High-end retail outlets at airports: Do people actually buy stuff there?

[LSLGuy]

@bump

Yeah this is definitely a thing, especially in Latin American countries. I was astounded to find out that there are people who regularly fly from Mexico and the northern parts of South America to places like Houston, Miami, and Dallas just to shop at the higher end retail outlets. I had just assumed that all those stores would have outlets in their capital cities or whatever, but apparently not, or apparently there’s a wider variety in some US cities within a relatively short flight.

It’s not just the Latin wealthy who do this. The sorta upper middle class folks come up here in droves to buy goods cheaply and bring them home.

In many Latin countries there are very high tariffs on imported goods. Trying to keep money and jobs in their country, not exported to China. But the actual effect is that imported goods become both scarce in their local stores, and very expensive. So everybody, not just the poor, only own old shitty stuff. (Sound familiar?)

Which is a double whammy when you consider that “upper middle class” in the USA might be $150K/year but down there it’s $30K/year. Buying electronics and kitchen gizmos and clothing and such that’s all made in China, et al, gets real expensive when prices are doubled by tariffs and you make 1/3rd or 20% of what Americans do.

Anyhow, legions of folks fly up here to MIA, go to one of several malls or outlet malls near the airport, buy 2 or 3 huge wheeled suitcases from the dozen (no exaggeration) kiosks in the mall selling huge cheap hardsided suitcases, then wheel them around the mall filling them with discounted goods at US outlet mall prices.

Then they drag their groaning new suitcases back to the airport, check them, and fly home. Purchases brought in by travelers for “personal use” are generally exempt from duty = tariffs. So the moment they’re passed out of customs, they have goods to sell for less than what any legit local store could have imported them for. And yes, certain customs officers recognize certain travelers then nods, winks, and cash sometimes changes hands on the way through.

Lots of local eBay equivalent e-shops are supplied this way. Ditto lots of Mom & Pop retailers. And folks get stuff for their extended family too. Latin folks tend to have very large extended families, both from high fertility and from a culturally determined very expansive definition of who’s “family”. Second cousin’s next door neighbor’s best friend? Family for sure.

Those suitcases they bought in Miami? Used just the once and sold the same way as what was inside them. Then the people come back next week or next month and do it again.

Some countries have higher tariff barriers than others, and hence larger or smaller gray market import channels.

When a flight to those fat-channel destinations is planned, the cargo / baggage folks know to assume 200# of checked luggage per passenger; not the 15# per that’s common on many US domestic flights.

[asterion]

@Dewey_Finn

Regarding duty-free shopping, I think Americans have a different view of such things, given the wide availability of discounted goods

Also historically the de minimis exemption existed and was fairly high ($800 or so), the duty free exemptions for personal use were fairly liberal, other duties and any tariffs were generally quite low, and most things were widely available in a normal store. The only stuff I’ve ever bothered bringing back in besides normal souvenirs is alcohol that simply isn’t available. And all that still fell under the personal exemption.

[suranyi]

That’s exactly what I was going to say. I once read an article about those high end airport retailers and that’s what it said: one or two sales a day was enough to make them profitable.

[doreen]

@Dewey_Finn

Regarding duty-free shopping, I think Americans have a different view of such things, given the wide availability of discounted goods. Things like liquor or luxury watches are sold at a discount in stores like Costco or Total Wine & More.

That’s part of it - but there’s more. My husband expressed surprise about certain stores in erither Aruba or Curacao. He asked why someone would go there to shop at Fendi (which I’m pretty sure was not an actual Fendi store, but may have sold real Fendi items) instead of buying it at home. He didn’t realize that there are many places ( in the US and outside the US) where certain items are just not easily available because it’s easy for us to get anything that is sold in the US. And it’s not just high-end ones - if I ever see a Body Shop when I’m traveling I’ll make a beeline for it because their products are not available in the US except on ebay or Amazon

[Apodder]

I have always wondered about the luggage for sale in the airport….who’s buying more luggage when you’ve already packed, checked, and gone through security?

[Kent_Clark]

@kenobi_65

@Pleonast

For some companies, keeping up a storefront with luxury items likely comes out of the marketing budget. It shows your brand is great enough to have a shop in a large airport. It’s also an advertisement to everyone who walks past it. And a lot of people, people who are wealthy enough to fly, will walk past it. That kind of targeted advertising is valuable.

Speaking as an ad guy: this is likely true. It helps reinforce brand awareness, and reinforce the connection between the luxury brand and the upscale travel experience.

A long time ago I worked for a marketing company who got a client’s product placed in airline club lounges. Not for sale, mind you, but for show. The club lounges had a clientele of passengers who were either business executives flying first/business class, or wealthy vacationers who had the time and money to spend hanging out in airport lounges. A perfect place to show off a new product aspiring to look high-status.

[LSLGuy]

Anyone whose handle or wheels break.

[commasense]

Just imagine how horribly overpriced those things must be for that to be true. Salaries, rent, utilities, etc, all offset by the profit from a single sale.

[LSLGuy]

Nothing is overpriced if the customer buys it. By definition.

I know what you mean, but an e.g. Rolex is not a timepiece. Or rather, keeping time is one of the least of its many functions. All the value to the buyer is in the other thing(s) it does. Showcase wealth, demonstrate membership in a club, attract women or men as the case may be, etc.

Whether you or I value those other functions is immaterial. They do, and they’re the ones buying them and paying for them.

