Is AI the future of travel retail?

This year’s TFWA World Conference dwelt on the many challenges facing the travel retail sector, not least the unsettled geopolitical environment and the seismic impact of new AI technology, as Joe Bates reports

Spare a thought for travellers caught up in a spate of drone-related incidents at European airports this September, such as those in Copenhagen, Oslo, and Munich, which caused considerable ­flight delays, diversions and cancellations. In recent months, other European countries, including Belgium, Romania, Estonia, and Lithuania, have also reported drone overflights, sometimes near military sites. Such incidents have been widely perceived in the west as a form of hybrid warfare waged by Russia to test and disrupt NATO’s critical infrastructure.

In the long list of destabilising factors currently disrupting the travel retail business, geopolitical tensions are often dismissed too quickly, so it was refreshing to see the recent TFWA World Conference in Cannes tackle the issue head-on. In his presentation, Rudolph Lohmeyer, senior partner at global management consulting firm Kearney and head of its National Transformations Institute, acknowledged that the world order has fundamentally shifted this year, with tariff wars, shifting political alliances and cracks in rules-based international laws and governing bodies dominating news headlines.

For an international business such as travel retail, which relies on peace, stability and open cross-border movement, such a changed trading environment has significant ramifications. As Lohmeyer pointed out, around 25% of global travel retail sales, some $18bn, now sit on so-called “high-risk corridors”, particularly in Asia Pacific and the Middle East, where operations can be disrupted overnight. Moreover, the fragmentation of airspace is causing costly operational challenges such as route closures and rerouting, which are driving up costs and causing congestion.

The other hot-button issue addressed by this year’s conference was the AI revolution, which is set to transform every aspect of personal and business life over the coming decades. Indeed, TFWA president Philippe Margueritte made AI a central theme of his opening address, labelling it an “extraordinary opportunity” for the industry. He emphasised that “AI is not tomorrow, it’s today”, pointing to its existing role in real-time analytics, traveller profiling and dynamic retail experiences.

To dramatise this message, Margueritte beckoned Ameca on the main stage of the Palais, billed as the most advanced human-like robot ever built, which then went on to take part in a live dialogue with the audience, symbolising human-machine collaboration and the dizzying pace of technological change.

It was left to the conference keynote speaker, Tony Parker – four-time NBA champion and entrepreneur – to stick up for humankind, insisting human contact remained vital. “People still crave emotional connection and great service. Technology should support that, not replace it.”

Alongside retail technology, sustainability, and retailtainment, AI was also a key aspect of the Innovation Square, TFWA’s big innovation for 2025, billed grandly as a 400sq m space located outside the main Palais dedicated to innovation, leadership in technology, retailtainment, sustainability and science. Sponsored by Avolta, the space hosted morning workshops, demonstrations, and private networking events.

Quiet year for launches

In terms of major launches, it was a quiet year, especially for the big multinationals, underlining the challenging times the channel is currently facing. For instance, Pernod Ricard chose to unveil its latest Chivas Regal innovation, the clear spirit line extension Crystalgold, away from the show, while Diageo Global Travel opted to stage an industry panel debating the weighty topic, The Future of Travel Retail: Adapting to Volatility and Consumer Change.

In addition to Diageo Global Travel managing director Andrew Cowan, the cross-category panel included executives from Swiss chocolate company Lindt & Sprüngli, global travel retailer Avolta and industry body the European Travel Retail Confederation. The panel agreed that the travel retail sector needed to pivot from transactions to experiences, especially as only around 12% of passengers visit the liquor aisles of the typical duty free store.

What launches there were at the TFWA show tended often towards value and accessibility, another sign of the changed global economic climate. For instance, Suntory Global Spirits unveiled two entry-level Islay single malt exclusives: Laphroaig 12 Year Old, available exclusively with Gebr Heinemann until the end of 2025, and Bowmore 11 Year Old, priced attractively at only $55.

This year’s show wasn’t entirely without a sprinkling of aspirational celebrity stardust, however. Ian Somerhalder, star of hit TV series Lost and The Vampire Diaries, dropped by the stand of distributor GMAX Travel Retail to promote his Brother’s Bond bourbon brand, which he launched with Vampire Diaries co-star Paul Wesley in 2021. Somerhalder believes travel retail can help broaden Brother’s Bond’s international distribution, and the brand has already gained a multi-airport listing with Gebr Heinemann.

It's abundantly clear we are living in troubled, economically straitened times and, while travel retail must cut its cloth to suit its measure, celebrity-backed brands such as Brother’s Bond have an important role to play in bringing a little glamour to the duty free spirits aisles.