The Americas Summit of the Americas 2021 by Paramount Publishing Ltd.

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SUMMIT OF THE AMERICAS 2021

DUTYFREEMAG.COM APRIL 2021 · SUMMIT OF THE AMERICAS VOL 30 · NO 1

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ARI’s McDonagh makes things work in tough times p.18 Dufry Brazil mitigates losses p. 26 Canada/US Land Border Update p. 38 Recovery in the Caribbean p.48

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Letter from the Editor

Slow

APRIL 2021 · SUMMIT OF THE AMERICAS VOL 30 · NO 1

Revival

hile in some ways the current situation for travel retail is very much the same as it was one year ago — borders closed, travel halted and all work-related communication being done in a digital environment, this year there is an overwhelming sense of optimism when speaking with those in travel retail, whether they represent brands, operators, airports or any support industry thereof. The industry saw a drop in business that would have been unimaginable just 13 months ago, with anywhere from a 70% to 100% plummet from 2019 figures. As Jackie McDonagh from ARI stated during the interview in this issue, she considered a modest 65% drop in December’s YOY sales to be good. And yet the optimism remains. This is due in great part to the fact that the world gathered together like never before to solve things. The scientific community managed to produce at least three highly effective and safe vaccines in a matter of months, whereas this had not been expected to happen for another year or so. While the recovery of travel is moving slowly, it is moving. In the travel retail community, brands, retailers and landlords have all had to work in partnership to help each other through. ASUTIL’s José Luis Donagaray has found governments to be more receptive to listen, while Portland’s Ibrahim Ibrahim has found operators more open to experimenting with the way things have always been done. And there have been some bright lights throughout the darkness. The opening of Brazil’s land border stores helped the cash flow of some brands and distributors, such as Essence Corp. Mexico and some Caribbean countries remaining open or reached compromises to allow tourists, and domestic travel in two of the largest countries — the US and Brazil — helped airlines and retailers to keep a hold of some equity. But the biggest takeaway from the past year is that we are all in this together. Never before have we seen the entire world impacted by anything so great. We all saw and experienced a level of caring, concern and the willingness to help each other that has set a formidable foundation for our future relationships. We all know the recovery will not be linear, and it will not be quick. But we know just as surely that the recovery will come. The travelers of the world are figuratively packed and ready to fly. And while this Summit of the Americas might still be taking place in the digital realm as we await our vaccinations and the reopening of borders, we will undoubtedly see each other in person again very soon.

Kindest Regards,

HIBAH NOOR Editor-in-Chief hibah@dutyfreemagazine.ca

4 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

The Americas Duty Free & Travel Retailing magazine (ISSN 0962-0699) is published four times a year April, June, October and November by Global Marketing Company Ltd. 3414 Mississauga Road, Mississauga, ON, L5L 1T2, Canada. It is distributed throughout Central America, South America, the United States, Canada, U.S. Virgin Islands, U.S. Pacific islands, and the islands in the Caribbean. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. April 2021, Vol 30. No. 1. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. © 2021 Global Marketing Company Ltd. .

THE AMERICAS DUTY FREE & TRAVEL RETAILING 3414 Mississauga Road, Mississauga, ON, L5L 1T2, Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemag.com PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca DEPUTY EDITOR Laura Shirk laura@dutyfreemagazine.ca SENIOR EDITOR Wendy Morley wendy@dutyfreemagazine.ca SENIOR WRITER Rebecca Byrne rebeccabyrne10@yahoo.com.sg ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

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Contents

WHAT’S INSIDE

Lead Stories 24 Shopping China Update

14 Neutral Free Shop by Luryx

Looking up Shopping China CEO Felipe Cogorno says new Brazil border stores, a strong offer, good service and loyal customers have united to forge a surprisingly successful reopening

The new shopper Having successfully navigated the pandemic, Neutral’s management is now focused on learning what the new customer will want, and how he or she would prefer to make those purchases

26 Dufry Brazil Update

18 Aer Rianta North America

Making things work Despite hopes that things would pick up slightly, Canada’s international travel ground to a near halt in 2021 as the government canceled southern flights, put in mandatory PCR testing and a hotel quarantine. Through this, ARI’s Jackie McDonagh and her team have managed to creatively arrange store schedules and staffing to stay in the black

22 3Sixty Duty Free at

Philadelphia International Airport

Seeing it all 3Sixty’s Gary Pospiech discusses navigating the total shift in travel and business at Philadelphia International, from creating contactless shopping to preparing for a slow recovery

Diversification wins The strategic decision to create an exceptional duty paid shopping experience throughout Brazil has helped Dufry to mitigate losses as the company readies itself for recovery starting in 2021

32 CircleSquare & Digitalization

The power of storytelling & a holistic journey Described as the future of connected travel retail, The Connected Shopper Platform helps the sector become a recruitment channel for local markets

36 Vancouver Airport Authority

InterVIEW from the top Americas Duty Free talks to Tamara Vrooman at Vancouver Airport Authority about the status of YVR and participating in the Summit’s Knowledge Hub

18 32

Features News Bites Portland envisions potential

10 28

Starboard gains a sense of clarity Canada border stores update

30 38

Contents

WHAT’S INSIDE Lead Stories 54 Meet The Team

44 Latin America Update

Keep walking ASUTIL’s Secretary General José Luis Donagaray discusses the ever-changing situation in LATAM, the many items the association is working on, and how this crisis may improve things for travel retailers at the end of it all

48 Recovery of the Caribbean

They will return Countries that rely on tourism for much of their GDP have been especially hard hit, and that is the case for countries throughout the Caribbean. With the tourist season of 2020/2021 all but wiped out, a panel of experts discusses what needs to be done to attract people back in the coming year

Meet the Team: Greater Toronto Airport Authority From personal inspirations to professional accomplishments, Americas Duty Free introduces the key members of GTAA’s duty free and travel retail team

56 Essence Corp.

Strength in travel Essence Corps’ company culture and brand quality has helped the distributor stay buoyant over the past year; now with the US market showing clear signs of recovery, the focus shifts to the future

64 Japan Tobacco International

51 Guest Writer: Sven Olschewski

Industry support

Opportunity abounds While the domestic market can sometimes offer the illusion of being easier and less expensive for brands, in South America as a whole and Brazil in particular, tariffs and bureaucracy often ensure is not the case. Travel retail, then offers the perfect place for brands to bring their items to the people

The tobacco category is resilient in the face of any crisis, and this one is no exception. JTI’s research shows that tobacco is not only outperforming based on PAX drop, it is helping the industry at large

66 Lockdown Blues

Coping With Lockdown From teambuilding exercises to mental health services, companies in the travel retail channel are re-thinking health, safety and wellbeing

Features CLIA prioritizes rebuilding trust E. Gluck and Duty Free Dynamics partner Editor’s Picks

42 47 52

Confectionery Report Spirits Report MONARQ’s Social Club’s online engagement

58 61 63

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NEWS BITES

MishiPay & Paradies Lagardère offer contact-free shopping As a way to further the reality of contact-free payment, Paradies Lagardère has become the first concessionaire to introduce MishiPay’s Scan, Pay & Go technology in a US airport, in the travel essentials store in the Fort Lauderdale-Hollywood International Airport and the Charlotte News and Gift store in the Charlotte Douglas International Airport. With MishiPay’s Scan, Pay & Go technology, travelers use their own devices to select the items they want, scan the barcodes and pay, with no cashier interaction. This new way to shop and pay enhances speed of service in addition to reducing contact, making the purchase both easier and safer. This also helps ensure a cleaner, more efficient and safer environment by freeing up staff to perform sanitizing duties and restocking. “We are thrilled to partner with MishiPay to deliver this next generation service that will further enhance our customer’s experience in our airport retail stores,” said Gregg Paradies, President and CEO for Paradies Lagardère. “Yet another accomplishment in our ongoing digital strategy

efforts, the Scan, Pay & Go technology is a significant step to the future of travel retail. Early results from our pilots at Fort Lauderdale-Hollywood International Airport and Charlotte Douglas International Airport show that travelers are embracing this user-friendly service.” MishiPay founder and CEO Mustafa Khanwala said: “Standing in line to pay for purchases is irritating at the best of times but in an airport environment, where customers always have an eye on the clock, it’s even more frustrating. By using technology to remove this archaic bottleneck, MishiPay enables retail to evolve to meet the demands of consumers.”

DFS reopens two stores in Maui airport DFS Group has re-opened two of its stores in Maui’s Kahului Airport. All five DFS stores in the airport temporarily closed at some point during the pandemic, but with the recent relaxation of pandemic measures in Hawaii and the resumption of some flights from Maui to the US mainland and Canada, DFS re-opened the two Kahului Trading Company stores March 15. These stores are open from 5pm to 10pm daily to service departing flights. The Kahului Trading Company stores specialize in local and locally made products including cookies, chocolates and souvenirs. “We are excited to welcome travelers back to two of our Kahului Airport stores, and to see some flights resume as health conditions stabilize,” said Martin Matthews, DFS Managing Director North America. “Hawaii remains one of our most important locations, and we remain steadfastly committed to the state. We look forward to resuming normal operations and serving local and international customers as soon as we can.”

The newly reopened Kahului Trading Company stores specialize in local and locally made products

Members of the DFS Hawaii leadership team join with Kahului Sales and Support staff along with members of the Maui Kimokeo Foundation, who performed the blessing and opening ceremony

10 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

Contents

NEWS BITES

Motta CEO Orillac says price beats fear The reopening of stores in 2020 was expected to be the beginning of a gradual recovery, but there has been a setback, according to Erasmo Orillac, Chief Executive Officer, Motta Internacional, SA. He says through December and January passenger levels had increased to 50% of 2019 levels, but have since dropped back down to 30%. Orillac is hesitant to make any predication about the coming year: “It’s a difficult call,” he says. “We need fewer waves of COVID-19 and more vaccinations in order to have an accurate prediction.” Motta Internacional's Duty Free stores called ATTENZA are currently open in Panama, Bogota, Cali, Quito, El Salvador and Managua, but Orillac says there are fewer flights and passengers. Some demographic trends noted by Orillac at these stores appear to be like global trends at the moment. Of course business travel is practically nil, although there are currently some indications that executives are beginning to travel again. Meanwhile Millennials and Gen Z are making up a larger than normal proportion of travelers, likely because as a generalization this age group does not fear catching the virus to the same degree as older groups do. Orillac says: “Millennials are traveling at a higher proportion and need to be catered to in regards to range of product, merchandizing and digitalization. They need less indication and education of innovation and technology. One fortunate global travel retail trend that Orillac affirms is that travelers are willing to shop. He says the spend per passenger is about 8% higher than it had been. In addition to safety measures and a secure shopping environment for staff and customers, ATTENZA's current focus lies in two places: First, making sure to concentrate on the tried and true, “now is not the moment to try new things; we must stick of the basics,” says Orillac. Second, to offer appealing promotions. “Price beats fear is the old saying,” he adds. While customer numbers are down, spend per customer is up 8%, as travelers are showing their willingness to shop

12 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

Ticket Scent, which was inspired by the tickets used in queues, offers the perfect solution to contact-free fragrance sampling

Perfect timing for perfume sampling company The pandemic offered a perfect opportunity for interactive P&C sampling company Adhespack. The company, which began exporting samples during the pandemic has now supplied over a million samples. The Ticket Scent product was inspired by ticket dispensers for queues, using a patented technology for sampling perfumes. Each ticket contains the fragrance and also additional information about the product, such as photos and texts. The units, which will be distributed in airports and stores in Europe, Latin America and the US, promotes contact-free customer interaction. To date, Carolina Herrera, Benetton, Antonio Banderas, Paco Rabanne and Jean Paul Gaultier have acquired Ticket Scent for distribution in these regions. “Ticket Scent was conceived just before the pandemic, and appears as an excellent alternative at a time when consumers avoid sharing testers and stores are looking for safer, hygienic and individual options.” says Volney Camargo, CEO of Adhespack and creator of Ticket Scent. “Customers want a safe and single-use experience.” points out Sérgio Picciarelli, Director of Marketing and Innovation at Adhespack. “It is also possible to apply a QR code on the back of the sample so that the consumer can buy later on e-commerce or access additional content.”

Neutral Free Shop by Luryx

The new shopper

Neutral is prepared for the future, incorporating exclusive brands and offering virtual shopping platforms authorized by the Brazilian legislation for purchases abroad

Having successfully navigated the pandemic, Neutral Free Shop's management is now focused on learning what the new customer will want, and how he or she would prefer to make those purchases by HIBAH NOOR

ince Neutral Free Shop was acquired by Top Brands International in 2019, the company has branded all nine stores with the Luryx name; seven stores with the Neutral by Luryx brand and two with the Luryx brand. Combined, these stores have 15,000 square meters of floor space across six cities. “Our priority continues to be offering a superior shopping experience, and in the current context where consumers are scarce, our competitive advan-

tages are even more relevant. By way of example, the exclusive brands with which we operate attract a large part of the few clients that arrive at the border, and that allowed us to maximize sales possibilities,” says Marcelo Montico, CEO of Neutral Free Shop by Luryx. While the impact of COVID-19 was very large, Montico says the situation allowed the company to keep its border store operations open. “Through a series of actions we began carrying out in March 2020, we managed to drastically lower our operating costs and align our expenses and income. We have no doubts that this puts us in an excellent position to capitalize on growth opportunities when the borders open again and the market begins to show signs of recovery.”

Slow recovery

Between the regional governments’ restrictions and customers being careful to minimize their exposure to the risk of

14 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

The Pickup-Contactless service helped Neutral to increase spend

contagion, the industry fell about 70% in the second quarter of 2020. Since then it has gradually begun to recover, but very slowly. “Our management indicators show drops close to 45% at the end of last year, better than the business average but still far from our expectations,” says Montico. “We also experienced a very profound change in the buyer's profile, including shorter visits to stores and with a focus exclusively on categories where the level of saving was maintained against the local Brazilian market.”

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Neutral Free Shop by Luryx

Changes to the consumer profile include shorter visits to stores and with a focus exclusively on categories where the level of saving was maintained against the local Brazilian market

He says the recovery continued through early 2021, but it is well understood that a quantitative leap in sales will not take place until travel is fully open again and people feel comfortable to shop.

Health the priority

In order to help customers feel safe to shop until that point, since reopening in June 2020 the stores implemented not only the control measures established by the government, but also some other self-regulation measures to ensure the health of customers, team members and other partners. “We use all our social networks to publicize the prevention measures in our stores, to give security to our customers and convey with complete certainty that visiting Neutral by Luryx stores does not generate any risk of contagion. As a result of our sanitation processes, we can affirm that after almost a year of pandemic, we have not had any contagion in our stores,” says Montico. “While the pandemic lasts, our absolute priority will be to preserve the health of our customers and employees, ensuring the sanitation conditions of our stores and therefore continue to deliver a superior shopping experience.” The customer encounters these safety measures the instant he/she enters the store. First is the mandatory wearing of masks. If the customer does not have one, the store will provide it. Then a sanitizing mat for shoes. Next, the customer is tested for temperature. Each store has a maximum capacity of one client every five square meters. Throughout the store are gondolas which offer alcohol-based gel

sanitizer. Every team member is wearing a mask, and cashiers have acrylic screens between them and the customers.

Increasing spend

Historically, customers spend an average of 37 minutes in the store; with the pandemic this has fallen to 16 minutes. Montico says increasing spend is difficult under these time constraints. “We understood that the best strategy was to give our clients the technological tools so that they could visit the stores virtually while in their homes and make the reservation of their order through our website under the Pick-Up — Contactless modality,” he says. For this service, the customer indicates the day of pick up and the store’s customer service team waits in the parking lot with the purchase ready. This service, combined with a customer service line via WhatsApp Business, allowed the company to increase spend.

