DUTYFREEMAG.COM OCTOBER 2021 · VOL 33 · NO 2
Asia Pacific Brand Ambassador
Dubai Duty Free’s Brightening outlook p. 7 Sunil Tuli talks recovery p. 18 Virtual TR Expo is back p. 36
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he EMEA and Asia regions this year are truly the story of multiple realities. While duty free and travel retail in China has famously flourished and Chinese visitors have ensured that Macau has started to do well again, the rest of the APAC region has continued in virtual if not literal lockdown, traffic remaining below 20% of what it was in 2019. The MENA region has begun its gradual climb back to previous heights, but the effects of the surge in cases in India, the lack of travel with China and east Asia and, until this very month, the locked-down route with the UK have held the region back from true recovery. Within Europe, while some destinations were busy in the summer — Greece actually surpassed 2019 numbers — others, such as the UK, showed dismal results. Combined with ever-changing border guidelines and ongoing uncertainty, this recovery hodgepodge has been challenging. But despite all this, the trend is unequivocally in the right direction. The vaccination rate, which had stagnated in many countries, has once again picked up — mainly due to the initiation of vaccine requirements for such things as going to restaurants or concerts, and especially travel. And increasingly, countries are allowing visitors to cross their borders if fully vaccinated. While it will likely still be two to three years before our industry returns to normal, as Dubai Duty Free Executive Chairman and CEO Colm McLoughlin states in our interview with him, all indications are that the world is on a clear path to reopening. ARI Chief Operations and Business Development Officer, Nuno Amaral, mentions that when the skies closed down, naysayers jumped from the woodwork to proclaim the travel industry finished. “No one will want to travel together in an aluminum tube,” they said. But in reality, the opposite is true. People are chomping at the bit to travel, and are doing so as soon as they are able. It is in this cautiously optimistic climate that we have two very important events taking place this month. First, the Moodie Davitt Virtual Travel Retail Expo. This event was incredibly important in 2020 as the industry tried to find its way through the darkness, and this year it retains its importance as so many around the world are still not in a position to travel, whether because of border closings, quarantine regulations or financial difficulties. It truly was a breath of fresh air to hear that TFWA WE would take place again in Cannes. While the event won’t be quite the same as it has been in the past, meeting our colleagues in person for live meetings in a familiar way will be reaffirming. We at the newly rebranded Global Travel Retail magazine hope you enjoy this issue. Please share with anyone who might enjoy our interviews and insights. We wish you and your team both health and great success at the Virtual Travel Retail Expo and at TFWA WE in Cannes, and we very much look forward to seeing you there.
HIBAH NOOR Editor-in-Chief email@example.com
4 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
OCTOBER 2021 · VOL 33 · NO 2 Global Marketing Company Ltd.,. 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 Tel: 1 905 821 3344 www.dutyfreemag.com PUBLISHER Aijaz Khan firstname.lastname@example.org EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor email@example.com EDITORIAL AND DEVELOPMENTAL DIRECTOR Wendy Morley firstname.lastname@example.org DEPUTY EDITOR Laura Shirk email@example.com SENIOR WRITER Rebecca Byrne firstname.lastname@example.org SENIOR EDITOR Mary Jane Pittilla email@example.com ART DIRECTOR Jessica Hearn firstname.lastname@example.org
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Lead Stories 22 Retail inMotion
Brightening outlook While numbers at Dubai International Airport remain low relative to prepandemic numbers, traffic continues to increase. With its busiest route to UK now restarted, while ever more borders open around the world, Dubai Duty Free Executive Vice Chairman and CEO Colm McLoughlin hopes that traffic will double in 2022 vs 2021
A life well lived Rising from humble beginnings, Amb. Bienvenido Tantoco Sr founded a Philippine luxury empire with his wife Glecy out of their home. A visit to Morocco soon resulted in the extension of his business empire to that country, with International Duty Free Stores. Amb. Tantoco passed earlier this year at 100 years old, leaving behind a legacy that included not only successful businesses but also loving bonds with family and friends
20 Going Global
New name, new logo, new focus Following more than three decades of serving as travel retail's regional specialist, we're proud to announce Duty Free & Travel Retailing Magazine will be re-launching as Global Travel Retail Magazine; to learn more please click, flip & read on
x e-Mersion Media
The future of in-flight In collaboration with e-Mersion Media and Eurowings Discover, Retail inMotion launched an on-board e-magazine to expand personalized content and provide new revenue streams
28 Mazaya Update
Unmatchable flavors & potential opportunities Throughout the pandemic, the premium shisha molasses brand provided multiple reasons for consumers to stay true to its name; top of the list: special purchases, aggressive promotions and gifts with purchase
30 FOREO x FAQ
A deep dive on beauty-tech & daily viewership During this Q&A, we speak with Gary Leong at FOREO about FOREO and FAQTM meeting the growing demand of the Chinese consumer in 2021; tune in to learn more about the role of livestream broadcaster and the concept of brand education
42 Whiskey Report
Staying on course From one company to the next, from one region and even one location to the next, there is little consistency in sales these days, especially in travel retail. That being said, whisky distilleries are keeping their endgame in mind with the knowledge that quality wins out and their strategies are in place for the long term
Features Iraq Duty Free King Power Gebr. Heineman Moroccanoil expands into fragrance category
14 18 24 32
SKROSS combines tech knowhow & practical thinking Virtual tastings & the post-pandemic landscape
Dubai Duty Free
Dubai Duty Free
Dubai Duty Free Executive Vice Chairman and CEO Colm McLoughlin says the operator has retained an excellent relationship with brands and suppliers throughout this time. “Despite the difficulties, we have kept all of our commitments in addition to paying on time, thereby proving to be a good partner in good times and bad
Brightening outlook While numbers at Dubai International Airport remain low relative to pre-pandemic numbers, traffic continues to increase. With its busiest route to UK now restarted, while ever more borders open around the world, Dubai Duty Free Executive Vice Chairman and CEO Colm McLoughlin hopes that traffic will double in 2022 vs 2021
isitor numbers are still down drastically from pre-pandemic levels, but traffic at Dubai International Airport has continued to rise. “Currently, we have around 85,000 passengers per day at Dubai International Airport compared to 241,000 passengers in 2019. This figure has increased to around 102,000 over last weekend and we do expect to see some spikes arising as we enter a busy last quarter. Passenger traffic has now reached 14 million in the past eight months compared to 58 million in the same period pre-pandemic,” says Colm McLoughlin, Executive Vice Chairman and CEO of Dubai Duty Free. McLoughlin states that the recovery is doing well overall, but he expects it to take two to three years to recover to pre-pandemic levels. “So far, based on the indications and forecast, we can see the economic outlook brightening,” he says. “There is a huge global urge to travel, but
by WENDY MORLEY
as long as there are still borders closed and the possibility of other variants emerging, it is very difficult to forecast a return to pre-pandemic levels of travel.”
Returning traffic and sales
Maintaining its spot as the world’s busiest international airport, Dubai International currently serves 68% of the destinations in 94% of the countries on 70% of the aircraft compared to before the Covid-19 pandemic. Emirates now flies to over 120 destinations on six continents, recovering close to 90% of its pre-pandemic network. Load factors are also recovering. In 2019, the airport welcomed 86.4 million passengers. Projected numbers for 2021 are 27 million passengers, with hopes to double that figure in 2022. Dubai is one of the world’s major hubs, but by far the majority of travelers arriving at the airport currently are remaining in Dubai as opposed to transiting. In August, 72% of passengers arrived in
Dubai while 28% transited to other destinations. McLoughlin says growth should accelerate in Q4 with milestone events including Expo 2020 and the UAE Golden Jubilee celebrations. The average spend of those travelling and shopping at Dubai Duty Free increased approximately 33% from US$39 to US$52. The is due to a number of factors, including the pent-up demand to shop by travelers, less congestion in retail areas, and attractive promotions. Year to date, Dubai Duty Free sales have reached US$605 million, which is 21% higher than the same period last year.
East Asia has remained quite locked down. Before the pandemic, the region contributed 14% of total passengers to Dubai International, and 24% of total sales. In August of this year, the region contributed 4% total passengers and only 6% of total sales. “For Chinese travellers,
www.dutyfreemag.com ASIA & EMEA DUTY FREE & TRAVEL RETAILING
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Dubai Duty Free
loss of Chinese travelers and the interruption to travel with the Indian subcontinent, the UK and Saudi Arabia, he says. “The loss of these travelers has had a considerable impact on sales,” he says. “The worst-hit categories were Watches, Skincare and Cosmetics —mainly due to mask wearing and no access to testers — along with Delicatessen and Toiletries, which are dominated by the subcontinent, and also Souvenirs and Fashion, but to a lesser extent.”
Brands, inventory and activations
we had approximately 12,000 passengers per day in 2019, generating sales of approximately US$822,000 per day; currently we have approximately 600 Chinese passengers per day generating sales of approximately over US$27,000 per day,” says McLoughlin. The removal of the UAE from the UK’s red list will result in a major boost, as this is the busiest air route by far for Dubai International. “We expect to see an increase in passenger traffic in the coming weeks and months with the easing of travel restrictions from African and Asian countries, and in particular from our major market India,” says McLoughlin. “Likewise, the return of Saudi nationals to Dubai is creating a gradual increase in sales, and we will soon resume to sales of Dhs1 million per day from KSA passengers. Visitors from these countries are expected to rise in line with seasonal trends in the last quarter; of course Expo 2020 kicked off on 1st October and there
are major events happening here in the coming months, which will attract visitors from all over the world.”
From a category perspective very little has changed in terms of purchasing trends, says McLoughlin: “We have seen the category split remain the same, more or less, in recent months with Perfumes and Cosmetics the No. 1 category, followed by Liquor, Tobacco, Electronics and Gold. This is mainly due to the heavy concentration of passengers using Terminal 3, where there is more luxury access, less arrivals which has a lower spend per passenger and a higher percentage of spending nationalities – for example Russia and ex-CIS (Commonwealth of Independent States).” Although overall sales are above passenger numbers, this trend is not consistent across all categories, according to McLoughlin. This is mainly due to the
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
10 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
In addition to other issues, inventory management has been a challenge for operators during this time. McLoughlin says Dubai Duty Free’s purchasing team and suppliers helped manage this, achieving a 50% reduction in the inventory from the start of the pandemic. He adds that the Home Delivery service introduced in June 2020 also helped to decrease inventory of time-sensitive categories such as confectionary and fashion. The operator’s relationship with brands has remained excellent, changing only in what they have to discuss and coordinate together. “Last year, there was a little time spent on orders and more on managing the situation we found ourselves in and trying to reduce stock where necessary. This year has been more about trying to work together to mitigate losses due to uncertainty on passenger numbers.” Some brands were keen to follow through with activations as soon as Dubai Duty Free reopened last year, while some were happy to continue with what was in place pre-closure. “As much as we can say, the demand has certainly reduced,” says McLoughlin. “But there is still enough interest for us to have a cohesive offer and look.”
