Travel Retail’s Promotional Problem
11 minutes read
Introduction by: Peter Marshall
Shoppers don’t respond to promotion presence. They respond to the perceived value gap. And travel retail has got it wrong.
If you walk through almost any major airport store today, you’ll see it instantly: red tickets everywhere (or yellow, depending on the market).
“Special Offer”, “Save”, “Travel Exclusive Deal”, “3 for 2” – the fixtures are layered with call-outs. The shelf-edge is loud and the messaging is constant.
At first glance, it feels dynamic, commercial, energetic, even value-led. It looks like a marketplace of opportunity. But, according to Garry Stasiulevicuis, Managing Director of Shelftrak and this feature’s author, you really need to step back and look at the data, consider the macro performance of the channel as well as the psychology of the shopper. And a much harder truth emerges: much of travel retail’s promotional activity is noise.
Read on to discover some extraordinary insights together with what is effectively a new roadmap for Travel Retail and its current dependence on red ticket promotions. Garry very elegantly argues that the red ticket has now simply become decoration, not a tool for persuasion.
The Macro Context: Value Is Growing Faster Than Volume
Across global travel retail, value growth is currently running ahead of volume growth in many major alcohol and confectionery categories. On the surface, this appears positive. Revenue is increasing, performance looks healthy, and average selling prices are rising. But the mix tells a more nuanced story.
When value grows faster than volume, inflation and price increases are inevitably playing a role. Premiumisation is also contributing, pushing average selling prices higher. Shoppers are spending more per unit, but they are not buying proportionately more units. In simple terms, revenue growth is being driven partly by price rather than purely by incremental demand.
That dynamic creates pressure.
When growth becomes more price-led than unit-led, elasticity becomes more sensitive. Shoppers become increasingly price-aware, scrutinising what they are paying and whether the proposition feels fair. Promotional credibility becomes more important, and the perceived fairness of pricing shifts from being a background factor to a strategic issue.
Layer onto this the impact of shrinkflation – smaller pack sizes, reduced weights, adjusted formats at the same or higher price – and scepticism naturally increases. Today’s traveller is more informed and more vigilant than ever. They compare airport pricing with domestic markets. They check online prices. They notice pack size reductions. They question whether a “deal” is genuinely delivering value or simply creating the illusion of savings.
In this environment, weak or shallow promotions do not reassure shoppers. They amplify cynicism.
The Reality on the Shelf: Over-Promoted, Under-Impacting
At Shelftrak, we analyse thousands of alcohol and confectionery promotions globally each year across 70+ airports.
And what we see repeatedly is not a lack of promotional activity but an excess of it.
Across key categories, we regularly observe:
- 40–50% of SKUs on promotion at the same time.
That sounds aggressive. It looks value-led. It feels commercially energetic. But here’s what that looks like in practice. In one representative example from the Asia region:
- 730 total Alcohol SKUs
- 370 SKUs on promotion
- 62% offering less than 20% saving
- That’s 230 SKUs sitting below the behavioural conversion threshold
Nearly a third of the category was technically “on deal” – yet unlikely to materially change shopper behaviour.
In a market where value growth is already outpacing volume growth, shallow promotions do not drive incremental units. They simply inflate communication.
This isn’t promotional intensity. It’s promotional inefficiency. And in a high-cost, high-visibility environment like travel retail, inefficiency compounds quickly.
The Psychology of the Perceived Value Gap
Shoppers do not respond to the presence of a red ticket.
They respond to the perceived gap between what they expect to pay and what they believe they are saving.
That perceived value gap has thresholds. And it is not linear.
Under 10%: Invisible
Decades of FMCG research (Nielsen, IRI, Ehrenberg-Bass) demonstrate that sub 10% discounts rarely drive incremental volume unless supported by major theatre or visibility.
In travel retail, where the very premise of duty-free and travel retail is already a value advantage, a 10% saving often feels disappointing. In an inflationary environment, it can feel like price correction rather than generosity.
