Gulf-Africa & Asia Duty Free & Travel Retailing Magazine - Virtual Expo October 2020

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VIRTUAL TRAVEL RETAIL EXPO 2020

DUTYFREEMAG.COM OCTOBER 2020 VIRTUAL TRAVEL RETAIL EXPO · VOL 30 · NO 2

A NEW GENRE OF ANTI-AGING

ARI invests in the future p. 10  JDF responds to the wake-up call p. 30  3Sixty offers a glimpse of its transformation p. 32




Letter from the Editor

Coping

strategy T

his year the entire world has been rocked to its core. For no industry is that more the case than travel and, by extension, travel retail. This may be the most severe setback in our industry’s history, but we are known to be a resilient bunch; for an extraordinary number of companies this time has become something of a gift despite its difficulties, offering the opportunity to pause, reflect and become ready to emerge stronger than ever. This is certainly the case with Jordanian Duty Free, which is currently investing in the future by building, refurbishing and digitizing, Before the emergence, however, must be the recovery. Industry associations such as DFWC, TFWA, APTRA, MEADFA and more are doing their utmost to help governments understand the importance of all stakeholders in the wider travel community and to the importance of a united response to the virus — one that allows for the opening of borders and thus the preservation of businesses and untold numbers of jobs. That recovery has begun, but it is not happening steadily around the globe. Asia is definitively leading the way. Many Asian nations did an especially good job of controlling the spread of the virus, and they are reaping the rewards of that right now, with recovering economies that include the travel sector. Nowhere is that more the case than in China, a country that offers hope to the rest of the world. Long have we seen that the economic center of gravity has been moving east, and the current situation highlights this more than ever. Dufry is on top of this trend, reaffirming its strategic Asian focus with its recent announcement of a new joint venture with Chinese e-commerce giant Alibaba, one that will see these two retail giants working together on travel retail and digital progression. Innovation and diversity have been the cornerstones of survival. Travel retail company 3Sixty shows this with its omni-channel approach, which the company’s COO Alex Anson says helped it get through this time. Innovation has also helped The Moodie-Davitt Report. In this issue founder Martin Moodie tells us about the creation of the Virtual Expo, and also how its framework will extend into other channels, helping his company not only now, but well into the future. While helping his own company, he is also helping the industry as a whole by offering a way to present and to learn, despite current restrictions. We are certainly missing seeing our friends and colleagues in person this year, but we are sure that we will all see each other soon, better and stronger than ever.

OCTOBER 2020 · VOL 30 · NO 2 Global Marketing Company Ltd., 26 Pearl Street, Mississuaga, Ontario L5M 1X2 Canada. It is distributed to duty free operators and distributors in the following countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Yemen, Algeria, Azerbaijan, Benin, Cameroon, Cape Verde, Djibouti, Egypt, Ethiopia, Gabon, Ghana, Guinea, Iran, Ivory Coast, Jordan, Kenya, Lebanon, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Namibia, Pakistan, Reunion, Senegal, Seychelles, South Africa, Sudan, Syria, Tanzania, Togo, Tunisia, Turkey, Turkmenistan, Uzbekistan and Zaire, as well as to duty free suppliers worldwide.

GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 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 Mary Jane Pittilla maryjanepittilla@hotmail.com SENIOR WRITER Rebecca Byrne rebeccabyrne10@yahoo.com.sg ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Jas Ryat Wendy Morley

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

Kindest Regards,

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

4 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020



Contents

WHAT’S INSIDE

20

Lead Stories 7 Dufry Group

24 Virtual Travel Retail Expo

Two giants Top travel retail giant Dufry and top Chinese e-commerce company Alibaba have agreed to form a strategic joint venture, bringing travel retail, ecommerce and digital expertise together

Necessity begets innovation One of the better-known faces of the travel retail industry, Martin Moodie is no slouch when it comes to innovation. In this year of upheaval, he discusses his new platform, the new virtual expo and surviving during crises

10 Aer Rianta International

30 Jordanian Duty Free Shops

Carry on Despite continued global travel restrictions that severely restrict international travel, ARI sees passenger spend rise and continues to invest in the future, with new technology and new stores

20 Dubai Duty Free

Open for business After a total shutdown, Dubai opened up again with an eye for bringing travelers back. This means everything from ensuring stringent health and safety measures to creating a quarantine-free entry. Dubai Duty Free’s Colm McLoughlin has been working to ensure as swift and solid a recovery as possible, every step of the way

JDF responds to the wake-up call Despite the pandemic, Jordanian Duty Free Shops is working towards the digital transformation of its business while continuing to invest in new projects

32 3Sixty Duty Free

Clear vision Watching well-established duty free company DFASS rebrand as 3Sixty has offered a glimpse into a transformation. The company’s new name was no accident, as it has developed from a successful inflight retail operation to a panglobal phenomenon, with strong Asian connections and a rapidly growing footprint in airports and cruise terminals

24

10 30

Features Connected shopper platform 16 The beauty of digital 36 Gulbahar looks forward to normality 38 Nestlé’s recovery through innovation 40

Lindt’s chocolate treat 42 Smart Project takes digital journey 44 Distell’s Q1 a domestic success 46

32


Dufry

Two

giants TOP TRAVEL RETAIL GIANT DUFRY AND TOP CHINESE E-COMMERCE COMPANY ALIBABA HAVE AGREED TO FORM A STRATEGIC JOINT VENTURE, BRINGING TRAVEL RETAIL, ECOMMERCE AND DIGITAL EXPERTISE TOGETHER

D

ufry AG (Dufry) and Alibaba Group have announced that they have agreed to form a strategic Joint Venture in China, to partner in the Chinese travel retail markets. This Joint Venture, which will be owned 51% by Alibaba and 49% by Dufry, will bring Alibaba’s established network and digital capabilities to Dufry, whereas Dufry will contribute its existing travel retail business in China and support the joint venture with its supply chain and operational skills. Alibaba Group is also investing with Dufry, with a target ownership of up to 9.99% of the post-offering share capital, and will participate in its ordinary capital increase, which is subject to approval of Dufry’s shareholders at its upcoming EGM on 6 October 2020. Dufry began operating travel retail businesses in China in 2008; this partnership will help build on that history and is also in line with Dufry’s growth strategy, which focuses on Asian markets. The company is also seeking to expand its digital offerings including store and staff digitalization, pre- and post-travel online services, digital customer engagement and online presence inside and outside of the airport, as well as data analytics and digitalization of operations.

Share issuance

Dufry has already secured a commitment from Advent International Corporation or its affiliates ("Advent International") to purchase shares at CHF 28.50 per share up to a maximum investment amount of CHF 415 million (to be automatically increased by an amount equal to 20% of any amount by which the gross proceeds from the offering exceed CHF 500 million, up to a maximum investment amount of CHF 455 million).

Given the commitment from Alibaba, Dufry is proposing the issuance of up to 25 million fully paid-in registered shares, which result in gross proceeds of approximately CHF 700 million. This will be used to finance the previously announced acquisition of the remaining equity interest in Hudson Ltd. It also may fund the setup and operations of the joint venture, and will likely also be used to pursue growth opportunities in China and to accelerate Dufry’s digital transformation. The shares will be first offered to existing shareholders, subject to legal limitations. The rights will not be tradable, but are transferable. Shares not taken by existing shareholders will be offered first to Advent International and second to Alibaba Group. Any Rump Shares not purchased by Advent International or Alibaba Group will be offered to the market by way of a public offering in Switzerland and private placements in certain jurisdictions outside Switzerland in compliance with applicable securities laws. Julian Diaz, Dufry Group CEO, commented: “We highly value this partnership with Alibaba Group to form a strategic Joint Venture to explore growth opportunities and develop the travel retail business in China. We expect this collaboration to drive growth in Asia and with Chinese customers worldwide with the support of new digital technologies. Alibaba Group is a leader in digital commerce with an ecosystem of more than 800 million consumers in China. Dufry holds a leading position in travel retail globally and brings in its strong operational expertise in 65 countries and over 2,500 shops. By fostering existing and new business models in offline and online travel retail, we are convinced the Joint Venture will capitalize on growth opportunities and will support Dufry to become the leading digital travel retail company worldwide.”

www.dutyfreemag.com GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING

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Aer Rianta International

Carry on DESPITE CONTINUED GLOBAL TRAVEL RESTRICTIONS THAT SEVERELY RESTRICT INTERNATIONAL TRAVEL, ARI SEES PASSENGER SPEND RISE AND CONTINUES TO INVEST IN THE FUTURE, WITH NEW TECHNOLOGY AND NEW STORES by HIBAH NOOR

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W

In order to reopen, ARI had to determine the best way to work within government guidelines. Customers and staff have all needed to adapt to the “new normal”

hile true recovery throughout the world might be slow coming, across almost all of Aer Rianta International (ARI) stores, sales are recovering at a faster pace than passenger volumes. “We are getting great engagement from customers, reflecting the wide range of confidence-building measures in each of our stores,” says ARI’s COO Nuno Amaral. According to Amaral, per-passenger spend is up approximately 14% from this time last year in Dublin.“We have reacted quickly and effectively to the changing passenger needs, and our efforts have been very successful, materializing into higher average spend and better conversions. It’s early days, but there are lots of encouraging signs we can learn from and build on going forward.”