Enticing the customer

In terms of commercial management, Montico says the objective has been to constantly monitor the saving against the local Brazilian market in the main brands and prioritize the assortment of stores in the pillars of each category. The current situation has greatly affected the ability to sell new or impulse items. “One of the most relevant changes in consumer behaviour is that the conversion rate rose considerably, because whoever visits us already arrives with a definite idea of what they want to buy and a previous analysis of what the reference price is in the local market. It is a much more planned

16 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

purchase where it leaves little to no space for impulse purchases, which benefits some categories but clearly harms others. This determined that our communication strategy in social networks will focus on talking to this type of client much more in terms of prices and saving, with the clear objective of raising the average ticket and the number of units per transaction.” To combat this, the company began cross promoting between categories and brands in such a way as to "tempt" the customer to take an unplanned purchase. “There is always opportunity to improve, but we are very satisfied with the result we obtained so far and how we can overcome the storm,” says Montico. “We think that as soon as this pandemic ends, consumer behaviour will increase consumption of all those products that generate personal gratification. There is no doubt that the portfolio that Neutral by Luryx stores have will comply with that goal.” That being said, he questions how the customer will buy these items, given the change in habits to shopping online. Neutral is prepared for this future, incorporating exclusive brands (MAC, Adidas, and Pandora among others) and offering virtual shopping platforms authorized by the Brazilian legislation for purchases abroad. “In short, we think that the consumer will buy more but not in the traditional way as we have known it until now,” says Montico.

A bright future

In all, Neutral is optimistic about the future after a couple of challenging years. The company had its own circumstances to deal with, then the pandemic. “Because of the merger with Top Brands International, we recovered the solidity necessary to grow during adversity, empowered by a human group that makes a difference every day,” says Montico. “We are incorporating new exclusive brands, which will allow us to increase the flow of visitors to our stores, so we are in an excellent position to capitalize on the increase in sales that we will experience once the pandemic subsides and consumers return to their consumption habits. We are innovating in what we sell and how we sell it, and we have no doubt that we are on the right path to recover the leadership of the channel that we already knew how to have, that is the commitment of all of us who are part of this family and we are going for it.”

Aer Rianta North America

Making things work

Despite hopes that things would pick up slightly, Canada’s international travel ground to a near halt in 2021 as the government canceled southern flights, put in mandatory PCR testing and a hotel quarantine. Through this, Aer Rianta International's Jackie McDonagh and her team have managed to creatively arrange store schedules and staffing to stay in the black by WENDY MORLEY Each day, ARI staff is given a packet containing two masks, hand sanitizer and gloves, to help keep themselves and travelers safe

hile the Canadian travel reality has gone from bad to worse since COVID-19 began affecting travel early in 2020, Jackie McDonagh, Aer Rianta International's General Manager North America, says her division has been able to manage the crisis without any company refinancing. “I’m very proud of the way we’ve managed cash flow,” she says. “We have cut costs, reworked our budgets and have put in place many protective measures to keep up our cash flow.” McDonagh says the company has continued to order best-selling stock, but has scaled down on orders. “We’ve worked closely with our brand partners in terms of managing those stocks, in creating promotional offers to drive revenue and to offer our customers even better value when they come to the airport.”

No duty paid

Travel retail the world over has faced incredible challenges since early 2020, but ARI Canada has faced more than most. Before the pandemic even began, travel retail in Canada was missing two opportunities most others have — duty paid and duty free on arrival. Duty paid stores could have done much to help the industry during this time as international travel has all but ground to a halt. “You can’t gift in an airport here while flying domestic,” says McDonagh. “We’re the second largest country in the world. These are long haul flights. You go to visit your friend or family and you can’t pick them up a gift in the airport. There’s a huge appetite for a domestic duty paid program, and the 38 million people who live in Canada are at a disadvantage.” Arrivals are the other side of that coin, which McDonagh says makes up 50% of sales globally but which Canadian retailers do not have. “We’ve been in a lobbying process for many years now, working together with other retailers,” she says. “We will continue to strive for this; it is not just about the retail opportunity — this would be a game changer. The passenger would benefit, government would benefit from taxes, the airport would benefit, and ultimately it would create new jobs.”

18 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

ARI’s award-winning Click and Collect system allows travelers to choose from 5,000 items and then pick them up on the day of travel

Aer Rianta North America

Testers remain, with assistance

The perfume and cosmetics category is always a top seller in travel retail, but testing is important for the customer and the pandemic has created a difficult situation in this regard. Most retailers have taken testers off the floor completely, but McDonagh decided on a different approach. “Most stores took testers off floor; In Montreal, we didn’t go that route. We replaced old testers and put appropriate signage and screens up for customers to ask for help. So people still can test, but it is closely guarded by our team and there are appropriate sanitation measures in place to ensure no spread of infection. For makeup, she’s asked the team to show the colour on a blotter, socially distanced form the customer. “It’s very hard to see the colour of a lipstick from the sticker on the bottom,” she says. “So a team member will show it on a fragrance blotter. If someone wants to see foundation, you show it on the blotter.”

Award-winning click and collect

Last July, ARI launched its Click and Collect desk and its connected award-winning online shopping experience, with 5,000 products available to purchase and about 1,500 more to be added. “Up to 90 days before you fly you can place your order. We preauthorize your credit card because for duty free you have to purchase the day of your flight. You go to the desk, finish your transaction, you get your receipt and go to the gate.”

Pickup in December, then drop

Business for ARI Montreal in 2020 was 73% lower than in 2019, even with a strong beginning in January. “Like Vancouver, we probably got hit more than other locations because of Chinese flights. Chinese flights started dwindling the end of January and into February, and then stopped altogether. We were hurt before a lot of our peers,” McDonagh says. The stores closed on March 24 and the international store didn’t reopen until July 14. When she began seeing flights to Fort Lauderdale, she opened up the transborder shop.

20 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

“We had a really good December, with 35% of 2019 sales. That was the strongest month we had. Lots of people were going home for Christmas or going home in general, carrying three or four suitcases with no intent to come back for a few months. These people hadn’t seen their family so they were gifting a lot. January was ok but then the travel restrictions with the three-day hotel quarantine announced people panicked and since then, the situation has gone from bad to worse.” Whereas before the flights to and from the Caribbean were halted and the hotel quarantine had begun sales were about 18 to 19% of 2019 numbers, this immediately dropped to 7%. McDonagh explains the reasoning in staying open at such a time. “I didn’t want to shut stores again because I don’t want to lay off team members. A certain number of transborder flights go out in the morning, mainly to New York or Chicago, and Florida. We open in the morning just for those flights. We shut the transborder store at 2:00 pm because there’s no activity after that. Then at that time we open the international store, because the first flight goes out 4:00 pm. We keep that open until 10:00 pm to service all the international flights.” In the early part of the week that’s only about a dozen flights each evening, to Paris, Frankfurt, Doha and Tel Aviv. By the end of the week this jumps to about 25 international flights per night. The London variant caused London flights to all be canceled, coming and going.

Main business disappeared

While international flights to Europe were drastically cut, the biggest issue for the retailer has been the cancelation of flights to the Caribbean and Cancun. “Montrealers stay in Canada in the summer but in the winter they go south. We just had spring break. That’s usually our busiest time of the entire year and there’s nobody travelling to the Caribbean. There are no flights going down and no flights coming back.

ARI and other operators are lobbying the Canadian government for the right to sell duty paid in airports

“We did budgets in September and October making an assumption that smaller airports would be open by March/April, which hasn’t happened. We thought we’d have a charter season with people would be going south and that never happened. We thought transborder store would be open in March/April; that also didn’t manifest.”

Subsidies and partnerships

“Amazing” partnerships with landlords and stakeholders have helped the retailer. “We’ve worked very successfully together to come up with a recovery plan,” says McDonagh. The wage subsidy program has helped, but that is the only help that has come from the government. Employers are able to receive 75% of an employee’s salary, up to $870/wk. This program continues until the end of March. The prime minister has stated the program will be extended until end of June but as of this writing the details had not been announced. “That has enabled me to keep on the team we have at the moment,” says McDonagh. “Unfortunately we had to temporarily lay off members of the team, which is never an easy decision for us, personally or professionally; they are being supported by the government. We’ve had to extend that temporary layoff period.”

Slow recovery, strong 2022

The plan for 2021 is a slow recovery, says McDonagh. “It’s very difficult to predict. I used to be very good at predictions until last year. What you think is going to happen might not. Here we were thinking we were going to be better off by now and we’re actually worse off.” That being said, she does predict that some southern flights will resume at the end of April. While the US is rolling out vaccines pretty quickly and will likely open its borders earlier, the

Canadian vaccine rollout is slower. Most Canadians will have had the vaccine by September, and McDonagh believes by that time travel will be opening up again. “Passenger flights will be slow for summer. So it will be a slow year, ramping up end of Q3 into Q4. I’d like to believe Caribbean travel will be back on by Q4. I personally don’t see Chinese flights coming back until 2022.” McDonagh believes a vaccination passport is likely, that travelers from countries with low vaccination rates will still have to quarantine, and that there will probably be quarantine bubbles, meaning open travel for countries with high vaccination rates. “We could get a huge 2022 because people are just itching to travel. People are going to be traveling for two reasons: first, to see family and friends and second, for leisure. These passengers are the spenders,” she says. “People are excited to travel. As travel retailers we need to get them excited to come to the airport. Great promotions, great products, great gifting products.” McDonagh says this time offers a huge opportunity for the travel retailer. She says retailers need to take this opportunity to look inward. “What are our ranges? What’s our offer? Is it strong enough? What about customer service, convenience? What will be the new expectations in a post-COVID world? These are just some of the things we are currently strategizing at ARI.” She says things were ticking along, growing year on year, then Chinese travelers came along to boost sales even more, and now is a time for reflection. “There is lots of planning to be done. All of these things need to be looked at because service is now more important than ever, from an efficiency perspective and a human perspective. Are there new categories we should be introducing? Are there brands within those categories? Retailers really need to look internally within, and work with airports and say how can we do this together.”

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

3Sixty Duty Free at Philadelphia International Airport

Seeing it all by WENDY MORLEY

3Sixty Duty Free at Philadelphia International Airport

3Sixty’s Gary Pospiech discusses navigating the total shift in travel and business at Philadelphia International, from creating contactless shopping to preparing for a slow recovery

ary Pospiech, General Manager of 3Sixty Duty Free at Philadelphia International Airport (PHL), has worked in the duty free and airline industry for over 40 years. He started in Philadelphia in 1973 when Pan Am and TWA were the preeminent international carriers. At that time Philadelphia was mostly a charter-based airport. Given his history, he is in the position to share true wisdom on the effects of the pandemic on retail at the airport. Pospiech has seen it all during his tenure. “I worked through 9/11, but nothing compares to the current situation. When airlines stopped flying at that time, other carriers were there to pick up the slack. When 9/11 happened, air travel came to a halt for several days, but within a couple of months most of us were ready to fly again. This time is different, because the epidemic itself continues to change both nationally and internationally, and so do the rules, including quarantines. The airlines are constantly changing flight resumptions.”

Huge decline

While domestic travel in the US has helped buoy the travel and travel retail industry in the country relative to others, that does not mean it is unscathed. Far from it. “Domestic travel in our airport is off by about 60% while international travel is off by nearly 80% in 2020 compared to 2019 enplanements,” says Pospiech. “And like enplanements, our sales have dropped significantly.” He says American Airlines is currently operating about 40 weekly flights to the Caribbean in addition to Cancun and Cozu-

22 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

mel Mexico. Qatar Airways began flying again last September and operates four weekly flights to Doha, while British Airways is currently the only airline flying to Europe, though he says these flights do not always carry passengers; sometimes they carry only cargo. Just one of retailer’s four stores at the airport is open, the one located in the terminal where the majority of the international flights are departing from. Given the extraordinary circumstances, even with the travelers who are there, things are not the same. For example, the passenger profile has changed. “We have more first-time flyers, younger travelers and far fewer business travelers,” says Pospiech. Of course, the retailer has also focused a great deal of attention on safety regulations within the store. “We are following all of the company, airport and governmental regulations with regard to COVID safety, mask wearing and routine surface cleaning and our airport has had the face mask regulation in place since stores reopened so for the most part this has become routine for most everyone.”

Interactions and activations

Again and again research has shown that staff interaction with customers improves sales. While it might appear difficult to engage in an effective manner while observing safety protocols, Pospiech says this is not the case. “We are still meeting and greeting passengers when they enter our store and more importantly, helping them find what they are looking for. The mask really

“

While domestic travel in the US has helped buoy the travel and travel retail industry in the country relative to others, that does not mean it is unscathed. Far from it.″ - GARY POSPIECH, GENERAL MANAGER OF 3SIXTY AT PHILADELPHIA INTERNATIONAL AIRPORT

doesn’t stop us from engaging with our customers. We also need to make sure that the store doesn’t get too full; Philadelphia allows a maximum five people per 1,000 square feet.” Engagement with staff is one thing, but the traditional way of testing and sampling is also not possible at the moment. Staff members help provide an alternative as much as they are able. “We have removed all of the cosmetic testers. We assist the customers with fragrances, utilizing the tester strips for them to smell. We of course do not do any sampling or tastings, whereas in the past we would utilize a tasting bar to promote certain liquor brands. For the most part I think the traveling public knows there is reduced service from the airlines so expects less from the vendors as well,” says Pospiech. While samplings and activations might not be possible at the moment, promotions are. Pospiech says they have continued to promote sales during this time. “We promote with signage and event tables; mostly we promote deals like beauty sales of ‘Buy One Get One 50% Off,’ which has been very successful. We have fewer customers, so we are really looking to maximize those in our store. We have also worked closely with our landlord Marketplace to advertise on their website, which both passengers and airport employees have access to.”

Contactless shopping

Recently, we at Americas Duty Free reported on 3Sixty’s new “Grab” concept store, where shoppers can purchase items with no contact. Philadelphia is one of the locations where this is now

available. “We went live with Grab in December,” says Pospiech. “This is clearly a good example of delivering a new contactless shopping service for the customer. This service is shown on the airport and landlord websites, and as part of the airport terminal advertising. In addition, Marketplace offered a coupon to any customer that purchased from us via Grab in the first month.

What is to come

Pospiech continues to have hope for improvements in the coming months. “We are hopeful that we will see some of our European destinations resume in the next couple of months, with Aer Lingus, British Airways, Lufthansa and Qatar as well as Air Canada,” he says. “But of course PHL is one of the hub cities for American Airlines, and has in the past been their largest European gateway city. They operated seven daily flights to Europe year-round and added many new destinations each summer season. In fact in 2020 they were going to fly to Casablanca, Morocco as well as Iceland, two new destinations for the airline.” Pospiech’s personal feelings are in line with what research is showing, that there will be no quick recovery for the industry. “Personally I see this as a slow recovery because of all of the external factors that no one can control,” he says. “Upswings in the disease cause new or different regulations, and not many people can afford a two-week quarantine, so that has everyone apprehensive about traveling. Business travel may never come back to pre-COVID levels.”

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

Shopping China Update

up Looking

SHOPPING CHINA CEO FELIPE COGORNO SAYS NEW BRAZIL BORDER STORES, A STRONG OFFER, GOOD SERVICE AND LOYAL CUSTOMERS HAVE UNITED TO FORGE A SURPRISINGLY SUCCESSFUL REOPENING by HIBAH NOOR

midst the difficult news arriving from duty free operators around the world there are few exceptions, but Shopping China in Paraguay is one of them. After closing its stores from March to October of 2020, management has been pleasantly surprised by the sales results upon reopening, even in stores on the Brazil border. “We expected that sales would grow gradually,” CEO Felipe Cogorno tells Americas Duty Free, adding that they assumed it would be a fairly lengthy process as customers began to gradually feel safe. “We have been surprised to find that we have received more customers than we expected. Now the challenge is to meet their expectations in the post-pandemic era.” He states the company had very good sales at Christmas, New Years and Three Kings’ Day.