A promotion at this level does not trigger switching. It does not create urgency, and it barely registers cognitively. And in a value-growing market, that’s not enough.
10–15%: Acceleration, Not Recruitment
At this level, you may accelerate a purchase that was already planned. But you rarely recruit new buyers or trigger switching between brands.
In everyday segments such as Standard Vodka, lower priced Blended Whisky, standard Gin, chocolate tablets or bite-size confectionery, a 12–15% saving feels modest.
It does not create a compelling gap versus the rising price baseline that shoppers already see. In a market where price perception is under scrutiny, nominal savings do little to restore trust and do little to really drive conversion.
20–25%: The Conversion Threshold
Global retail studies show behavioural change accelerates once discounts cross the 18–20% threshold.
At 20–25%, perceived value becomes much more obvious. The saving feels meaningful and this in turn drives behavioural change. At this level, we see that switching increases and the urgency to purchase increases.
A level of 20% can be considered the tipping point but below this level, promotions are often decorative. Above it, they become functional.
30%+: Hero Mechanics
When a discount hits the 30%+ mark, the impact can often be profound. We see that switching becomes significant, the consideration of stock-up behaviour increases and the move from standard to premium trial accelerates.
The key point is that, at 30% +, hesitation reduces and enticement levels increase. This is where a promotion becomes a genuine driver of interaction and conversion.
A Data Driven Concern
However, when we take a closer look at the data, what we consistently see is the opposite of focus. Instead of a concentrated effort on fewer, bigger, better activities, we see a plethora of shallow discounts that are spread thinly across too many SKUs.
The result? A sea of promises. No clear standout value. Shoppers drowning in over-communication.
Portfolio Discipline: Promotions Must Reflect Price Ladder Strategy
The solution is not to create rigid rules for premium versus non-premium SKUs in isolation. The solution is portfolio discipline.
Every brand owner operating in travel retail must adopt a laddered promotional strategy aligned to their price architecture. There are no absolute rules, but the principle is clear: promotional depth and mechanics must reflect the role each SKU plays within the wider portfolio.
A structured approach might look like this:
- Entry tier: Clear, compelling value triggers to drive recruitment and accessibility.
- Core tier: The 20–25% activation band, where switching and incremental volume are most likely to occur.
- Premium tier: Selective hero mechanics, added-value bundles, exclusives or visible savings that feel meaningful in absolute terms.
- Ultra-premium tier: Protect margin and exclusivity, using theatre, storytelling or experiential value rather than overt discounting.
It is important to recognise nuance within this framework. A shallow percentage discount on a high-ticket item can still represent meaningful value in absolute terms. A 10% saving on a £300 bottle is materially different to 10% on a £30 SKU. For premium products, the perceived value gap is often judged by the actual cash saved, rather than percentage alone. That is precisely why promotions must be evaluated in the context of the full portfolio – not as isolated percentage mechanics.
Blanket, low-depth promotions applied indiscriminately across the entire range create signage without stimulus. They dilute hierarchy, compress perceived price ladders and blur the distinction between entry, core and premium roles.
In a market where revenue is growing ahead of volume, the objective must be clear:
Promotions must drive incremental units and strengthen portfolio architecture, not simply create visual activity.
The Promotion Paradox: High Presence, Low Depth
Our global data repeatedly shows the same pattern. Promotional density across categories can reach up to 50% +, yet promotional depth is weak and diluted.
In a recent global gin study across a representation of key airports:
- 36% of SKUs were on promotion.
- Only 15% carried meaningful discounts.
Two-thirds of promoted SKUs were effectively shallow offers.
Across alcohol and confectionery categories, we consistently observe:
- 35–50% of SKUs on deal.
- 50%+ of those below 20% saving.
That is systemic over-promotion.
Travel retail has created the illusion of value without delivering the behavioural impact required to sustain unit growth.