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IDFS - In Memoriam
A life well lived Rising from humble beginnings, Amb. Bienvenido Tantoco Sr founded a Philippine luxury empire with his wife Glecy out of their home. A visit to Morocco soon resulted in the extension of his business empire in that country, in partnership with the Kingdom of Morocco. Amb. Tantoco passed earlier this year at 100 years old, leaving behind a legacy that included not only successful businesses but also loving bonds with family and friends
Ambassador Bienvenido Tantoco Sr passed away in July of 2021, leaving a legacy far larger than his early life would have suggested
by WENDY MORLEY
Points of connection
o those of us in travel retail, Ambassador Bienvenido Tantoco Sr. was the Chairman of International Duty Free Shops (IDFS). To those in the Philippines, he was a respected businessman, father of Philippine luxury retail, and former ambassador to the Vatican — an incredibly honoured and honourable position. To his family, he was a man who left behind a legacy that was much more than business — he left a legacy of fun, laughter, and strong, loving family bonds. Amb. Tantoco passed away at the age of 100 on July 6 of this year after a life well lived.
In the mid 1980’s, Amb. Tantoco & his wife, the late Gliceria “Glecy” Tantoco visited Morocco and immediately fell in love with the country, its fascinating culture and most especially its people. With their entrepreneurial spirit and the
Bienvenido Tantoco Sr and his wife Glecy began their empire from modest beginnings out of their home. They fell in love with Morocco on a trip in the mid80s, and this inspired what would eventually become 23 duty free stores operating in the Kingdom
great potential they saw in the Kingdom’s tourism industry, they turned this warm connection into something concrete – introducing duty free shopping in Morocco through International Duty Free Shops in partnership with the Kingdom. On November 21 1989, the very first 100-square-meter IDFS store opened in Casablanca Airport, transforming a dimly lit corner into an elegant shop. Two months later, in January 1990, they opened a small shop in Marrakech, followed by another in Agadir in May and then one in Tangier in July. Early success gave way to a “hopeless situation” as airports were empty for six months beginning with the outbreak of the Gulf war in 1992. Tantoco managed to bring his company victoriously through this and other challenging times such as the Casablanca terrorist bombings of 2003 and the entry of competition in the market in 2005, creating a legacy in Morocco much as he had in the Philippines.
12 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
The Tantocos believed that airports held special importance as the first and last points of connection within a country. This is why it was important for them to invest in the growth of its airports, building beautiful shops to showcase the same beauty that they saw in the Kingdom on that fateful visit in the 1980s. Morocco became their second home, while IDFS employees became their family. Their love for the King and commitment to his people encouraged them to continually invest in the growth of tourism for the livelihood of the IDFS Team. From a small shop in Casablanca Airport over 30 years ago with a handful of employees, IDFS has now grown and thrived into 23 stores across 11 international airports, plus a diplomatic shop, offering the best service and shopping experience in Morocco’s travel retail. Amb. Tantoco’s legacy in Morocco will always remain through the values and the family he leaves behind in IDFS, as his legacy will remain through his beloved children, grandchildren and great-grandchildren. His memory looms larger than life for the people in his life, who remember him as a man who lived his life according to his strong ethics, with a sense of humour and an infectious laugh, always making those around him feel valued. Current President of IDFS, Christopher Tantoco, says his grandfather left him the legacy of strong values, integrity, hard work, dedication, commitment and offering the best service — service to all people, including employees, customers and business partners.
Iraq Duty Free
A GOOD YEAR
Iraq Duty Free is breaking new ground literally and figuratively as the first downtown duty free shop is being created in Baghdad
While most operators in travel retail had only tales of woe from 2020 and 2021, Fouad Jabbour, General Manager of Iraq Duty Free, was surprisingly happy with sales, stating that they were considerably higher than expected
by WENDY MORLEY
n 2021, Iraq Duty Free has had a surprisingly good year. After a difficult 2020 facing the pandemic that affected the travel retail industry all over the world, Iraq Duty Free managed to keep all staff on the payroll, cutting down on expenses in order to assist and protect the team during the challenging times. Given that situation in Iraq and around the world in 2020 and into 2021, the operator had projected sales of around 65% those of 2019, but by the of the end of Q3 2021 all indications showed that sales will instead be approximately 80% of 2019’s by the close of the year — significantly better than expected. Fouad Jabbour, General Manager of Iraq Duty Free, says the higher-thanexpected sales were in part thanks to the addition of air routes, with a number of airlines increasing flights over 2020. But additionally, stock availability was robust in all categories, and Jabbour says travelers were simply willing to spend money in the duty free shops.
Renovations and openings
The year 2019 closed with the completion of phase three of the renovation plans in all Iraq Duty Free shops at the Baghdad Airport. These include shops in both arrivals and departures in Baghdad International Airport in the Iraqi Airlines Terminal, and the arrivals shop in the International Airlines Terminal. Phase four of the renovations of the departures shop in Baghdad International Airport has been held off until Q1 of 2022, when it will be completed. In addition to these substantial renovations listed above, in 2021 Iraq Duty Free worked on the opening of a brand-new arrivals shop in Basra International Airport. In February 2021 the newly built arrivals shop, with 84 square meters of floor space, began granting the travelers a new shopping experience on their arrival to the city. “The closure of the old shop and creation of the newly opened one could not have been achieved without the support of the official government figures of Iraqi
14 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
For Iraq Duty Free Chairman & Owner Mr. Ahmed Kamal, 2021 has turned out to be much better than expected, thanks to stronger air travel and travelers willing to spend in the airport shops
Civil Aviation, Basra Airport management and personnel, along with the dedication of the Iraq Duty Free management and staff members,” says Jabbour. “Together we achieved the goal of bringing a modern look and a world class design in line with other duty free shops we currently operate in the other airports.”
Iraq Duty Free is branching into new territory, soon opening the first downtown duty free store in Iraq. “Iraq Duty Free has signed a contract to operate a dedicated new space as a downtown duty free shop,” says Jabbour. “This shop is projected to be operational in the first quarter of 2022, with a 10-year contract. This will be the first and only downtown duty free operation in Iraq, and also for us.”
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Iraq Duty Free
This first 500-square-meter shop will be part of the General Company for Central Markets in Baghdad, facilitating additional duty free purchases for visitors to Baghdad. “Our section of the shop will be strictly duty free with no duty paid. Clientele will be travelers to Iraq from any international destination. The holder of a passport and a boarding pass has the right to purchase for 15 days from the date of entry,” says Jabbour. Jabbour says his team will also be looking at other cities in the country where they feel a downtown duty free shop would work for the region, the area and for their business.
Kirkuk, the city of the oil reserves of Iraq, is the site of two new shops soon being opened by Iraq Duty Free. Major international companies work in the area and its surroundings. Jabbour states that the duty free shops will be the perfect addition to all concerned, including Iraq Duty Free as operator, along with the Airport , Civil Aviation and, of course, travelers. At Kirkuk International Airport, Iraq Duty Free will be opening two brand new shops in November 2021. In departures
The team of Iraq Duty Free achieved the goal of bringing a modern look and a world class design to the new arrivals shop in Basra
the space will be 140 square meters, and 110 square meters in arrivals. “This opening will strengthen our presence in Iraq with the support of management, team and government officials, all of whom trust the company and its vision for Iraqi airports, granting us an extension of our contract with Civil Aviation until 2037,” says Jabbour. “At Kirkuk International Airport, with all the studies and anticipation, we will bring excellent added value to the region, travel and passengers in the city of Kirkuk and its surrounding area.”
Liquor and Tobacco are among the five most popular categories for Iraq Duty Free — Perfume and Confectionery top the list
16 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
The top categories for Iraq Duty Free are Perfume, Confectionery, Liquor, Tobacco and Cosmetics, in that order. These five categories represent 85% of the operator’s sales. Currently, Jabbour and his team are in discussion with various houses from the top 5 categories to add them to our brand portfolio. These agreements will be announced soon. Though the usual activations may have been restricted to varying degrees, Iraq Duty Free has supported all fragrances brands throughout 2021 with podiums, free of charge, with any launches that took place from brands carried by the retailer.
Sunil Tuli – King Power
Slow return Group CEO, King Power Group (HK) Sunil Tuli enjoying some sunshine with Group Chairman, King Power Group (HK) Antares Cheng
King Power took advantage of the lockdown to renovate its stores at Macau Airport, extend some contracts, renegotiate some leases, and start an ecommerce business
While King Power is doing well in Macau and domestic China, closed borders, quarantines and ongoing red tape are impeding recovery in other locations throughout Asia
or Group CEO, King Power Group (Hong Kong) Sunil Tuli, one of the more challenging aspects of business currently is the complicated and ever-changing border regulations. While some places such as Macau and Hong Kong have been opening up, the situation is so fluid it can be difficult to know which regions are open, which need quarantine, and what specifically a traveler needs to do to get in. Tuli says: “There’s something new with border regulations every day, which of course makes planning for travel very difficult. And all the paperwork, forms, tests, certificates, QR codes on your phone to show your medical status, etc. It just goes on and on. Singapore was doing well until recently, and now it’s back to two-person meeting and all that. So, yes, while Hong Kong, Singapore and Macau are currently open to travellers, there is a two or threeweek quarantine, depending on where you are coming from. That puts people off, so unless you have to travel, you won’t. I’ve spent 77 days in quarantine so far, and will do another 14 end of November. That’s 91 days.” Tuli jokes: “Should I apply to the Guinness book of records?”
by WENDY MORLEY
Making the best of things
Unsurprisingly, King Power has been doing well in the Shanghai domestic terminal. The Macau location is also busy, as Macau is open to visitors from China. At the company’s other locations, Tuli says they’ve been keeping busy: “We have managed to take advantage of the situation [the lockdowns] to quite an extent. We have renovated our stores at Macau Airport, extended some contracts, renegotiated some leases, and have also started an ecommerce business, a bit later than some others, but nevertheless, we are into it now. For our airport stores, we are currently we work with the airport websites, especially at Changi. Tuli confirms that, as is the case with other operators, King Power is discussing different landlord-tenant agreement models. “Clearly the minimum guarantee model regardless of sales or passenger numbers is not going to work and everybody realizes that. Different ideas are being discussed.”
Grateful for help
King Power received a great deal of help from the government in terms of subsidies for salaries, and from landlords for rent. “I think that will continue till traffic
18 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
picks up, but no one can say at this point. As we discussed earlier, everything is complicated and ever changing. But I have to say that we are thankful for the support we have received so far. Stores have been closed in Hong Kong and Singapore for over 18 months now. We have managed to keep most of our staff but not all, unfortunately. Macau and Pudong are back to normal now.”
