Asia TFWA WE Oct 2017 by Paramount Publishing Ltd.

TFWA WE 2017

DUTYFREEMAGAZINE.CA OCTOBER 2017 · TFWA WE · VOL 21 · NO 3

Costa Cruises opens own port in China p. 14 Sydney Airport outperforms expectations p. 24 11.09.17 Narita Airport unveils arrival DF stores p. 26

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LETTER FROM THE EDITOR

No bounds A

sia-Pacific seems to offer an endless number of surprises and opportunities in travel retail, so it’s no surprise that it’s surpassed Europe as the industry’s largest market and shows no signs of slowing down in its dominance anytime soon. This year, “cruise” is the big news. Our Singapore-based correspondent was able to attend the dramatic opening ceremony at DFS’ renovated stores at Singapore’s Cruise Centre’s Harborfront Terminal, and she’s had in-depth interviews with Costa Cruise Lines, the first major international cruise liner with its own port in China, and the Senior Vice President of Starboard, the luxury cruise retailer, all in this issue. Also in this issue, Eraman’s General Manager discusses how the company weathered tremendous storms in Malaysia, we take a close look at Narita Airport’s new Arrivals duty free policy and stores, and we find out how Heinemann and Sydney Airport are joining forces to produce success on a large scale. In Korea, Shilla and Incheon Airport discuss the ever-changing duty free climate in the country, and their main customer: the Chinese traveler. Duty free does not exist without brands, and in this issue retailers and brands discuss launches, new offerings and promotions, all to inspire the Asia-Pacific consumer to buy. The world comes to Cannes for TFWA WE. At Asia Duty Free, we want to provide the most up-to-date and relevant information to industry members for their region as they meet and greet colleagues from around the world at this spectacular event. Kindest regards,

Hibah Noor Editor-in-Chief hibah@dutyfreemagazine.ca

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

OCTOBER 2017 · TFWA WE · VOL 21 · NO 3

Asia Duty Free & Travel Retailing (ISSN 1360-9548) is published by Global Marketing Company Ltd. 26 Pearl Street, Mississauga Ontario L5M 1X2 Canada. It is distributed in the following countries, states, regions and territories on the Asian continent and in the Pacific Rim: Australia, Bangladesh, Bhutan, Brunei, Cambodia, China, Fiji, French Polynesia, Guam, Hawaii, Hong Kong, India, Indonesia, Japan, Macao, Malaysia, Maldives Islands, Myanmar, Nepal, New Caledonia, New Guinea, New Zealand, Philippines, Saipan, Samoa, Singapore, South Korea, Sri Lanka, Taiwan, Thailand, Tonga, Vanuatu and Vietnam. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or editor. October 2017, Vol 21, No.3. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. ©2017 Asia Duty Free & Travel Retailing.

ASIA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemagazine.ca PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@dutyfreemagazine.ca SENIOR EDITOR Wendy Morley wendy@dutyfreemagazine.ca ASSOCIATE EDITOR Jas Ryat jas@dutyfreemagazine.ca SOCIAL MEDIA COORDINATOR Eman Khan eman@dutyfreemagazine.ca ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Rebecca Byrne Mary Jane Pittilla Claire Malcolm

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

CONTENTS

10 85

What’s inside LEAD STORIES 10 DFS ECONOMIES OF SCALE

Asia Duty Free was the sole trade media present at the dramatic ceremony of the refurbished and extended DFS stores at Singapore Cruise Centre’s Harborfront terminal

14 Costa Cruises CRUISING TO SUCCESS

Costa Cruises, the largest Italian travel group and Europe’s favorite cruise line, was the first major international cruise liner to have its own port in China

18 Starboard Cruises SALES ON BOARD

David Goubert, Senior Vice President for luxury cruise retail and Asia, Starboard Cruises, discusses cruise retail

26 Narita Airport FIRST TO ARRIVALS

In an industry first for Japan, Narita Airport will be introducing arrival duty free stores later this year