Case Study 1: European Hub – Alcohol
Promotional Saturation Without Salience
In one major European airport, 40% of all alcohol SKUs were on promotion at the same time. However, 73% of those promoted SKUs were discounted at less than 20%, and multiple overlapping mechanics were running simultaneously across the category.
In effect, nearly half of the aisle was shouting “deal,” yet almost three quarters of those deals were sitting below meaningful behavioural thresholds. Rather than creating urgency, this created communication and cognitive congestion.
Shoppers were confronted with competing percentage discounts, multi-buy offers sitting alongside straight price-offs, and different savings levels across adjacent SKUs with little apparent logic. There was no clear hero mechanic to anchor the category. Instead of a small number of powerful, high-impact messages, there were dozens of diluted ones.
The outcome was predictable. Promotion became the baseline rather than a signal of exceptional value. Shoppers were forced to compare too many similar offers, increasing decision fatigue rather than accelerating choice. And the few genuinely meaningful deals that did exist were buried within the noise, losing their ability to stand out.
When everything is on deal, promotion loses its signalling power.
Case Study 2: Asia – Confectionery
Complexity Over Clarity
In one key Asian airport, 52% of all confectionery SKUs were on promotion at the same time. Yet 54% of those promoted SKUs offered less than a 15% saving, and the category leaned heavily on multi-buy mechanics.
More than half of the category was technically “on deal.” But many of those deals required mental arithmetic to understand the real savings. In a category like confectionery, where purchases are frequently impulse-driven and decisions are made in seconds, that level of complexity works against conversion rather than for it.
Shoppers were confronted with “3 for 2” offers sitting alongside percentage discounts, tiered mechanics such as “Buy 2 Save 10%, Buy 3 Save 15%,” inconsistent signage, and overlapping price messages competing for attention. Instead of simplifying the choice, the promotional environment demanded effort.
The red ticket became decoration rather than persuasion.
In a price-led growth environment, where shoppers are already more sceptical and more alert to perceived value gaps, complexity does not build confidence. It compounds distrust and slows decision-making at precisely the moment when speed and clarity should be driving conversion.
Retailers Must Move Beyond Operational Convenience
There is no such thing as a one-size-fits-all activity. Today, the industry talks about global promotions and brands are encouraged to implement the same activity across all regions. This isn’t about consistency, it’s about efficiency over effectiveness.
Shopper behaviour varies across every region. Often, even the same shopper will behave differently in different airports.
Across regions and even intra-region, brand preferences differ. Price sensitivities differ and occasions differ. Yet too often, promotions are rolled out globally for operational simplicity. Operational efficiency should never override behavioural effectiveness.
Promotions should be:
- Merit-led.
- Category-informed.
- Regionally or airport relevant.
- Portfolio-aligned.
Retailer and brand partnerships have a responsibility to manage discipline and effectiveness – not just activity.
Fewer. Bigger. Better.
The solution is not more red tickets. It is concentration.
Fewer promotions, executed with greater depth and a clear hierarchy, will always outperform a cluttered, shallow approach. Concentrated activity maximises the value of shelf real estate rather than fragmenting it. It simplifies operational execution for store teams, reduces workload, sharpens inventory focus and restores visual clarity to the category. Most importantly, it strengthens conversion.
Five powerful hero mechanics will consistently outperform fifteen weak ones. In a value-led growth environment, focus matters more than frequency.
The Economics of Noise
Promotions are not free. They come at a cost to every stakeholder in the chain. Margin is sacrificed. Fixture space is consumed. Staff time is diverted. Visual real estate is allocated. Operational complexity increases.
When discounts sit below behavioural thresholds, those costs do not generate incremental return. Brands give away margin without gaining meaningful unit growth. Retailers absorb execution complexity without improving efficiency. Shoppers, confronted with shallow or confusing offers, lose trust in the credibility of the deal.