Loyal customers

Shopping China CEO Felipe Cogorno says a surprisingly successful reopening has the company preparing for post-pandemic times

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Helping create this positive outcome, Shopping China’s customers are loyal, says Cogorno. Upon reopening, the numbers of customers crossing the doors were virtually the same as before the pandemic hit. Managing these numbers requires effort on the part of the retailer and retail staff to ensure safety. “As a responsible company we apply all the necessary health protocols for a safe visit to the shopping center,” says Cogorno. “We constantly train our collaborators so they can offer complete care. We have seen opportunities to improve in all aspects during this pandemic, and we are working on them.” All Shopping China stores are open and following strict sanitary protocols. “This gives security to our clients and collaborators,” says Cogorno. “We firmly believe that we

must continue working, since many people depend on the business group to bring daily sustenance to their homes.”

The best use of the shutdown

During the shutdown from March to October of 2020, the Shopping China board of directors decided to carry out a restructuring in terms of the company's mechanics, says Cogorno. “This included setting commercial objectives, solving issues involving imports and supplying our warehouse to be filled in due course with stock for our customers. Since 1933 Shopping China has not stopped in terms of growth and diversity, adapting to the needs of customers and also to the needs of the market,” he adds. The shutdown last year allowed the operator’s senior management the time to organize internally. The company also used this quiet period to grow in its technology, allowing it to officially launch its ecommerce platform. “This allows us to reach the entire Paraguayan territory,” says Cogorno. “From the new ecommerce platform we offer exclusive benefits and partnerships with credit card companies in addition to shipping insurance. We currently offer more than 20,000 products from premium brands.”

Making up for lost time

Given the year that 2020 was, Shopping China did not have enough in-store time to implement several ideas and promotions that had been planned.Cogorno says they will definitely

be carried out this year. “We believe that this new year will be much more flexible in terms of events and activations,” he says. “We intend to surprise our customers with exclusive benefits that you will find only in our stores.” Already the retailer has had a more positive few months than many, and Cogorno says he is “quite optimistic” about the future market. “Taking into account that we are already prepared with and following the health protocols, and then we will also have the vaccine to help, we anticipate a significant increase in visitors from more remote cities who have not come to the borders until now. Vaccinations against COVID-19 have already begun in Brazil.” This is a point in favor of border trade, notes Cogorno, adding that it will have a positive impact on the flow of Brazilian visitors.

The best service and variety

Now that protocols are underway and traffic is good, speaking with Cogorno feels like normal times are back again, with the focus strongly on business as opposed to dealing with the pandemic. He says, “Our purpose has always been to provide a good service and a good variety to customers. We are going to focus on having everything they are looking for at the best price and with the security they need. And then we will continue to enhance our ecommerce, taking into account that it is a safe platform to buy products of high quality. In addition, we will continue adding other brands in the stores and thus cover the needs of all our clientele.”

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Dufry Brazil Update

Fagundes expects 2021 to be a year of recovery, as the vaccination process gains momentum around the world and some restrictions can start to be eased

D I V E R S I F I C AT I O N W I N S Gustavo Fagundes, Dufry’s Chief Operating Officer – South America

The strategic decision to create an exceptional duty paid shopping experience throughout Brazil has helped Dufry to mitigate losses as the company readies itself for recovery starting in 2021 by HIBAH NOOR

razil’s travel retail has found itself in a unique position since the pandemic began. Whereas its air borders have remained open, cases in the country have been exceptionally high. Restrictions of entry at other international locations — and the resultant loss of flights — have served to keep international travel in the country low. Despite this, airport retail in the country has not been hit as hard as in most other places because of the high proportion of domestic travel. “Although the Brazilian Government policy towards the air borders was one of the least restrictive, the most popular and important international destinations for Brazilians imposed their own very strong restrictions to their borders, which therefore impacted significantly on the international passenger flow,” says Gustavo Fagundes, Dufry’s Chief Operating Officer – South America. Dufry is in an especially strong position relative to other travel retailers, because long ago the company made a strategic decision to invest in duty paid in the country, creating spectacular stores with enviable offers. “Domestic pas-

26 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

senger flow has certainly been less impacted by the Covid-19 crisis, with the duty paid share of the total business growing quite strongly during this period,” says Fagundes. “This is a good example showing how our diversification strategy of serving different sectors (duty free and duty paid) helps to mitigate external impacts even in an extraordinary situation.”

Opportunities at the border

A wholly new division of travel retail in Brazil has been the land border shops, which after years of effort and lobbying finally opened in 2020. While on the surface border shops might not appear to be a boon when the surrounding land borders are closed — particularly the borders of Argentina and Uruguay, where these shops are located — the government had thankfully made the decision to allow its residents to shop there. At a time when the travel retail business is so fragile, this has been especially important. “The Brazilian border stores have continued to be able to sell to Brazilians who are based in those locations or who are traveling within the region,” says Fagundes.

shopping environment for our staff and customers alike.” As borders begin to reopen and international flights resume, launches and activations will be back, but now with a whole new set of guidelines that must be worked around. At least for the foreseeable future, testing of makeup or tasting of liquor will not happen in the way we are accustomed. Dufry will be working with brands and within health and safety regulations to develop ways to bring these experiences to customers, says Fagundes. “Dufry is in full compliance with local legislation regarding this topic and brand partners/ suppliers will also be implementing their own health and safety guidelines in our store spaces, alongside those of Dufry, to ensure that the health and safety of staff and customers is the foremost priority.”

Recovery begins

Traveling is one concern, but those travelers also must feel safe and inspired to shop, says Fagundes

As this segment is only beginning, opportunities abound. “The border stores sector is still in an early stage of development. Because of that, it has stronger growth potential when compared to other areas of the travel retail. We continue to track business opportunities in the region,” says Fagundes.

New contracts and extensions

Dufry is well known as a company that consistently seeks opportunities regardless of the climate, and this pandemic is no exception. Fagundes agrees: “With respect to the border shops, we continue to monitor the situation and maximize opportunities as and when we are able to do so. However, we can also see that despite the circumstances in 2020 we have successfully increased our footprint in the region by winning important new contracts or further extending existing concessions. Among others, these include two new duty free shops at Fortaleza airport covering 1,169 square meters of retail space, as well as the extension of two duty paid contracts with a total space of over 700 square meters. Moreover, in December we also won a duty paid contract

at the Santiago del Chile international airport in Chile.” For brands, travel retail is an important channel for global launches and to introduce new products around the world. With international travel virtually halted, many of these launches and certainly any activations also came to a halt. “The partnership with suppliers has been very important during these challenging times and we have worked closely together to make alternative arrangements regarding any activations or launches that may have been planned. The current situation clearly shows how important a close collaboration between brands and retailers is,” says Fagundes. “Dufry stores will be bringing all the most relevant activations and launches of the travel retail sector to our customers as we have always done, as soon as recovery accelerates. It is difficult to make a general statement here, as these initiatives might differ location by location depending on the local traffic pick-up. In any case, we will work closely with our brand partners and suppliers to ensure that any plans are progressed in line with all required health and safety protocols, to provide a safe working and

Fagundes expects 2021 to be a year of recovery, as the vaccination process gains momentum around the world and some restrictions can start to be eased. While the specific decisions and paths may change because of current circumstances, Fagundes says Dufry is committed to moving on with confidence and conviction. “We have taken the necessary steps to ensure that we are well prepared to accelerate sales and efficiency during this recovery phase, which will allow us to emerge from the crisis in a strong position.” Overall, Fagundes emits a sense of optimism. “It’s been encouraging to see in the shops we have reopened that our customers do want to shop with us and to travel as soon as the restrictions are lifted.” Traveling is one concern, but those travelers also must feel safe and inspired to shop. Fagundes notes positive signs in this area as well. “We notice that customers tend to spend slightly more than before. Even if overall sales volumes are still low as compared to a normal environment, these are important indications and positive signs that customers will resume traveling and continue to enjoy the attractive product assortment and appealing shopping environments we offer. In this context, besides offering great service, a key element during the recovery phase is to give our customers the reassurance and certainty that we are doing everything we can to protect them and our employees alike, and that they can relax and enjoy shopping in a safe environment.”

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Portland Design

Envisioning potential Vienna Airport has a little of the Town Hall feel with modular space, a central courtyard, a selection of shops and lounging areas

Portland Design is exceptionally busy these days changing the way public and commercial spaces are thought of and used. The design company is currently working on five large airports in addition to some smaller ones, and bringing along a commercial concept that is at once old and new, combining the wisdom of experience with state-of-the-art possibilities

by WENDY MORLEY

or much of his 30 years of airport design, Ibrahim Ibrahim of Portland Design says he’s been thinking, ‘we can do this better.’ Of course, during those 30 years air travel has been growing, with travel retail growing right alongside. There has been little incentive to change a system that continues to produce revenue. As revenue producing as the traditional travel retail has been, however, there is no doubt that its potential is much greater. The trinity is continuously wondering how to increase footfall when even with a captive pool of potential consumers the share of those actually shopping rests somewhere in the neighborhood of 15%.

Do nothing is not an option

Ibrahim feels real, radical change is imperative, and now is the time. “Travel Retail is inherently, within its DNA, a

conservative industry,” he says. “But donothing is not an option. Safe is risky! We are facing changes — not just in airports but particularly in airports — not cyclical change but structural changes. This is not a blip and then back to normal. It’s a cultural shift not driven by business models, revenue models, design or architecture. It’s driven by a power shift. The power has shifted to the consumer and the peerto-peer relationship. The new relationship between consumers and brands and between consumers themselves is at the core of this structural change, and it impacts the role of brands and how consumers shop.” Until this past year, Ibrahim’s ideas have often been met with: “Show me where it works.” But if COVID did anything positive, it has created an environment where retailers are seeing that the past is no longer a reliable guide. COVID

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has led to the death of precedent. Virtually across the board, retailers are ready to embrace newness because what has been, is no longer. “Clients are much more willing to embrace new ideas because death is an amazing change agent,” says Ibrahim. “A lot of retail businesses are facing death, or at least severe disruption.”

Seeing what could be

Whereas we in the industry refer to airport shopping as travel retail, airports refer to it as non-aeronautical income, a distinction relevant to this discussion. “We have to think carefully about non-aviation revenue and the customer experience, as it represents an increasing proportion of the airport’s income,” says Ibrahim. “There are opportunities for a whole range of commercial experiences beyond just transactional retail. The purpose of the physical space for a brand is less and less about transacting and more and more about brand experience — and media impressions the experience generates.” Ibrahim says while there will always be a place for transactional retail, a proportion of space should be used to create shareable experiences. “There is no better place than an airport for a brand to recruit customers, to drive them online

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Portland Design Managing Director Ibrahim Ibrahim discusses the three typologies to consider when designing airport space

The airport town hall

Aelia’s robotic Click & Collect arm is a perfect example of making a huge impact in limited space

or to social platforms. Airports have the potential to be the most effective media platform available to a brand, so the space should behave like a media platform. Retail will no longer be about real estate; it will be about content. Stores will need to monetize experiences, and also the data those experiences generate.” From a brand perspective, airports are great for recruiting customers, Ibrahim believes. “It’s incumbent upon the airport to demonstrate the value of that space to drive media impressions. How much is it worth to recruit a new Instagram follower or to have someone watch a YouTube livestream? We can capture the data that proves the media impressions, and we can develop revenue models that respond to this.” If the value to the consumer is the experience and the value to the brand is the media impressions, then where does this leave the retailer? “The concessionaire needs to be able to capture the data that demonstrates it has a valuable piece of space beyond paying per square foot. A brand could create a mind-blowing experience that thousands of people share and talk about, in only a few square meters.”

The second is community. “This is where a brand uses a physical space for an experience that brings together its fans or members. This could be fans of a fashion brand like Lululemon, or it could be a membership experience like Netflix or Amazon, or it could be an experience for subscribers, like the Economist. Regardless, the brand is creating an experience for its fans or potential fans. The revenue model could be based on footfall, dwell time, or subscription plus an element of transactional turnover and size of space.” The third is recruitment. “This is the physical space that a brand uses to recruit customers and drive them to their website, Instagram or YouTube channel as a consequence of the experience they have had.” The revenue model could be based on media impressions plus an element of transactional turnover.

Ibrahim would like to change the way airports are thought of and used. Whereas until now, people generally get to the airport in time for their flight, which leaves little time for shopping, Ibrahim would like the airport to be an extension of their life, creating nearly endless opportunities for F&B, brand experience, amenities, services and more. “Imagine you have a flight at 6:00pm. You’re working from home because that’s the new work pattern but you’re tired of working from home. So instead of going to the airport at 4:00pm, you go in the morning. You’ve got a fantastic co-working facility there, and it’s aligned to retail and F&B. You do some work at 9:00am, you have some breakfast, maybe go for an exercise class, have some lunch, wander around the shops and then maybe have a massage.” Ibrahim sees this as a blended space holding near-endless opportunities for engagement, all of which are branded and sponsored. “A whole new commercial ecosystem is possible,” he says. “The transactional retail ‘items on shelves’ is a smaller part of that. There’s a massive opportunity to merge shopping, working, entertainment, learning, culture and hospitality. We call this SWELCH. We can bring these together to create a fantastic and unique experience that reflects the essence of place and delivers serendipity, the most powerful consumer emotion. The new airport commercial experience should be a serendipity machine. Now that will encourage more than 15% of passengers to spend.”

The AMUSE P&C stores in Sydney and Melbourne make the visitor feel like a movie star

Three uses of space

Ibrahim says there are three retail typologies to take into consideration: The first is the traditional transaction and fulfilment model. “The customer buys an item and takes it away, or collects it at the gate — there are many different ways of fulfilment, but the main aim of that physical space is to purchase items.” www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

Starboard Cruise Services

STARBOARD GAINS

Looking ahead, Starboard will continue to build on elevated, experience-driven luxury retail and deliver memorable moments

a sense of clarity As guests return to the water, the company will introduce a number of concepts including private appointments and limited time experiences

by LAURA SHIRK

his spring will mark two years since Lisa Bauer took on the position of President & CEO, Starboard Cruise Services, and its sister company, Onboard Media. From the beginning, Bauer’s main focus has been to encourage those around her to actively seek new possibilities and re-imagine the cruise retail experience. In late 2019, Starboard launched dedicated account teams to curate products, experiences and marketing strategies for each cruise line partner to complement its brand essence and guest profile. This restructuring not only strengthened cruise line partner relationships and bonded team members, but also positioned the company to successfully navigate the challenges of 2020. When asked about the learning curve of the position and recent evolution of the cruise retail industry, Bauer says that last year was about Starboard crystallizing its purpose and using the established values as a foundation to balance difficult decision-making and survive the global pandemic as a stronger company. In addition to cruise lines, immediate efforts centered on collaborating with product and brand suppliers to find solutions for the shared profitability pressures of COVID-19. According to Bauer, now, more than ever, cruise partners value its ranking as a Moët Hennessy Louis Vuitton (LVMH) company, which offers accessibility and stability, with more than six

decades of experience creating innovative at-sea concepts, compelling product assortments and engaging consumer experiences. Moving forward, Starboard has a greater sense of clarity and stronger company culture.

A major change in itinerary

Described as revolutionizing shopping on-board cruise ships and creating a unique retail environment, Starboard Cruise Services will continue to build on elevated, experience-driven luxury retail and deliver memorable moments. However, following months on pause, Starboard will need to evaluate its managing of inventory and balancing of new and traditional collections and categories. This is especially the case when it comes to curated destination products reflecting changing itineraries, such as seasonal destinations that include Alaska. As guests return to cruising, Starboard will introduce a number of concepts including private appointments and limited time experiences. Bauer states that the move to private appointments is the natural intersection of the desire for personalized shopping experiences and post-pandemic services, which is ideal for high-end luxury products. The team is encouraged by the results of its pilot program. In partnership with both emerging and established brands, the limited time experience will be part of Starboard’s business

30 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

Following months on pause, Lisa Bauer says that the company needs to evaluate its inventory management and tap into the acceleration of global trends

recovery plan. Exclusive products and a limited time within which to buy them will support a sense of urgency to purchase. The company is also preparing to present re-imagined, immersive and personalized on-board shopping experiences on this year’s most anticipated sailings. Reported by the 2019 Global Economic Impact Analysis, North America accounted for the highest rate of cruisers with approximately 15.4 million passengers. Based on encouraging booking data collected and analyzed by Starboard’s cruise line partners, North America will likely continue to be the leading market in terms of highest rate of cruisers, and loyal cruisers are expected to comprise a significant percent of the passengers on-board. Bauer comments that as a key differentiating aspect of cruise retail, the strong value proposition of its shopping environment will continue to be impor-

tant. Considering the return of its loyal consumer base, the company is looking forward to the expected growth of cruise brand logo collections. Drawing parallels between revenge traveling and revenge spending, the team representative shares that as cruise operations re-start, itineraries will include fewer stops. With this in mind, travelers will have more time on-board, providing more opportunity to browse shops, develop relationships with retail staff members and purchase a tangible memory of their time away.