Moving toward normal
Passenger spend is up for King Power, as seems to be generally the case industrywide. “I believe the term for it is ‘revenge spending,’” says Tuli. “In our region, people still buy more or less the same stuff as before.” Interestingly, while most retailers have cut SKUs, King Power has actually taken on new brands and increased SKUs, especially in the company’s newly renovated Macau stores. For the future, Tuli says his team is ready. “Plans are to live in the hope that things start getting back to normal soon. I won’t guess about how things will turn out in the coming months; all I can say is that we are ready for the business to resume, to get back to what it used to be, and the sooner the better.”
global When our magazines began over 30 years ago, Europe was the only focus in travel retail. Our publisher Aijaz Khan noticed the need to expand beyond these limited horizons, and therefore created magazines focused on each of the regions that he thought would become important in the channel: Asia, Gulf-Africa and the Americas. His foresight was impeccable, as these regions grew in importance to the point that Asia in particular far surpassed Europe. In recent years, however, travel retail is becoming increasingly more global; now so are we
NOVEMBER 2020 · FDFA VOL 23 · NO 5
A Leader in The Global Fashion Watch Industry for Over 65 Years.
FDFA’s Abe Taqtaq p.12 Canadian land border p.22 FDFA exhibitors p.34
Along with our new focus, new name and rebranding comes our new website. You can find all our news, interviews, articles and issues at GTRmag.com
by WENDY MORLEY
he past year and a half has brought a great deal of reflection, and with it change. That is as true of us at this magazine as it is of others in the industry and the world at large. As a result of that reflection we are now undergoing a transformation. We are so proud to announce our new magazine branding, our new logo and our new focuses, and we are incredibly excited to share these with you. In the past, our magazines were created for specific regions and we released issues specific to trade events such as TFWA World Exhibition in Cannes, Summit of the Americas, TFWA Asia Pacific, FDFA and MEADFA. While we will certainly continue to report on regional news and create issues with a focus on events such as these, as with the industry at large in recent years, we are going fully global. As one travel retail leader recently stated to me, while in the past we approached the traveler and channel on a local or regional level, travel has become increasingly global and that is how we must now approach the channel. And so we have now become Global Travel Retail magazine.
20 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
Beginning in January, 2022, our issues will be released monthly. These monthly issues will give you cutting-edge features including interviews and roundtable discussions, where the industry’s leading minds discuss topics that are hugely relevant to all within the industry. We will offer special reports on topics such as sustainability, with news and insight into the infrastructure and behind-the-scenes decision making that affect travel the world over.
Targeted B2B in China
You could not discuss global travel retail in 2020 without talking about China, as so many factors came together to bring incredible success to the duty free landscape in that country. From the decision to make Hainan a duty free haven, to the partnerships between China’s duty free companies and western companies, to a pandemic that did not allow the 1.4 billion Chinese to travel outside of their own borders, the result has been sales that sometimes topped even 2019 numbers. While Chinese people
will soon begin traveling outside the country again, this will not decrease the domestic market, but rather will increase the importance of this demographic as a global whole. We are so proud to be able to offer to you highly targeted access in Mandarin to both traveling Chinese consumers and the Chinese travel retail decision makers. In our new, exclusive Chinese B2B channel, our translated magazines, articles, ads, videos, online posts and targeted advertorials will reach the exact key Chinese decision makers you want to reach. We also have editors on the ground in China, reporting on news, launches, openings and events happening within the country.
Direct to consumer
Normally, B2C can be challenging – how do you reach the exact people you want to reach and not throw money away sending your message to those who aren’t interested or who don’t have the financial ability to purchase your item? Our partnership with China i2i Group allows for the most efficient and effective choice for reaching your target consumer. We have direct access to i2i’s 7.2 million followers (and growing!) on all popular social media outlets in China. Every one of these individuals has received a visa to travel to other countries. In non-pandemic times they travel outside of China on average four to five times per year, and on average 50% of all their travel-related expenditure is spent on shopping.
This group includes high-net-worth individuals and business travelers, and when they are not spending outside of China, they are traveling and spending in China, with 93% of these followers traveling domestically in the past year.
Recovery on the horizon
We have all been through an exceptionally challenging time. “Unprecedented” is the word most commonly used, and with good reason. While there is no magic fix coming and recovery will take much time and effort, signs that the recovery has begun in earnest are clear. Vaccines are being distributed, and they are working. Borders are opening to those who are vaccinated. Air routes are returning and planes are beginning to fill with passengers. The airline industry is hiring people and buying planes. While full recovery is forecast to take two to three more years, the pent-up travel demand is real and palpable. Online searches for travel information have reached record levels, and as soon as people are able to do so — and feel safe to do so — they are snapping up tickets. This, along with the return of such events as TFWA WE and the planning for live events next year, has led to a feeling of industry-wide optimism and excitement. We all here at Global Travel Retail magazine are truly looking forward to working with you in the coming year and beyond.
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Retail inMotion x e-Mersion Media
THE FUTURE of the in-flight magazine In collaboration with e-Mersion Media and Eurowings Discover, Retail inMotion launched an on-board e-magazine to expand personalized content and provide new revenue streams
This “first-in-market tech innovation” invites Eurowings Discover passengers to explore product and brand information via interactive video clips and slide galleries
by LAURA SHIRK
his summer, Retail inMotion (RiM), on-board retail solutions company, announced its exclusive partnership with Melbourne-based interactive digital magazine publisher, e-Mersion Media (e-MM). The goal: to expand the provision of digital content into the international airline and rail markets. With the support of e-MM and Eurowings Discover, the new Lufthansa Group leisure airline, the on-board retail and technology expert is marking a travel industry first and offering a fully digital and immersive magazine to those taking flight. According to RiM, the partnership will upgrade the on-board experience and help airlines further engage and connect with their passengers via an immersive mobile communications platform and
22 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
generate revenue via untapped channels in the magazine industry. This “first-inmarket tech innovation” invites Eurowings Discover passengers to interact with curated content and explore product and brand information via video clips, slide galleries, exclusive pop-ups and other digital features. When asked about RiM’s approach to uniting on-board retail services, technology solutions, product development and crew engagement, Tim Noack, Business Development Europe, Retail inMotion, states the company’s goal is to deliver a personalized experience, as well as a diverse product assortment to passengers and crew members, who sell its products on-board. “RiM’s retail strategy is based on an innovative and easy-to-use technol-
only able to read interactive print content, but also experience integrated video, visual and sound. Along with displaying product and brand information, the solution enables interactive ordering within an integrated Order2Seat service. “Beyond creating a personalized retail offer, new marketing channels are available to brands, retailers, partners and suppliers to secure product placement and advertising on-board to raise awareness and generate revenue. Importantly, brands are provided with data and analytics in order to further understand passenger interests and behaviors and factor into their decision-making,” says Noack.
Vector system & Order2Seat solution
According to RiM, the partnership will upgrade the on-board experience and generate revenue via untapped channels in the magazine industry
ogy solution, which is delivered by our end-to-end Vector system. This system is unique to the industry and assigned to completely fulfill the requirements of the airlines, crew members, caterers and management teams along the value chain. In addition to the quality standard of this technology platform, the IT solution is continuously evolving to enhance the customer experience. Current innovations such as Order2Seat, artificial intelligence, augmented reality tools, pre-order services and digital menu cards allow us to bring the retail experience to the next level,” says Noack.
Digital menu cards & new marketing channels
Following its initial meeting with e-Mersion Media more than a year ago, Noack notes that RiM was convinced that the company represented the future of the in-flight magazine. He adds that the COVID-19 digital transformation validated its decision to partner with e-MM to promote its digital menu card. Setting a new standard within the industry, Eurowings Discover introduced RiM’s menu card on-board and supported the implementation of digital content and curation. Designed to create product interest among passengers, the menu card provides the necessary means and tools to support the flight crew in their traditional
service procedures. To date, RiM has received positive feedback from airlines, crew members and passengers. Nevertheless, with more and more airlines showing interest in introducing the menu card, many are hesitant to do so because of the lack of necessary Wi-Fi infrastructure. “Digitalizing on-board magazines and menu cards enhances the in-flight experience, as travelers are able to interact with the platform, information and offer. Passengers can select the type of content that they are interested in engaging with or learning more about and make a purchase directly from the page. “The e-Mersion Media technology suite has significantly improved the passenger experience with customers not
Looking to connect with passengers at each point of their travel journey, post-booking a ticket, the company offers pre-order solutions that are integrated with Eurowings Discovery’s booking system and encourages travelers to select preferred products for their flight(s). When speaking about the future expectations of RiM’s digital offering, Noack refers to expanding its presence and payment methods. “Despite existing hurdles, we believe that the digital menu card will be rolled out on many aircraft and eventually replace the classic print menu card. Currently, we are working on the integration of the menu card with our Vector system and existing Order2Seat solution. This step will give passengers flexibility in terms of deciding when to place an order and how to pay for it, as everything is handled within the same solution via the customer’s mobile device,” concludes Noack.
Tim Noack at Retail inMotion says RiM’s retail strategy is based on an easy-to-use technology solution, which is delivered by its end-to-end Vector system
www.dutyfreemag.com ASIA & EMEA DUTY FREE & TRAVEL RETAILING
CIGAR SPECIALIST Over the years, Gebr. Heinemann has nurtured a relationship with cigar aficionados and luxury cigar manufacturers such as Oettinger Davidoff and Habanos, earning the retailer and distributor a lofty and exclusive space from which to benefit all by WENDY MORLEY
ebr. Heinemann has set itself apart as a retailer of choice for cigar enthusiasts. In 2015, the operator partnered with Oettinger Davidoff to create a Davidoff of Geneva – since 1911 walk-in humidor at Frankfurt Airport. The success of this endeavour has spurred the expansion and optimization of the retail assortment in order to best satisfy customer needs, with the close relationship between the companies bringing continuous growth for Gebr. Heinemann in the cigar category. “Over the last years, we have been able to offer a unique and exciting brand experience within the premium cigar segment, where cigar aficionados and newcomers can find a wide range of handcrafted premium cigars, limited editions and travel retail exclusives,” says Niels Altmann, Head of Buying Tobacco at Gebr. Heinemann. The reaction Gebr. Heinemann received from cigar aficionados has been “positive without exception. Heinemann was quickly recognized as a top address for buying premium cigars as the walk-in humidor is a clear symbol of know-how and excellence for our customers and reflects our dedication and passion for premium tobacco products.” Currently, Gebr. Heinemann is working on an overall category manage-
The walk-in humidor that started it all, Davidoff of Geneva – since 1911 at Frankfurt Airport
ment approach together with Oettinger Davidoff in efforts to take the business to a whole new level. This approach includes strategies for different shop concepts, the development of limited and exciting products and new ways to communicate at point-of-sale.