In the airport environment, where every metre of shelf space carries a premium, inefficiency is magnified. And in a market where value growth is already outpacing volume growth, the priority must be clear: drive true incremental units and sustainable conversion, not simply inflate promotional optics.
Making Travel Retail Easy to Shop
At Shelftrak, we stand firm behind our ethos that a focus on the fundamentals of retail, is the industry’s biggest under-utilised growth lever. For travel retail to succeed it should feel curated not cluttered. It must be clear, not chaotic. And for the shopper, it needs to be effortless, not exhausting.
Reducing promotional clutter does more than tidy up the shelf. It rebuilds shopper confidence. It accelerates decision-making. It elevates perceived store quality and restores premium cues that are easily diluted by excessive discount signage. It improves basket conversion and protects long-term brand equity.
Excessive shallow discounting gradually shifts premium categories into transactional territory. When every shelf-edge screams “deal,” even high-end products begin to feel commoditised. Travel retail should never resemble a clearance aisle. It should feel curated, intentional and worth exploring.
Winning requires discipline, not volume.
This is where a structured promotional framework becomes critical. Our 3-Tier Promotional Discipline Model provides a simple but effective guide.
Discounts below 15% generally deliver limited behavioural impact across most core segments. They may create activity, but rarely stimulate switching or incremental volume.
The 20–25% range represents the core conversion band, where perceived value becomes meaningful and behavioural change accelerates.
Discounts at 30% or above become true hero mechanics – capable of driving switching, stock-up behaviour and urgency when applied selectively.
The key is not to apply these thresholds universally, but intelligently. Promotions must be aligned to portfolio roles, tailored by region or even intra-region dynamics, and grounded in shopper insight. Depth, density and placement should reflect strategy, not convenience. That is how promotional discipline protects both margin and meaning.
The Strategic Shift Required
At Shelftrak, we work with brands and retailers at category level to define promotional strategy using global SKU-level data across more than 70 airports. Our role is not simply to measure activity, but to help shape it by defining the right depth of mechanics, the right density of promotional activity, and how this should be structured across an entire portfolio of SKUs.
The approach is straightforward, but powerful.
It begins with auditing promotional depth by category, quantifying how much activity sits below meaningful behavioural thresholds – particularly the percentage of promotions under 20%. From there, we typically recommend reducing the number of promoted SKUs by 30 – 40%, raising minimum depth thresholds, simplifying mechanics, and restoring clear visual hierarchy so hero offers can genuinely stand out.
Crucially, promotions must be aligned to portfolio ladders and tailored to regional and intra-regional dynamics. What works in one airport or shopper profile may not translate directly to another. Density, depth and mechanics must reflect context.
This structured approach allows brands and retailers to identify inefficiencies in promotional penetration and depth, benchmark against behavioural thresholds, and design portfolio-led promotional frameworks rather than reactive, SKU-by-SKU decisions. It provides clarity on which mechanics are regionally relevant, quantifies the commercial impact of fewer, bigger, better activity, and ultimately isolates what truly drives incremental units.
Promotions must be insight-led, not assumption-led.
The Bigger Point
The industry is celebrating value growth. And rightly so.
But when value begins to grow even slightly ahead of volume, discipline becomes critical. Growth that is driven by price rather than incremental units is inherently more fragile. Layer in inflation, shrinkflation and rising shopper scepticism, and the margin for error narrows further.
In that environment, shallow promotions do not just underperform, they actively erode trust. They reinforce the perception that prices are inflated and discounts are cosmetic.
Travel retail does not need more promotions. It needs fewer, clearer ones. Promotions that create a visible, meaningful and credible value gap. Promotions that reflect portfolio role and regional reality. Promotions that stimulate behaviour, not just decorate the shelf.
Because shoppers do not respond to the presence of a red ticket. They respond to the size and credibility of the value gap it represents.
And until that gap is obvious, meaningful and regionally relevant, the red ticket is just decoration.