30 Eraman MEETING CHALLENGES HEAD ON

Eraman has been faced with challenging times and had to constantly adapt to unforeseen circumstances over recent years

38 Bhatia Traders BHATIA GEARS UP TO GO MOBILE

The UAE’s diverse port operations demand a one-of-a-kind approach to duty free sales and Bhatia Traders has the answer

14 FEATURES Dufry introduces new cruise center 20 Sydney Airport outperforms expectations 24 Difficult times for Korean retailers 34 The ultimate destination for Shiseido 46 Molton Brown’s totally fragrant experience 48

Buying on impulse Surprises in store at Nice Côte d’Azur Furla’s one of a kind GQ Award for Wild Tiger Rum owner Desigual lends color to travel retail

50 56 60 72 70

LEAD STORIES

58 MCM MADE TO MOVE

Luxury lifestyle brand MCM is forging ahead with key openings in major airport locations worldwide while targeting the on-the-move millennial generation

62 Misaki TIMELESSLY FASHIONABLE

There’s lots in store at Misaki for its 30th birthday this year, including a new travel retail strategy, glamorous collections, and a fresh logo

64 Tateossian GETTING PERSONAL

Tateossian’s new Lucky Me jewelry collection can be personalized with letters, charms and flags for a unique look

66 Heinemann Tax & Duty Free A FLAIR FOR FASHION

Global travel retailer Heinemann Tax & Duty Free has reinvented the Fashion & Accessories category at Sydney Airport since taking over the concession

68 Editor’s Pick FIT TO TRAVEL

These must-have products are the latest travel-friendly items from top suppliers

FEATURES Looking beyond the label 76 MBWS’ continued progression 82 Diverse Flavours trades on diversity 84

Royal Dragon Vodka makes a splash 86 Kavalan’s constant innovation 88 Tobacco news 90

74 Anthon Berg BUYING CHOCOLATE EXPERIENCES

In an exclusive interview, André Haunsø Kampmann, Senior Brand Manager of Anthon Berg International, reveals the confectionery company’s recipe for success

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DFS

Two Chinese dragons blessed the new DFS stores at the Harborfront terminal

Economies

OF SCALE Asia Duty Free was the sole trade media present at the dramatic ceremony of the refurbished and extended DFS stores at Singapore Cruise Centre’s Harborfront terminal by

REBECCA BYRNE

T Christina Siaw, CEO of SCC and Wilcy Wong, DFS Group Managing Director, Singapore and Indonesia opened the new DFS stores at the Harborfront terminal

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

he opening ceremony for the new DFS stores was a colorful and theatrical affair. Two Chinese dragons, symbolizing wisdom, power and wealth, danced in front of the newly revamped liquor and tobacco store before moving through the beauty and confectionery stores and on to the Arrivals store, bestowing good fortune in their path. Wilcy Wong, DFS Group Managing Director, Singapore and Indonesia and Christina Siaw, CEO of SCC, joined forces to cut the red ribbon to open the store, and Wong rolled a pineapple into the store to ensure future prosperity. Invited guests then toasted the opening with champagne. The addition of the SCC consolidated duty free concession at both Tanah Merah and HarborFront makes perfect sense for DFS as it offers a crossover with its Changi Airport operation. Customers traveling through the DFS renowned duplex store can enjoy promotions designed to promote ferry travel to the nearby Indonesian Islands. During June and July in 2017, DFS Changi gave out pairs of Majestic Fast Ferry tickets to Batam to customers spending over S$120 (US$89) at its arrival stores. DFS also supported Changi Airport Group’s travel fair initiative aimed at promoting the Ferry-