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Aer Rianta International

There are some small lights in the darkness, however. ARI serves the duty paid market in the domestic terminal in Riyadh, which has been relatively strong since opening,” says Amaral. Beirut also shows positive signs, despite even greater troubles there than elsewhere. “Beirut was hit very badly even before COVID-19 — huge economic and political issues there,” Amaral says. “Even now they’re struggling to form a government. But they’re resilient people. Our numbers in Beirut have always been relatively good in terms of passenger spend levels. Even after the bomb blast, people got together very quickly to try to bring the economy back on track despite the political tension.” Muscat is also relatively strong. “We reopened the stores on October 1. Until that point again the airport was only open for repatriation flights. We have a fantastic operation there, and we’ve done a lot during the downtime. In Muscat we have very strong promotional activities.”

ARI COO Nuno Amaral says people are still willing to fly once borders are open again

People want to travel and shop

Stating a decrease that would have seemed incomprehensible just a short time ago, Amaral says somewhere from 10 to 25% of passengers are coming through most stores in comparison to 2019. “Between April and June the majority of our locations were closed, with those remaining open having very little traffic. There is no doubt that COVID-19 has had a profound impact on every aspect of our operation. We are managing our business through the largest crisis in travel retail history. Today airports still have very low levels of passengers, in some cases it’s just a trickle in comparison to previous volumes.” One of the company’s biggest challenges at the moment is the level of restrictions being applied by governments and the various rules around travel. “The inconsistencies of approach and the fact these rules continue to evolve, is giving rise to more uncertainty and discouraging passengers from recommencing travel,” says Amaral. He states that although the industry has come together during this time, tough decisions still had to be made. “Retailers, suppliers and airports have really understood each other. We’ve all worked collaboratively,” he says. And despite governments around the world offering “great support,” with such extremely reduced numbers ARI still had to do some downsizing. “We try to minimize that because we truly value our staff,” says Amaral.

While the next wave of the virus has paused the progression of borders opening in Europe, Amaral says during the summer the company saw some “relatively good numbers” in the region. He says passengers from the UK flew a great deal within Europe, and ARI has some good locations there. “We believe that people want to travel, but all of these government restrictions are impeding on people traveling,” he says. “When a country opens up you see an immediate flood of passengers from that county. Eventually once restrictions ease up, people are still willing to fly. We are hopeful that we can get out of this situation in a couple of years.” The company’s first step on reopening was to make the stores work within government-imposed measures. “Should we restrict access? Should we have one-way circulation? I would say the biggest investment we had to make was ensuring that there were markings on the floor or ceilings. We moved freestanding units

All locations open

ARI has locations all around the world, and currently each of these locations is open despite the fact that some of the airports in which the retailer operates are closed to commercial flights, such as India and New Zealand. “There are repatriation flights happening, so in some way or form we have our retail spaces open to try to capture those opportunities,” says Amaral. “We have a huge operation in Auckland and technically Auckland has also shut down; there’s no international traffic.” 12 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

Cosmetics companies have been very helpful in letting ARI know what they needed in order to sell now that testing is not possible


Contents 

WELCOME TO THE BRIGHT SIDE OF AGING

www.dutyfreemag.com GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING

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Aer Rianta International

Online investment

As has become clear to many companies, Amaral says the online experience is where ARI needs to invest. “We will be investing in e-commerce but also other platforms to direct traffic to our e-commerce platforms for example, Instagram and Facebook.” The company’s most robust online communities are in Dublin, Montreal and New Zealand. ARI is rolling out its e-commerce platform around the world, most recently for customers at YUL Montréal-Trudeau International Airport. The new website for that location, theloopdutyfree.ca, offers 4000 items in an intuitive, user-friendly experience that allows shoppers to “Click & Collect” up to 90 days before flying.

Five-year commitment

Montreal’s new e-commerce platform allows passengers to shop up to 90 days before their flight, using “Click & Collect”

here and there but there were no major reconfiguration,” he says. The next question is, how to move forward given the current state of things. “There will be a new normal obviously,” says Amaral. “We have commissioned extensive research during this period and understand that our passengers, while ultimately wanting safety reassurances, want as ‘normal’ as possible an airport experience, and they see shopping as part of that experience. We’ve worked very hard to provide a store environment that is safe and feels comfortable to shop in, still affording customers the ability to browse.” The new normal must include a new way to sample and test products. “People want contactless experiences,” he says. “We got a lot of guidance from cosmetics brands. Testers have stopped; tastings have stopped. We’re working on things like infusion technologies for fragrances and the virtual trying on of eyewear.”

The most recent news concerning ARI is its winning bid for the duty free retail concession at Tivat and Podgorica Airports in Montenegro. The stores will open later this year, with a contract that will run for five years. In Tivat ARI will have a 98.5 squaremeter store, and in Podgorica the store will be 122 square meters of duty free space, branded “Montenegro Duty Free”. ARI’s CEO Ray Hernan said the decision to open these new stores this year is a sign of the company’s financial position and belief in the industry’s future. “We are still committed to profitable growth over the longer term and will invest in the Montenegro market for at least the next five years. It is also a sign of our commitment to the industry and our confidence that it will return to strength.”

Customer first

“It always has to do with Millennials and Gen Z, who prefer a more independent shopping experience,” Amaral says. “This is new for us and our brand partners and for our staff. We’re trying to work out how can we improve on our sales techniques to fit this new environment. We’ve always been very proud of our engagement with customers. All our training is based on how to approach the customer and identifying their needs.”

Offering a concept that is fresh, modern and tailored to the passenger profile at each airport, ARI’s contract in Montenegro will run for five years

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The Duty Free Industry’s

T S I L A I C E P S REGIONAL

DUTYFREEMAG

.COM

For more details contact: hibah@dutyfreemagazine.ca; + 1-416-727-1300


Connected Shopper Platform

Virtual connection Long has the travel retail industry discussed optimal geo-targeted marketing that engages shoppers and encourages them to shop in-store. This partnership between CircleSquare, comtogether and Neoma does just that by LAURA SHIRK

C

ircleSquare, expert in retail marketing, brand experience and consumer engagement, has unveiled a new digital tool – the Connected Shopper Platform. Transforming a brand’s ability to reach the consumer at all points of the customer journey, this platform is sparked by an initial online connection. Targeted specifically at the travel retail market, the mission of the Connected Shopper Platform is to create an immersive digital brand world that engages shoppers via social media, exclusive content, rewards and gamification. It’s expected that this innovation will drive shoppers to physical retail touch points or make pre-travel purchases that can be collected safely at the airport. To drive traffic to physical touch points, the team has executed a digital ad campaign, which allows customers to further discover the range of products available. This could take the form of a simple QR code or a geo-targeting enabled wallet pass. Developed in partnership with comtogether, the Swiss digital marketing agency in which CircleSquare recently acquired a stake, and Neoma, the leading expert in Al-based location service, its aim is to grow communication beyond a standard brand e-commerce page or a virtual version of a flagship store. Most importantly, the Connected Shopper Platform offers central campaign management, enabling the client brand or retailer to manage global campaigns in real time across all airports. The success of the campaign is measurable, as the digital methods used leave a trace. For example, those involved can note how many times their ad has been displayed, how many people have been on the platform to browse and how many clicks have been made on the ad. CircleSquare cites research from Salesforce showing that 81 percent of shoppers

Developed in partnership with comtogether and Neoma, The Connected Shopper Platform aims to evolve brand experience and consumer engagement beyond a standard e-commerce page or virtual version of a flagship store

still turn to brick-and-mortar locations to discover and evaluate new products, making a first-time purchase in a physical store 2.4x more likely than online. Allowing brands to target consumers preairport arrival, the Connected Shopper Platform is ideal for product discovery. Additionally, this platform leverages the existing ‘Click & Collect’ infrastructure of retailers to offer a pre-travel shopping option to travelers, which is perfect for the purchase of gifts and best-sellers. “The new normal in travel retail is bound to include social distancing, queues and limited in-store engagement. Airport shopping will likely not be as fun as it used to be so we need to find new creative ways of converting shoppers. The footfall in travel retail is going to be limited for a long time so brands and retailers can’t just be waiting for customers to come to them. The Connected Shopper Platform is a smart way of engaging with passengers before they travel and convert them into shoppers.

16 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

Higher conversion rates are the key to prosperity in the current travel retail environment and this platform is a major step towards achieving that. Through integrated platform, brands can use the same budgets but drive more sales by redistributing the activation spend across digital and physical touch points,” says Stephane Zermatten, Managing Partner, CircleSquare. “The Connected Shopper Platform is all about ‘one brand, one voice’, allowing you to engage with your customers before they travel in a personalized way. A successful campaign is defined by a consistent storytelling delivered across all touch points of the shopper journey, digital and physical, and the Connected Shopper Platform is the ideal way to achieve that,” adds Philip Handley, Executive Creative Director, CircleSquare. Visit www.connectedshopper.io to discover more about the Connected Shopper Platform.