[jnglmassiv]

@Voyager

Victorinox, the maker of Swiss Army knives, almost went bankrupt since a large part of their sales were from exactly these airport stores

I’d guess it was the general ban on pocket knives in airports that hit bottom line more than the loss of airport retailers. People don’t carry knives (or pens, combs, cash, lots of stuff) like they used to.

I’ve seen a lot of Victorinox knives but I’ll bet zero were purchased at an airport. Weellll, I take it back, I’ve seen auction listings for items confiscated or surrendered at TSA screenings. Lots of nail clippers and knitting needles, plenty of pocket knives. They were sold like “ten pounds asst TSA contraband” with one or two pics.

[Voyager]

@jnglmassiv

I’d guess it was the general ban on pocket knives in airports that hit bottom line more than the loss of airport retailers. People don’t carry knives (or pens, combs, cash, lots of stuff) like they used to.

Nope. Sales of Swiss Army knives dropped 30% right after 9/11, eventually going down 40%. That’s not from them being confiscated. One reason I check luggage is to pack my knife. The competitor to Victirinox went under and was bought out by them.

Switzerland accounted for 20% of knife sales, but half were to tourists. They put up signed in Swiss airports reminding people to put their knives in their checked luggage.

My book is my cite - I wrote a chapter on Swiss Army knives for our book on military innovations used by civilians now, so I researched this thoroughly. Did you know the Romans had a multi-use tool?

[LSLGuy]

@Voyager

@jnglmassiv

I’d guess it was the general ban on pocket knives in airports that hit bottom line more than the loss of airport retailers. People don’t carry knives (or pens, combs, cash, lots of stuff) like they used to.

Nope. Sales of Swiss Army knives dropped 30% right after 9/11, eventually going down 40%. That’s not from them being confiscated. One reason I check luggage is to pack my knife. The competitor to Victirinox went under and was bought out by them

Is this perhaps a miscommunication?

I stopped carrying any sort of pocket knife after 9/11. Both at work at airports and day-to-day at home. Too easy to goof habits & bring contraband to work. The second time post 9/11 I lost a $100 pocket knife to then-new TSA I just gave up.

Prior to that I always had some pocketknife or other on me since maybe age 10. And bought something new and different every year or so. Fast forward to now: It’s been 24 years since my last knife purchase. If e.g. Victorinox was depending on me they’d be dead.

I might not be typical of everybody. But I might be representative of some decent fraction.

[EddyTeddyFreddy]

@Voyager

Did you know the Romans had a multi-use tool?

Like this?

Look, think, do: Roman "Swiss Army Knife"

[silenus]

Yep. I stopped carrying a pocket knife when I had the second one confiscated at the county courthouse. Just wasn’t worth the hassle.

As for high-end shops at resorts/casinos - it also works in reverse. If you want to buy a Ferrari in Las Vegas, the dealership is at Wynncore. And since you’re already there…why not drop a few tens of thousands at the tables, or at least have a thousand dollar lunch?

[Voyager]

I’d have to look through my notes, but a major point of sale for them was airport duty free stores and airport knife stores. I doubt people giving up carrying the knives would have led to an immediate sales decrease. Anyhow, the connection was not made by me but by my sources, including Victorinox IIRC.

There are definitely lots of places you can’t bring a knife any more. Besides the airport and the courthouse, they are banned in the Contemporary Jewish Museum in San Francisco (not closed) and I had to put mine back in my car for a talk by Neil deGrasse Tyson. His desire, not the venue.

[blondebear]

@Apodder

I have always wondered about the luggage for sale in the airport….who’s buying more luggage when you’ve already packed, checked, and gone through security?

Not quite what you’re describing, but I’m reminded of the scene in “Up In The Air” where George Clooney’s character schools Anna Kendrick on the proper way to pack for a business trip.

[DrDeth]

@Spiderman

The difference with the SkyMall catalog is I didn’t need to lug anything with me for the rest of my trip.

And the stuff isnt always that expensive.

@LSLGuy

Prior to that I always had some pocketknife or other on me since maybe age 10. And bought something new and different every year or so.

I still do, but I havent flown is quite some time. Most of my daily use pants vest and jackets have a Swiss army knife in them. I do have special “Disneyland” pants and shorts which have been disarmed however.

[hajario]

@jnglmassiv

Lots of nail clippers and knitting needles, plenty of pocket knives.

Nail clippers were briefly banned after 911 but have been allowed for over twenty years. Similar for knitting needles. They are explicitly allowed. I’m not sure if they were ever banned but at worst were on the same trajectory as nail clippers.

[LSLGuy]

@DrDeth

I do have special “Disneyland” pants and shorts which have been disarmed however.

I recall sometime around 2017 being turned away at the gate to a minor league baseball game because I had a small penknife in a pocket. Took it back to my car, returned to the gate to enter the venue and all was well.

That was the end of my attempt to reintroduce pocket-knife carrying to my life. ~15 years post 9/11.

[jnglmassiv]

@Voyager

I’d have to look through my notes, but a major point of sale for them was airport duty free stores and airport knife stores.

Yes, I’m skeptical that airport sales of knives were in any way significant.

@hajario

Nail clippers were briefly banned after 911 but have been allowed for over twenty years. Similar for knitting needles

Heh, that’s why I mentioned them. Maybe it also was voluntary surrender box contents? Or screeners unclear? The main point is that it’s not ten pounds of awesome Swiss steel but mostly busted screwdrivers and corkscrews.

Reading a bit more (there’s a ton of splashy articles, it’s a frequently asked question), it seems items confiscated by TSA are turned over to the local State for liquidation, sale, auction. There might be other State confiscated items mixed with the airport stuff like prison visitor screenings, stadiums, concert venues, etc.