DFS

Wilcy Wong joined DFS colleagues and partners at the Arrival Store

Fly packages via Changi Airport. DFS gave shopping vouchers for its Wines & Spirits as well as a gift with purchases at the Fashion & Watch boutiques at the airport. DFS and SCC have been working together over the past two decades. However, this new partnership gives DFS an expanded 558-square-meter of retail space and access to a further 6.3 million customers annually. At the grand opening, Wong said: “We are honored to have been awarded SCC’s first ever consolidated duty free concession at both Harborfront and Tanah

Merah ferry terminals. This means that DFS is now able to extend the great retail experience that it is globally known for to travelers at these terminals across all categories including wine, spirits, tobacco, beauty and confectionery.” Siaw of SCC congratulated DFS on all the work since the award of the concession in December 2016 saying: “We wanted a partner that could deliver a seamless one stop and interactive shopping experience to passengers of cruise and ferry operators who are our customers. From the design of the duty free shops to the space optimization to the

Wilcy Wong rolled a pineapple into the store to ensure future prosperity

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

product mix and points of service, the DFS team has invested much time and resources and done an excellent job.” She also commented that a single duty free operator would be able to maximize space productivity through an optimal mix and improve the look and feel over a wider range of offerings. “They will also enjoy economies of scale with a larger variety of products to suit every taste and budget.” Siaw concluded by saying that the SCC looks forward to working with DFS for another five years and to continue to provide a delightful travel experience for all guests.

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COSTA CRUISES

Cruising to success

Costa Cruises, the largest Italian travel group and Europe’s favorite cruise line, was the first major international cruise liner to have its own port in China by

REBECCA BYRNE

Costa Cruises has five ships in Asia

osta was the first international cruise company to operate regular cruises in China and Asia, bringing its special brand of “Italy at Sea” to the Chinese market in 2006. The Costa Cruise Asia office opened in Shanghai to capitalize on the rapid growth in demand for cruises in China. Then, Costa had one ship. Now it has five ships in Asia and deploys ships out of multiple home ports across China including Shanghai,Tianjin, Guangzhou, Qingdao, Shenzhen, Xiamen and more, offering regular short cruises of 5-6 days as well as long itineraries such as an 86-day world cruise. Its rapid growth continues, both organically and through new partnerships. The most recent addition to the Asia fleet is Costa neoRomantica. This liner is dedicated to the Japanese market where demand has also started to grow and is based in the Sea of Japan. Zack Chen, Senior Onboard Revenue Manager, Costa Pacific Asia Operations, believes that as an operator it is essential that Costa Cruises is part of the growth as well as encouraging the market to grow across the Asia Pacific Region. Duty free retail space on the cruise liners ranges from 400 to 900 square meters. Chen points out that retail is an inherent component of the cruise products alongside F&B and entertainment, and he sees great scope for development as the industry continues its dramatic growth. “I believe the Chinese market still has plenty of potential. If you look at the cruise penetration rates and compare to the growth of the more mature markets, China is still in its infancy. We have seen tremendous exponential growth in the past 10 years in the markets and I think this growth will continue. It is never a linear growth; there will be ups and downs like any other business, but ultimately the total number of cruising passengers will continue to grow.”

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

In-House Retail has been successfully piloted on Costa Fortuna

Compared to retail at airports, where the per capita spend is high but penetration is low, Chen states that on cruise liners, the penetration rates are much higher, generallly 40% and above. On Costa cruises, even though space is constrained, there can be 2000 or more SKUs on board. Within the mix cosmetics are extremely popular, both international and Korean, as are both luxury and affordable watches. Fashion and luxury jewelry as well as destination products are also firm favorites. However, success in retail relies on the total offering of the cruise, not just the number of SKUs, as Chen comments: “We look at maximizing the overall guest experience with regard to retail. For example, entertainment can be part of the retail experience - you can provide the guests and customers with a more satisfying experience with initiatives such as treasure hunts to win certain prizes or vouchers from the brands.” At present there is no option for home delivery, but Chen believes it is something that will be possible in the future as he feels that it makes more sense for bigger items such as art and