As the retailer established itself as the place for cigars in travel retail, Gebr. Heinemann has been able to implement new walk-in humidor concepts all over the world. Along with certifications as a “Habanos Specialist” at Frankfurt Airport and Amsterdam Airport Schiphol, Gebr. Heinemann has ten walk-in humidors at the new Istanbul airport including six humidors certified by Habanos. “We set luxurious highlights for the cigar category in travel retail. A clear signal for aficionados, who can expect a unique, high-class selection here – including the rare and highly coveted Limitadas,” says Ruediger Stelkens, Director Purchasing Liquor Tobacco Confectionery at Gebr. Heinemann. At the new Istanbul Airport, Gebr. Heinemann also added more Davidoff of Geneva – since 1911 walk-in humidors, possible thanks to many years of successful collaboration with Oettinger Davidoff. “At Istanbul Airport cigar enthusiasts can
24 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
Niels Altmann, Head of Buying Tobacco at Gebr. Heinemann
discover the outstanding quality of the full Oettinger Davidoff product range and in doing so, they can utilize this first class service provided by well trained staff. The concept represents quality, exclusivity and a unique shopping experience,” says Altmann. In May 2021, Oettinger Davidoff relaunched the brand Zino. A brand that follows the current trends and a brand which will delight novices as well as experienced cigar aficionados. Gebr. Heinemann received the right to sell the brand exclusively in the European travel retail market for the first couple of months after launch. “This is once again a proof of our strong, successful and trusting business partnership which both companies have shared for more than 45 years,” says Stelkens.
While the walk-in humidors offer an undeniable experience and selection, the physical space is simply not available at all airports. Stelkens adds: “Due to space limitations at smaller airports, we are not able to implement walk-in humidors in
Taste chocolate in full colours. Visit us at Booth N18 Mediterranean Village TFWA Cannes.
FOR MORE INFORMATION PLEASE CONTACT US:
Heinemann Gebr. Heinemann has certifications as a “Habanos Specialist” in Frankfurt Airport and Amsterdam Airport Schiphol
Ruediger Stelkens, Director Purchasing Liquor Tobacco Confectionery at Gebr. Heinemann
each outlet which is relevant for cigars. This is exactly why we are working on a strategy for smaller shop concepts in order to provide the same expertise, excitement as well as excellent service to the customer. In this context, we will focus on charter airports in Turkey and Tunisia, our Nordic outlets as well as Vienna Airport, which has become one of our top outlets in terms of cigar sales.” Gebr. Heineman is also seeing an increasing demand for quality cigars within its distribution business. This includes customers running duty free shops all over the world, free zones and customers who are supplying diplomats around the globe.
Over the past few years, the cigar segment has been experiencing a real boom. This is not only among younger people, but according to Gebr. Heinemann, the Millennial demographic is an important driver. In Germany, roughly 25% of cigar consumers are between 25 and 34 years old. In the US market the share for this group is greater, at 37% in 2020. The
majority of cigar smokers are still men. In Germany only 8% of cigar smokers are women. “Among our shoppers you can find four customer groups: The Traditionalist, who is a symbol of superiority; The Enthusiast, who smokes cigars for a special moment; The Rebel, who sees the cigar as a rule-breaking symbol; and The Poser, who smokes cigars for a social rise and luxury. The last two groups are dominated by the so-called Milennials. They are looking for an extraordinary and exclusive experience. We pursue these requirements and offer a wide range of exclusive and limited articles such as the Cohiba 50th Anniversary Humidor or the Romeo y Julieta Grand Churchill Humidor manufactured by Elie Bleu,” says Stelkens.
Gebr. Heinemann shares the view that responsible trade in tobacco products needs rules, because that is exactly what duty free and travel retail stands for. “Like no other trade channel, duty free and travel retail relies on trusting cooperation with customs and other authorities in distribution. Our certified Secure Supply Chain (ISO 28000) must meet exceptional standards and daily controls. We pay special attention to preventing access by
26 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
unauthorised third parties at all process stages such as delivery, storage, handling, packaging, transport, etc. through appropriate structures and processes. And retail at the airport is also a strictly monitored marketplace.”
“Tobacco purchasers have a higher spend overall. This is one of the reasons why the tobacco sector continues to be of enormous importance for Gebr. Heinemann,” says Altmann. Tobacco is a category that, beside the new general conditions, requires little service in logistics or the sales area. In addition, the tobacco sector is the driver of the whole idea of duty free, with an attractive price saving on tobacco products. Because of this, more than 82 percent of tobacco purchases are pre-planned. For Gebr. Heinemann, this helps ensure that customers are entering the retail outlets at the airports. Moreover, the conversion rate among tobacco buyers is 71 percent, significantly higher than with other buyers. Tobacco consumers are also the ones who are willing to make purchases in other categories on premium products such as Cognac, whiskies and P&C. In Heinemann stores, on average, every Euro spent on tobacco products brings an additional 1.5 Euro turnover in other categories.
Mega Flavour, Mega Fun!
Meet us virtually or visit our booth in Bay Village 11B at TFWA WE&C Cannes 2021!
This year, Mazaya will sponsor the Frontier Awards which will take place at the prestigious Barrière Le Majestic. “Our decision to support the Awards is to demonstrate our faith in travel retail, and to celebrate our industry’s resilience and creativity despite all the challenges and uncertainty around us, as we believe that all the hard work and innovation that brands have demonstrated in the past 12 months is definitely worthy of recognition,” says Elayyan
With unwavering dynamism, Mazaya created multiple reasons for consumers to buy in duty free during the pandemic, including gifts with purchase, multiple-purchase specials and other aggressive promotions. Global Travel Retail Manager Rawan Elayyan says the company remained true to themselves as a premium shisha molasses brand, supported retailers and operators and delighting consumers by WENDY MORLEY
Mazaya’s portfolio comprises over 150 flavours to suit the diverse consumer preferences around the world, from standard flavours such as Lemon with Mint and Two Apples to innovative blends such as Blueberry Exotica, Gum with Cinnamon and Candy Drops, all made with premium French tobacco and high quality ingredients
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n recent months, we’ve begun to see a slow, but not steady, reopening happening around the world. Mazaya has seen a surge in PAX flow and hence duty free sales as of the middle of Q3 in the Middle East — which is the main market for the shisha brand. “With the roll-out of the vaccine worldwide and the gradual lifting of restrictions, there is a positive sentiment around the world and people are getting ready to fly again, something we hope to continue seeing in Q4,” says Global Travel Retail Manager Rawan Elayyan. In travel retail the company continues to recover its losses incurred in 2020 – 2021. “We are very proud to say that our recovery plans worked better than expected,” says Elayyan. “Currently, we are back to pre-pandemic sales levels. This was accelerated by a very dynamic approach to what was happening around us; our team succeeded in adapting quickly to changes in the travel retail channel through re-purposing marketing budgets to fund attractive multi-purchase, price-offs and GWP promotions, and we have stood by our retailers and end users.” Mazaya’s recovery plans were compelling; Elayyan says the company adapted quickly. “Especially in the markets that were most affected by the pandemic, we supported our retailers and operators with aggressive plans. We reshuffled our budgets and
Elayyan and her team invite all participants to join them on their yacht BANG! From October 25-28 to explore Mazaya’s exquisite shisha molasses, enjoy unmatchable flavours and discuss potential opportunities of working together Face-to-face events are very important for travel retail, and one key observation Elayyan had the past year is that no matter how elaborate virtual meetings and events are, nothing can replace the human element and the enthusiasm in the physical events
are anticipating in their markets to be better prepared for the future. “Cannes will also give us room to go through our portfolio at each location, explore untapped opportunities across the TR channel, and optimize our strategy to suit each market. Also, the networking aspect of the event is very important. We are already in touch with a number of duty free shops where we feel that our product would be relevant; Mazaya is a young brand that already succeeded to have presence in over 30 duty free stores. We are always looking for new opportunities to expand.”
Returning HORECA channel
Shisha is a trend growing globally, and although the HORECA channel was badly affected during the pandemic, Elayyan says users shifting to in-home consumption helped stabilized sales in the domestic market. While duty free sales fell off, Elayyan observed that consumers were stocking up, while benefiting from the tax exempted prices and the multi-purchase and price-off promotions Mazaya was running. “Smoking in restaurants and shisha bars has already recovered wherever restrictions were eased up, and it will continue to be on the rise,” says Elayyan. “We are very positive that people are eager to go back and socialize, and with the vaccination roll-out all over the world and the gradual lifting of restrictions they will do so as soon as they are able. With the growing popularity of shisha, especially among the younger generation, we believe that the shisha molasses category will keep its upward trend.”
In touch with the consumer
repurposed our marketing and sales funds to meet the purchasing power of travelers, who have become more price sensitive.” Mazaya customers benefitted from attractive multi-purchase and price-off promotions; this proved to be very effective as shisha smokers tend to stock up, especially when they’re expecting another lockdown. “In addition to the promotional action plan, we remained true to ourselves as a premium shisha molasses brand and delighted our customers with our signature glass shisha in selected locations,” says Elayyan. “This helped in introducing new shoppers to shisha molasses and contributed to growing the tobacco category overall, which was very much appreciated by operators in those challenging times.”