New offerings and global trends

Regarding the planning of new offerings, informed by global trends that are accelerating as a result of COVID-19, Bauer listed the following:

As a key differentiating aspect of cruise retail, the strong value proposition of its shopping environment will continue to be important

Experiential • A shopping experience that creates a memorable moment of the overall vacation

Digitalization • Consumers will expect mobile-first digital integration throughout the complete shopping experience • Starboard will offer fresh content, digital touchpoints, contactless retail options, augmented reality and e-commerce

Purpose/Conscious Consumerism • Since purchasing decisions reflect one’s personal values, Starboard is committed to people and the planet • The team will continue to cater to the shared interests of guests in connection to culture, community and sustainability

Personalization • From in-store apparel monogramming to private appointments, Starboard will curate personalized “treasures” throughout the customer journey

“Times like these spur innovation and forward-thinking. As we look ahead, we’re adapting to cruise line guidelines and protocols to ensure the enjoyment of a cruise vacation and safety of everyone on-board. Our guest experience remains at the center of everything we do and we’ll offer shopping highly attuned to today’s traveler needs and expectations,” adds Bauer.

Omnichannel • Consumers will expect aroundthe-clock access to brands and businesses via fully integrated digital touchpoints • Starboard will introduce readily available product discovery in realtime on any device, as well as pick-up and statement delivery options

From in-store apparel monogramming to private appointments, Starboard will curate personalized “treasures” throughout the customer journey

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CircleSquare & Digitalization

The power of storytelling & a holistic journey Described as the future of connected travel retail, The Connected Shopper Platform helps the sector become a recruitment channel for local markets by LAURA SHIRK

CircleSquare partnered with Neoma and comtogether to provide a unified customer journey across physical and digital touchpoints

ounded in 2003, CircleSquare is a brand experience agency made up of a global network of creative people blending art & data to create engaging and people-centric brand experiences. From strategic thinkers to storytellers, the team is known for being ahead of its time, which is important to the survival of a company, now, more than ever. A simple visit to its website and the viewer is instantly transported to a world that brings to life its tagline: retail for the people. From half-way across the globe, Americas Duty Free connected with Stéphane Zermatten, Partner, CircleSquare, to learn more about The Connected Shopper Platform and its significance as the heart of the travel retail customer journey. Headquartered in London, UK, CircleSquare’s presence organically expanded with the opening of its ninth global office in Hainan late last year. Across categories, the team has worked with a long list of established names, both clients and retailers. Several years ago, the company turned to the local market for inspiration and experienced a light-bulb moment. Easier said than done, applying the idea of engaging with customers pre-point of sale to the travel retail market. The company executed its first fully integrated campaign at Hamburg Airport in 2019, with

travel retailer, Heinemann, and leading eyewear brand, Luxottica. A strategic combination of social media content, gamification, store promotion and on-site engagement, Zermatten says that this basic campaign, which targeted people online to drive in-store traffic featured the first application of a connected shopper platform. Although this campaign received a positive response, it failed to generate buzz. Enter COVID-19 and the halt of international travel. Described as the future of connected travel retail, The Connected Shopper Platform aims to communicate with the customer beyond standard brand e-commerce or a virtual version of a flagship store. On the list of platform to-dos: recruit new customers, support product discovery, offer personalized pre-travel engagement, increase footfall and convert passengers into shoppers. Linking travel intent and consumer interest, the platform determines individuals with potential and confirmed travel plans and demonstrates how shoppers react to different incentives. Since its experimentation in the digital sphere pre-pandemic offered insight into the growing digital transformation and the impact of COVID-19 has allowed CircleSquare to expand this concept, Zermatten believes that it’s an exciting

32 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

With the greatest opportunity available to decision-makers in recent time, Stéphane Zermatten at CircleSquare says that it’s an exciting time for travel retail

time for travel retail, with the greatest opportunity available to decision-makers in recent time. To create the best version of the platform, CircleSquare partnered with Neoma, leading AI & location-based insights platform, and comtogether, data-driven digital marketing agency and Google Premier Partner. As one, the team provides a unified customer journey across physical and digital touchpoints and transforms the way that brands engage with consumers to improve customer relationship management (CRM) and increase brand loyalty. “The development of the Connected Shopper Platform was a natural evolution of CircleSquare’s core business: defining ideal customer journeys. Since working with travelers, the key challenge is the need for media planning strategies that differ from any local market.

In addition to the technical development of the platform, Neoma helps the team turn the data collected along the journey into actionable insights via its proprietary AI technology. Plus, as a data-first agency, comtogether intervenes when a campaign is activated on two levels. First, to provide data-driven insights to inform the brands’ content strategy and second to plan and optimize the media campaign(s) that drive traffic to the platform,” explains Zermatten.

A digital transformation

According to the partner, as the initial step toward a digital transformation for brands in travel retail, The Connected Shopper Platform is a recruitment, drive-to-store and data collection tool. As the connecting force of all physical and digital touchpoints, the platform offers consumers a single journey and brands a better understanding of their base, which leads to the opportunity to create a more personalized omnichannel experience. By giving brands control over content and messaging and collecting data in a meaningful way, CircleSquare can start a conversation via a mobile-first approach, refine targeting, select means of engagement, integrate product education and gamification and extend the journey across touchpoints – online and offline. The ultimate aim of the platform is to help travel retail become a recruitment channel for local markets. Although the key of the platform is smartphone penetration, Zermatten comments that the starting point of any campaign is creating an overarching creative concept that is fitting of the brand. Next, the team has to establish a compelling story, content and touchpoints; all of which need to be supported by consistent narration and easy navigation. Depending on the campaign, the combination of mediums such as sensory engagement, augmented reality and on-site brand ambassadors will differ. From new techs to old tricks, it’s up to CircleSquare to curate appealing enough content

When consumers return to shopping in-store, brands will need to adapt the role of the physical environment from convenience to experience

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

CircleSquare & Digitalization

for consumers to engage with and continue on. Providing a clear and detailed explanation, he shares that positioned at the center of the journey, The Connected Shopper Platform collects data and personalizes content, which means the journey is not linear, but rather holistic. Zermatten goes on to provide a window display as an example of a physical touchpoint that based on consumer interaction, mobile engagement, profile development, personalized content and first-party data collection will generate a “myriad” of different journeys from one location. “When it comes to travel retail, there is an opportunity that the likes of Amazon and Alibaba don’t possess: we know where people will be at a definite time and can interact with them ‘in real life.’ Therefore, the opportunity lies in creating engaging experiences for travelers and offering something more exciting than products on shelves or a straightforward purchase experience that they can do from anywhere in the world on their phone. The caveat: when traveling through an airport everyone spends most of their time glued to their phone. This means the on-site experience needs to be interesting enough to catch the attention of passersby or passengers and the teaser needs to create a mobile hook to drive people to the physical experience,” states Zermatten.

A permanent activation

Since travelers are in the mindset to try new experiences and purchase new products, travel retail is a channel for discovery (first-time consumers) and cross-over (converting travelers into repeat buyers). Zermatten says that the way to win brand

Giving brands control over content and messaging and using data in a meaningful way, the team can start a conversation via a mobile-first approach

loyalty is to understand the shopper, remind them of the brand post-purchase (or post-travel) in a non-intrusive manner and direct them to a local store. He touches on a Lunar New Year campaign by CircleSquare in which the company discovered a surprisingly large majority of the participating consumers were new to the luxury brand – and therefore, didn’t exist as part of its local market CRM. Zermatten adds that this illustrates how deep the pool of untapped customers in the local market is. Open communication between the domestic market and travel retail market and the sharing of information between brands and retailers will

As the initial step toward a digital transformation, the platform is a recruitment tool that uses smartphone penetration to collect data and personalize content

34 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

lead to more successful experiences and campaigns. When shoppers return to browsing and buying in-store, brands will need to deliver a balanced journey of physical and digital touchpoints and adapt the role of the physical environment from convenience to experience. Since travelers can pre-order their favorite tube of lipstick, bottle of gin or pack of cigarettes, the purpose of maintaining or growing an offline presence is no longer about stocking and replenishing. Using the physical environment as a permanent activation will create a flexible space to change the in-store experience according to product launches, store promotions, exclusive collections and/or brand campaigns. “Physical retail will remain extremely important, but we have to look at what the shopper missions are: the convenience or replenishment mission can be fulfilled via digital as consumers are becoming more comfortable with e-commerce (in part due to restrictions caused by COVID-19 and the desire for a contactless experience); the discovery mission will require the existence of a physical space. In many cases, especially for luxury brands that service exclusivity, a hybrid experience will come into play,” concludes Zermatten.

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LEGO is a globally known and loved brand and LEGO Airport stores are incremental revenue makers. LEGO Airport stores offer great gifts and the assortment include novelty launches and exclusive hard-to-find items throughout the year – driving kids, adults and toy connoisseurs alike to visit your store every time they fly in.

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A LEGO Airport store offers:

• Engaging activities – Play is central to our DNA and all travellers are invited to join. • Impressive, large 3D-models – Take a picture with the LEGO figure or study the construction up close. • Localization – the LEGO store points to the city of destination and becomes itself a destination at the destination.

Vancouver Airport Authority

InterVIEW FROM THE TOP Americas Duty Free talks to Tamara Vrooman at Vancouver Airport Authority about the status of YVR and participating in the Summit’s Knowledge Hub by LAURA SHIRK

During the pandemic, the airport partnered with its local health authority to develop a drive-thru public COVID-19 test collection site at one of its long-term parking facilities; more recently, YVR recalled some laid-off airport workers to staff clinics and support the province’s vaccination effort

cheduled to speak at Summit of the Americas – a Virtual Experience, as part of its Knowledge Hub, Tamara Vrooman, President & CEO, Vancouver Airport Authority, will feature on day four of the View from the Top series. Following up on the invite, Vrooman will share with listeners from across the aviation industry what recovery might look like in the Americas. The leading topics of discussion include the future of the airport business model, the maintaining and managing of airport relationships (from concessionaires to brands) and the evolving of consumer expectations and behaviors. As an expert in the field and featured speaker, Americas Duty Free interviewed Vrooman to learn more about Vancouver International Airport’s (YVR) diversification strategy and its health and safety campaign, TAKEcare. During the Q&A, the President & CEO elaborates on minimizing operating costs, developing local and national partnerships, researching new technologies and advocating efforts to establish a unified framework. She believes that the path to recovery requires a standardized national testing strategy.

Tamara Vrooman, President & CEO, Vancouver Airport Authority, says that the path to recovery requires a standardized national testing strategy

36 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

Q::As passenger traffic continues to slow at YVR, the airport has optimized the use of its terminals. Describe public response. In addition to this change in service, what other ways has the airport diversified its business model? A: During the pandemic, we’ve minimized our operating costs to be more in line with reduced passenger demand wherever possible. This includes consolidating our operations and closing 22% of our terminal. YVR is the only airport in Canada that hasn’t increased its fees during this time – we looked very closely at how to balance reduced passenger flows with supporting our airline customers and commercial partners as they continue to operate. Regarding diversification, we’ve looked at ways to ensure our airport remains in service of our community. For example, we partnered with our local health authority to develop a drive-thru public COVID-19 test collection site at one of our long-term parking facilities. We’ve also just announced that YVR will be lending its expertise to British Columbia’s vaccination effort, recalling some laid-off airport workers to staff vaccination clinics. Despite these challenges, those who need to travel can still expect the same high-level of customer experience when traveling through YVR including strict health and safety protocols under our TAKEcare program. I often say that the airport is the best kept secret during COVID-19 — while everyone is familiar with what the grocery store looks like these days, only those who need to travel have experienced YVR and everything that has gone into making it a safe and positive experience. Q::How does YVR’s health and safety campaign, TAKEcare, impact public awareness, on-site traffic, retail sales, consumer engagement and travel experience? Please touch on the team’s investing in new technologies and re-thinking airport processes. A: YVR TAKEcare is an operational program and health and safety campaign that is designed to help people move through the airport safely and with confidence.

Designed to help people move through the airport safely and with confidence, YVR TAKEcare applies to all aspects of operation, reduces crowd size and eases the flow of traffic

When first launched in 2020, it served as an educational program helping those who need to travel for essential reasons understand new protocols that have since become a part of our everyday lives: social distancing, hand sanitizing, mask wearing. It applies to all aspects of our operation, placing industryleading health, safety and cleaning practices and protocols at the forefront of all airport processes. As part of the program, we’ve asked only travelers and those working at YVR to enter the building. This has aided in reducing crowd size and easing the flow of passenger traffic. We’ve been researching and investigating new technologies and their place in the airport for when we welcome travelers back such as an electro-static sprayer that is being used in the terminal. It uses robot sensors to kill 99.9% of surface bacteria in five seconds or less. Q::How will YVR support the development of a long-term testing strategy for international travel and the recovery of the travel retail industry? A: The path to recovery requires a standardized national testing strategy. That’s why Canadian Airports, along with the Canadian Airports Council and the National Airlines Council of Canada, are advocating and lobbying for a unified national testing framework for Canada’s airlines and airports that is consistent with the global aviation industry. We’re also busy doing our own research and expanding our testing capability to help inform and prepare for a future testing solution. This winter, we partnered with WestJet, UBC and Providence Health Care to lead a voluntary research study for departing passengers. This study was the first of its kind in Canada and it was designed to investigate both the feasibility and the practicality of rapid antigen testing to detect COVID-19 in departing passengers. It concluded in late-February, with zero positive test results and has been submitted for publication in a peerreviewed journal. YVR has also partnered with LifeLabs to create a full testing and laboratory facility on Sea Island, BC. This will provide greater capacity for longer term testing needs, as we anticipate testing will be a part of travel for some time. We’re in exploratory talks with other testing providers about further testing projects and providers. Q::Elaborate on the creative concept of YVR’s Pier D expansion project. Once opened, how will the expansion help to improve the overall travel experience and return to prepandemic levels? A: The Pier D Expansion Project is our largest expansion since 1996. It aims to bring the beauty of British Columbia to travelers making their way through YVR. It features a glassed-in forest with access to the outdoors, an immersive digital experience and a yoga, prayer and quiet room. While plans to open the facility are on hold due to COVID19, we anticipate it’ll position us well for when air traffic does rebound to pre-pandemic levels. It has eight more gates, which will allow for additional flights and its aesthetic will provide a calming, natural experience for travelers.