COSTA CRUISES

luggage to be sent from a warehouse rather than the cruise. Similarly he is unfazed with internet price comparisons; in fact he sees it as an advantage. “As we offer a price match guarantee, we encourage our guests, Zack Chen, Senior Onboard who have access to conRevenue Manager, venient wifi on board, to Costa Pacific Asia Operations check prices so that we remain competitive.” Costa Cruises has outsourced its duty free to Starboard Cruises. Chen sees the pros and cons of both approaches. “On one hand we are not specialist retail operators in China and we Costa was the first international cruise company to operate regular cruises in China and Asia

Duty free retail space on the cruise liners ranges from 400 to 900 square meters

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

sell a lot of products so we need to consider warehousing and logistics if we want to be the retailer.” With this in mind, a year ago, the company set up a travel retail department to look at options. Costa Cruises has introduced some in-house retail with regional and destination products which is being piloted on the Costa Fortuna. Chen continues: “In-House Retail was trialed on Costa Fortuna and has proven a success. So this project has been rolled out onto Costa Serena and Costa Atlantica as well, both launched in August 2017.” Currently Costa is focusing on Japanese products that do not compete with its main concessionaire. These include personal care, daily care, kids products and snacks. It has taken a space of approximately 16 square meters that had a low footfall and transformed it into a destination retail area. As a result traffic to that area has increased significantly. “We are very pleased with the sales,” comments Chen. “It has exceeded expectations and is still growing.” Costa is looking at rolling this concept out throughout its fleet in Asia, making it an itinerary category. Chen mentions that they are looking at bringing in Korean local products on some lines. When asked where he sees retail in five years’ time, Chen sees huge scope for using retail to enhance the overall guest experience. He also sees huge benefits in harnessing the power of the mobile devices during the journey to encourage an increase in spend. This can include highlighting a discount, offering vouchers or encouraging celebrations. “We need to use the interconnectivity to enhance the guest experience,” says Chen. He is also looking forward to the potential of virtual reality in shopping. With the rapid growth in the cruise market, the ability to capitalize and exploit the opportunities in the duty free market will be key to success. As pioneers in Asia, Costa Cruises will continue to lead the way.

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STARBOARD CRUISES

Sales on board

David Goubert, Senior Vice President for luxury cruise retail and Asia, Starboard Cruises, discusses cruise retail

REBECCA BYRNE

Q: What is the scope of your operation in the Asian cruise industry? A: We are on four cruise lines in Asia – Costa Cruises, Genting/Dream Cruises, Royal Caribbean International and SkySea – with more than 400 brand offerings covering significant retail spaces on board. We continue to see positive results in Asia and are excited to be the leaders in the Asia cruise retail market.   Q: What is the potential of cruise retail? A: We believe Asia will only get stronger as a cruise retail market, especially for those under 40. We think cruise retail will benefit from the enormous expansion in the Asian cruise population, while adjusting the retail landscape to create a better experience to the younger generation – brands, products and services that appeal to younger cruise guests who potentially have high disposable income.

Q: How are you increasing passenger spend during the cruise? A: To improve spend we highlight the best reasons to shop onboard, which include having the most favorable products, prices and service, and we offer retail promotion events customized for each cruise line, based on our understanding of our core guests. We reach out to VIP guests with personalized invitations to special shopping experiences. We have the best teams, we provide the best training and we offer unparalleled customer service. We believe strongly that success is about building relationships with our guests through one-on-one interaction so we know just what each guest wants. Q: Are you currently running any high impact/notable promotions? A: In every market we serve, our onboard events are designed to elevate the shop-

Starboard offers more than 400 brands

The company offers a wide variety of high-quality brands from Asia as well as from international companies.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