Back to Cannes
Elayyan and her team are excited that TFWA WE will be a live event again in Cannes. “After more than a year of meeting virtually, the excitement to go back to Cannes and meet face-to-face with buyers and operators is definitely visible among all players in the industry. After all, TFWA Cannes is the flagship event of Global Travel Retail. She adds that she is looking forward to gaining more insight and perspective from key speakers and industry experts, and understanding from our buyers and operators the changes they
Elayyan says the key strength that allowed Mazaya to succeed through this time is the unmatchable shisha smoking experience. “Our unique molasses are made from single-origin French tobacco leaves, thoroughly cleaned and cut according to Mazaya specifications. The French tobacco leaves then enter a fully automated process where they are blended with pure glycerine, natural honey and food-grade flavours that guarantee a longlasting shisha smoking experience.” Mazaya also keeps a close eye on changes in consumer behavior around the world in a bid to understand the unique nuances between smokers. “While the older generation prefers standard flavours, the millennial smoker is always on the hunt for innovative and bold flavours, and with a strong portfolio and distribution networks in over 30 duty free stores and 50 countries, Mazaya is true to its identity as a premium shisha molasses brand,” says Elayyan. For the future, Elayyan says being true to brand identity and keeping the close collaboration and ongoing partnership with the duty free operators, while optimizing and fine-tuning its business strategy to accommodate in the changes in each market will keep Mazaya moving forward. “We are very positive that PAX flow in the greater Middle-East region will continue to be on the rise. Dubai is gearing up to receive an influx of tourists flying to witness the highly anticipated EXPO which will take place from October to March. Saudi Arabia is heavily marketing their vision 2030 with plans to position the kingdom as an international tourism and business hub, and Qatar succeeded in positioning Doha as a key transit point in international air travel. Add the desire of people to travel and explore after almost two years of waiting, all these changes give us hope that the future of travel retail is bright.” www.dutyfreemag.com ASIA & EMEA DUTY FREE & TRAVEL RETAILING
FOREO x FAQ
A deep dive on beauty-tech & daily viewership
The Phase II opening of Haikou Global Premium Duty Free Plaza at Mova Mall in Haikou represented a milestone for the sister brands
Opening a collection of new counters and placements, FOREO and FAQTM significantly expanded in 2021 to meet the growing demand of the Chinese consumer by LAURA SHIRK
ince the start of COVID-19, FOREO has launched its sister brand FAQTM and leaned into the rise of home beauty and digital adoption. The leading beauty-tech brand re-iterates that consumers have been actively seeking ways to practice self-care and wellness in order to resemble a state of normalcy. This is only the beginning of the e-commerce boom, the GTR team
predicts that it will continue to grow exponentially over the next serval years. According to FOREO, with an annual compounded growth rate of 4.75% worldwide, the global beauty industry is expected to increase from $483B (USD) in 2020 to $511B (USD). With this in mind, FOREO and FAQTM regularly launch a number of products to cater to different skin types. Most recently, FAQTM released its FAQTM 101 Range, which features tailored technology and a combination of Power-RF, EMS-Pro and LED-Pulse tech to boost collagen production, define facial features and reduce the appearance of fine lines.
Livestreaming in action & delivering the brand message
Opening a collection of new counters and placements, FOREO and FAQTM have significantly expanded in 2021 to meet the growing demand of the Chinese consumer. Gary Leong, Global Travel Retail Director, FOREO, reveals that the Phase II opening of Haikou Global Premium Duty Free (GDF) Plaza at Mova Mall in Haikou represented a milestone for the 30 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
Open around the clock, each brand is home to a livestream studio located at its Asia Pacific HQ in Shanghai, China, and broadcasts daily to its flagship store via Tmall
During the last week of August, FOREO and FAQTM presented a two-day livestream via GDF’s WeChat Mini Program and Yi Zhi Bo App
sister brands. During the last week of August, the GTR team presented a twoday livestream via GDF’s WeChat Mini Program and Yi Zhi Bo App. As part of the online campaign, customers had the chance to directly purchase select hero products via the retailer’s WeChat Mini Program. “The main challenge was that both FOREO and FAQTM products were scheduled to be featured on the livestream on opening day. Our team needed to align internally to successfully explain the functions, benefits and correct usage of each product to the livestream broadcasters in a short time frame and ensure that the hosts could accurately deliver the brand message to viewers,” comments Leong. Describing the role of livestream broadcaster as an extension of brand ambassador, Leong says the new position is specifically tasked with channeling accurate information in an engaging way to convert “pitches” into sales and effectively answering wide-ranging questions. Open around the clock, each brand is home to a livestream studio located at its Asia Pacific HQ in Shanghai, China, and broadcasts daily to its flagship store via Tmall. This innovative content marketing approach supports the idea that brand education is a key component
of purchase. Depending on a number of different factors such as the time of day, the day of the week and the presence of social media influencers or international supermodels, daily viewership spans 10K – 100K users. Across regions, languages and demographics, it’s believed that accessing a platform or tuning into a livestream is more valuable than searching for information about a brand.
Along with conducting livestreams in collaboration with Sunrise Duty Free members’ app, the company is expanding its digital presence via a list of platforms and partnerships. Most notably, FOREO and FAQTM launched on CDF Macau e-shop, FOREO unveiled a campaign with SSG.com, Shinsegae’s online shopping platform, and FAQTM partnered with Singapore’s premiere travel retail operator, KrisShop – all of which will generate awareness and boost confidence in the region. Additionally, FOREO has implemented online shopping with most of its retailers to further its expansion in the online domain. “We are committed to spreading the value of FOREO by ensuring that we are available in as many locations as possible, and to as many people. We are focused on expanding business in Hainan, which presented a great opportunity in 2020 and amended our planning to reflect the
significance of the island. With more shopping centers and duty free partners increasing their on-the-ground presence in Hainan, we will continue developing our presence in the resort province into 2025. “FOREO and FAQTM are planning to open 29 new offline counters in Hainan by end of year, bringing the total to 20. We will continue to work closely with prestige duty free partners such as GDF Plaza, China Duty Free Group and Hainan Tourism Duty Free Complex & CNSC to explore more opportunities,” explains Leong. Since the duty free channel in Hainan targets travelers from mainland China and absorbs the demand of the Chinese consumer, the GTR team has implemented a communication channel and operation strategy to support its aggressive expansion. Earlier this year, FAQTM conducted a pre-launch campaign at Hainan Tourism Duty Free Complex. During this one-month trial, the brand offered customers a hands-on experience. Following the execution of its dynamic and 360-degree approach, the brand found that offering exclusive trial experiences and services leads to the best return – not only in sales, but also immediate feedback.
Planned vs. impulse purchasing
Returning to the peak of the pandemic at the close of our discussion, Leong says with the increase of online engagement, COVID has directly impacted the brand recognition process. This shift opened the potential for FOREO and FAQTM to further educate consumers about the brands. “The past 18 months of social limitation has increased the digital experience and prepared the consumer to become more knowledgeable about their expectations and needs, while browsing at an airport duty free store. As a result, this will continue to lead to a balance of planned and impulse purchasing among consumers who have been meaning to try a specific product or wanting to discover a new product that appeals to their needs,” concludes Leong.
www.dutyfreemag.com ASIA & EMEA DUTY FREE & TRAVEL RETAILING
From head to toe MOROCCANOIL RELEASES BRUMES DU MAROC & EXPANDS INTO FRAGRANCE CATEGORY by LAURA SHIRK
Levi at Moroccanoil notes that travel sets will become a key part of the Moroccanoil strategy, complementary to the routine and multi-scent aspects of day-to-day hair and body care
32 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
Although the brand successfully launched its Body range several years ago, Moroccanoil will continue to revamp and expand this range into 2022
ith the release of Brumes du Maroc Hair & Body Fragrance Mist by Moroccanoil in 2021, the iconic beauty brand has expanded into the fragrance category. Featuring a lightweight formula and the signature Moroccanoil scent that is loved by men and women alike, Brumes du Maroc offers a “sensorial journey.” Initially launched in North America, the product will become available in Europe this fall. Providing a full head-to-toe experience, Sebastien Levi, Vice President of Global Travel Retail, Moroccanoil, says Brumes du Maroc perfectly encapsulates the essence of the beauty brand. Although the brand successfully launched its Body range several years ago, Moroccanoil will continue to focus on product diversification and revamp and expand this range into 2022. Along with introducing five new scents inspired by the Mediterranean, the company will add products such as Hand Wash and Body Lotion to its existing portfolio. Although this range will be re-launched in all channels, when it comes to travel retail, Moroccanoil will offer channel-specific sets and specialty
releases and rely on strategic merchandising to help consumers get to know its product assortment. Concentrating on product development and innovation throughout the past 18 months, Levi notes that these efforts will be visible in 2022 — and beyond. “Complementary to the routine and multi-scent aspects of day-to-day hair and body care, travel sets will become a key part of Moroccanoil’s strategy. As for travel sizes, the 30-ml Brumes du Maroc Hair & Body Fragrance Mist and 40-ml hand cream products play to both the convenience and the affordability to purchase,” he says.
Travel sets & sizes
When asked how shifting consumer practices and behaviors of the post-COVID traveler will impact the Moroccanoil brand portfolio and value chain in travel retail, Levi adds that it’s too early to form a clear picture of the post-COVID travel world. However, the GTR team believes that the shared increase in practicing self-care and wellness throughout the pandemic has led to greater conversion and spend on skin, beauty and hygiene products. Additionally, the re-launch of
Featuring a lightweight formula and the brand’s signature scent, Brumes du Maroc offers a “sensorial journey”
its Body line allows the brand to participate in the sustainability movement taking place in travel retail. Moroccanoil will take this opportunity to explore more sustainable ingredients, packaging techniques and waste management methods. With the return of travel in sight, Moroccanoil will use value proposition, brand exposure and a multi-channel model to drive engagement and sales in travel retail. Levi says a combination of brand offer, brand exposure and powerful marketing in local markets will generate awareness, establish consumer interest and support the expansion. “There is an opportunity to display travel sets and sizes not only in main stores, but also at gate shops in order to improve business. Moroccanoil’s focus on sets and sizes will play a key role in its success and the excitement of the development could not come at a better time. “We also believe that Click and Collect will grow significantly in the future and our digital expertise – developed with big players such as Amazon and Sephora – puts us in an ideal position to capitalize on this trend in travel retail,” explains Levi.
www.dutyfreemag.com ASIA & EMEA DUTY FREE & TRAVEL RETAILING
Offering extreme versality, NUXE’s new hero product, Huile Prodigieuse© Néroli, is organic-certified – a key selling point in travel retail
Marion Bruimaud, Global Travel Retail Director, NUXE, speaks with Duty Free & Travel Retailing about how the company is continuing to build its value proposition in travel retail by LAURA SHIRK
Marion Bruimaud, Global Travel Retail Director, NUXE
ince entering the travel retail channel in 2013, NUXE, leading player in France’s dermo-cosmetics sector, has experienced ongoing success because of its natural, eco-friendly approach to cosmetic formulations and commitment to innovation. Central to its offering is NUXE’s iconic product: Huile Prodigieuse©, a multi-purpose dry oil for face, body and hair, which according to the company, is ranked as the top product of its kind in the country. NUXE considers travel retail to be a perfect channel for increasing customer loyalty and extending its international presence, with exclusive gifting products and packaged sets playing an important part. Founded in 1991, NUXE is celebrating its 30th anniversary with the launch of Huile Prodigieuse© Néroli. Offering versatility, the addition of this organiccertified formulation of the original Huile Prodigieuse© is the latest example of the company’s commitment to creating, eco-
responsible cosmetic formulations, an increasingly key buying motive for travel retail consumers. During the following Q&A, Marion Bruimaud, Global Travel Retail Director, NUXE, speaks with Duty Free & Travel Retailing about how the company is continuing to build its value proposition in travel retail. Duty Free & Travel Retailing (DF&TR): Heading into Q4 2021, please explain NUXE’s overall approach to the travel retail business and its hybrid business model. Marion Bruimaud: NUXE’s overall approach to travel retail is to maximize brand exposure and retail sales by ensuring distribution in all key travel retail channels and offering its most iconic and internationally-recognized products such as Huile Prodigieuse©. The company’s business model is founded on a stand-alone division within NUXE, which is dedicated exclusively to serving the needs of travel retail. DF&TR: With the return of travel in sight, how does NUXE plan to use value proposition, brand exposure and planned purchasing to drive engagement and sales in the channel? MB: Our value proposition is already wellestablished and underpins the appeal of our product range, along with the regular introduction of travel retail exclusives, which further enhance the appeal and relevance of our offering to travel retail customers.