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

Land Border Duty Free Stores

A MAJOR SHIFT

If the recovery of SARS is an indication of 2021, the team at Importations Guay Ltée Duty Free (IGL) is carefully monitoring projections to anticipate a spike in traffic to the United States

As regulations surrounding retail operations continue to evolve across Canada, land border stores prepare for recovery by LAURA SHIRK

ith most of the Canadian land border duty free stores still closed as a result of COVID-19, Americas Duty Free reached out to Blue Water Bridge Duty Free in Sarnia, ON, Importations Guay Ltée (IGL) Duty Free in SaintBernard-de-Lacolle, QC, and Peace Bridge Duty Free in Fort Erie, ON, to learn more about how these locations are sustaining business, implementing new health and safety measures and preparing for the recovery of COVID-19. Regulations surrounding retail operations are constantly evolving across Canada. Regardless, all of these stores are experiencing an extremely low volume of traffic, most of which is made up of commercial drivers and essential workers who are part of the trade and supply industry. The following is a snapshot of each duty free store:

Blue Water Bridge Duty Free: Gerry Lee, Operations Manager •

•

Hours of operation: open 24 hours a day, 7 days a week to essential travelers; the store continues to employ its longterm and most experienced retail and office staff members New health and safety measures include the use of personal protective equipment (masks, face shields, gloves, plexiglass barriers, disinfectant) and the enforcing of social distancing

38 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

•

and face coverings; Blue Water installed extensive signage at its entrance and in its lobby stipulating these requirements The store has also implemented an on-site COVID-19 screening questionnaire for both employees and service providers to support contact tracing in the event of an outbreak Regular traffic is down more than 50% and leading product categories include tobacco, liquor, fragrances and confectionery Based on a reduced marketing budget, Blue Water’s marketing efforts are in relation to developing its online curbside platform, maintaining its web presence and social media channels and posting on-site signage to attract drive-by traffic The store’s new curbside service will help the store gain a presence in the omnichannel shopping experience

Importations Guay Ltée Duty Free: Justin Guay, Vice President • •

Hours of operation: open 8am – 7pm daily to essential travelers (limited hours of operation) In addition to essential travelers, citizens, dual citizens and permanent residents are still permitted to travel across the border

Blue Water Bridge has installed extensive signage and implemented an on-site COVID-19 screening questionnaire to support contact tracing

•

Non-essential travelers are required to present a 14-day quarantine plan and undergo a mandatory COVID-19 test; essential travelers aren’t required to do so The store successfully managed its pre-pandemic inventory, avoiding the expiration of any product while at the same time, ensuring no out-of-stock occurrences

Peace Bridge Duty Free: Jim Pearce, General Manager •

•

Hours of operation: closed; the store continues to provide some limited non-retail services and washroom availability to essential travelers All planning in connection with health and safety measures, marketing promotions and retail operations are on hold until the team has a better idea of when the border will re-open Regular traffic is down 95% and Peace Bridge is attempting to identify the unknowns that the industry will be facing in both the short and long-term such as travel patterns, consumer behavior and shopping preferences Expecting to re-open this year, the store’s initial marketing plan will aim to generate awareness, inform people of its safe and convenient environment, expand its hybrid retail approach and remind travelers of the benefits of shopping duty free

sets or our overall customer base. When the border re-opens, we hope to make gains in other areas by making omnichannel buying available, further developing loyalty programs with recurring customers and fine-tuning our sales data and reports to reveal trends within certain departments and demographic segments,” says Lee. Similar to Blue Water, IGL is launching a new website this month to offer curbside pick-up, which is expected to be a common practice for many customers during the recovery period. Guay comments that nearing the end of the SARS pandemic, land border stores experienced a high level of traffic due to public concern surrounding air travel. With this in mind, the team is carefully monitoring projections to anticipate a spike in traffic to the United States. Bringing to light activity across the border, he touches on New York’s "Welcome Back" campaign launch, which is expected to coincide with the increase in vaccine administration. Looking ahead, Pearce believes that it’s possible customers might dramatically reduce their dwell time. If this is the case, duty free stores will need to assess product placement, on-site engagement, consumer demands and marketing trends to address this challenge. “With more consumers enjoying the digital experience and connecting with various touchpoints to promote both our duty free brand and all the great brands that we represent, this will be a key strategy going forward,” says Pearce.

An update on HASCAP

An update on Duty Free & Travel Retailing Magazine’s previously published interview with Barbara Barrett, Executive Director, FDFA, Barrett notes that the Highly Affected Sectors Credit Availability Program (HASCAP) program has opened up a line of government-backed credit that some of its stores have accessed. However, the 4% interest is higher than FDFA would like and the team is in discussion with officials. “On a separate but similar note, FDFA will be embarking on Hill Days on April 6 – 7. Members will have scheduled virtual meetings with MPs and senior staff members about the land border duty free stores’ recovery plan,” adds Barrett. Expecting to re-open this year, Peace Bridge will aim to inform people of its safe and convenient environment and remind travelers of the benefits of shopping duty free

A lesson from SARS & look at the USA

Although Lee points out that the main areas of diversification available have been limited, Blue Water is highly focused on the shift of its main demographic and the correlating sales data. This has led to a major change of product placement throughout the store and a minor growth of its average transaction among this group. “Due to the border closure, many of our current consumers are recurring travelers who work across the border. As a result, the most effective marketing is advertising on-site and instore with the intent to sell particular products or increase purchase size. “The shutdown has demonstrated that benefits can be earned by drilling down on sales data to better promote to specific subwww.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

SEVA Group

the peace DISRUPTING WITH THE TRAVEL RETAIL LANDSCAPE NOW EASIER TO EXAMINE, SEVA GROUP SAYS IT’S TIME TO BREAK THE RULES AND REDISCOVER THE BASICS by LAURA SHIRK

Natalie Jackson, General Manager, Organico Travel Retail, SEVA Group

escribing “disruptive marketing” as breaking the established rules and changing the core perceptions of the shopper, Natalie Jackson, General Manager, Organico Travel Retail, SEVA Group, explains that right now traditional basics such as great range, availability and visibility need to be prioritized along with new standards of hygiene, social distancing and contactless shopping. It’s about examining changes in the marketplace and adapting from the standard way of thinking when it comes to conducting business. Although travel retail has seen its greatest disruption to date, SEVA Group is relying on a back-to-basics, consumercentric approach to show empathy for the consumer and meet the quality of perception. “The real disruption is observing the consumer journey; understanding how digitalization can help us communicate with travelers and cement travel retail as a great way to add value to their trip,” shares Jackson.

40 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

Since a work-from-home reality has led to the virtual disappearance of the business traveler, SEVA continues to pose the question: what’s the most useful thing we can do? The company sees a need to revise its focus given the shift in passenger profile. SEVA is concentrating on the consumer who is most accessible, the opportunities that are available and the best means of communication. Jackson notes that the shift in consumer profile has caused a change in shopper mission from gifting to replenishing, and therefore believes that consumer insight and social listening is more important than ever. This forced layoff from business as usual has offered brands the space to assess how to best capture the imagination of the consumer and convert passengers into shoppers. With more restrictions and fewer travelers, Jackson states that the travel retail landscape is more invitational to experiment. Traditionally, travel retail is a “busy and loud” promotional environment; however, when you strip away the high-profile brand activations and campaigns and focus on the core level of sales, you can evaluate what does and doesn’t work. Compared to the domestic market, the channel has previously been difficult to study without a global data set. These days, SEVA is noticing

Elaborating on its brand identity, Jackson notes that SEVA Group has always been an agile company, with multi-discipline operations and innovative strategies

Jackson says that the real disruption in travel retail is observing the consumer journey and adapting the standard way of thinking

a key change in the way people are maintaining relationships and sharing data. And Jackson says that this is perhaps the best disruption of all. “One disruption I’d identify in travel retail marketing is that everyone has come together; buyers and brands are working together. It’s been ambiguous for all of us; we’ve had this massive shared experience personally, and professionally, which no one had the answer to. We’re no longer planning a year out; we’re planning what to do the next three months,” she explains.

It’s all in a word

With public safety a major concern, passengers are taking more time to research their route and destination via social media channels and websites. Naturally, this has led to more applied thought and planned behavior across the consumer journey. In addition to the list of duty free brands and stores available, shoppers now want the footprint of the shopping area.

When asked if the effectiveness of disruptive marketing depends on the method of engagement, point of travel or retail category, Jackson replies that “effectiveness” is a subjective word in marketing and each retail category has its own metrics of success. “SEVA Group is breaking down the journey and working out what is the best measure of effectiveness and what are the new conditions as how to market. We’re challenging ourselves to step into the retailers’ shoes each day and find ways to differentiate by location that ensure everyone can have some point of difference, while still executing bold, market-wide strategies. The key to this is understanding the boarding card data and the demographic of each airport. At the moment, no two airports are the same – so we can always tailor based on this to ensure we deliver on all bases,” she adds. Elaborating on its brand identity, Jackson notes that SEVA Group has always been an agile company, with multi-discipline operations and innovative strategies. During COVID-19, SEVA has paid all of its suppliers on time and partnered more closely than in the past to show its commitment to travel retail and maintain its reputation. “We’ve noticed a shift in the mindset of retailers on the whole. COVID-19 has been a unifier across the trade; we’re all humans with similar wants and needs. Our combined priority is to make passengers feel that it’s safe and easy to travel. Every airport, retailer, trade press and brand is responsible for making this happen, so cohesion is at an all-time high,” concludes Jackson.

When asked if the effectiveness of disruptive marketing depends on the method of engagement or point of travel, Jackson replies that “effectiveness” is a subjective word and each retail category has its own metrics of success www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

Global Cruise Community

CLIA PRIORITIZES

rebuilding trust Following the guidance of leading experts, the trade association has established a multi-layered health and safety approach by LAURA SHIRK

s the world’s largest cruise industry trade association, Cruise Lines International Association (CLIA) provides “a unified voice and leading authority” of the global cruise community. Leading up to the COVID-19 outbreak, CLIA represented more than 50 ocean, river and specialty cruise ships or 95% of global cruise capacity and served almost 30 million passengers who cruised annually. Despite a challenging 2020 and a slow recovery, consumer research indicates that optimism is on the horizon with two out of three cruisers willing to return to the water within a year and 74% of cruisers likely to return in the next several years. While the statistics are encouraging, CLIA understands the need to maintain perspective and adapt to its consumer base. “[Although enthusiasm from cruisers remains strong, we recognize that it might take time before the public is comfortable with many aspects of traveling post-pandemic. Rebuilding public trust in the cruise industry is going to be a priority for us, as we look to the future and hope to be able to do so by demonstrating the effectiveness of the new measures in place],” shares Laziza Lambert, Manager, Strategic Communications, CLIA. When asked to elaborate on the new measures in place, Lambert offered a summary of the multiple layers of protocols that CLIA members have agreed to adopt. From medical care to response mobilization, the protocols are informed by the insights, research and guidance of leading experts in health and science.

Medical •

•

Ship Environment • • •

Reserved cabins for isolation and physical distancing Air management risk mitigation strategies to increase fresh air flow and deploy enhanced filtration technologies Hand washing stations and heightened sanitation protocols

Measures for Crew Members: •

• • •

42 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

Expansion of medical staffing and resources on-board ensures the support and receipt of personal protective gear, diagnostic equipment, illness reporting and intensive care of COVID-19 cases A dedicated on-shore entity to address all inquiries related to COVID-19 health and safety protocols and case management Daily temperature checks of crew members and staff members

100% testing of all members, with a requirement to report any positive results to the cruise line medical director – or equivalent – for appropriate action: prior to departing from home, embarking the ship and upon conclusion of a minimum seven-day quarantine Access to training in new protocols and mental health support resources Daily symptom screening and mask-wearing in public spaces and service areas Limited cabin occupancy

All CLIA health and safety protocols are informed by the guidance of leading experts in health and science

Measures for Passengers: •

•

• •

Frequent communication from time of booking (i.e. instructions for complying with public health requirements) Staggered guest arrivals and departures, the completion of a health declaration and the requirement of a negative test result prior to boarding Health screening, physical distancing and mask-wearing Maintain tracking information for at least 30 days following disembarkation to facilitate post-cruise communication

Case Detection and Management • • •

Immediate isolation of possible and/or confirmed cases of COVID-19 in pre-designated reserved cabins Rapid implementation of risk-based response plans to identify and quarantine close contacts Screening and testing of disembarking passengers who are close contacts of confirmed COVID-19 cases

Response Mobilization • •

Pre-arranged response logistics for each itinerary for transportation providers Shoreside quarantine and medical facilities in the event that infectious illness exceeds on-board management capability

Environmental protection and responsible tourism

The team representative says that when cruising resumes in full force, CLIA will continue to offer holiday-goers the three most desirable types of travel: experiential, transformational and accessible in order to expand personal growth. Lambert points out that in addition to the trade association working to address the pandemic, the industry has remained focused on its commitment to preserve the air and oceans in which it operates. With more than $23 billion (USD) invested in ships featuring modern technologies and alternative fuels, significant progress has been achieved and CLIA will continue to work hard to meet consumer demands and cruiser expectations. “CLIA and our cruise line members are committed to responsible tourism practices and environmental stewardship. Although cruise lines comprise far less than 1% of the global maritime community, the cruise industry works every day to advance its responsible tourism efforts. While much progress has been made, the cruise industry recognizes that continued and greater investment in research and development is critical in order to achieve the ultimate objective of zero carbon emissions across the global maritime fleet. Last year, CLIA joined an array of partner associations in the maritime sector to put forth a proposal to the International Maritime Organization to fund and establish a $5 billion (USD) Research and Development Board dedicated to working collaboratively across the maritime sector to identify—and in some cases, develop—technologies and energy sources that will enable the cruise industry to pursue solutions that do not yet exist,” concludes Lambert. www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

Latin America Update

KEEP WALKING ASUTIL’s Secretary General José Luis Donagaray discusses the ever-changing situation in LATAM, the many items the association is working on, and how this crisis may improve things for travel retailers at the end of it all by WENDY MORLEY

One of the difficulties facing Latin America travel and tourism — and therefore travel retail — is the lack of consistency on border restrictions from country to country

uring the ASUTIL conference held in Santiago, Chile in 2016, the guest keynote speaker was Roberto Canessa, who also participated in the ASUTIL webinar during 2020. In 1972 Canessa walked through the mountains for days to find help for the surviving victims of the famous Andes plane crash. While the current one is a very different type of crisis, José Luis Donagaray, Secretary General of ASUTIL, says the solution is the same: start to walk, as nobody will come for you.

Waiting for the vaccine

One of the difficulties facing Latin America travel and tourism — and therefore travel retail — is the lack of consistency on border restrictions from country to country. Uruguay has remained closed. Brazil has remained open. Most countries in the region fall somewhere in between, either requiring quarantine, negative PCR tests or both. Donagaray says he does not think there will ever be a consistent entry standard as far as these means are concerned. He believes that, since the vaccination program has now begun for

44 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

José Luis Donagaray, Secretary General of ASUTIL (right) with Michael Payne, President & CEO of IAADFS addressing delegates during the Summit’s educational session in 2019

EXPLORING THE ART OF CHOCOLATE. THE COCOA ENTHUSIASTS TAKE CHOCOLATE ENJOYMENT TO NEW DIMENSIONS.

SCAN ME RITTER SPORT COCOA SELECTION DELUXE www.ritter-sport.com

Latin America Update

the region, there will be two conditions of entry for any country: Prove you have had a vaccination, or prove that you had the virus through an antigen test. Donagaray expects that borders will begin to open for those who fall into those two categories within the next two or three months, and that things will remain as now until most of the population has been vaccinated. “This will be progressive,” he says. “First, start the vaccination process and then lift some borders. But this will be very dynamic.” On the Brazil-Argentina border, changes are already brewing. Donagaray says it is expected that there will be news of Puerto Iguazu opening within the next week or so.

Changing the rules

Brazil’s border stores, which began to open in September, have done well considering the current situation. This is in great part because Brazilians are allowed to shop there. Uruguayans cannot shop in their own stores, but although the border remains closed to Brazil, Brazilians are able to shop in Uruguay land border stores as immigration is on the other side. Be that as it may, ASUTIL has been hard at work lobbying the government to allow Uruguayans the right to purchase from their own duty free stores. Currently, Uruguay has a trade agreement with the US that allows its residents to purchase US goods three times per year for an amount of US$200 each with no customs charges. ASUTIL is trying to make it possible to buy from the country’s own duty free stores instead. “We are working on this, but it’s not easy,” says Donagaray. “We have been working a lot with the governments. We cannot increase the number of passengers so we have to find a way to decrease costs or increase the average ticket,” he adds. ASUTIL is doing this by trying to get taxes lowered, by getting allowances increased, and any other ideas they can come up with. As an example, he points out that passengers returning to Brazil from an international destination will fly to one of the larger airports but due to the size of the country must often get on another flight. This severely restricts their duty free purchasing as they take the items as carry-on for their next flight. ASUTIL is trying to get the government to allow a 15-day period to buy duty free after the flight, so travelers could shop online and the purchases could get delivered to their house. Donagaray says these talks are going well and the government is receptive. “We need to think a different way. A person cannot buy four bottles of liquor or a TV and get on another plane.”

