Earlier this month, South Korean retail business Lotte Duty Free launched a three-level boutique store in the Sydney CBD, bringing the business’ duty-free offering to the city for the first time. According to Lotte Duty Free Oceania chief executive Stephen Timms, the store’s design and concept is built around levels dedicated to certain product categories: beauty, alcohol, and luxury. Timms said this approach came from the business’ understanding that to succeed in retail, it needs t
eeds to provide unique experiences to customers.
“Our location at the corner of Pitt and Market Streets positions the store as a focal point of Australian retail,” Timms told Inside Retail.
“Design innovation and client experience were the guiding principles in the creation of this store. We want people to build [this store] into their plans and be excited to experience it as a part of the international travel journey.
“The store has a huge focus on beauty brands, but also includes a curated Swiss watch collection [and] an intimate cellar door, where you can be guided by a house sommelier and whiskey expert.”
Duty-free stores are usually located at international airport terminals, as they allow customers to purchase products without paying local taxes, but Lotte’s CBD store creates a new opportunity for travellers.
In airport stores, customers are only able to access duty-free stores after they have checked the bulk of their bags, and are likely only carrying carry-on luggage – limiting what they can purchase. This isn’t the case for products bought in advance, however.
“[When you buy from our Sydney store], you take your purchase with you in a sealed bag,” explained Timms.
“This is a unique offer to Australia, and it allows you to pack products in your checked luggage before you get to the airport, avoiding having to carry them as hand luggage and potential confiscation at a transitioning airport.”
The store also allows customers to plan and shop at their leisure, rather than with a looming flight, forcing them to rush through the airport, said Timms.
Lotte also has a standalone store in Melbourne, airport terminal stores in Brisbane, Darwin, and Canberra, as well as international stores.
Travel is recovering, but slowly
The launch of Lotte’s Sydney store comes as Australians gear up to travel abroad following years of lockdown. According to Traveller, the time to renew passports has shot up by 70 per cent since the announcement that Australia’s international borders would reopen last November due to high demand.
The travel industry was one of the hardest hit sectors throughout the pandemic, and even since borders reopened, international tourists are not returning in the numbers they once did.
According to the Australian Bureau of Statistics (ABS), international arrivals hit a two year high in March 2022 at 580,000 – a number well short of the Jan 2020 high of 2.26 million. Almost 81,000 of that number are overseas visitors who only plan to be in the country ‘short-term’.
Australia’s biggest tourist customers have traditionally come from China, but with only two local flight operators now flying from China to Australia, mounting political tension, and issues with vaccines, the numbers of high spending tourists have fallen dramatically.
“There’s no doubt that Covid has presented a huge challenge for the industry,” Timms said.
“Our client profile mix has certainly changed, and so Lotte has broadened its approach to [appeal to] all nationalities.”
ABS data now shows that the three leading sources of international travellers to Australia are now the United Kingdom, New Zealand and India.