34 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
DF&TR: Having had time to focus on product development and business strategy, how will the company adapt practices from the domestic market to the duty free market? MB: Since the demands of the duty free market are different from those of domestic markets, the best practice for us is to take our most successful products from domestic markets and adapt and re-size the packaging and combination(s) to create travel retail exclusives, which are genuinely relevant to those traveling. DF&TR: How will shifting consumer behaviors of the post-COVID consumer impact NUXE’s value chain in travel retail? MB: Customer behavior is clearly shifting toward the use of beauty products that are sourced as from natural products and produced and packaged in ways that are environmentally responsible. Respect for the planet was a particular concern of NUXE founder, French entrepreneur, Aliza Jabès. One of our most significant and recent responses to this trend was our launch of NUXE Bio Organic, a line of certified organic products reflecting these new expectations. This product is enriched with botanical active ingredients with genetic traceability monitored by botanical DNA tests. This is achieved without compromising sensoriality, with sublime textures and 100% natural scents.
TFWA 2021 – RIVIERA VILLAGE RG16
Virtual Travel Retail Expo
T H E V I RT UA L EXPO 2021
The Virtual Travel Retail Expo has a new look for 2021, embracing its digital possibilities more than staying true to a traditional event look as it did last year
Hainan was the one beneficiary to the halt of global travel last year, but will undoubtedly continue strong even after the rest of the world opens back up. With so much possibility, Hainan truly is a place for those in travel retail to consider investing
With travel still uncertain, Moodie Davitt’s successful Virtual Travel Retail Expo is back for the second year, with a new look, new experiences and new partners by WENDY MORLEY
ast year was one of true global upheaval. It’s impossible to overstate the disruption to virtually all areas of life, and none more so than that of travel — thus our industry. Between valid health concerns, laws governing gatherings of people and closed borders, live events were unsurprisingly canceled industry-wide. But despite this — or even because of it — during this crisis it
36 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
was more important than ever to create a space to meet, conduct whatever business was possible, learn about how others are coping and about what to expect, in addition to simply catching up with colleagues after months in lockdown. Together with his team, Martin Moodie, one of the most well-respected individuals in the industry, created the solution: The Virtual Travel Retail Expo. Last year Moodie told us that as he realized his own events would have to be canceled, he became convinced that the larger ones soon would be too, and he was proven correct. While he and his team first looked at “webinar-type activities,” they realized these would not help him in their financial plight. They therefore identified the opportunity to create something “groundbreaking.” And that they did. Before long they had created a virtual event that was as close as could be imagined to a live event. Entering the Virtual Expo felt like entering the lobby of an event space. From there, delegates chose one of three
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Virtual Travel Retail Expo
CDFG & The Moodie Davitt Report
The Knowledge Hub was a popular destination last year with approximately 75 speakers discussing virtually every relevant aspect of the industry; that is sure to also be the case this year
places that would feel familiar to anyone who regularly attends conferences and trade shows. First was the Exhibition Hub, a virtual trade show floor where buyer met seller. Next was the Knowledge Hub, which had a stellar lineup of speakers and thoughtprovoking dialogues. Finally, the Engagement Lounge featured four platforms to launch, promote and educate about products. Of course there was also a space for networking. The biggest names in travel retail offered support as Platinum and Diamond Partners; along with the exhibitors and attendees, they helped to make this first virtual event a success.
Second annual event
While the announcement that TFWA WE would be once again taking place live in Cannes this year was welcome in a time when we are all crying for some hint of normality, still many people around the world are having difficulty traveling, whether because of border closures, slow rollout of vaccines in their country, health concerns, workplaces that are not yet embracing travel or other reasons. The subsequent support for the Virtual Travel Retail Expo again this year proves that it is serving an important purpose. Again, the event has a starry lineup of the industry’s giants as sponsors. Confirmed attendees include all the biggest names in the business. As with last year, the Knowledge Hub will be a huge draw. At approximately 75 speakers, the list is too long to reproduce, but these speakers include those who head many of the biggest travel retail operators, in addition to airports, conces-
sionaires, consulting companies, retail analytics, travel companies and more.
We are all aware of the increasing importance of the APAC region in travel retail, despite the temporary plunge in travel and thus sales in virtually the entire region with the exception of China. In light of this importance, the Virtual Travel Retail Expo will host The APAC Dialogue – a partnership between the Asia Pacific Travel Retail Association (APTRA) and The Moodie Davitt Report. This session will focus on digitisation, diversification and domestic travel retail in China, Australasian recovery and “veracity of industry research.” A highlight of the Expo, this three-segment programme addresses key regional opportunities and issues.
38 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
In further demonstration of the importance of China as a duty free region, China Duty Free Group (CDFG) and The Moodie Davitt Report formally signed an Exclusive Strategic Cooperation Partnership agreement for the Virtual Travel Retail Expo this year. The CDFG management, buying, branding and merchandising teams will reportedly be “out in full force.” China Duty Free Group has its own dedicated virtual area called CDFG City, where it will showcase its most exciting current and planned projects, and CDFG President Charles Chen will deliver the morning keynote address in the Knowledge Hub on the first day of the Expo.
While the topic of sustainability had already been increasing in importance in recent years, the events of 2020 skyrocketed its significance. Companies are creating — and achieving — tangible sustainability goals. The Virtual Travel Retail Expo has announced a Sustainability Partner. Ocean Bottle is pledging to rid the ocean of the equivalent of 500,000 plastic bottles as a direct result of the Expo presence. That’s the equivalent of a hefty 5,000kg of ocean waste. Ocean Bottle aims to help stop ocean plastic pollution at the source and simultaneously improve the lives of millions of people. We at Global Travel Retail magazine wish the Moodie Davitt team, its partners and all delegates the greatest of success, and we look forward to meeting up at the event.
The virtual event has industry-wide support this year, with retailers from around the globe taking part
DUFRY IMAGINES A NEXT-GENERATION FUTURE
Dufry continues to develop its strategy to better attract younger generation consumers
In this interview, Dufry’s Chief Commercial Officer Andrea Belardini spells out the importance of digitalization and younger customer engagement as the travel retail recovery begins by MARY JANE PITTILLA
Dufry’s New Generation Store concept at Amman Queen Alia International Airport, Jordan
Duty Free & Travel Retailing (DF&TR): Heading into Q4 2021, briefly explain Dufry’s overall approach to the travel retail business. Please elaborate on its evolving hybrid business model in the channel. Andrea Belardini, Chief Commercial Officer, Dufry: So far this year, we have seen the recovery of our industry gradually starting in most locations around the
world as restrictions have begun to ease. As we head into Q4, the industry needs to continue to work together more closely than ever to maximize all opportunities and improve our offers and services to customers. The digitalization of our industry and the propensity of customers to use digital devices and applications is an ongoing
40 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
certainty, which will definitely continue and increase in importance. Dufry had already started to launch its digital strategy several years ago and we continue to develop an omni-channel approach, aiming to increase our customer engagement through multiple touchpoints, as well as by developing new online and digital services for them. This is not a tech game! Technology is only an enabler and is under our control; this is a content game and we are working closely with brands to step up the game and deliver, in the common interest of all stakeholders, on engagement opportunities to entice our very large and affluent CRM base beyond the act of traveling. I am confident that in the near future all industry participants will agree that it’s time to adjust to reality and treat travel retail customers as they deserve, breaking channel and organizational barriers. On the other hand, the fact that we have a captive audience is – and remains – a huge advantage for the travel retail industry and this is something we need to further capitalize on going forward. We have the opportunity to combine online services with our existing physical shops, in which we will continue to engage and excite our customers as we have always done, with experiential store environ-
Many of Dufry’s brand partners are creating digitally based campaigns that can be activated in its stores
ments, innovative campaigns and a wide range of quality products ranging from travel essentials to the most iconic and prestigious brands. DF&TR: Since Covid-19 there has been a shift in the purpose of travel and demographic among travelers. How do you expect consumer behaviors among the Gen Z consumer to permanently change? AB: We conduct quarterly surveys with our customers to assess potential changes in their behavior and to adapt our offers and services if needed. So far, we have not seen fundamental or structural changes in the shopping behavior of the customers. As you mention, there was a shift in travelers’ profile whilst restrictions were in place, which led to an over-proportional share of domestic passengers traveling and looking for their specific needs and assortments, but as these start to lift, we are seeing the same broader demographic traveling and the surge of the traditional duty free core categories. Also, as explained above, we are continuing to develop our strategy to better attract younger generation consumers at various levels: digital engagement, range innovation and store concept development. We will soon be able to demonstrate tangible progress in this context.
Dufry is set to launch a number of indie beauty brands such as Huda, Hourglass, Pat McGrath and Kylie Cosmetics
DF&TR: How does Dufry plan to expand its digital presence to further connect with the Gen Z consumer? Please elaborate on any specific platforms, partnerships and/ or campaigns. AB: Digitalization is a key focus for Dufry and the deployment of our digital strategy significantly helps to attract more customers to our shops, increase sales and complement the physical shops themselves. Our digital strategy is built on a multichannel approach to increase customer touchpoints and includes four key elements; our New Generation Store concepts, our Red By Dufry customer loyalty program, our Reserve & Collect online ordering platform and Dufry’s own social media channels. We will be leveraging all these channels to further engage with all our customers and alongside this, many of our brand partners are developing more technology and digitally based campaigns that can be activated in our stores. We are seeking cooperation with brands on this journey. A good case in point is the recent launch of Phantom, the latest male fragrance from Paco Rabanne. It was launched exclusively in our World Duty Free stores two months in advance
of its release into the UK domestic market. The fragrance represents one of the most innovative launches to date, with the bottle itself featuring digital connectivity that can be controlled via the customer’s mobile phone. As the business returns to normality, we are also getting ready to accelerate on one key area to attract younger generations: range development. For example, we are about to launch a number of indie brands such as Huda, Hourglass, Pat McGrath and Kylie Cosmetics by Kylie Jenner. DF&TR: With the return of travel, how will Dufry use value proposition and brand exposure to drive traffic, engagement and sales in the channel? AB: We will do what we have always done – continue to offer our customers an attractive product assortment, including novelties and offers which are exclusive to travel retail. And we will continue to improve the effectiveness of our campaigns by increasingly leveraging the digital reach and touchpoints, whilst delivering superior brand visibility in-store as well as via the passenger experience.
www.dutyfreemag.com ASIA & EMEA DUTY FREE & TRAVEL RETAILING
Staying on course
The response around the world to The Macallan Red Collection, a range of rare single malt whiskies, has been extremely positive, Speirs says. ‘This highlights the continued appeal of rare and exclusive bottlings from The Macallan in the travel retail channel’
From one company to the next, from one region and even one location to the next, there is little consistency in sales these days, especially in travel retail. That being said, whisky distilleries are keeping their endgame in mind with the knowledge that quality wins out and their strategies are in place for the long term Edrington’s strategy remains the same
Jeremy Speirs, Regional Managing Director, Global Travel Retail, Edrington, says in terms of brands, the company’s longterm strategy remains the same despite the pandemic. “The Macallan remains a stand-out brand that has delivered incredible results throughout this very challenging period. The Macallan is recognised as a brand which has established itself as a leader in the single malt and broader luxury spirits categories in travel retail. It has incredible brand equity with whisky enthusiasts, connoisseurs and collectors, and is actively sought out in our channel, particularly in limited edition and ultraexclusive formats.” Speirs adds that Edrington has had great success with The Macallan Red Collection, which was recently presented to Ever Rich Duty Free’s VIP customers at an exclusive event in Taipei, creating a significant buzz and resulting in encouraging sales. The Macallan Anecdotes of Ages collection — created in partnership with iconic pop artist Sir Peter Blake — has also proven popular.