PROFESSIONAL FACIAL REJUVENATION


UK Aviation Industry  CDF

With the decision to end VAT-free sales at UK airports, the government shows its ignorance of the importance of non-aeronautical revenue for the life of the air industry, which in turn is essential for the economy at large

Show of ignorance

I

n a move “out of touch with international standards,” on September 11 the UK government shocked the aviation industry by announcing that tax-free sales would cease at UK airports from January, 2021. For an industry already on life support with the current global pandemic and resultant virtual shutdown of the skies, this announcement was akin to a doctor randomly announcing he would shut off the patient’s oxygen supply. This decision will result in the loss of 19,400 jobs nationally and cost the UK economy £2.1billion in GDP, according to a York Aviation economic impact assessment. The unexpected move also negates the benefits of the Treasury decision to extend duty free sales on alcohol and tobacco for travellers to the EU post-Brexit.

Lack of understanding

While this decision will result in some obvious consequences such as increased airport prices for those traveling abroad, the government has shown its apparent lack of understanding for the financial structure of airports, and the importance of duty free shopping for the airport industry’s viability. As a press release from the UK Travel Retail Forum (UKTRF) stated, “industry has warned [that this decision] will undermine UK aviation competitiveness, with EU member airports gaining an overnight advantage over their UK counterparts, and could force smaller UK airports who rely on passenger retail out of operation altogether.”

The UK government puts many thousands of jobs at risk and delivers a massive blow to an already embattled industry with its shocking decision to end tax-free sales at airports by WENDY MORLEY

The government appears to have illadvisedly made this decision on the basis that it will earn in taxes what otherwise it would not, but York Aviation research shows that instead it will result in a significant reduction in inbound tourism, traffic and sales. In addition, this decision could be the final nail in the coffin of the country’s smaller airports, for which nonaeronautical revenue is lifeblood.

Opposite direction

The UKTRF, which has consistently advocated for an increased VAT-free system that would offer significant economic contributions to the nation, has urged the Government to urgently review its decision. The association has calculated that the current decision would have the exact opposite effect from what the government obviously believes, arguing that an increase rather than elimination of VATfree system would add an extra £1.1 billion in Gross Value Add (GVA) and support more than 10,000 new jobs, most of them outside London.

Stakeholders unite

Individuals who understand the coming negative impact of this decision have united to urge the government to reconsider. These include Sir Roger Gale MP (Cons), President of the General Aviation All Party Parliamentary Group, Tory Stalwart (MP for 38 years) and MP for North Thanet; Angus MacNeil MP (SNP), Chair of the International Trade Select Committee and Member of Parliament for Na h-Eileanan an Iar; Henry

18 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

Smith, MP for Crawley and Chair of the Future of Aviation Group; and Chair, UKTRF, Francois Bourienne. Bourienne stated: “This decision puts the UK out of step with travel retail systems around the world, completely disincentivises tourists to visit the UK and British passengers making purchases as they go on vacation abroad, and puts UK airports and travel retail at a substantial disadvantage against their European counterparts after Brexit. This will lead to significant additional job losses in the travel industry. “It may well be the best gift the UK could have given the EU as well as a massive blow for UK plc, and we are dismayed at the lack of industry consultation before this decision was reached. “In the more immediate term, this announcement deals a hammer blow to an industry already struggling with the devastating impact of the COVID-19 outbreak. Retailer and airport revenue will suffer, but most regrettably thousands more jobs and livelihoods will be wiped out in regions across the UK supported by the sector. “While we are grateful for the Government’s move to extend duty free sales to passengers travelling from the UK to the EU, we are extremely concerned that ministers have not fully appreciated the impact this decision will have on the wider travel retail and aviation sectors. “We urge the Government to immediately review its decision and act swiftly to ensure jobs, businesses and Britain’s place as a premier travel hub are not lost.”


Aer Rianta International is the proud winner of “Speciality Concept of the Year� at Frontier Awards 2020. ARI has transformed its confectionery experience at The Loop in Terminal 2, Dublin Airport, with radical improvement in quality, range, service, value and engagement. Experience is everything at ARI. Discover more at www.ari.ie


Dubai Duty Free

Open

for business

Dubai Duty Free has changed the layout of its stores somewhat, first to follow health and safety guidelines, and then given that, to make it easier to shop

20 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

by HIBAH NOOR

After a total shutdown, Dubai opened up again with an eye for bringing travelers back. This means everything from ensuring stringent health and safety measures to creating a quarantine-free entry. Dubai Duty Free’s Colm McLoughlin has been working to ensure as swift and solid a recovery as possible, every step of the way


Contents

With more visitor traffic the retailer is seeing a gradual increase in sales, but it is very gradual. “It is going to take a long time before we see anything like pre-Covid sales,” said Colm McLoughlin, Executive Vice Chairman & CEO of Dubai Duty Free

D

ubai Duty Free has always been a mighty member of the travel retail world, with exacting standards and sales that belie its single-airport locations, thanks in part to that airport’s position as a primary international hub. Currently, the retailer’s focus is strongly zeroed in on recovery. Since reopening, the retailer, the airport and its airlines Emirates and FlyDubai have made great strides to encourage people to travel and shop safely, according to Colm McLoughlin, Executive Vice Chairman & CEO of Dubai Duty Free. “Encouragingly, that message is being well received. [The airlines and airport] have done a great job in reassuring travellers that it is safe to travel. Dubai Duty Free also plays its part in ensuring the safety of all our customers and staff, and providing those travelling with as wide a retail choice as possible,” he says. Sales have gradually returned as traffic has increased, but

there will be no magic bullet that brings the retailer to its former figures. “Our level of pick up at Dubai Duty Free has been very gradual, with sales for the year down 66% on last year. However, with more and more flights coming online, we expect that the situation will keep evolving,” says McLoughlin. “Emirates is flying to more than 90 destinations now, compared to around 140 destinations pre-Covid-19.” The type of passenger on flights is also evolving to one more likely to shop. “Most of the flights in the early days were repatriation flights and sales were low as a result,” says McLoughlin. “With more visitor traffic now we are seeing a gradual increase in sales, but it is very gradual and it is going to take a long time before we see anything like pre-Covid sales. The retail areas currently in operation are Terminal 3 (Concourse B and Arrivals) and Terminal 2 at Dubai International Airport, but we have tried www.dutyfreemag.com GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING

21


Dubai Duty Free

to ensure that those passengers travelling now have as wide a choice of goods as possible.” As an example, the retailer opened up a fashion pop-up shop in Concourse B with many of the fashion brands not usually associated with that concourse. According to McLoughlin, that shop is doing well.

Positive sales trends

While there are few travelers in the airport and therefore fewer people shopping in the stores, those who are traveling feel safe and secure knowing the airport, airlines and Dubai Duty Free are following all health and safety protocols at every stage of the passenger journey. This has helped to make those travelers feel comfortable enough to shop. “We are pleased to see an increase in passenger spend per head to around US$57 from US$40 last year, so that is a positive and means that those who are travelling now are open to shopping and are spending a bit more. We have also seen that Chinese travellers, although returning in low numbers, are still looking at buying high-end luxury goods, which is another positive. We just need to see more people become increasingly confident to travel, and that will happen, but it will take time,” says McLoughlin. In addition to presenting more shopping opportunities within the airport, Dubai Duty Free also launched a Home Delivery service for UAE residents. This service features a special selection of over 5,000 items, including popular products in categories such as Beauty, Food, Technology, Fashion, Jewelry, Watches, Toys, Books and Health & Wellness. The retailer is well known for its promotions, and this also continues outside of the airport, as home customers can receive special discounts and promotional offers on some products ranging from 15% to 40%. “To date, we’ve had 590,000 sessions since we started, and we’ve sold over AED18 million (US$5.12 million) worth of merchandise, so we’re happy with that,” says McLoughlin.

Promotions continue and millionaires are made

Dubai Duty Free has always been known for creating exciting promotions, and the unusual times are not changing that reality. “We have ongoing promotions, of course, and these continue with major focused on promotions that push the purchase value above the average, including those in key categories such as Liquor, Perfumes, Confectionery and Fashion, which tend to work very well with us. We have high discount offers on categories such as Confectionary and Fashion, which are going well. In order to offer travelers as much selection as possible, Dubai Duty Free opened a Fashion pop-up-shop in Concourse B, carrying brands not normally associated with that location

22 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

“In terms of our Dubai Duty Free Millennium Millionaire and Finest Surprise promotions, we have promoted these quite heavily to our growing database. The chance to win US$1 million or a luxury car or motorbike is very appealing to our customers, who can buy tickets online, and sales here have been very strong. To date 340 millionaires from 43 countries have been created by Dubai Duty Free in the promotion’s 21-year lifespan. This includes seven winners who doubled their luck and won the promotion twice!”