Opening minds

While the association has had to work extra hard during this time — doing all the work it normally does plus a whole other set of jobs arising from the special circumstances, Donagaray says these special circumstances have also opened doors. Governments are listening. “In Latin America we are very accustomed to dealing with crisis, but usually we are the ones in crisis and the rest of the world is fine, so they help us,” he says. “This time the whole world it in crisis and there is no one to help, so we are all going to the government. The pandemic is very democratic.” This has created a situation where governments are more receptive to consider the industry’s plight and any possible solutions. The good news is, these solutions could well carry on after the pandemic is over.

46 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

Looking to future for tourism

Flights have returned to the region, but talk of tourism is a long way off. Domestic PAX for the region was down 43% and international was down 68% year on year, but there can be no real talk of tourism until most people have been vaccinated. The region lost its busy summer season and Brazil lost Carnival, so all eyes will be on the 2021/2022 season. Some Caribbean countries and Cancun, however, did well, says Donagaray. “Those that kept their borders open had large numbers of US tourists.”

Big crisis = big work

The association is especially busy these days. They have been meeting with suppliers to see how they might help. ASUTIL is working with m1nd-Set's Peter Mohn on the Recovery Monitor, meeting with boards, with governments, and getting the Summit of the Americas ready. And if that all isn’t enough, they are also working on getting the borders meeting ready for end of this year, which Donagaray hopes will be held in person in November. “For the association, it’s big work during a big crisis,” he says. ASUTIL membership remains high, with many retailers and brands taking part. This membership is imperative when Donagaray speaks with governments, as he is able to tell them all the companies the association represents, giving his words more weight. “We did a lot of things with ALTA (Latin American and Caribbean Air Transport Association), with ACI Latin America; we helped airports to negotiate fees, we negotiated fees at the border, we’ve had lots of success,” he says. “The biggest success is to open the minds of authorities so they understand what is happening.” ASUTIL is also preparing a webinar that will take place later this month as in 2020.

Summit of the Americas

The Summit of the Americas has “three legs,” according to Donagaray. First is the speakers, or the knowledge hub. Donagaray is quite excited about the quality and variety of keynote speakers. Then are the retailers, and while the digital event may not allow for social events such as the opening cocktail or meeting colleagues for lunch or dinner, it does allow for people to take part who normally wouldn’t. Donagaray says there are 150 people from retailers all around LATAM, and this gives the opportunity for brands to speak with people they wouldn’t usually get the chance to, such as marketing personnel. And then there are the stands. Currently the number of stands sold is not yet as expected, they are working on this. “We need to do things; we need to share information; we need to connect suppliers and operators; need to connect people you don’t normally see at conference. We are confident this will go well.” While there’s no denying certain aspects of the conference cannot be replaced digitally — everyone staying in one hotel, seeing each other throughout the day and at social events, doing day trips together — Donagaray has high hopes this will return next year.

E. Gluck & Duty Free Dynamics

surprise A pleasant

Looking to form the foundation of the partnership early on, E. Gluck encouraged building the collection in a collaborative way in order to meet shared objectives

ollowing a number of spontaneous meetings at TFWA Cannes in 2019, E. Gluck Corporation and Duty Free Dynamics (DFD) decided that a joint venture was worth exploring. After several months of exchanging ideas and determining the terms of a distribution agreement, DFD pulled together a proposal. Robert Robertaccio, Senior Vice President, Global & Travel Retail Sales, E. Gluck Corporation, says it’s at this point that things started falling into place. Offering a strong infrastructure, DFD has the ability to support and expand E. Gluck’s existing business with independent operators in the Americas and Caribbean. In the short-term, DFD was expected to take over accounts previously handled directly by the E. Gluck team and present the Anne Klein brand to other accounts in order to build its presence and foster new relationships. “Having signed our agreement at the beginning of COVID-19, my expectations of the first year of business became limited compared to the aggressive plan that DFD had developed. To my pleasant surprise, DFD hit the ground running, almost immediately taking a stock order and opening accounts. Given the worldwide shutdowns, what the team accomplished in 2020 is impressive. Based on its success mid-pandemic, DFD has certainly raised the bar for my expectations of our shared long-term objectives,” says Robertaccio. Looking to form the foundation of the partnership early on, E. Gluck encouraged

E. Gluck and DFD signed a distribution agreement prepandemic that has already proven to be a success in the Americas & Caribbean by LAURA SHIRK

building the collection in a collaborative way. The partners connect on a regular basis to brainstorm, share opinions and participate in strategy meetings. Describing members of the DFD team as experts in their markets, Robertaccio comments that E. Gluck is in a good position to emerge from this challenging time stronger than before. Defining flexibility as the key to success right now, Robertaccio says that E. Gluck never paused product development to navigate running the risk of being unprepared for the return of travel. Unfortunately, due to the current state of travel retail, some of this product might not make it to this market. For nearly 40 years, E. Gluck has continued to make Anne Klein a leading fashion watch brand among consumers. As a trend-setter in product design, Anne Klein launched its “Considered” collection in 2019 ahead of the current sustainability trend in duty free and travel retail. This range of watches features eco-friendly components including solar movements. “We’re extremely anxious for the full re-start of GTR so we can broadly expand the footprint of this collection beyond the domestic market. To DFD’s credit, these were some of the first items that the distributor took into inventory,” adds Robertaccio. “Recognized as an energized and dynamic company with a highly motivated team, Duty Free Dynamics is a natural partner for Anne Klein with a great ability to adapt and quickly capital-

ize on opportunities,” shares Francisco Suárez, Category Manager for Watches, Duty Free Dynamics. Sticking to its proven strategy, E. Gluck is focused on developing a quality product that is on trend for the fashionable watch consumer and offering great value with an accessible price point.

As a leader in product design and development, Anne Klein launched its “Considered” collection in 2019 ahead of the current sustainability trend in duty free and travel retail

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

Recovery of the Caribbean

They will RETURN Travelers are looking for beautiful wide-open beaches, which are abundant throughout the Caribbean

Countries that rely on tourism for much of their GDP have been especially hard hit, and that is the case for countries throughout the Caribbean. With the tourist season of 2020/2021 all but wiped out, a panel of experts discusses what needs to be done to attract people back in the coming year by WENDY MORLEY

s with all regions during this pandemic, it’s not really possible to look at the Caribbean’s current travel and tourism situation as a whole, because countries within the region have taken vastly different approaches to COVID-19 border restrictions. Not surprisingly, countries that have remained open to tourists during this time have done quite well at acquiring a greater share of those willing and able to travel, especially individuals from the region’s largest market, the US. But the term open borders has its own variations — from requiring a negative PCR test to various lengths of quarantine to simply making tourists remain within a resort — and these different levels of restriction have had consequences not only for the islands’ tourism, but also their own populations’ health.

Tourist panel webinar

During a recent conference with the Caribbean Tourism Organisation (CTO), members of the tourism industry discussed what has been happening with tourism in the region, what might be expected in coming months and most importantly, how the Caribbean can now recover. Present at the conference, which was held as a zoom webinar, were Johnson Johnrose, Communications Specialist for the CTO; Vivian Mur, Director of Sales at Adara Travel Data Consortium; Carol Johnson, Senior Principal Client Partner at Tripadvisor; Colin Pegler, Managing Director of Resort Marketing International; and Eric Bowman, Executive Editor of TravelPulse. Johnson Johnrose began by stating what we all instinctively know: Everything those in travel and tourism used to take

48 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

for granted is now gone. Johnrose said that while those in Caribbean tourism used to know “when to start preparing for the high season and plan for refurbishment during the low season, planning for tourism during this age of COVID-19 is a complicated affair.” He wondered aloud whether there will be such a thing as a high season anymore, as expected openings continue to turn into prolonged closings and season after season is dismal. This is in no small part due to everchanging governmental decisions on who can travel, when and under which circumstances; and this does not apply only to the country being traveled to, as Canadians hopeful for a break from the winter recently realized when the government imposed a negative PCR test and an expensive initial hotel quarantine in addition to the 14-day quarantine already in place for returning Canadians. But even those who are willing and able to travel are currently being haunted and held back by the spectre of canceled flights and new regulations.

Travel trends and retail

Current trends are very clear, according to those involved in this webinar. Luxury is leading the recovery, which might be very good news for travel retailers. Those will-

Tocumen International Airport, Panama

The Venetian Macao

JFK, New York

Miami International Airport, USA

Punta Cana, Dominican Republic

Recovery of the Caribbean

ing and able to travel right now are people with money to spend. As further potential boons for travel retail, those who do have money to spend on travel have not been spending it — nor have they been spending on restaurants, concerts or expenses related to work commutes. Not only are they itching to travel, but their travel money is burning a virtual hole in their pockets. Additionally, up to 80 percent of this travel is being paid for with vouchers. For the traveler who paid for the ticket long ago this feels like a free trip, and it means the travelers have even more money to spend at the duty free store. Who is booking this travel? While the 55+ community are traditionally the demographic that spends the most on luxury travel, Millennials and Gen Z have risen as an important cohort, as they tend to be less concerned about contracting the virus and more concerned about the enjoyment of life.

What are travelers booking

Search trends are one thing, but actual booking is another. Current booking trends are going in two clear directions, toward last-minute travel and toward travel in the fourth quarter of 2021. This shows that travelers are feeling cautious but also optimistic that travel will again be possible gearing up for next winter. Lastminute bookings are considered safer because the rules are less likely to change, whereas travelers are expecting that by Q4 enough people will be vaccinated that the borders will have opened up again. One reason for the hesitancy to book in the medium term is that travel rules are constantly changing — as an example pointed out by Colin Pegler, within just a couple of days Boris Johnson went

from saying there would be no hope of a vaccine passport to saying such a thing is likely. He then suddenly gave dates for the allowance of travel and the end of lockdown — dates that had not even been mentioned before — which caused a flurry of travel bookings. The pandemic has made people miss many things in life once taken for granted, but possibly nothing more than the inability to spend time with loved ones. For this reason it’s probably not surprising that multigenerational travel is a clear trend, with families booking villas and sailboats — places where they can be together without having excess exposure to others. They also want to be able to spend time outdoors safely, specifically on beaches that are not crowded; the Caribbean offers almost endless options.

Why choose the Caribbean

The Caribbean is always an important travel region. According to Carol Johnson of Tripadvisor, 45 percent of all US searches involving international travel are for destinations in the Caribbean. During the pandemic and postpandemic period, the Caribbean has the opportunity to take full advantage of the ever-referenced pent-up desire to travel, as it has everything on offer that travelers are looking for: Beaches, a tropical atmosphere, all-inclusive options and the ability to unwind and relax with no pressures. Already the region is especially popular not only with the US and Canada, which is to be expected given the proximity, but also Europeans and those from the UK, who have historical ties to the region. Even in the post-pandemic period, travelers are expected to seek travel with the option for social distancing, such as those wide-open beach.

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While in the near future European and UK bookings suggest short trips to the Mediterranean, the Caribbean is likely to become more and more popular, especially as the countries within become more welcoming. But the panel on this webinar suggest the region needs to focus very strongly on making itself the most attractive option. If travelers don’t feel safe to go — and that means not only because of the risk of catching the virus but also the risk of being trapped at the border, of having regulations suddenly change, or of needing to quarantine for too long to make the trip worth it — then they have other options such as Mexico, which offer much of what the Caribbean offers. As Colin Pegler suggested during the webinar, the region as a whole needs to “be proactive, be visible and be open.”

Creating visibility and openness

In all, the participants of the CTO webinar are exceptionally optimistic and hopeful. The data is showing that people are looking to travel, and as soon as rules and regulations change in their favor, they are booking it. While Tripadvisor’s Carol Johnson and TravelPulse’s Eric Bowman both see the interest in the Caribbean to be high, Vivian Mur, the participant with the most actual travel data, says as of April this year bookings for the Caribbean are a bit sluggish. This may be in part because of confusion. Additionally, the strong Canadian market was canceled overnight when all flights to and from the region were halted until end of April. It will be up to the CTO and its country partners to create the visibility, the options and the feelings of safety necessary to turn searches into bookings.

Guest Writer

Opportunity ABOUNDS While the domestic market can sometimes offer the illusion of being easier and less expensive for brands, in South America as a whole and Brazil in particular, tariffs and bureaucracy often ensure it is not the case. Travel retail, then offers the perfect place for brands to bring their items to the people by SVEN OLSCHEWSKI, Senior Market Strategy Manager Travel Retail, P&G´s Braun and Oral-B brands

hroughout global travel retail, the long-held promise of duty free does not hold true anymore. While duty free means that the purchased items will not be subject to duties, this does not necessarily translate into lower prices, because of the high cost structure of airports and subsequent margin needs of its retailers. Add to this the simple fact that for most categories there is no duty to be paid, at least not on domestic soil. And where there is no duty, there is no savings. In South America, however, arrivals duty free is booming, driven by the domestic market. Especially during the pandemic, local airports can be a great opportunity, with the domestic flight levels having already recovered to a level of 90% vs. Pre-COVID-19. One might think that domestic airports would be a good place to offer lower prices, but this is not the case. Import tariffs inflate the retail price of imports, even if a brand wants to retail only at the domestic airports. Brazilian carriers such as Gol and Azul lead the global flight recovery because of the country´s vast expanse and difficult road conditions. Flying, in many cases, is the only way. Brazil’s roads offer a

different story. Achieving full shelves depends on an eroding road network and imposes harsh working conditions on the indispensable, yet underpaid truck drivers. This, naturally, drives up logistics costs – transporting merchandise from Sao Paolo to Rio can cost more than the transport from Europe to the port of Santos. Add in the interstate taxes and this creates a shelf price of US$7 for a pack of cookies that would cost the equivalent of US$2 in Europe. The price, is literally paid by the consumer, punishing with every transaction. As of writing, 78% of Brazilian consumer debt is from credit card usage, and default rates are on the rise. Brand distribution is defaulting, too, with many firms having stopped catering to the domestic market altogether, paying tribute to an anythingbut-lean import system. I don’t want to engage too much in an evaluation of governmental protective measures, but it’s safe to say the economic environment in Brazil and its neighbors is challenging. In the “ease of doing business” ranking published by the world bank, Brazil, Paraguay and Argentina are ranked 124, 125 and 126, respectively. Their neighbors in the ranking are Senegal at 123 and Iran, at 127. It is anything

but easy to work with the South American markets in travel retail, but it can still be well worth it. Because in South America, that old duty free saving promise still does hold true, more so today than in the past, even when this is due to macro-economic factors. Brazil is the prime example. When a traveler enters the country via Sao Paolo Guarulhos, he or she enjoys a vast offering of products, often sold in bulk, and duty free allowances are being increased regularly by the government. By partnering with retailers along the the borders and at the airports themselves, brands in travel retail can provide product availability and value to local consumers across Brazil and the rest of South America. They can make their products available much more affordably than through domestic channels. And this, ultimately, benefits more than 500 million consumers across the region, directly or indirectly, be it in Brazil or elsewhere, creating an opportunity for brands and a promise to their consumers.

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

Editor's Choice

Ready to take flight 1

Check out what’s ready and waiting for when travelers are back in action 5

1. Cihuatán Sahumerio Gift Box: Cihuatán Sahumerio is a limited-edition rum created in honor of love. For the ancient Maya, fire was the symbol of love and the eagle-goddess Chantico was its guardian. To attract love, Mayan people would burn treats in intricate pots called “sahumerios” in honor of Chantico.

3. Go Travel American Dreamer Pillow:

2. Oribe Travel Retail Exclusive Kit: Avail-

4. Godiva Gold Gift Box: This 19-piece

5. Jimmy Choo I Want Choo Fragrance:

assorted chocolate gift box is an exquisite mix of treasured chocolate pieces, featuring milk chocolates, dark chocolates and white chocolates with delectable fillings like creamy pralines, silky ganaches, rich caramels, fruits and nuts.