The Chinese beacon
While Speirs remains confident that recovery and growth will eventually come from many regions, China – specifically Hainan – has become a beacon for the industry. “We’re working hard to stay on top of the opportunities presented there, which is no mean feat given the pace of development. We want to be in the 42 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
right places but also make sure our brands are presented in the right way and with suitable adjacency to other luxury brands.” He confirms that Hainan is a key strategic opportunity, and the company has confidence in the long-term viability of it as a major destination, bolstered by the government’s decision to make the area exclusively duty free by 2025. “Once the model in Hainan is refined, I really hope we can use this as a case study for how travel retail can evolve to create a more commercially viable landscape for all parties, and how governments can help to stimulate this channel through ambition and investment.” While Hainan might be a focus destination, the Chinese consumer outside of China remains a focus for the company outside the country as well. “Given the investments we’ve made over the years in building brand awareness and driving recruitment in China, we want to make sure that these consumers are able to engage with our products on their travels in engaging and relevant formats,” Speirs says. “We also maintain close relationships with HNWI Chinese customers through The Macallan Boutiques at Dubai and London Heathrow, where we offer a curated selection of luxury products.”
Long, short and mid-term
In the long term, Speirs says Edrington’s approach hasn’t changed. “But we have to recognize that the TR landscape will still be challenging in 2022 in the wake of COVID. So, in the short- and mid-term it’s really about maximizing opportuni-
In 2018, Kavalan created two travel retail exclusives, bottling the Kavalan Distillery Select for Duty Zero and Dufry. “This is something we will continue to do, creating exclusive products from different recipes or new packaging for travel retail shoppers.”
Domestic sales also down
Kavalan has collected more than 600 gold awards or higher from the industry's most competitive contests
ties as they arise, remaining flexible but also open to investment opportunities. We’re asking ourselves ‘which locations are most likely to flourish over the coming years?’ One obvious answer to that would be Hainan, but there are other locations and new travel retail channels where we might see opportunities arise and where we need to react quickly. “Overall we have to take a ‘rise with the tide’ approach. There will be a variety of different recovery scenarios playing out across the globe across 2022 and we need to retain our ability to flex our investment levels wherever the tide is rising.”
Kavalan whiskies were barely known until the distillery’s Solist Vinho Barrique won the World Whiskies Awards World's Best Single Malt Whisky award in 2015. At that time, the American magazine TIME wrote the headline: “You Won't Believe Where the World's Best Whiskey Comes From,” with subtitle “Sorry, Scotland. Nice try, Japan.” Consumers the world over started to ask for Kavalan. According to Kavalan, stocks of Solist Vinho Barrique were snapped up and went out of stock for a period of time, increasing overall sales.
And now, growing its global presence is one of Kavalan’s goals. “We started our global expansion in 2012. Since then, Kavalan has exported to over 60 countries. In recent years, we started to export to some countries in Latin America such as Mexico and Panama; our next step is to enter more countries. People there are used to drinking more locally produced spirits and whisky is newer to them. Also, most of the existing whisky brands in Latin America are from the traditional whisky making regions. We believe that it would be a good opportunity to share Taiwanese whisky with people in the Latin American market when the world begins to reopen.”
While many spirits brands were not heavily affected during the pandemic because domestic sales picked up to make up for ontrade and GTR losses, Kavalan relied on tourism to the distillery. “Before the pandemic, Kavalan Distillery attracted about 800 thousand visitors each year from all over the world, including 80% local people. The situation in Taiwan was relatively under control and we could travel freely until this May when there was a surge in domestic COVID-19 cases. Since then, Taiwan has been on level 3 restrictions and the distillery was temporarily closed to all visitors. More than 40 showrooms were also closed. Although the government lowered the epidemic alert level to Level 2 from July 27 and our domestic channels have all been reopening in a safe way, the whole domestic market is only recovering slowly.”
Duty free future
Kavalan is now available in select duty free markets in Asia, Europe and America. “In 2022, we would like to connect with more duty free operators around the world and become more approachable for all passengers. They can easily buy Kavalan as Taiwanese souvenirs. Also, we will implement more sales promotions when the world reopens. We expect the sales will be better than 2021.” Additionally, cruising is an area the company is endeavouring to invest in and expand into. “We’ve seen cruising in Asia continue to gain in popularity, visiting ports as diverse as Singapore, Hong Kong, Manila, Penang, Saigon and Shanghai. New duty free shops open and cater only to cruise ship passengers at main tourist ferry terminals in Asia. We do see much potential to propel Kavalan’s growth by listing onboard. In the future, we hope to attend more cruising activities to introduce our whiskies.”
Kavalan Distillery in Yilan County has been pioneering the art of single malt whisky in Taiwan since 2005. The whisky is aged in intense humidity and heat, sourcing the meltwaters of Snow Mountain and enhanced by sea and mountain breezes. All this combines to create Kavalan's signature creaminess
www.dutyfreemag.com ASIA & EMEA DUTY FREE & TRAVEL RETAILING
INDISPENSABLE PA R T N E R
The new Zino brand is inspired by people who celebrate a lifestyle and state of mind driven by experiences, open-mindedness and an unwavering curiosity
Davidoff Cigars is a visible, respected and wellknown brand both in and out of the duty free channel. The company’s focus on providing quality cigars including exclusive and limited editions continue to serve it and its partners well as we all begin to emerge into the international traveling light
by WENDY MORLEY While creating the new Zino cigar brand, Davidoff aimed to suit Zino Davidoff's sense of discovery and spirit to live in the moment
44 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
ean-Christophe Hollay, Head – Partner Markets & Duty Free EMEA, Oettinger Davidoff AG says that for Davidoff Cigars, the duty free channel plays an important role. “Duty free has its place in the global economic circuit; it generates value, employment and business,” he says. “We continue to consider the duty free business as a legitimate channel where legitimate consumers can buy their legitimate and preferred products.” While in the last months, duty free sales were “de facto” severely reduced by the lockdown measures and travel restrictions put in place by the authorities around the world in response to the
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New cigar line Davidoff Dominicana Limited Release is blended with vintage tobaccos exclusively, with a fuller-bodied taste experience paired with Davidoff’s signature sophistication
sales similar to those of 2019, as would be surmised by anyone who keeps abreast of travel numbers. Though Hollay says those who are shopping are purchasing at good levels. “We are continuously supporting our partners on this recovery journey,” he says. “What is noticeable is that shoppers are buying at the same level as prior the start of the pandemic, if not even more. Tobacco is one of the 'fundamentals' of the Duty Free channel. Indeed, we can see that tobacco, and cigars in particular, recovered faster than any other category in the channel.”
pandemic, the imposed limits to reduce travel and therefore access to duty free zones were a fact for all in travel retail and not only for the tobacco category, Hollay reminds. When asked about how Davidoff dealt with expiring stock in the channel, as it cannot be sold domestically, Hollay’s response is that the question is not how the company dealt with expiring stock in the channel. “The question is more, how did our consumers manage to buy our products in those exceptional circumstances. The answer is clear: they continued to buy in the domestic markets. By this demonstrating their loyalty to us and to our brands. This is definitely an advantage of being a global actor in the premium cigar category. But of course this is a temporary and exceptional situation. With the progressive lifting of the travel restrictions, we expect shoppers soon back in travel retail.”
Limited and exclusive additions
Regardless of any travel restrictions and limitations in the channel, as in previous years Davidoff has developed an
exceptional program of Limited Editions to complement its ongoing range of products. “Exclusive editions have been prepared for different major duty free operators and will soon be on shelves,” Hollay says. “These Limited Editions are expected of us, and are particularly important in the travel retail / duty free channel all around the globe.” The company has two other major launches this year to join its ongoing portfolio. These are the Davidoff Dominicana and the Zino Nicaragua, which have both already been released in domestic markets — from May 2021 — and are currently being actively rolled out in travel retail.
Improvement in 2021
Oettinger Davidoff AG is thankfully seeing an improvement in sales in duty free in 2021 vs 2020, but Hollay says, “The frame of comparison is always important. ‘Good sales’ compared to what? Compared to 2020 — yes, definitely. But if we compare to 2019, it is a different story.” Hollay confirms that recovery has been strong in recent months, but there is a journey ahead before reaching duty free
46 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
As the Swiss cigar company is a global player in both duty free and domestic channels, Hollay says the company’s main attention goes to shoppers and consumers. “Our activities and new launches are deployed globally,” he says. “In terms of products, our current focus is the continued successful deployment of our new Davidoff Dominicana and Zino Nicaragua in all channels. — two launches that we coordinated globally on the same day.” Hollay confirms that Asia is part of the company’s global strategy, representing an obvious important potential for additional growth. “That said, and in particular with regard to Asia, the question is more related to the speed of recovery of the travel retail business and thus the number of shoppers traveling,” he says, adding that any traveler needs to be approached on a global level, not only locally or regionally as perhaps might have been the case in the past. “Like everywhere else in the world, the situation of travel retail in Asia and elsewhere strongly depends on the strategy of the authorities with regard to travel limitations and vaccination programs,” he says.
Precise and dedicated
Hollay says Davidoff will continue to lead the category through dedicated programs of activities and a precise selection of product range and offers while supporting its partners on the recovery journey. “We also know that major operators will have to focus more on ‘true values’ and well-known brands to be successful and rapidly regain business and volume,” he says. “It is our aim to accompany them in this process as indispensable business partner.”