Sampling not possible

While promotions continue, however, duty free shopping as a sensory experience has changed. “The pandemic has temporarily put a halt to our make-up and perfume testers,” says McLoughlin. “Our beauty advisors have to focus now on giving product advice and making recommendations to customers, who are socially distanced. The trying on of clothes and accessories is also not allowed for now. So in accordance with the health and safety guidelines, we do not see the return of sampling in its original format for some time.” The layout of the stores has also changed, first to follow health and safety guidelines, and then given that, to make it easier to shop. “The retail areas are marked out for social distancing, which includes directional floor markings and way finding,” says McLoughlin. “We have also looked at prominently featuring the most popular brands in highly visible and easy-to-reach areas so that the shopper can quickly identify the product and pick up easily.”

Making things easy for travelers

Dubai is very much open for business. Visitors do need to follow a number of guidelines including having a negative Covid-19 test result, observing social distancing and the compulsory wearing of masks, but allowing for these practices means they do not need to quarantine. “This approach is working well and we are seeing leisure traveller numbers increase along with the opening of tourist attractions this season,” says McLoughlin. In all, Dubai is making it as easy as possible for travellers. “The overall recovery is doing well, but it is going to take time and nobody can predict when things will return to 2019 levels at this stage,” McLoughlin says. “However, the situation remains fluid and everything depends on the opening up of more international borders as well as the stability of the global economy.”


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The Martin Moodie Interview

NECESSITY BEGETS I N N O VAT I O N

Some faces you might recognize from a number of duty free events! From left: Martin Moodie from the The Moodie Davitt Report, Hibah Noor and Jas Ryat from Americas, Asia & Gulf-Africa Duty Free Magazine and the lovely Breeda McLoughlin with partner in crime Dubai Duty Free’s Colm McLoughlin at last year’s Summit of the Americas show in Orlando

One of the better-known faces of the travel retail industry, Martin Moodie is no slouch when it comes to innovation. In this year of upheaval, he discusses his new platform, the new virtual expo and surviving during crises by HIBAH NOOR

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ecently I had the chance to catch up with well-known and much-respected colleague Martin Moodie, founder of The Moodie Davitt Report and The Trinity Forum. This year we can also call him the founder of the Virtual Travel Retail Expo, as he and his team have produced a truly novel platform to help fill the void created in anticipation of other industry events being canceled. Duty Free & Travel Retail magazines: How did the idea of the Virtual Expo come about? Were you confident about it succeeding? Martin Moodie: Innovation born of necessity! Having lived and run a business through the dark days of SARS, I knew as soon as the reports started coming out of Wuhan about this thenmystery virus that it was going to be serious. We had a dedicated daily COVID-19 column running by 21st January, so we were on the case extremely early. We held a webinar in February with Dr. David Heymann, who headed the global response to SARS in 2003. Dr Heyman was adamant that large-scale physical gatherings would be seriously 24 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

compromised for some time to come. He suggested that the travel retail industry might have to relearn some of its practices for the foreseeable future. I remember conducting that webinar in a small Parisian hotel room and thinking that I had to do something about this quickly or my business of 18 years – wholly reliant on travel retail advertising, sponsorship and physical event revenue – would be dangerously exposed. It was clear to me that our own events – FAB in Istanbul in June and The Trinity Forum in Beijing in October – simply would not happen. I was convinced that none of the other major sector trade shows would either, and I was proven right. We looked at replacing our own shows with webinar-type activity but we felt that wasn’t enough and that it would not help our financial plight. Instead we identified a real opportunity to create something groundbreaking in the virtual realm – especially as it was clear no one else planned to. Was I confident of it succeeding? No, but that gave me and my team enormous energy to do everything we could to ensure it did. I suppose I was the original disruptor to the travel retail B2B media landscape back in 2002 when I launched The Moodie Report, as it was then known. The media business was based entirely on a legacy print model. Few gave me a chance of succeeding with what back then was a pure-play digital model. Yet we were the market leader in under two years. And here’s the thing. It’s my belief that what is happening with the MICE industry this year represents a reprise of when digital met print. While virtual will not wholly replace physical, it will at worst complement it, at times replace it and simultaneously stretch the boundaries of what trade shows can achieve.


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The Martin Moodie Interview

Artistic renderings of the upcoming, first of its kind Virtual Expo in travel retail

DF&TR: As of today, how many exhibitors have signed up? Are there any particular suppliers you’d like to highlight? MM: We’re delighted to say that we will close with 122 exhibitors drawn from all sectors of industry. We’ve got some of the biggest names in travel retail, including as Platinum Partners AOE, Bacardi, Beam Suntory, Camus, Changi Airport Group, Clarins, Diageo, Dior, Dubai Duty Free, Duty Free Global, JTI, KrisShop, Kweichow Moutai, Luxottica, Pernod Ricard, PMI, Puig, Shiseido, SK-II, Whyte & Mackay, plus China Duty Free, Qatar Duty Free and The SEVA Group as Diamond Partners. But that’s just the tip of the iceberg, as we’ve attracted a stellar line-up of independents, SMEs and other prominent industry names. We’re very excited too that Hainan International Development Bureau is a Platinum Partner. While we appreciate our Diamond and Platinum Partners, however, we don’t really want to single out names. Each exhibitor is a business partner and we’re intent on ensuring that the show works for each and every one of them. DF&TR: Can you walk us through the program? MM: Briefly, there are three key components. The Exhibition Hub, where buyer meets seller but without either party having to leave their home or office; The Knowledge Hub, which is an amazing five-day line-up of thought leaders; and the Experience Hub, which includes an Engagement Lounge featuring four platforms to launch, promote and educate about products through virtual master classes, tastings and demonstrations. Either live or pre-recorded, these 30-minute segments will be streamed to a global audience, including the option to invite a number of KOLs and category influencers who we have signed up to attend, plus B2B and B2C press. It’s a fantastic mix to ensure this is not some cold, digital experience. DF&TR: You’ve created some excellent synergies with Dubai Duty Free and Qatar Duty Free. What type of feedback have you received? 26 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

MM: Besides being a Diamond Partner, Qatar Duty Free is hosting a brilliant innovation called The QDF Factor in association with us. It is a competition open to all brands and concepts, both within and outside the travel retail channel, that offers a top prize of a complimentary six-month listing and high-profile promotion with Qatar Duty Free at Hamad International Airport, Doha and a six-month US$50,000 multi-media advertising campaign with The Moodie Davitt Report. I can tell you that we have been flooded with entries, which proves that our industry’s innate sense of innovation has not been dulled by the pandemic. Dubai Duty Free, as you know, is always a good supporter of the industry media. They have been offering two tickets each week in their Millennium Millionaire and Finest Surprise car draws to registered visitors and it’s been a great talking point – and motivation to register – ever since it started. DF&TR: You announced the Expo prior to TFWA canceling their annual Cannes event. What was the thought process in making that decision early? MM: Yes and I don’t apologize for that. It was clear that TFWA, understandably, wanted to buy time in the hope that the COVID-19 crisis would ease in time for the Cannes show to happen. I just didn’t believe that would be possible, as evidenced by our very early cancellation of The Trinity Forum due to be held in late October. I could not simply wait and wither on the vine. In crises you have to innovate and adapt to survive and that is what we did. As I have said before, our event did not stop the Cannes show from happening; COVID-19 did! We’re very hopeful that the TFWA events will return next year. Remember, they’re good business for us too, but more importantly are good for the industry. DF&TR: As you’re aware, our respected colleagues at TRBusiness also put on a similar event. How do you feel about this? Is there room for two similar events just a few weeks apart? MM: With respect to our friends at TRB, the events are not


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similar at all. Our software program, which was the best-in-class we could procure, has been taken to a whole new level by FILTR, our Singapore- and London-based partners for the Expo. They have curated an overall digital architecture and brought individual virtual stands to a level that I don’t think has happened in the virtual exhibition world before. You will see it with your own eyes – the brands are really knocking this out of the park. The reaction of the trade to the two shows speaks for itself in terms of the respective number of exhibitors and we’ll let that fact do our talking. Brands of the caliber I mentioned earlier are not easily convinced to make such investments in this desperately difficult year so we think the scale of what we have created has paid off. Is there room for two events? Put it this way: I don’t think it’s sensible, but you can’t stop competition. TRB is fighting for

its survival like everyone in the industry, so I am not going to blame or criticize them for belatedly announcing their event and positioning it two weeks in front of ours. We covered their event and wish them well. DF&TR: When things get back to “normal” next year and physical tradeshows are back (fingers crossed), what are the plans for your future virtual expos? MM: Great question. My fingers are crossed too! But as mentioned I see a continued and growing role for virtual expos, and most certainly next year when I believe sector recovery from COVID-19 will be slow. Between us and FILTR we have put something like 7,000 man- and woman-hours into creating this event, and we’re certainly not going to waste that investment by treating it as a one-year wonder. We’re keen to work with various trade associations, notably of course ACI – our partner in The Trinity Forum – to ensure credible, successful events take place, and we are open to all parties for discussions. And we’re very excited to have announced last month that we’re working with ASUTIL and IAADFS to create the Virtual Summit of the Americas next April. On that note, it’s important to emphasize that it was our suggestion to both associations that the event’s press room – and therefore ability to showcase digital editions – should be open to all media such as yourselves Hibah, even our friends at TRB and so on. This is about maximizing exposure for the associations and helping them generate revenue, not about us. 28 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