An ode to the playful spirit and confident glamor that epitomizes the Jimmy Choo woman, I Want Choo is a powerful oriental floral fragrance with a seductive twist. Giving off sensual vibes, base notes of vanilla and benzoin leave an intense vapor trail behind.

able exclusively at Hyundai Duty Free Shop, this kit features the brand’s best-selling Gold Lust Nourishing Hair Oil. Making it the perfect travel companion, this set includes three airline-friendly sizes of the oil.

Offering personalized comfort, this highquality neck pillow combines soft foam and smooth fabrics. Made in the USA, its snug 360° fit and patented front closure mirrors your individual contours.

52 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

8 10 9

6. Versace Dylan Turquoise Pour Femme Fragrance: A reminder of warm sun and summer days, Dylan Turquoise meets the highest standards of social and environmental sustainability. A burst of light, Primofiore Lemon ensures a highly characteristic starting point.

7. Flor de Caña Eco Rum: Flor de Caña Eco Rum is a sustainably produced rum that’s Carbon Neutral & Fair Trade certified. This collector’s item features a bottle cap made from volcanic rock, a replica of Nicaragua’s iconic 1902 volcano postal stamp, a certificate of authenticity and an elegant black leather case.

8. MyClearMask: Powered by customer experience specialists, Ethos Farm, MyClearMask is a totally transparent face covering that enables the wearer to smile and communicate with the natural human facial expressions of pre-pandemic time.

9. Mayaza Pan Masala: Uniquely crafted for the South Asian smoker, Pan Masala balances nutty and spicy flavors with a hint of lime. Reviving the taste of home, this exciting variant is guaranteed to take you back to the buzzing streets of Karachi and Mumbai.

10. LEGO DUPLO Animal Train: Little fans will love playing with the elephant, tiger, giraffe and panda of this playful learning toy. As toddlers build and re-build, line up the carriages and stack the animals on top of each other, they’ll develop fine motor skills and discover a magical world of imaginative role play.

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

Meet The Team

MEET THE TEAM:

Greater Toronto Airport Authority Following the conclusion of the pilot testing program, GTAA continued its leadership in supporting COVID-19 testing research with the launch of a valuable COVID-19 PCR and antigen testing research program at Pearson on March 1

From personal inspirations to professional accomplishments, Americas Duty Free introduces the key members of GTAA’s duty free and travel retail team

SHAUN MALONEY, Senior Representative, Partnerships, GTAA Q: Tell us about your professional background. What inspired you to take on your current position and join the GTAA team? A: I began working at Golf Town, a national sporting goods retailer. From there, I went on to work for a consulting firm that managed marketing and sponsorship programs at RBC, CN Rail and Manulife. My inspiration for joining GTAA comes from my lifelong connection to Toronto Pearson, as my mother worked for Air Canada starting in the 1970s. Growing up, I made frequent visits to the airport, which ignited my passion for traveling.

by LAURA SHIRK

arlier this year, the Ontario government launched a COVID-19 pilot testing program at Toronto Pearson International Airport to protect the airport community and minimize the spread of the virus. Described as another layer of protection in Pearson’s Healthy Airport program, which helped Pearson become the first Canadian airport to achieve Airports Council International health accreditation, the voluntary test was administered by Switch Health and led to the discovering of almost 150 cases. Following the conclusion of the pilot program, GTAA continued its leadership in supporting COVID-19 testing research with the launch of a valuable COVID19 PCR and antigen testing research program at Pearson on March 1. Strongly committed to a science and data-based approach, this initiative reinforces GTAA’s focus on contributing to the local and national economic recovery. It’s believed that this study might have application in other settings including schools, workplaces, retailers, nursing homes and community centers. Here, we meet the main players of the GTAA team:

Q: Considering the state of the aviation and travel industry, what is your greatest professional accomplishment of the last year? A: Over the past year, GTAA has been able to strengthen its relationships with its partners. This has resulted in investments in new technology supporting its Healthy Airport initiatives, as well as identifying an opportunity to bring in a new retailer that will be opening soon. Q: How has the team continued to support its duty free and travel retail partners throughout the global pandemic? A: Working closely with partners and collaborators to innovate and trial new opportunities, our team has been focused on delivering a safe and healthy airport experience. We’ve also been developing data-backed recovery plans in various scenarios, continuing to use our resources and channels to drive revenue, ensuring the health and safety of passengers and employees is the top priority. Q: How are you spending your time in lockdown? A: The majority of my time has been spent with my immediate family members and our pets. I’ve had time to complete a couple of household renovations and I continue to explore travel options for when restrictions are lifted.

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LUCY POLSINELLI, Senior Representative, Food and Beverage Category Management, GTAA

Q: Tell us about your professional background. What inspired you to take on your current position and join the GTAA team? A: I’ve been working at Pearson Airport for over 24 years and my background reflects what I truly love about working in such a diverse environment: people. In my current position, I have the opportunity to build relationships with our partners in order to deliver a world-class airport experience for passengers. I’m fortunate to interact with individuals of many backgrounds and skill levels on a daily basis, which has allowed me to expand my own knowledge and build on my expertise. Q: Considering the state of the aviation and travel industry, what is your greatest professional accomplishment of the last year? A: My greatest accomplishment is how our team has been able to adapt to find new ways of bringing a first-class passenger experience in food and beverage. One example of this is the launching of Uber Eats across Terminal 1 and Terminal 3. This new service, which gives customers the option of skipping the line and limiting contact by ordering ahead, allows GTAA to provide a variety of excellent food and beverage options, while adhering to the latest health and safety protocols. It’s been a win-win effort so far and we’re looking forward to the growth of the program. Q: How has the team continued to support its duty free and travel retail partners throughout the global pandemic? A: We continue to support our partners through the pandemic by giving them the flexibility to adjust their business in a way that makes sense both financially and operationally. Something as simple as changing or reducing hours of operation can make a difference in the long-term. Q: How are you spending your time in lockdown? A: During the lockdown, I’ve made it a priority to focus on my overall wellbeing – mentally and physically. I set up a home gym and have dedicated time every day to exercise. I’ve made sure to reach out to friends and family via video calling to stay connected. I’ve also taken on a few home improvement projects along the way!

NINGXIA CHEE, Senior Representative, Duty Free and Specialty Retail, GTAA

Q: Tell us about your professional background. What inspired you to take on your current position and join the GTAA team? A: I began my career in corporate finance and advisory. My entry into the aviation industry started with Singapore Changi Airport as a Commercial Manager and I loved my experience there. I wanted to continue building my career in this exciting industry and having recently been voted “Best Large Airport in North America” by Airports Council International for the fourth consecutive year, Toronto Pearson is an industry leader. GTAA is a natural fit for my experience and I’m happy to be able to contribute to the growth and evolution of the commercial business. Q: Considering the state of the aviation and travel industry, what is your greatest professional accomplishment of the last year? A: We’ve been a nimble team throughout the pandemic. For example, we undertook a new partner to quickly launch a PPE vending machine business, providing an important service to meet the needs of travelers and the airport community. We continued to establish business relationships and developed new retail offerings, which are ready to go to market once passenger traffic returns to pre-pandemic levels. Q: How has the team continued to support its duty free and travel retail partners throughout the global pandemic? A: We continuously engage with our partners in open conversations to understand their needs. We’ve re-negotiated contractual terms, providing flexibility in operating hours and supporting retailers through innovative channels and promotions to drive sales. In support of Pearson’s Healthy Airport program, we work closely with our partners to ensure health and safety measures are in place in order for businesses to operate safely, both for travelers and employees. Q: How are you spending your time in lockdown? A: Most of my free time is spent with my family, making improvements around the house and enjoying nature walks. I’m very much looking forward to the return of non-essential travel! www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

Essence Corp.

STRENGTH IN TRAVEL Essence Corp’s Vice President Sales Antoine Bona, says the challenges currently being faced are similar to those throughout the previous year. “It’s hard to plan because we deal with international markets and each market has its particular uncertainty.”

Essence Corps’ company culture and brand quality has helped the distributor stay buoyant over the past year; now with the US market showing clear signs of recovery, the focus shifts to the future

he strength of Essence Corp is in its culture and its people, and this has been evident throughout the pandemic. The company took good care of its staff and made all attempts to keep business going as usual, which will no doubt help ensure a smooth transition into the post-pandemic economy. For Essence Corp’s Vice President Sales Antoine Bona, the challenges currently being faced are similar to those throughout the previous year. “It’s hard to plan because we deal with international markets and each market has its particular uncertainty.” He says the issue is determining a plan when the company’s sales in North America depend on passengers from Latin America and Asia. “When will people from these regions be allowed to travel to the US and Canada? Now we have to figure out the timeline for when these markets will be 50% or 70% vaccinated and people start feeling comfortable to start traveling internationally.”

Caribbean extension

The Caribbean as a whole was greatly affected by the pandemic, with cruises halted, high-season travel halted from Canada and a number of regional borders closed. But the region has held some bright lights for Essence. “We have stores in the Caribbean that never really shut down, where they were able to adapt to click and collect or pick up services. The hotels have low occupancy, and the ships

by HIBAH NOOR

aren’t sailing, and this affects the Caribbean economy however locals were not able to travel to the US during the summer and spent locally.” Bona says a lot of islands have been testing and thus allowing a flow between the US and Caribbean. “The US mentality is that the Caribbean is an extension of domestic; it’s their backyard. We see hotels like Baha Mar opens their doors after being closed for so long, for example. These are positive signs.”

Perspectives on Brazil

The extension into Brazil’s new border stores has been an upside during this challenging time, despite the country’s own challenges. “This country has the highest population in South America, and the cases and death rates are still increasing,” says Bona. “The exchange rate isn’t doing well and the virus isn’t being handled well.” But he adds once the exchange rates become favorable, consumer purchasing will pick up. “Brazil has such large borders, that not only depend on air travel but more on terrestrial travel. Traffic will increase quickly with a better exchange rate.” By 2020, Essence Corp was able to partner with all key retailers on the Brazil border. “We also managed to extend our portfolio with brands that we offer to the Caribbean; Hermes, Shiseido fragrances, and PUIG appointed Essence Corp. as their distributor to the Brazilian borders.

56 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

We also offer Euroitalia, Interparfums, Rituals, Bath and Body Works and Victoria’s Secret to these stores. The new store openings have been one of highlights of the pandemic,” says Bona.

Retail decisions

During times like these retailers tend to streamline their portfolio and assortment, and many are looking at delisting some brands. But Bona says: “At the same time this creates opportunities as consumers are looking for newness and new categories. This is positive news. We see retailers thinking of new strategies. New brands can benefit from this. However the 80/20 rule is that 80% of your sales are done with 20% of your SKUS. At the end of the day your clear best sellers are always going to drive sales.”

Area of growth

Essence Corps’ home and body brands such as Bath & Body Works is actually growing during this time. “BBW is such a strong brand in the US that even during the pandemic we’re seeing double-digit growth,” says Bona. “Their items are anywhere from $8-10; they offer hand sanitizers; there aren’t many brands like that. This is similar for Rituals. Our focus this year is rolling out the rest of the distribution for Bath and Body works and Rituals throughout travel retail.” Bona says he and the company remain optimistic. “The outlook here in US is strong. In the long run, travel is strong.”

5 - 9 APRIL 2021 IN ASSOCIATION WITH

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Confectionery Report

Finding the drivers Americas Duty Free spoke to three confectionery category leaders to gain insight to business right now, business models and their strategies for the future by HIBAH NOOR

assenger levels are currently too low for confectionery companies to have benefitted from any increased spend; therefore Ritter, Nestle Travel Retail International (NITR) and Anthon Berg are all determining the best ways to be ready for travelers on their return.

Ritter banks on trustworthy sustainability

Jan Pasold, Managing Director Global Travel Retail, Ritter, says given the size of the company, they had to decide where to focus in consideration of Ritter’s global strategy during this crisis. The decision was to continue working on the design and packaging relaunch “to combine the colorful world of Ritter Sport with our sustainability strategy” and also some digital projects, he says. “We are also doing our best to find agreements with retailers that

everyone can work with, and of course we are looking for more opportunities for Ritter Sport, in order to be well prepared when hopefully as of Q3 the passenger numbers continue to increase.” Sustainability and social responsibility have always been important to Ritter, and this is currently serving the company well. “We believe that all our activities in terms of sustainability and social responsibility are becoming even more important globally than prior to the pandemic. We are convinced that these are key reasons to purchase. It is especially that the brand and company are trustworthy, and such is the case for our familyowned business,” says Pasold. Pasold does not agree with the separation between value and gifting models. “In the end it is an individual decision if certain packaging formats are for gifting, sharing or self-consumption. I believe much more in the separation of a value model which brings clarity to the consumer of ‘traditional’ sourcing and production versus ‘green washing’ or truly and transparent sustainability and social responsibility initiatives, because it is proven that consumers are willing to pay more when they can trust the brand and its initiatives.” While passenger spend is up, Pasold says that has not affected Ritter. “Confectionery is globally in a constant special offer. Furthermore, it is extremely important to understand why the current average transaction value is higher and how realistic it is to keep this level when we are back at a passenger level of 50%+ of 2019.”

Core drivers remain for NITR

Sustainability and social responsibility have always been important to Ritter, and this is currently serving the company well

58 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

Stewart Dryburgh, General Manager, NITR, says the company is confident that the core consumer needs will not change as a result of the current crisis. “The universal appeal of confectionery along with its accessible price points will make it one of the first categories to bounce back.” He says NITR has worked closely with research partners to monitor shifts and changes in consumer behavior that may affect buying patterns. “Digital engagement will be key,” he says. “We have upgraded our website content and we are working with our retail partners to look at how future activations instore can best meet the consumer’s need for interactive components. As the majority of the NITR range is exclusive travel retail, we believe that provides additional leverage.”

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important. Smarties will become the first global confectionery brand to move to sustainable packaging.” Dryburgh mentions m1nd-Set research that indicates more than five-sixths of passengers who visit airport shops intend to continue to do so when possible. “As such, high quality in-store execution will be critical,” he says. “We are confident that passenger numbers will recover in time and we will be ready to meet the needs of our future customers with a portfolio that is stronger and more relevant than ever.”

Anthon Berg new releases

To prepare for travelers’ return, NITR is focusing on price point and sustainability

At the moment there are so few customers that it’s too early to discuss future behavior, though he says the three core consumer needs will remain. “What we know from global research is that there are three core drivers of purchase, so NITR's strategy continues to be based on the need states of “Elevated Experiences,” “Deeper Connections” and “Better for You.” Dryburgh says identifying the correct growth drivers to meet the needs of the post-COVID-19 travelling consumer is critical, though in general the company’s decisions are still guided by these three key purchase motivators. “These drivers will continue to boost consumer engagement through NITR’s SOUL framework: story, occasion, unique and local,” says Dryburgh. “Our execution will adapt in response. In addition, we will further explore the wider opportunities the food category presents to airports, developing that important ‘sense of place’ for returning travellers and so drive all-important footfall.” To prepare for travelers’ return, NITR is focusing on price point and sustainability. “The launch of the KitKat Senses tablets range has a more accessible entry price point,” he says. “Also, factors such as sustainability will quickly become significantly more

Peter Dige, Travel Retail Director, Anthon Berg, says for 2021, the company made index regulated agreements based on the turnover of investment in 2019. “We were looking at deals where we didn’t have to approach our customers all the time, because no one can predict what is going to happen. It’s based on turnover and they get a percentage, which is reasonable and in line with what we did in 2019. This has been quite positive.” Dige says for 2021 the company is not in a place of such high vulnerability as last year. “We haven’t made a lot of new products. We’re looking at introducing new products at the end of this year. Travel retail is a very important part of our business here at Anthon Berg.” While customer spend is up overall, Dige says he still sees people afraid to go into stores. “I’m finding passengers are going directly the gate and waiting for their flight. I think this will continue for a while until everyone has the vaccine. The spend per head has increased maybe because there aren’t many people in the store, so the people buying feel less stressed.” During a crisis people tend to want the familiar, and Dige says for Anthon Berg this is the case. “People are sticking to their favorites.” Since tastings are not currently possible, the company is leaning more on pricing promotions such as buy two get one free. Regionally, the Middle East is doing quite well given the circumstances. The company has some business in Asia and Europe. “Currently we are doing 10-15% in comparison to 2019 sales levels,” he says. “Q2 sales are lower than we expected but we hope people will begin to travel in summer and continue because they have a travel pass. In Europe once you get the vaccine you get a travel pass.”

