10 and returned around Japan’s Tsushima Island (the environment for the smash-hit PlayStation 4 game Ghost of Tsushima) been given a sturdy response, with a full of 260 seats bought out across equally days.

Who would have imagined at the commence of 2019 that Lotte Duty Totally free would come to be an inflight retailer? But this is not inflight searching as we knew it, as Lotte Obligation Totally free pivots immediately to adapt to a planet the place barely anything at all is standard. (Over) Cabin crew attract the lucky winners of a sweepstake.

Travellers applying these constitution flights put in all around KW1.2 million on average, on par with the common non-landing flights, but shoppers above 40 accounted for 86% of the overall though 62% were girls. The browsing attributes of VIP buyers at Lotte Responsibility Absolutely free have been “remarkable”, the retailer stated. Fashion and leather was the leading group, accounting for 56% of income, followed by cosmetics and perfumes with 24%, liquor and cigarettes (6%), and watches and jewelry (4%).

Traces from Creed, Make Up for At any time, Reward, Biotherm Homme and Lancôme major the greatest-advertising record from the inflight system

Lotte Obligation Totally free explained that it is contemplating extra charter operations many thanks to the enthusiastic help for the idea.

The journey retailer has also introduced a selection of internet marketing things to do these as supplying airline affiliate marketers cash and free gifts, upgrading the membership amount of Lotte Online Obligation Free, and web hosting inflight prize draw gatherings in relationship with all 7 Korean airlines that conduct non-landing tourism flights. At the conclude of April, Lotte Resort and Asiana Airways will launch a product or service that brings together lodge accommodation, air travel and duty no cost purchasing.

Lotte Duty Totally free partially reopens Gimpo and Gimhae airport stores to serve non-landing flights

Adhering to the Ministry of Land, Infrastructure and Transport’s recent announcement that it would allow non-landing tourism flights at regional intercontinental airports this kind of as Gimpo, Gimhae and Daegu airports from Could, Lotte Responsibility Free, which has shops in Gimpo (Seoul) and Gimhae (Busan) airports is partly re-opening the shops in accordance with the planned flight schedules.

Lotte Obligation Totally free Head of the System Business enterprise Division Lee Jung-min explained, “Lotte Obligation Free options to proceed to showcase a variety of situations based mostly on the industry’s greatest airline community to fulfill the duty cost-free purchasing demands of Korean consumers.”