The Moodie Davitt Report has created a new company to develop the virtual expo concept further and we’re taking our first exciting steps outside travel retail with a wellbeing event, an alcoholic spirits event and one more to be named in late September. And that is just the start. For the Virtual Travel Retail Expo, we want to work with the industry – including all relevant trade associations – to see how and when our event fits into the calendar. DF&TR: We’re all in the same boat at the moment where companies are losing money daily. Can you talk about the resources and funding that went into pulling off such a grand and professional event? Surely, all this comes with a hefty price tag! Is there a ROI for you? MM: Indeed, it’s been a terrible year, one in which we’ve seen so many companies retrench – or worse. So many talented people have lost their jobs and there has been so much hardship throughout the industry. Your company, Hibah, mine and any other publisher are clearly not immune to any of that hardship; in fact we are probably among the most vulnerable. People tend to think because we are the market leader and we are highly visible during the crisis that we are somehow ok. The reality is that we have had to let a lot of good people go. We are running on severely depleted resources, and my business partner Dermot Davitt and I are practically working around the clock to maintain our coverage, which, perversely, is generating record traffic. I have not had a single day off this year nor many hours within those days! But just defending and cutting costs is not my way, and anyway those steps would not see us through a crisis that runs for a long time as this one might. So you have to take some risks, follow your instincts and go with what you feel is right in terms of innovation. So, yes, this has been costly, but equally it has been rewarded with tremendous industry support and has spurred us to create a whole new operation and to work with some of the world’s best brands on an incredibly exciting project. There’s your ROI! DF&TR: Can you talk a bit about the state of our industry? We’ve all heard that we can be waiting up to three or four years to return to 2019 levels but what are your thoughts? MM: I would avoid generalizations. I think the recovery is going to be stuttering (i.e. two steps forward, one back) and selective. Hainan, China is already beyond “recovery.” Their year-on-year numbers are extraordinary. South Korea is much better than anyone expected despite its borders basically being closed – the daigou effect. Travel bubbles will emerge, particularly in shorthaul intra-Asia travel. Elsewhere, much depends on the timing of vaccines and appropriate treatments. Things could move fast once those breakthroughs happen, and they will. People’s need and desire to travel has not diminished during this sustained crisis; in fact it has increased. The human need to discover, to sojourn, to learn, to enjoy human encounters will never be quenched. I am very confident about the future of travel retail but all of us – airports, retailers, F&B operators, trade associations, publishers – must be able to flex quickly to different realities and not simply revert to type. That would be fatal.


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 Jordanian Duty Free Shops

JDF's Boulevard Shop in downtown Amman has added more space for a newer and bigger range of premium products to tempt customers

JDF

Despite the pandemic, Jordanian Duty Free Shops is working towards the digital transformation of its business while continuing to invest in new projects

responds J to the wake-up call 30 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

by HIBAH NOOR

ordanian Duty Free Shops (JDF) is embarking on a new digital strategy as it emerges from a tough three-month lockdown period due to the pandemic. Borders around the kingdom are currently closed to international travel in response to COVID-19, and most of its stores remain shut. But the operator’s Boulevard Shop in downtown Amman is open, along with Aqaba Gateway in the south of Jordan. JDF management is focused on boosting sales in these stores, while creating a healthy and safe environment for customers, according to CEO Haitham Al-Majali. The company has applied a strict set of measures, such as frequent store sanitization. Staff are constantly tested for the virus and social distancing is enforced. In addition, the operator has extended its store at the Boulevard, adding more space for a new and bigger range of premium products to tempt customers.


While the land borders remain closed, the Jordanian government announced the return of commercial flights and reopened Queen Alia International Airport in early September, after six months of closure. However, travel restrictions remain, and strict quarantine rules are in place depending on the passenger’s country of origin. But in a very recent government press conference, the Minister of State for Media Affairs and the Minister of Transport announced plans to reopen land borders and the seaport of Aqaba for travelers, without giving exact dates. Despite Jordan’s three-month lockdown period from midMarch to early June, JDF was among the companies that maintained a relatively healthy financial situation, and its employees were not affected by the coronavirus outbreak. In further positive news, construction work has resumed on JDF’s new project called The Fountain, a large commercial and entertainment complex in the Red Sea port city of Aqaba. Construction is nearly complete, and JDF expects to start operations and welcome visitors in early 2021.

Store refurbishments

In another major development, JDF is also following technological trends to better serve its customers and partners. “We are currently studying the strategy of boosting our operations and market penetration through heading towards e-commerce,” said Al-Majali. “I believe COVID-19 unveiled the importance of technology, where we have immediately responded to this trend and altered our strategy to adapt to it.” He continued: “We are also in the process of internally developing the company’s compliance with international standards. Our Business Development and Strategy Unit is working with all departments and outsourced business consultancy and auditors

to apply the international standards for Quality Management and Risk Management, to prepare the company for the digital transformation era. Having a holistic approach on all that can help the company grow and prosper.” Al-Majali believes the pandemic has taught some valuable lessons. “COVID-19 has been a learning experience for all companies around the world,” he said. “For our company, the virus has given us a wake-up call, and gave us the time to sit back and think more strategically, and concentrate more on how to better serve our customers, our partners and merchandising our products within the stores. Our staff are currently working on a plan to refurbish the stores and provide our customers with a unique shopping experience, from the moment they enter the store until the time they walk out of it.” The border shutdown and uncertainty remain as major challenges for JDF. Since the beginning of the pandemic, the tourism sector has been badly hit, and the numbers of tourists almost dropped to zero, meaning that one of its main passenger segments “almost vanished”, noted Al-Majali. “This resulted in slow movement of items and a piling of stocks. When the pandemic started spreading, and the borders were closed, the company halted all its purchasing orders, and we were faced with the challenge of how to sell those products when there are no tourists. Luckily today, we still have our diplomatic missions as another major segment of customers. We also believe that the Government of Jordan’s positive approach towards reopening the economy and the borders will help us resume our operations in our stores around the kingdom.” Fortunately, despite the economic setback due to COVID-19, JDF enjoys a healthy financial situation, while maintaining high cash liquidity, and is looking to invest in several projects as part of the company’s strategy.

Construction has resumed on JDF’s new project called The Fountain, a large commercial and entertainment complex in the Red Sea port city of Aqaba

www.dutyfreemag.com GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING

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3Sixty Duty Free Transformation The company’s omnichannel approach allows 3Sixty to weather storms such as COVID19, because of its diversity

Clear VISION Watching well-established duty free company DFASS rebrand as 3Sixty has offered a glimpse into a transformation. The company’s new name was no accident, as it has developed from a successful inflight retail operation to a panglobal phenomenon, with strong Asian connections and a rapidly growing footprint in airports and cruise terminals by HIBAH NOOR

32 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

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raditionally known for its in-flight retail as DFASS, 3Sixty has quickly evolved, significantly increasing its scope since rebranding in 2018. The company’s name illustrates its ongoing omnichannel approach, and strategic new partnerships definitely emphasize the “omni” aspect. After a long period of negotiation, Hotel Shilla last year purchased 44% of the 3Sixty, changing the image and scope of the company overnight. 3Sixty has partnered with Singapore Airlines to reinterpret and revitalize KrisShop, and additionally the retailer now operates 41 shops in 13 airports and cruise terminals throughout the Americas. The company has announced that more of these retail operations are in its future. During a recent conversation with 3Sixty’s COO, Alex Anson, Asia Duty Free learned more about the company’s plans to increase its impact, forcing the industry to recognize the status quo travel retail “trinity” is actually a “quaternity.”


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3Sixty Duty Free Transformation

Duty Free magazine: Inflight duty free sales have taken a huge hit in recent years, mainly with the advent of digital shopping. How is 3Sixty taking what has been a negative for many companies and using it to its advantage? Alex Anson: I believe inflight duty free has suffered more from the expanding airport duty free offer over the last 20 years than anything else. Why buy on board from a limited selection of products when you can walk through a shop before you board a plane or in some cases, you find an equally strong offer on arrival at your destination? Furthermore, for many years now, the industry has approached travel retail as a “trinity” — airport, operator and sup-

western location while Shilla brings Asia and brick-and-mortar retail. Would you say this is fair? AA: With Shilla in our shareholding structure, we are better positioned to leverage our existing footprint in the Americas to compete for every airport opportunity while expanding omnichannel globally, further leveraging Shilla’s industry-leading positioning in Asia and in e-commerce to support our strategy. DFM: Last year you partnered with Singapore Airlines and SATS to create a revised and renewed KrisShop. Can you tell us a little about that experience, the partnership and how much impact this has had on your overall business?

DFM: We cannot speak this year without discussing the virtual shutdown of global skies due to the pandemic. Has there been any way 3Sixty was in a greater position of strength to weather this typhoon relative to other companies? AA: The diversity of the 3Sixty business has been an important factor to help us navigate through this crisis as we operate across the world in different channels, be it inflight, brick-and-mortar retail, omnichannel, cruise terminals, border shops, etc. and with different operating models, from typical concessions and joint ventures to supply and management agreements. While all have been affected in some way, not all of them have been totally impacted at the same time. DFM: Is the current state of travel and health restrictions affecting the way you sell? If so, how? AA: We believe there is pent-up customer demand, and we have taken every possible measure to protect staff and customers. However, we have to acknowledge some categories, like color cosmetics, and some normal engagement tactics, like sampling, have been compromised. For some brands this is having a material impact.