David Goubert, Senior Vice President for luxury cruise retail and Asia

ping experienced from a mere transaction to an experience filled with memories that guests can relive after the cruise. We tailor each event to the particular market. We feature the New York at Sea Shopping Festival, with various promotions to bring a true New York shopping experience to the guests onboard. There is Beauty of Broadway, the New York Fashion Show and Diamond District Fine Jewelry Bidding. We recently brought the Omega 60th Speedmaster anniversary event on board to celebrate the marvels of the iconic watchmaker and give our guests an enriching consumer experience. Meanwhile, responding to guests’ summer beauty interests, we’ve also launched the Summer Beauty Festival, engaging top international brands such as Estée Lauder, Clinique, La Prairie and SKII. It’s a new way for our beauty specialists to engage with guests as they demonstrate skincare rituals, makeup looks and fragrances. Q: Which of your brands are doing particularly well? A: We offer a wide variety of highquality brands from Asia as well as from international companies. For instance, in beauty we offer Estée Lauder, Lancôme, Kiehl’s and La Prairie, with highly popular Asia brands including SKII and History of Whoo. Our handbag and accessories brands include Michael Kors, Burberry, Coach and Salvatore Ferragamo, all of which are very popular among our Asian guests. Mikimoto is a successful jewelry brand for us, and watches from brands like Longines, Omega and Bulgari also do very well.

DUFRY CRUISE SERVICES

According to the Cruise Lines International Association, ocean cruise passengers reached 24.7 million in 2016, and for 2017, CLIA projects another year of growth for the industry with a passenger forecast of 25.8 million

Full steam ahead Dufry introduces its new Miami-based cruise center of excellence as it launches retail operations onboard Norwegian Cruise Line’s Joy in China

eading travel retailer Dufry is embarking on an epic voyage with the creation of the Dufry Cruise Services center of excellence based in Miami, in line with its strategy to expand its cruise ship business. And in another exciting development, Dufry recently started retail operations onboard the Joy, a Norwegian Cruise Line vessel, especially built for and customized to the Chinese cruise market. The cruise line channel is a strategic growth area for Dufry as it is globally growing and offers new opportunities, the company said. Dufry Cruise Services combines the proven cruise ship expertise formerly known as Flagship Retail Services Inc with the global strengths and resources of the Swiss group. While Florida-based Flagship Retail Services has a knowhow that is second to none in the sector, Dufry offers the resources and support of a global company, such as centralized procurement and purchasing, store development, marketing and logistics as well as supply chain. Additionally, through its presence

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

in 63 countries, the group has a global support network for its growing cruise operations, while at the same time providing proximity to the markets, customers and business partners.

Entering the Asian cruise market From an operational perspective, Dufry’s cruise ship and seaport sales account for 2% of group revenue. Its cruise ship

operations cover routes from the US to Asia, the Caribbean, Alaska, and Europe. The company operates a total retail space of around 9,000 square meters, ranging from 140 square meters to almost 2,000 square meters per store on vessels operated by Norwegian Cruise Line, Carnival and Pullmantur Cruises. In total, Dufry is present on 17 cruise ships and offers a full range of traditional duty free products as well as brand boutiques similar to airports

Cruise Services

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DUFRY CRUISE SERVICES

and specialist shops, such as Colombian Emeralds jewelry stores. Dufry recently started operations on the Norwegian Joy with nine shops covering a retail space of 1,950 square meters. The Joy is the first Norwegian cruise liner which has been built specially for Chinese travelers. The new Breakaway-Plus Class ship caters for up to 3,850 guests with luxurious suites in its exclusive ship-withina-ship complex. According to Dufry, this is an important strategic step to open the Asian cruise market and further expand this growing channel. According to the Cruise Lines International Association (CLIA), ocean cruise passengers reached 24.7 million in 2016, and for 2017, CLIA projects another year of growth for the industry with a passenger forecast of 25.8 million. Part of the

growth can be attributed to the ongoing development of the Asian market, whose ocean capacity was up by 9.2% in 2016, representing a 38% upswing when compared to 2015.

