ITALY. Leading global travel experience player Avolta and travel fintech company utu are launching a pilot programme to maximise duty-free shopping at Milan Malpensa Airport Terminal 1 and Milan Linate Airport, driven by an enhanced VAT refund process.
The innovative programme offers travellers +25% more spending power by upcycling city-side VAT refunds, with the goal to unlock “significant airside duty-free revenue growth”, said the partners.
From this month, the Avolta x utu programme will “redefine the traveller’s retail journey” by transforming VAT refunds into duty-free vouchers redeemable in Milan.
While the pilot is focused on Avolta’s Milan duty-free operations, if successful the programme will be rolled out across its global shop network.
From early June, non-EU travellers can convert their VAT refunds from city-side purchases into airside duty-free vouchers worth around +25% more than their original refund.
By erasing the line between cityside and airside shopping, the programme aims to maximise the potential of VAT refunds, offering travellers increased spending power.
They can gain access through utu’s dedicated web solution available on all smartphones. Tourists will continue to complete the standard tax refund process at the airport before departure.
The partners noted that in the global travel retail sector, an estimated US$4 billion in VAT refunds processed at airports goes unclaimed each year (a figure based on Global Blue data).
They said the Avolta x utu programme will be the first to capture this market at scale, offering VAT refunds that might otherwise leave the country, as an incremental sales driver for Avolta’s airside retail stores in Milan and if successful, worldwide.
Avolta Chief Strategy and Transformation Officer Maurus Lienhard said: “utu’s proposition puts the traveller at the centre by providing additional value and enhancing their journey; this fits perfectly within our Destination 2027 strategy.
“We are excited to launch utu in a major European travel hub where tax-free shopping plays a key role, and look forward to sharing its benefits with our customers.
“Additionally, we see potential to leverage our global network with a presence over 73 countries and 5,100 points of sale to roll out this programme, driving sales growth for our business. utu’s innovative solution complements our mission to make the journey as rewarding as the destination and unlock new sources of value.”
utu Co-Founder Ameer Jumabhoy commented: “Our partnership with Avolta demonstrates the untapped potential within the travel retail ecosystem. By rewiring the tax-free and duty-free value chain, we’re creating a win-win for travellers and airside retailers. We believe this model can be replicated in airports worldwide, driving multi-billion-dollar growth for the industry.”
utu’s solutions have already attracted much attention within the industry. In 2023, utu’s solution impressed judges at Avolta’s NEXT Global Innovation Challenge, a showcase seeking visionary ideas to elevate travel retail. Selected as one of 14 finalists from over 140 entrants, utu secured a funded project with Avolta.
The programme launch will be supported by a strategic marketing campaign featuring a mix of digital promotions with in-person engagement. Avolta x utu ambassadors will be placed in key locations in Milan city centre and at Malpensa Airport T1 to drive awareness of the offering.
The partners concluded: “As the project progresses, the travel retail industry will be assessing the impact of unlocking refunds earned city-side on their own airside duty-free sales. The Avolta x utu model will serve as a blueprint for airports and retailers worldwide, with an opportunity to unlock a new era of growth for the travel retail sector.” ✈