Dallas Fort Worth is 3Sixty’s newest airport location, which had its grand opening on August 29th

plier — forgetting that in the digital age in which we live, none of them know the customer. It is the airline that knows and owns the passenger data. By focusing our efforts in building strong relationships with our airline partners, and developing solutions that are data driven (in essence, the progression from “trinity” to “quaternity”), we are harnessing the true potential of omnichannel retail and delivering an attractive proposition. Seeing the success of our Singapore Airlines partnership, we are working to roll out similar programs with other airline partners and airports. DFM: How has the partnership with Hotel Shilla affected your retail structure and blueprint for the coming years? It appears that you bring airline experience and a

AA: We believe KrisShop is the industry’s gold standard for how to deliver a true omnichannel experience. From value proposition to service, it has proven to be a successful business model all around. During the COVID-19 outbreak, the business was able to quickly adapt to the crisis conditions to continue offering customers value, service and access to a wide range of merchandise, from luxury brands to more day-to-day categories. Holding KrisShop as an industryleading benchmark, 3Sixty has continued working with its other airline partners to develop similar propositions, which we are looking forward to bringing to market in the coming months. I would like to believe that the COVID-19 lesson has been learned, and is now being applied in the acceleration of omni travel retail.

34 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

DFM: Congratulations on the new store opening in Dallas. Can you tell us more about this? I believe expansion into American airports was one of your goals. Is this still in the plans? AA: As the industry knows full well, US airports still offer significant untapped potential. Not only for international traffic, but especially with regards to domestic traffic. This is critical during the economic recovery, as domestic travel recovers much more quickly than international travel. Working closely with some of our key partners, we are looking to take advantage of this opportunity through our concepts, our offer, and services in pipeline. DFM: What are 3Sixty’s goals and strategies for the coming years? AA: 3Sixty’s long-term goals are to advance our omnichannel vision, whilst continuing to expand airport operations, profitably. DFM: How do you see the future of inflight retail? AA: Quite simply we believe the future is bright; the future is omnichannel.


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Moroccanoil

The

beauty digital of

Beauty brand Moroccanoil has remained resilient during the pandemic thanks to its diversified distribution strategy

Moroccanoil’s Travel Hydration Set proves to be the perfect travel companion

36 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020


A

n omnichannel approach implemented before the COVID-19 pandemic has paid dividends for Moroccanoil, the oil-infused beauty brand. During the lockdown period, which triggered the closure of physical stores and hair salons across the world, the company has seen demand remain high for its products, especially around its core care categories of oil treatment, haircare and body care. This has proven the brand’s strength and resilience even in the most difficult times, according to Sebastien Levi, Vice President, Global Travel Retail, Moroccanoil. “One key strength for Moroccanoil is that we rely on a diverse ecosystem, which has been extremely helpful during this time,” he explains. “At the height of the crisis, most of our sales were coming from digital – e-tailers, pure players and Moroccanoil.com – and during the crisis we kept a strong marketing presence online to keep the conversation open with our customers. “Thankfully, many countries (in Europe, Asia, and the Americas) have since reopened, at least partially, and with them hair salons and brick-and-mortar stores in premium retail and travel retail.” In a significant shift, the company has noticed that even after stores have reopened, some customers continue to shop online for convenience and efficiency. “The main takeaway is that we are noticing an evolution, not a revolution, as our sales in brick-and-mortar have come back to a very satisfactory level. It shows that consumers not only mix and match brands and categories, they do that with the channels of distribution… which is totally aligned with our omnichannel strategy.”

Click-and-collect

Turning to travel retail, Levi believes the switch to digital will be particularly important in China. This factor, mixed with the development of click-and-collect in travel retail, will be a major trend, starting in China and later happening across the rest of Asia and Europe as well. The pandemic is bringing challenges, though, as the new hygiene measures look set to impact sales of beauty products. The major challenge will be the lack of testers, especially for new product launches, notes

Levi. “It will be even more important than before to convince the consumer of the benefits of a product without testing, possibly even with touchless demonstration – on a mannequin, for instance. “This is where the brand’s reputation and customer loyalty and trust will play a key role, so I remain confident in the performance of beauty sales.” The pandemic has elevated the importance of hygiene, which benefits special segments such as bath and body care or haircare, he believes. “Globally, I strongly believe that the beauty category will recover, beyond the opportunities in hygiene and personal care. The aspirational demand for beauty, well-being, and self-confidence remains strong, maybe stronger than ever before.” As the company works with the travel retail operators to bring value for consumers, this will mean focusing on best sellers and relevant products. “We believe that our brand’s strength lies in the benefits and results it offers, together with the variety of needs it answers. In these difficult times, we are carefully balancing our focus on the best sellers with valueadded propositions like large sizes (for example, liter bottles) and special offers, with the need to keep a relevant and diverse assortment that truly reflects the DNA of our brand.” When it comes to beauty sampling, Moroccanoil is reviewing its options. The increasing share of digital represents an opportunity, whether it is pure online shopping or click-and-collect, as samples can be added directly to the products purchased. Sampling can also be part of an online marketing strategy, not tied to purchases. “Sampling is actually part of the Moroccanoil brand DNA – our first deluxe sample, the 10ml Moroccanoil Treatment, was handed out to salons in the early days, which helped put our brand on the map,” says Levi. “Since launching in retail and travel retail, our sampling initiatives have increased tremendously, with over 10 varieties of samples available in the haircare and body care categories, and this has been a crucial success factor in these channels. So, we will definitely keep a focus on sampling, which is essential to have our products tried, embraced, and ultimately purchased.”

Moroccanoil’s Night Body Serum is a concentrated overnight body serum offering visibly smoother skin

www.dutyfreemag.com GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING

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Gulbahar Tobacco Update

Looking forward

TO NORMALITY Cigarette supplier Gulbahar Tobacco International is ploughing on with its investment in the travel retail sector despite the COVID-19 crisis

Muneeb Dar, Marketing Manager, Gulbahar Tobacco International

by HIBAH NOOR

G

ulbahar Tobacco International has experienced a slowdown in cigarette sales since the outbreak of COVID-19 in March, but that hasn’t dampened the Dubai-based company’s desire to invest in the travel retail channel. Quite the reverse. “At the moment we have posted 90% of our promotional campaigns,” Muneeb Dar, Marketing Manager, Gulbahar Tobacco International, tells Gulf-Africa Duty Free & Travel Retailing Magazine in August. “We have invested heavily in airport campaigns like boutique digital networks, airport trolleys and airport signage, but currently our promotional campaigns are running with much less viewership visibility as the borders still remain closed. We will be re-launching our additional campaigns once the flights start resuming.” Gulbahar Tobacco International has been careful to follow the COVID-19 norms laid out by the local health authorities and fighting the virus with the utmost caution, says Dar. Since the company is headquartered in the UAE and has a manufacturing facility in the business hub of Jebel Ali, it was necessary to ensure that

special precautions were taken. The entire factory was duly sanitized and its staff were taken care of. Gulbahar Tobacco ensured the thermal checking of everyone who entered the work premises. In addition, sanitizers and health supplements as approved by health authorities were distributed to ensure the safety of all personnel. Because of the virus, supply was mildly affected during the initial stage of the threat. However, due to the current easing of restrictions, the company has been able to resume normal operations.

Change in consumer behavior

The pandemic has impacted all walks of life, and this includes smokers also. Smokers have become more conscious about the implication of COVID-19, and as a result, this has impacted the consumer behaviour, says Dar. Usually smoking is a choice for consumers, but the pandemic has resulted in less consumption of the products, thereby affecting the sales locally as well as internationally. The company has been forced to rethink its strategy. “We were pretty determined in the first quarter of 2020.

Gulbahar Tobacco has invested heavily in airport advertising for its Milano cigarettes at Dubai International Airport

38 GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2020

Our marketing plan was in line with our strategies and we were already exploring new markets, especially in the duty free and travel retail segment. Our plans remain the same but our strategy has now changed due to the pandemic. We will be re-evaluating our plans and acting accordingly.” Despite the pandemic, Gulbahar Tobacco remains “really hopeful” for the future and is looking forward to the borders reopening and flights getting back to normal. Once that happens, it will be able to adapt its marketing strategy and make its product available in the markets where distribution has been halted. As for the recovery timeline for the tobacco category in general, Dar is cautious. “It remains to be seen how quickly the tobacco category will bounce back, taking into account the impact of COVID-19 on health. One thing is for sure – the pandemic has made tobacco consumers re-evaluate their buying options and most of them are looking to buy online and opt for free delivery .”


