Of all the many forms that tourism has taken over the centuries, retail tourism has come to the fore in an incredibly strong way over the past four decades.

Indeed, the sector has evolved into an experience-driven, digitally integrated, and premium-focused market which significantly drove the global economy into a state of recovery following the pandemic.

Since 2022 when nations relaxed travel restrictions, international travel spending per individual has surged massively but has also deviated from the concept of purely transactional shopping into something that experts are referring to as retailtainment.

Retail…what?!?

The term actually isn’t new as it was first mentioned in American sociologist George Ritzer’s 1999 book Enchanting a Disenchanted World: Revolutionizing the Means of Consumption.

There, Ritzer defined the concept as the practice of blending shopping with immersive entertainment. 

In the context of retailtainment, traditional stores shift from being simple product displays into experiential destinations. 

In a similar vein, brands use interactive technology, live events, and gamified storytelling to engage customers, encourage longer visits, and build brand loyalty.

Now, when it comes to retail tourism, it means that travellers are shifting from merely transactional souvenir shopping towards the end of the trip to making retail a part of the overall experience.

Localisation comes into play here, as well as personalisation: rather than embarking on yet another group tour that takes them to places that are of but passing interest, travellers now make it a point to customise their itineraries to include exclusive shopping opportunities at their destination, as well as retail experiences unique to it like the pasar malams [night markets] of the Malayan Peninsula or treks into the ancient mercantile districts of Taiwanese cities.

Doing so enables travellers to bring home more than just another cheap souvenir, but more tangible reminders of their trip.

Bring on the big brands

Individual nations aren’t the only winners in the current retail tourism scene: the world’s biggest consumer, fashion, and luxury brands are also cashing in on the trend.

The luxury and fashion industries, in particular, have shifted heavily toward physical, immersive brand activations in destination cities to capture high-spending tourists.

As our sister publication Retail Asia put it back in 2024, contemporary retail tourism can be summed up in two points: “First is the eagerness of travellers to customise their itineraries, their desired destinations and their shopping choices. Second is the continuous paradigm shift of consumer behaviour, wherein the products with the best value and quality are most sought.” 

It should likewise be noted that it’s the high rollers or high-net-worth consumers who are driving sectoral growth, particularly within the Asia Pacific where visitor spending has been characterised by a significant demand for luxury products, not only in mandated duty-free shopping areas, but also retail zones frequented by locals.

The bumpy road ahead

This, however, does not mean that the ongoing evolution of the global retail tourism sector is flowing smoothly.

An August 2025 report under the World Travel & Tourism Council (WTTC)’s Together in Travel initiative discussed several factors that could hamper the growth of the global retail tourism scene.

One major issue is the lack of adequate government support, even in some of the world’s most popular destinations. 

As the report points out: “In several regions, governments have not implemented policies that encourage retail spending by international tourists. For instance, the absence of tax-free shopping schemes in countries such as the UK, limits the attractiveness of those destinations for retail tourists. Similarly, restrictive labour laws, like Germany’s regulations on Sunday trading, prevent retailers from capitalising on peak tourist periods.”

In the face of the still unresolved West Asia crisis, soaring inflation and other economic disruptions challenge the sector’s growth.

These include the still-rising cost of goods, along with much higher energy prices and supply chain disruptions which have all led to higher retail prices and lower consumer confidence​. 

The report adds: “While the luxury market remains resilient, many tourists are more cautious about spending, impacting the overall growth of retail tourism.”

Sustainability is another key consideration, given the rising appeal of sustainable products among global travellers.

However, the implementation of sustainable practices in the context of retail tourism remains an expensive endeavour, especially for micro-, small-, and medium-scale enterprises (MSMEs).

Unless governments intervene, the development of relevant infrastructure, the entry of more substantial investments, and the necessary training of personnel will remain elusive for smaller players in the sector.