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When they go big, you go small
perating primarily within the wine and spirits industry, Nordic Beverage Company (Nobeco) aims to act as a modern company that responds to current trends and promotes the balance of indulging in an alcoholic beverage and living a healthy, active lifestyle. This concept is reflected in its brand portfolio and company culture. According to the Nobeco team, its members strive to meet the evolving demands and expectations of its consumer base and thrive in a creative environment. Presently, Nobeco is working on a consultancy basis, supporting the growth of smaller brands that are in the process of entering the Swedish market. Alexandra Rasmusson Rankloo, Head of Sales & Marketing, Nobeco, explains that this means as well as marketing and promotion, the company supplies logistics and distributional services. Realizing that smaller, lesser-known brands available at Systembolaget, governmentowned wine and spirits retailer in Sweden, don’t receive the same kind of public attention as recognized brands, Nobeco generates awareness and consumer interest, while granting them full control of their own brands. “Nobeco offers smaller brands logistics and distribution services, meaning they don’t have to compete with brands in the same categories, which is often the case in the portfolio of a larger importer. “The model is simple; the goal is to allow our partners to breakeven within a couple of months. Although there should be some indication of spend, we don’t set
Nobeco breaks the mould & brings attention to lesserknown brands by LAURA SHIRK
Available at Scandlines BorderShops on the border of Denmark and Germany, Nordic Beverage Company’s own brands, Polka the Pig, Lucyfer and Nomie, are especially supported via in-house social media and e-mail marketing
a fixed budget at the start of the year in order to provide our partners with the opportunity to halt production in case sales don’t measure up to investment. In our experience, this has proved to be a successful way to conduct business,” comments Rasmusson Rankloo.
Hero products & specialty releases
Additionally, Nobeco continues to distribute its own brands, Polka the Pig, Lucyfer and Nomie, in the Swedish domestic market and travel retail channel. Available at Scandlines BorderShops on the border of Denmark and Germany, these names are especially supported by Nobeco via inhouse social media and e-mail marketing. The company evaluates the performance of all SKUs in its portfolio on a regular basis and applies any relevant lessons to other categories accordingly. Coming up, Nobeco will offer its portfolio to key tenders in the Nordic duty free and travel retail business, alongside its existing agency collaborations. With the intention to offer a product line in each category at some point in the future, the
48 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
company is broadening its portfolio, while trying not to oversaturate the market. “Our products are developed with both the domestic market and duty free and travel retail channel in mind. There is consumer demand not only within travel retail, but also in Europe, as well as other parts of the world. This is confirmation that we must be doing something right. “We will continue to develop products to suit a number of different markets and perhaps create limited launches – if we can identify specialized demand. Hero products and specialty releases that are perceived to be local have piqued interest, not only in the Swedish domestic market, but also within export and duty free,” says Rasmusson Rankloo. With the return of travel, Rasmusson Rankloo believes that category spend will increase and consumer behavior will consist of a combination of planned and impulse purchasing. She notes that many consumers will plan to bring home repeat products and/or purchases and select new products and/or travel retail exclusives on impulse.
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WorldConnect AG - SKROSS
POWERING UP Gerber at SKROSS says finding the right combination of products – between essential and impulse purchases – is vital to the success of the brand by LAURA SHIRK
ith the tagline: a global success with a local connection, WorldConnect AG – SKROSS has combined company vision and brand strategy to reach 10,000+ points of sale worldwide. As a market leader, the Swiss company continues to provide innovative solutions for mobile travelers. Sam Gerber, Co-Founder & Co-CEO, WorldConnect AG – SKROSS, notes that the brand’s mission reflects the Swiss tradition of offering smart, functional and well-designed products to a global audience. “Our core products, the famous SKROSS World Adapters have become the ‘Swiss Army knife’ for travelers. Our company motto is Triple S: Safe + Simple + Swiss. This motto perfectly summarizes our philosophy – everything else is a matter of discipline. When it comes to the execution of our product range and market strategy, we try our best not to compromise in regards to expected standards,” he explains. Describing the pandemic as an opportunity to hit the “reset button,” Gerber explains that SKROSS has been able to strengthen its ties with travel retail operators not only to improve direct supply, but also range composition and POS design and execution. According to the Co-Founder, finding the right combination of products – between essential and
impulse purchases – is vital to the success of the brand.
Tech know-how & practical thinking When asked about SKROSS’ commitment to offering advanced digital tools and services, he says its commitment to innovation occurs via the integration of new charging standards such as high-power chargers with the compact design of its core products. This integration requires technical know-how and practical thinking. Furthermore, Cellularline Group’s acquisition of WorldConnect AG offers the company access to a new channel of technology and innovation. Acknowledging the impact of COVID19 on digital acceleration, Gerber points out that because its offering is considered a necessary commodity, SKROSS doesn’t need to depend on a particular marketing activity to create attention. More importantly, its product range needs to be displayed strategically in-store since its hero product(s) are essential to powering technical equipment in a safe and secure way. Since travelers need fully charged mobiles to show their boarding passes, vaccination certificates, proof of payment and more, the brand guarantees that it will always have the right solutions to keep travelers connected. “The near future will be the time to re-assess our global position. On the
50 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
one hand, we believe that the overall travel environment has changed and on the other hand, we have experienced a remarkable transformation in the focus of operators in terms of reducing the number of brands available and promoting higher spend per passenger (with minimal staff involvement). “As a leader in our category, we have managed to position our brand as the no hassle solution for a retail category that is truly essential for global travelers. Our focus will be to support this claim further by concentrating on services related to product development, management and execution,” adds Gerber.
As a global market leader, WorldConnect AG – SKROSS continues to provide innovative solutions for mobile travelers and follow its Triple S motto: Safe + Simple + Swiss
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Future of Virtual Tastings
Within the duty free channel, Mezcales Casa Armando represents the top three selling Mezcals: El Recuerdo Mezcal, ZIGNUM Mezcal and Señorío Mezcal; the team is prioritizing the way in which it shares information to provide a full 360° experience
Since each Mezcal has its own distinct profile, the company is constantly pivoting between three different outlooks; Valdor at Mezcales Casa Armando says midpandemic presented the opportunity to re-engineer the tasting process and consumer experience
52 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
pproaching the end of 2021, Mezcales Casa Armando continues to navigate the global pandemic and authentically share its product offering by collaborating closely with its partners in both the duty free channel and domestic market. While in conversation with Gustavo Valdor, International Commercial Director, Mezcales Casa Armando, about the future of virtual tastings and hybrid business models post-recovery, he tells Duty Free & Travel Retailing that the company is encountering each daily circumstance as a team. Although current megatrends in the wine and spirits travel retail category include convenience, “better for you” options and at-home consumption, Valdor notes that Mezcales Casa Armando is focusing on its consumer engagement since genuine connection is more important than ever during these unprecedented times. With this in mind, the team is prioritizing the way in which it shares information about how to consume and where to find its product range, providing a full 360° experience. Within the duty free channel, Mezcales Casa Armando represents the top three selling Mezcals: El Recuerdo Mezcal,
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Starting with the seedlings in its greenhouses, Mezcales Casa Armando systematically plants, harvests, cooks, mashes, ferments, distills, ages and bottles all of its products in-house
stuffs for pairing, which are curated to complement each audience members’ background. “To enhance the remote tasting experience, we include sensorial dynamics and elements that help to define the difference between taste and aroma and encourage attendees to ‘visit’ the city of Oaxaca and our distillery. As an example, we include sample pieces of our oak barrels and the local black ceramic in our kits,” states Valdor. Pointing out that mid-pandemic presented the opportunity to re-engineer the tasting process, he adds that the company’s new approach to the overall consumer experience is a product of the pandemic that has helped to maintain the interest of its virtual audience and an invaluable tool.
Listen & learn
Zignum Mezcal and Señorío Mezcal. Since each Mezcal has its own distinct taste profile and character, the team is constantly pivoting between three different outlooks; however, when it comes to communicating with its duty free partners, the company acts as one. “The industry has had to balance different venue restrictions, requiring close coordination between partners. As we continue to experience airports with varying degrees of restrictions around the world, from limited in-store capacity to ‘hands-free’ purchasing, we are in regular communication with our duty free partners,” explains Valdor.
Tasting kits & sensorial elements
With the return of travel in sight, Mezcales Casa Armando expects that the post-pandemic landscape will present consumers with the choice to participate in virtual or in-person tastings. Valdor notes that the constantly adapting role of brand ambassador is important to successfully sharing Mezcales Casa Armando’s message across its wide consumer base. According to Valdor, considering positive feedback and the convenience and efficiency of the experience, the team believes that even through virtual sessions, participants can learn more about the mysticism, heritage and history of Mezcal. Moving forward, it’s essential that brand ambassadors can communicate their passion, energy and knowledge both online and in-person. “Mezcales Casa Armando has developed a dynamic range of materials to support virtual tastings such as tasting kits that comprise our product range, glassware and non-perishable food-
54 ASIA & EMEA DUTY FREE & TRAVEL RETAILING OCTOBER 2021
When asked about key takeaways from the last year that Mezcales Casa Armando has applied to its business model in travel retail, Valdor responds with three lessons. Firstly, he remarks the reaction time from production to point of sale needs to remain the same as pre-COVID. “When a consumer is seeking a product and not seeing their regular brand, they will find an alternate option, which potentially translates into the loss of a consumer,” he comments. Secondly, quality cannot be compromised. The company operates its production from seed to bottle and takes pride in overseeing every step of the process. Starting with the seedlings in its greenhouses, Mezcales Casa Armando systematically plants, harvests, cooks, mashes, ferments, distills, ages and bottles all of its products in-house. Thirdly, listen to and learn from the consumer. When all is said and done, the team creates Mezcal for the consumer with the goal to share the spirit and its culture with the rest of the world – and this requires Mezcales Casa Armando to deliver without exception. The team’s most recent promotional focus involved delivering a DIY tasting experience to reveal how Mezcal is truly relished in Mexico.
El Recuerdo Mezcal 5 Seconds
Discussing upcoming plans in the travel retail channel, Valdor states Mezcales Casa Armando is working on the launch of El Recuerdo Mezcal 5 Seconds; a Reposado Abocado variant with five worms in the bottle. This variant celebrates UFC’s Jorge Masvidal’s fastest knockout in Ultimate Fighting Championship history, which occurred in 2020. He says El Recuerdo’s partnership with Masvidal represents Mezcal’s fighting spirit – a spirit born from family tradition – and adds the category is now a “heavy hitter” in the market. El Recuerdo Mezcal 5 Seconds will first launch in the US domestic market; followed by the Mexico domestic market and Mexico duty free. A select number of cases will be available at duty free outlets worldwide.
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