Anthon Berg’s Peter Dige describes a good start in the Americas right before the pandemic hit

60 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

Spirits Report

Same tone,

different spirits by LAURA SHIRK

Across the spirits category, key players elaborate on current megatrends, the digital transformation & the return of travel in the cruise channel

ue to the shutdown of international travel, it’s a shared opinion across the spirits category that it’s too early to understand how travelers will change their behavior in the travel retail and duty free channel. It’s only with the lifting of restrictions and opening of borders that the industry will be able to re-build its business worldwide and understand the true nature of changed consumer behavior.

With health, wellbeing and alcohol consumption top of mind, consumers are showing more interest in premium and luxury spirits that provide a sense of authenticity; the phrase “drinking less, but drinking better quality” was echoed throughout conversation

For an update on the spirits category, Americas Duty Free reached out to representatives of key players: Stoli Group, Haleybrooke International and Bacardi Limited. Along with the continued impact of COVID-19, we discussed current megatrends, growing consumer demand for moderation, the omnichannel shopping experience and the future of travel retail. “We’re deeply committed to GTR for the long-term as an important brandbuilding channel for our portfolio. While current circumstances are still uncertain in predicting recovery rates, we’re working closely with our retail partners to prepare for an accelerated recovery when the time comes. The vaccine roll-out and increase of COVID-19 testing at point of travel is encouraging and we’re positive that travel retail will see recovery in the second half of 2021,” says Vinay Golikeri, Managing Director, Bacardi Global Travel Retail.

A love of luxury

For an update on the spirits category, Americas Duty Free reached out to representatives of key players: Stoli Group, Haleybrooke International & Bacardi Limited

The phrase “drinking less, but drinking better quality” was echoed throughout conversation. This is particularly the case among Millennials and Generation Zers. With health and wellbeing top of mind, consumers are showing more interest in premium and luxury spirits that provide a sense of authenticity. JP Aucher, Global Travel Retail Director, Stoli Group, explains that COVID-19 will only accelerate this premiumization trend, as

consumers have become more focused on quality of life. Elaborating on the lifestyle and shopping patterns of the health-conscious consumer, Patrick Nilson, President, Haleybrooke International, points out that this way of thinking supports the fact that travelers tend to trade up when shopping duty free in order to maximize their savings. One of Haleybrooke’s brand owners, Bottega S.p.A., is launching a pair of non-alcoholic sparkling wines called Bottega Sparkling Zero Rosé and Bottega Sparkling Zero White to adapt to growing consumer demand. The company will be proposing the brand to all of its customers.

A sense of discovery

During the pandemic, travel retail has focused on offering price-driven promotions designed to ensure the survival of business in the short-term. However, once travel starts to resume, Aucher says that the industry will experience a good deal of “revenge shopping” and demand for super-premium brands. While COVID19 has had a damaging economic impact across the globe, at the same time, many people have saved throughout lockdown and are excited to travel and spend money as soon as possible. Looking at the impact of the pandemic from a different lens, Golikeri says that lockdown has sparked “a whole new world of discovery and experimentation” in eating and drinking at home with the

www.dutyfreemag.com THE AMERICAS DUTY FREE & TRAVEL RETAILING

Spirits Report

Moving forward, all parties are working toward a common goal: to make the channel a unique and engaging space that offers consumers a digitally enhanced shopping experience

RUM OF MAYAN GODS

use of new ingredients. The Bacardi 2021 Cocktail Trends Report outlines the cultural shift in transforming our home into the focal point of our social life, encouraging greater confidence in cocktail making. “We believe that, as the world opens up again, people will use travel as a key way in which to continue their passion for trying new types of food and drinks; it’s the perfect space to explore and discover ingredients that mean something to them personally. This gives us an opportunity in travel retail to not just sell products, but also create unforgettable experiences for shoppers to take back to their home for cocktailmaking,” he comments.

Travel planning & social shopping

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62 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

Moving forward, all parties are working toward a common goal: to make the channel a unique and engaging space that offers consumers a digitally enhanced shopping experience. “Today, it’s all about social shopping, particularly among Millennials and Generation Zers. They make purchasing decisions based on social media activity and online reviews. So brand dialogue is everything and we have to tap into this, linking it to their travel plans and what’s available. Next, this needs to link to dynamic in-store promotions and activations that can net the consumer and convert the sale,” explains Aucher. Bacardi is currently partnering with retailers in “a shared omnichannel mindset” to plan its 2021 programming. According to Golikeri, the company’s focus is on engaging with consumers across multiple touchpoints in order to drive traffic to travel retailers’ websites for click and collect. The team is also planning insight-driven strategies to improve conversion through value propositions and memorable experiences. “We’re confident that the transformation of travel retail to omnichannel will re-ignite growth in the new era of travel. In the Americas, there is positive news of a measured return of travel in the cruise channel. We’re optimistic that with the right testing and medical safety protocols, guests will be safe on-board. We’re working closely with our cruise customers as they make preparations to return to sailing,” he adds. Heading into Q2 of 2021, Stoli will continue to focus on four major spirits pillars: rum, vodka, bourbon and tequila/ mezcal — and position itself as a main player in the superpremium spirits category. The company looks to become a competitive force in many territories worldwide, particularly its core markets of the USA and Mexico. On the same page as Bacardi, Stoli is preparing for the re-start of cruise line operations, a market in which the team sees much opportunity for growth.

MONARQ Group

MONARQ’S SOCIAL CLUB

increases online engagement The Summit of the Americas marks MONARQ’s first digital appearance; as part of the experience, the company is offering access to its new Digital Marketing Expert by LAURA SHIRK

Robert de Monchy, Managing Director, MONARQ Group

MONARQ’s portfolio has expanded with the introduction of Peroni Libera 0.0% to the region

eading into Q2 of 2021, MONARQ Group is focusing on its social media presence. The company recently recruited a full-time Digital Marketing and Social Media Expert to enhance its online activity. MONARQ’s primary objective is to develop its Instagram following and increase engagement via this channel. Last year, with social distancing regulations in effect across the domestic and duty free markets in the Americas and the Caribbean, the company started MONARQ’s Social Club. Promoted mainly via Instagram, the online program features a weekly agenda of all the digital initiatives of its brand portfolio and provides access to exclusive masterclasses and live tastings. “Since the launch of MONARQ’s Social Club, we have grown our following by 170%, our reach by 360% and we have five times more engagement with our audience. The ‘new normal’ and strong engagement with the industry community makes our platform a great tool to promote our brands in a more intimate way,” states Nicoline van Woerkum, Marketing Director, MONARQ Group. When it comes to day-to-day commercial management of the channel, MONARQ has adopted a tailor-made approach for duty free and travel retail. The company aims to capture the atten-

tion of its potential customer at each step of the consumer experience, whether it’s planning a trip, booking a flight or visiting a local supermarket, restaurant or bar. The overall goal: to become part of the shopper’s preferred set of brands before he or she enters the store or e-commerce platform. Knowing the rapidly increasing importance of innovation, technology and digitalization, MONARQ has been working on the sale of its alcoholic beverages via Amazon in several countries. When asked about the current health & wellness category trend and MONARQ’s RTD options, Robert de Monchy, Managing Director, points out that its portfolio has expanded with a number of innovative line extensions and the introduction of Peroni Libera 0.0% to the region.

Ready to roll out

Having adjusted to the digital sphere throughout the last year, MONARQ will showcase its first digital presentation while in attendance at Summit of the Americas – A Virtual Experience. Leading up to the trade show, MONARQ will promote its participation among visitors via social media and press in order to be top of mind on opening day. Along with featuring a special section to showcase exciting new brands, the group’s digital booth will offer visitors the chance to book a

Nicoline van Woerkum, Marketing Director, MONARQ Group

training session with its new recruit to discuss opportunities and challenges that one might face in the digital environment. Following the Summit, MONARQ will participate in various virtual events in the region. In addition to implementing digital marketing initiatives, MONARQ wants to help its duty free and distribution partners prepare for the lifting of restrictions and the increasing of passenger levels. “We’ll do this by offering them an attractive assortment including unique gift packs and supporting marketing activities to drive sales. All is ready to roll out once the borders re-open and, in the meantime, we’ll make sure our brands are well communicated through our online presence,” adds van Woerkum.

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Japan Tobacco International

Haythem Bouchuiguir, General Manager, Duty Free, USA & LATAM, JTI

Industry support The tobacco category is resilient in the face of any crisis, and this one is no exception. JTI’s research shows that tobacco is not only outperforming based on PAX drop, it is helping the industry at large by HIBAH NOOR

rom the onset of the COVID-19 crisis, Japan Tobacco International’s (JTI’s) priority has been, and continues to be, the well-being of employees, their families and communities, as well as its customers and partners. “JTI has monitored and continues to monitor and adhere to the measures recommended by local authorities around the world to slow down the spread of COVID-19,” says Haythem Bouchuiguir, General Manager, Duty Free, USA & LATAM. “Today, our employees in approximately 70 locations are working from home and we have put on hold all international business travel.” Indeed, the company is taking further precautionary measures beyond government restrictions, having put in place additional health and safety processes throughout the supply chain, R&D centers and distribution networks. “We want to ensure that we protect our employees and reduce the risk of disease transmission in every area of our business,” says Bouchuiguir. “We still have a business to run, and communities where we operate rely on our business running as smoothly as possible, especially during

these challenging times. We are, therefore, taking every possible step within local restrictions to minimize business disruption and the adverse effect it could bring to communities, consumers and our customers around the world. Like any other responsible company during these difficult times, we continue to closely monitor the global situation and adapt to any official recommendations and laws accordingly. And we are supporting our local communities where we are able.”

Driving footfall

The tobacco category has the highest conversion rate in the travel retail industry. According to Bouchuiguir, JTI company data shows that tobacco is performing on average 10% better than the PAX drop, so with traveler numbers that are 83% lower year on year from February 2020 to February 2021, the tobacco category is at minus 72%. “This was evidence during the whole crisis period,” he says. Tobacco has continuously proven its resilience throughout crises, and the pandemic is no exception. Bouchuiguir says: “We certainly see this during the current crisis, as tobacco is outperforming

64 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

the passenger recovery in Duty Free shops that are open.” Tobacco always drives footfall, and according to retailers, this is even more the case during the crisis. Effectively, the tobacco category becomes the safeguard of travel retail business. “We nurture and look out for the category and the industry as a whole,” says Bouchuiguir. And in turn, what’s good for the industry is good for JTI. “The logic is simple: if the shop does well, the tobacco category does well, which means that we’re going to do well. This has been our approach for more than a decade and it has not changed during the pandemic.”

Category and industry insight

JTI is always a leader when it comes to strategic insight; the company has completed research during the pandemic to bring current insight to the category and the industry at large. Bouchuiguir says, “Our priority now is to share it with retailers and trade partners so we can enhance collaboration in critical areas such as forecasting and come out stronger from the crisis.”

WELCOME TO THE BRIGHT SIDE OF AGING

Coping With Lockdown

Coping With

Lockdown

FROM TEAMBUILDING EXERCISES TO MENTAL HEALTH SERVICES, COMPANIES IN THE TRAVEL RETAIL CHANNEL ARE RE-THINKING HEALTH, SAFETY AND WELLBEING by LAURA SHIRK

66 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

or better or worse, COVID-19 has brought mental health and wellness to the forefront of social conversation. The shared experience on a global scale has offered insight into the day-to-day and long-term struggles of isolation and depression. With a greater understanding brought on by their own challenges, mental health is no longer a taboo topic of discussion among friends and colleagues. Depending on the circumstances, work-from-home life is still a reality. These days, with limited ways to distinguish personal and professional hours, it’s up to the workplace to help employees find a work-life balance. From teambuilding exercises and educational workshops to mental health services, companies are re-thinking the design of their support system. With this in mind, Americas Duty Free reached out to a handful of companies to find out how people working in travel retail are coping with lockdown. Distell International, Brown-Forman Corporation and Maui Jim are taking the implementation of health and safety protocols to the next level.

Asahi Super Dry - available at MONARQ Group for USA Duty Free - www.monarqgroup.com

Coping With Lockdown

LUKE MAGA, Managing Director, Global Travel Retail, Distell International

In fall 2020, Distell International launched its wellbeing initiative, DistWell, which aims to lift employees’ spirits and boost company morale through a variety of fun activities. According to Luke Maga, Managing Director, Global Travel Retail, Distell International, the initiative includes a DistWell Champions Group consisting of volunteers from each department and site who have an interest in shaping wellbeing. Those involved encourage networking across the company and enable “Champions” to voice their opinions on policies and campaigns at monthly meetings. “The group focuses on at least one key topic per month from the National Health Service Campaign Calendar, with additional topics covering the four key pillars of the wellbeing strategy throughout the year: Emotional, Financial, Inclusivity and Physical. DistWell follows the ‘Health Working Lives’ framework to work toward achieving a Bronze Award recognition,” says Maga. To date, the group has organized a dance challenge and a mocktail making competition.

BEN TILLY, Global Benefits & Compensation Manager, Maui Jim

During the pandemic, Maui Jim has aimed to protect its employees’ health and safety and ensure business continuity and expectional service for its customers. Ben Tilly, Global Benefits & Compensation Manager, Maui Jim, says that within a matter of days at the start of lockdown, the company developed remote working policies and made significant changes to its workplace environments. 68 THE AMERICAS DUTY FREE & TRAVEL RETAILING APRIL 2021

AUDE BOURDIER, Vice President, Managing Director, Global Travel Retail, Brown-Forman

Although the health, safety and wellbeing of its staff members has always been a priority of Brown-Forman, Aude Bourdier, Vice President, Managing Director, Global Travel Retail, BrownForman, states that the focus has grown exponentially during the pandemic including attention to mental health. “The company has been forthright in developing initiatives focused on interaction and communication, key assets in promoting sound mental health. We initiated team ‘Mental Health Huddles’ where senior leadership and other professionals discuss ways to cope with the strain of working remotely and share their own experiences and struggles. These huddles are part of a larger ‘BeWell@B-F’ initiative that offers training and communication sessions in Brown-Forman markets around the world,” says Bourdier. Along with health and wellness, diversity and inclusion are embedded in the Brown-Forman corporate vision. On the global travel retail side, the company interacts virtually through more formal monthly town hall meetings and less formal #GTR coffee, tea or cocktail hours. Bourdier adds that both types of gettogethers place heavy emphasis on interaction and communication and provide a forum to stay connected and engaged while working remotely.

At the top of the list: implementing COVID-specific safety policies, modifying workstations to maximize social distancing and supplying hand sanitizer, disinfectant wipes and disposable PPE throughout its global offices. Additionally, Maui Jim established practices in connection to case management and contact tracing in order to provide a sense of comfort across all departments and levels. “To further ease the mental impact of COVID-19, we promoted our Employee Assistance Platform, providing free confidential mental, physical and financial health and counseling services to our global ‘Ohana [family] in over 20 countries. Senior leadership also promoted and supported flexibility by initiating open conversations with employees about childcare, homeschooling and work schedules. “The uncertainty of the pandemic has been challenging for everyone. We took this approach to communicate regularly and transparently with all of our team members and asked for patience when we didn’t have the answers. Hopefully, 2020 will never repeat; however, there have been positive outcomes that will shape the future of our company,” concludes Tilly.

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T S I L A I C E P S L A REGION

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