Asian passenger numbers increasing rapidly Americans constitute the majority of cruise passengers, with other nationalities, such as Canadian, British and other European passengers making up the remainder, and with Asian passengers increasing rapidly. To maximize its business potential, Dufry intends to maintain a commercial strategy that is flexible enough to account for varied customer types and nationalities. Rene Riedi, CEO of Division 4, Dufry, said: “The new operational offices will

complement the current operations and logistics-purchasing platform, in order to have our resources close to the main cruise ship itineraries. It allows a global footprint with specialized local knowledge and regional expertise. These offices and platforms will receive support from the Center of Excellence and other relevant teams across the Dufry business, while maintaining a close relationship with, and management of, the market, the customer and the operation itself. “We firmly believe that this is a remarkable step forward for this key strategic area of growth for the company and look forward to a continued success, hand-in-hand with our partners, and to expand our business even further as opportunities arise in this fastgrowing market.”

Dufry started retail operations onboard the Joy, a Norwegian Cruise Line vessel, built for and customized to the Chinese cruise market

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

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SYDNEY AIRPORT

Sydney Airport outperforms expectations Australia’s leading airport continues to transform its offering to an ever increasing number of passengers

13 global designer brand names make up the Luxury Precinct in T1

Glyn Williams, General Manager Retail, Sydney Airport

In an Australian airport first, icebreaker has opened at Sydney Airport

ydney Airport captures around 45% of the arrivals and departure market to Australia and its demographic has changed dramatically over the last decade. According to Glyn Williams, General Manager Retail, this makes it an excellent entry opportunity for brands that have previously not considered airport retail. Williams comments: “It is hard work convincing some brands that Sydney Airport is an appropriate place, but the ones that have come soon realize than we fulfill our promises”. Nowhere is this more evident than in the Luxury Precinct in Terminal 1 which was completed in July with the opening of Rolex in an Australian airport first. This year Hermés and Gucci have opened alongside other high profile brands such as Burberry and Tiffany. Turnover from the 13 global designer brand stores is already above expectations. Each of the airport’s three terminals has its own personality and product. At the recently redeveloped Terminal 1 there is the best of global and best of local for its international travelers.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

This includes an increasing number of Chinese visitors. Sydney Airport is now China’s number one destination for long haul. In keeping with the ‘best of local’ retail strategy, the new T1 Lifestyle Precinct is a dedicated space where passengers can immerse themselves in a range of products that showcase a rich sense of Australian culture. Here, the airport has unveiled the very best of Australian brands, including R.M.Williams, Australian Way, Merino Collection, Rip Curl and Toby’s Estate. Furthermore, knowing that passengers love a quality cup of coffee before they fly, the airport has positioned Toby’s Estate, a revered coffee brand that hails from Sydney’s metropolitan inner west district, within the precinct. And with the ‘best of global’ in mind, fashion and accessories store, Icebreaker has also joined Sydney Airport in an Australian airport first, located just before passengers head through to Customs at T1 International. Terminal 2 is becoming the ‘terminal of cool’ with brand offering targeting the 20-35 age bracket. At least 10 new stores are

R. M. Williams and Merino Collection are part of the T1 Lifestyle Precinct which showcases popular Australian brands

The opening of the Rolex store completes the luxury precinct at T1

in the pipeline and the food court has already been transformed with an earthy, modern design offering fresh food outlets such as SumoSalad alongside regular fast food options. Terminal 3 will be the premier domestic terminal with its high proportion of business travelers. Sydney Airport took back the lease from Qantas in 2015 but many of the store leases do not expire until 2019. Williams is in discussions to bring lease dates forward and has already introduced new exciting brands such as Calvin Klein and Mac. The dwell time for passengers at the

terminal is around two hours and spend is similar to the Chinese average. The potential is clear, and Williams is keen to ensure the right retail mix is installed as soon as possible. Williams predicts that terminals 2 and 3 will take the next 18 months to fully transform at which time the leases for Terminal 1 will be coming up for renewal. With international growth at Sydney Airport exceeding expectations, and many retailers outperforming, the future looks very positive.