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Nestlé International Travel Retail road to recovery

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NESTLÉ INTERNATIONAL TRAVEL RETAIL HAS PRESENTED ITS WINNING PRODUCT LINE-UP AS IT LOOKS TO SECURE THE FUTURE SUCCESS OF THE CONFECTIONERY CATEGORY by JAS RYAT

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N O I T A V O GH INN

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estlé International Travel Retail (NITR) played host to the travel retail media in September to discuss how the team is gearing up for 2021 with continued faith in the sector’s resilience and ability to recover from COVID-19. “Our industry has always shown itself to be resilient over the long term,” said Stewart Dryburgh, General Manager, NITR. “Identifying the correct growth drivers to meet the needs of the post-COVID-19 traveling consumer is critical to moving forward and our innovations for 2021 reflect this – notably the economic effect that COVID-19 is having on disposable incomes.”

Flagship brands lead the way

Tamara Spada, Marketing Manager of NITR, set out the facts and figures of the case. “We are facing unprecedented times. But travel retail has shown resilience in the long term. In fact, when you look at some of the statistics, 79% of people are willing to travel within the next six months, 76% claim that they will engage with the same or even more duty free services and only 16% say that the will not enter duty free shops due to COVID-19,” explained Spada. “This makes sense. When quarantine was lifted in the UK, people quickly grasped the opportunity to travel. We know there is a hunger to travel. And when this turns around, we will be there. The industry is resilient.” KitKat, NITR’s flagship brand, is leading the way to drive recovery in 2021. Originally launched in 1973, the brand is now available in over 100 countries.


KitKat Senses has been a key driver of growth and 2021 sees this range extended with a new travel retail exclusive, KitKat Senses Tablets, that seeks to meet the needs of travelers for “Uplifting Breaks”. KitKat Senses Tablets are offered at a low price, in three flavors, Caramel Crisp, Cookie Crumble and Hazelnut Crunch. Each bar is designed to be a shareable treat with 10 rows of inclusions on a classic KitKat wafer, enrobed in a milk chocolate coating. Available from March 1, 2021, this chocolate product can be placed in the confectionery merchandising sector or at the cash till point for impulse buy. “KitKat Senses Tablets create a complete brand portfolio with products available to suit any occasion within the Elevated Experience and Deeper Connections need-states,” explained Dryburgh.

Smart move to paper

Nestlé remains committed to sustainability and its ambition to remove all single-use plastic packaging by 2021. In early 2020, NITR introduced the Smarties travel retail exclusive Music Creator featuring a new recyclable carton box and digital content. NITR plans to keep this momentum going, with the full core confectionery range changing to recyclable paper packaging next year. The plastic lids on the Smarties Giant Tube and Toppers will be replaced with a cardboard closing and the shape will change to a giant Hexatube with a paper sticker. Plastic bags will also be replaced with sturdy paper with protective qualities. “This move is a great example of Nestlé taking the lead in sustainability,” continued Dryburgh. “We were the first confectionery brand to use 100% sustainable cocoa for KitKat. Now with Smarties we are the first children’s global confectionery brand to move to paper across all formats.” NITR will also be starting the roll-out of recyclable packaging for all its travel retail Nestlé Mixes & Quality Street pouches and sharing bags during 2021. Nestlé aims to have 100% of its packaging recyclable or reusable by 2025.

Three flavors were launched in 2019: dark chocolate with candied orange peel pieces and cocoa nibs, milk chocolate with cranberries, hazelnuts and almonds, and milk chocolate with grapes, almonds and hazelnuts. These are now joined by Dark Blueberry 170g containing dark Swiss chocolate with blueberry, almonds and hazelnuts. Dark Blueberry was originally launched in 2019, but will be relaunched in 2021 with a stronger product focus. Based on consumer feedback, indicating a desire for a more self-indulgent size, the Nestlé Swiss collection has been rightsized in 2020 from 195g to 170g. Importantly, the ingredient level (nuts and fruits) remains the same, retaining the ‘bursting with flavors’ and indulgent perception.

After Eight diversifies

London-themed travel retail exclusive After Eight after-dinner mint treats, available in 400g box, continue to be a category growth driver for NITR. The all-year-round gifting item’s success has inspired the introduction of four new limited-edition After Eight 400g flavors for 2021: Strawberry, Dark, Irish Coffee and Orange. “The luxury allure and sense of heritage around the After Eight brand is undeniable and we look forward to rolling out these new indulgent flavors in 2021,” said Dryburgh. “They are sure to appeal to traveling gift buyers who want an impressive gift item from a brand that they know, trust and love.”

Innovation in food

COVID-19 has expanded NITR’s focus from confectionery to include fine foods. “We have gone to great lengths to

ensure that our 2021 innovations are relevant across all category growth drivers, taking into account the changing pattern of travel,” continued Dryburgh. 2021 will include the launch into travel retail of Nescafé Gold as well as a range of premium infant products under the Illuma brand, targeted at the Chinese consumer. “COVID-19 may be having a most dramatic impact on our industry, but we at Nestlé believe in the future of travel retail and our category, thanks to the passion for the experience and discovery that travel brings to each and every one of us.”

Planning for the future

Spada explained that the confidence in this channel was supported by an experienced team. “Fundamentally our lives are enriched with travel,” she said. “The key here that we need to understand is that it is a long run. We might have some tough times and we may be running up a hill right now, but at some point it will level out and get back to smooth sailing.” She continued: “We need to do it in the right way, in a responsible way, by focusing on the consumer first. When people come back, fundamentally it’s the consumers that are coming back. And if you can offer them what they want, how they want it, at a price they can afford given the global recession, then you are set up for success.” On a positive note, Spada concluded: “The opportunity I see in our current situation is giving the industry a shakedown. It makes you re-evaluate the way we did things in the past and the best way to do things going forward. It may cause a step change in the right direction.”

Swiss success

The Nestlé Swiss range continues to drive category growth by adding value to the tablet and informal gifting segments, the company reported.

The three existing flavors of Nestlé Swiss are joined by Nestlé Swiss Dark Blueberry 170g. Ideal for sharing, it combines dark Swiss chocolate with blueberry, almonds and hazelnuts www.dutyfreemag.com GULF-AFRICA & ASIA DUTY FREE & TRAVEL RETAILING

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Lindt Home of Chocolate Designed to continue the work of the chocolate pioneers, who succeeded in producing and promoting Swiss chocolate across the globe, the Chocolate Competence Center features an interactive museum, a research plant and an open-view production line

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his month marked the opening of the Lindt Home of Chocolate in Kilchberg, Switzerland. Designed to continue the work of the chocolate pioneers, who succeeded in producing and promoting Swiss chocolate across the globe and embedding it within its national identity, the Chocolate Competence Center features an interactive museum, a research plant and an open-view production line. Realized by the Lindt Chocolate Competence Foundation and described as a chocolate-themed attraction, the visionary building project at Lindt & Sprüngli's headquarters is situated close to Zurich. Benefitting from excellent public transport connections, the add-on will serve as a center of excellence for chocolate making and provide an engaging destination for up to 350,000 chocolate lovers annually from both Switzerland and abroad. Based on the plans of Basel architects, Christ & Gantenbien, the three-story, multi-functional building is perfectly integrated into its existing surroundings and offers a striking counterpart to the historic Lindt & Sprüngli factory, which dates back to 1899.

Paying homage & sharing knowledge

“The chocolate fountain is the centerpiece of the Lindt Home of Chocolate and represents an homage to the globally renowned and popular Lindor truffles. The Lindt Home of Chocolate will play an important role in safeguarding Switzer-

Featuring an interactive museum, a research plant and an open-view production line, the Lindt Home of Chocolate aims to pay homage and safeguard Switzerland’s position as a center of excellence for chocolate making

land’s position as a chocolate country in the long-term, as well as contribute to the transfer of knowledge within the entire industry,” says Swiss Federal Council Ueli Maurer, Ernst Tanner, President of the Lindt Chocolate Competence Foundation. During the launch of the attraction, Maurer and Roger Federer, brand ambassador, unveiled the 9-meter high centerpiece and welcomed a shower of gold confetti. According to the team, during the celebration, Federer presented a new video that brought a smile to people’s faces. In the film, the world tennis star and a master chocolatier set out on a secret mission of discovery through the Lindt Home of Chocolate. “Chocolate is a part of our national identity and the chocolate industry is an important economic sector of [Switzerland]. For this reason, fostering local chocolate expertise is synonymous with boosting the country as an economic location,” adds Maurer.

A journey of discovery

The Lindt Home of Chocolate is home to master chocolatiers, who are now inviting guests to immerse themselves in “the fantastical world of chocolate.” As a comprehensive information platform on all things chocolate, the chocolate museum is open to the public. According to the company, after more than three years of planning, the research plant was launched at the start of 2020. “The facility combines maximum flexibility and functionality with the highest quality implementation

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and is available to chocolate producers, research institutes & universities for sector-specific further education and advanced training of specialists,” reads a press release. In addition to the chocolate museum and research plant, the Lindt Home of Chocolate features a 1,500-square-meter exhibition. Taking visitors on a journey into the world of the favorite treat, the informational tour ends in a tasting room, where a wide range of masterpieces can be sampled. The Lindt Home of Chocolate also houses Switzerland’s first Lindt Café, the world’s largest Lindt Chocolate Shop, as well as a Chocolateria for courses in chocolate making, all of which are operated by the subsidiary of Lindt & Sprüngli, Schwiez AG. When asked about following through with the opening of the Lindt Home of Chocolate during a global pandemic, Peter Zehnder, Head of Global Duty Free, Lindt & Sprüngli, expressed that the health of employees and visitors is of the highest priority. “A comprehensive health and safety concept was developed for the opening, as well as the ongoing operation of the [attraction]. In addition to the generally strict hygiene regulations within the food sector, we can confirm that all applicable protection and hygiene measures of the Swiss Federal Office of Public Health are implemented and various precautionary measures are taken. All measures are constantly re-evaluated and adapted to the situation,” he concluded.


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Smart Project: COVID & Virtual Training

Looking to unite, connect and educate Since mid-April, the advertising and promotion agency has conducted over 40 training sessions, with participants from 12 Russian cities, and trained 1,000+ travel retail employees

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ased in Moscow, Russia, Smart Project offers a wide range of marketing works and services to drive business, increase brand reputation and support recruitment and training. With a general specialization in below the line (BTL) marketing within the travel retail industry, the advertising and promotion agency consists of a dozen in-office employees including account managers, project managers and marketing specialists and more than 100 field staff members. According to Nadia Emelyanenko, CEO & Founder, Smart Project is experienced in leading every step of the marketing process from production and design to content and logistics. As a partner of the Moodie Davitt Virtual Expo, the agency will spotlight its offering of digital solutions next month. Since 2015, Smart Project has been a member of the Eurasian Association of Duty Free (EADF). One year later, the agency took on the role of official representative of Russia and CIS for the Airport Promotion Association (APA). During this challenging time, Emelyanenko expresses her support of all participants within the duty free and travel retail market. Although facing a situation of uncertainty and experiencing a significant loss in revenue, Smart Project has been able to generate mutual support among the industry, protect its dedicated team of employees and staff members and maintain positive relationships with its partners by providing online training. It’s her belief that the impact of COVID-19 will soon become a memory.

Uniting operators & sharing knowledge

As mentioned, throughout the last several months, the team has partnered with a number of clients (and brands) to present virtual training sessions, programs and activations. The agency united operators from a long list of regions such as Moscow, Kiev, Borispol, St. Petersburg and Minsk to participate in a digital journey – a virtual tour of cities and countries across the globe. With the goal to add a new element for each digital journey, Smart Project developed online Q&A games, educational quizzes, contests and discussions. In addition to the games, many clients invited special guests to join in the fun. For example, Whyte & Mackay welcomed Richard Paterson, Master Blender, and Loch Lomond Group featured André de Almeida, Commercial Director of GTR, writer and blogger. Free of charge for all participants, with the sharing and acquiring of knowledge a top priority, each session aimed to connect and educate people from across the country. Scheduled three weeks ahead of time, on average, 100 – 300 people tuned in to learn about consumer groups, brands’ inspiration and methods of creating fragrances and skincare and techniques to cope with questions in regards to the promotion of limited-edition travel retail products. In action since mid-April, over 40 training sessions have occurred, with participants from 12 Russian cities. Emelyanenko says that representatives from leading beverage, beauty and lifestyle brands have trained 1,000+ travel retail employees.

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Nadia Emelyanenko, CEO & Founder of Smart Project, believes remote technology will become the way of the future for travel retail

A snapshot of the future

When asked about remote technology becoming the way of the future for travel retail, the CEO & Founder explains that we already live in a digital world and concepts like remote working and learning lend to the applying of virtual tours, online consultants and new technologies in order to attract consumers and drive sales. “For many people, it is easier and more available to make an online order or purchase and use zoom or another form of online communication to discuss, negotiate and train. Remote technology is going to be the way of the future for travel retail and I think that most of the customers are already ready for this. We also need to keep up with them and adjust to this world, situations and customers’ demands, offering them new solutions and gadgets,” she adds. Looking ahead, the team is excited to continue its tradition of catching up with its travel retail family at TFWA via a digital format through its partnership with the Virtual Expo. Smart Project will be presenting its new advertising instrument – a digital program for brand ambassadors, beauty consultants and promoters to increase engagement on the shop floor. To learn more about the agency and its services, please visit: www.smartproject.ru


LEGO, the LEGO logo and FRIENDS are trademarks of the LEGO Group. ©2020 the LEGO Group. 93025


Distell’s domestic success

Domestic success by JAS RYAT

While for many companies 2020 has been a great abyss forcing them to inch up its walls, Distell has bucked the trend with a great start in its first business quarter

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istell is well known in travel retail, with the signature elephant of its popular brand Amarula a familiar sight. While Amarula might be the company’s most visible brand that is all but synonymous with South African liquor, Distell has much more on offer around the globe. The company’s Managing Director Travel Retail, Luke Maga, says that despite 2020 being a dismal year for many, this has not been the case for Distell. Its business year runs from July 1 to June 30, so the company is just finishing up its Q1. “The first three months of trade have actually been quite positive for us, especially in regions like Africa and the Middle East, where Distell has a strong portfolio,” he says. “We are finding that we were off to quite a fast start around brands like Amarula, and some of our value wines are really performing well around the Middle East and Africa.”

Slowdown in the Americas

That being said, the company’s travel retail business is not without its difficulties this year, and nowhere is this more evident than in its newest market, the Americas. “Obviously the Americas are one of the toughest markets to restart,” says Maga. “We foresee the market will take a lot longer than we all were first hoping for. This is especially the case in the cruise sector.” And then South America, which plays a vital role in the Distell portfolio, is still not welcoming international tourists as the company had hoped. Maga and his team expected the recovery in the UK and Europe to take a considerable amount of time, and that has shown to be the case. Meanwhile, Maga says that in the region, “things are ticking along.” Traffic in some parts of Asia Pacific is starting to rebound a little more quickly than in other regions, however, and

Distell has just signed a new distribution partnership in Korea. So despite slower business as a whole for the region in TR, this new partnership is opening up a lot of doors for the company. Maga says Jeju Island, which is a hotspot for Chinese consumers even now, has opened up. “All in all, three months into our new year we are seeing some positive signs,” he says. “We see green shoots, so I think we are now trying to work out what is the new world we are operating in, and figuring out how we can adapt to it.”

Waiting to restart

In Americas TR, Distell has been working with Christoph Henkel and Innotri, an agreement they signed a year ago that is “firing on all cylinders.” Maga says it’s unfortunate that given the current circumstances the two have not been able to execute a number of proposed plans, but he still believes Innotri to be a good

DIGITAL IN DUTY FREE/ VIRTUAL TASTINGS

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Distell’s domestic success

SPIRITS BOUNCE BACK

partner for the region. “Once we see the airports opening up again we will roll out the promotional activity and activations that we had already proposed,” he says. “Even within the first couple of months of starting this new partnership we saw some nice traction, especially in the Caribbean. We saw some great new listings.” The current shopping climate has seen Distell’s online sales increase. “For the domestic market we have seen a significant shift of consumers to purchasing online,” says Maga. “But within the duty free space at this time we haven’t seen that shift yet.” Distell is working with partners on different platforms to try and fast track its digital sales channel.

Safe tastings

One aspect of the current promotional world that is difficult to get around is tastings. “Liquor on lips was one of the biggest aspects of our strategy, so for us tasting is essential, especially when launching a new product,” says Maga. “I believe until we can find a safe way of doing tastings in most airports it’s going to be down to our brand ambassadors telling the story.” Maga believes tasting will be back, however. “It’s about how we as a channel

can come out with safety regulations as to how tastings should be conducted. “We are seeing lots of different innovations at the moment with bio-consumable pouches and things like that which is quite interesting,” he adds. “But I think we will wait for the opportunity where we can really experience and showcase our tastings in the proper way.”

The Chinese market

Domestic travel in China is showing a quite impressive recovery. Maga says the company is seeing some growth in Sanya, Hainan and Jeju Island. “That’s where the Chinese are starting to travel to at the moment. And we have seen within the first couple of weeks that traffic in Hainan and Sanya has really driven sales.” Maga has chosen to be optimistic. He believes the Chinese have the desire to travel, and if there are restrictions they will choose to explore their own country, taking advantage of these duty free havens.

Asia Pacific

According to Maga, last year both Bunnahabhain and Deanston showed significant growth in the APAC region. “We really believe that the work we did at TFWA in Singapore drove a lot of brand awareness,”

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he says. “We gained a lot of new listings and became more strategic about the assortment we put out into these channels and airports, and then really invested in it.” He says that last year up until December the company saw very strong growth in Hong Kong, and even more so in Sydney airport. The brand is also performing very well in domestic China. “Our domestic team within greater China has seen double-digit and sometimes tripledigit growth.”

Strategic action

Maga is excited by the range of Baines South African whisky the company has on offer, and also that the business continues full steam ahead. “We still plan to drive Amarula Ethiopian Coffee to the full potential once these markets open up, and support our partners and key agents to make the product a success,” he says. “One thing COVID-19 has allowed us to do is to step back and review our portfolio, and be more strategic about where we are placing these products,” he adds. “As airports open up we are working closely with our customers to support their needs. We will encourage some new innovations we had planned that will help retail at the end of the day.”


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