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NARITA AIRPORT

T1/North St: Sales at Narita Airport improved during the second half of 2017

First to arrivals by

REBECCA BYRNE

ntil recently, duty free products in Japan could only be sold in the departure areas of international airports. However this is all set to change. In order to capture more of the duty free market now that international travel is so commonplace, the Japanese government has relaxed the ban on arrivals stores. Narita Airport, Tokyo’s major international hub, was ready for this decision and has opened its first Arrivals store in Japan. The airport plans to open a total of five shops: two in Terminals 1 and 2 and one in Terminal 3. Two shops, Fa-So-La Arrival Duty Free North and Fa-SoLa Arrival Duty Free South opened in Terminal 2 in September. Three shops in Terminal 1 and a shop in Terminal 3 will also open by the end of this year. The floor space of the Terminal 1 South

store will be around 50 square meters with the other stores being about 100 square meters. The shops will be operated by NAA Retailing Corporation and will initially sell overseas liquor and tobacco brands. Narita Airport saw mixed results in 2016 with retail sales down 7% on 2015 figures at 108.6 billion yen (US$1 billion), a decrease of 8.3 billion yen (US$77 million). The figures showed a year-on-year decline in the first half of the year due to the strong yen. Furthermore, increases in China’s customs tariffs in April and more stringent customs inspections on entry into China led to a negative impact on customer spending among Chinese passengers, which was down 14% from the previous year. However, sales increased in the second half due to promotional campaigns and a slowdown in an appreciating yen. In addi-

Sales were boosted during 2017 by the opening of the Dining Terrace in Terminal 1 and new brand boutiques in 5th Avenue at Terminal 2

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

In an industry first for Japan, Narita Airport will be introducing arrival duty free stores later this year tion, sales were boosted by the opening of the Dining Terrace in Terminal 1 and new brand boutiques in Narita 5th Avenue at Terminal 2. An airport spokesperson commented that the expansion of shopping areas and refurbishments of shops will continue in order to draw in customers. Additionally, the airport will keep introducing popular products and sales promotions to boost sales. Perfume and cosmetics, liquor and tobacco, fashion, and confectionery are the core pillars of retail sales. In all categories, products that are Japanese are extremely popular. Data from Narita International Airport Corporation shows that the average spend among Chinese passengers has shown a recent recovery. While results for the first half of 2016 were down 15% and the third quarter was down 13%, the fourth quarter saw an improvement to just 2% below the same period in the 2015. Sales to Chinese passengers accounted for over 50% of total sales in 2016. The airport spokesperson said that the airport expects to see a continued increase in the number of visitors from China and as a result is working to offer more convenient shopping with a greater range of payment applications targeted at this demographic. In September 2016, the airport introduced Alipay and WeChatPayment payment solutions and UnionPay, the main method of payment used by Chinese customers. The airport also launched a sales promotion website for Chinese customers in October 2016. The site provides information on the respective duty-free shops at Narita and approximately 330 products.

â&#x20AC;&#x201A; NARITA AIRPORT

It directs users to the pre-ordering site of each shop, raising awareness of the preordering sites and encouraging their use. Information on retail offering and promotions is publized via social networking services and other electronic media, as well as overseas travel magazines and inflight magazines published by the airlines. For Chinese customers, the airport has a corporate account on the Chinese social networking app, WeChat, and also uses the Discover platform on the Alipay app to supply this information. Similarly, for Japanese customers, information is supplied through Naritaâ&#x20AC;&#x2122;s corporate account on Facebook, which was set up in December 2016, and Instagram, set up in May this year. Although the four duty-free shop operators at Narita Airport do not offer any products for sale on any domestic or overseas e-commerce sites, they have been operating their own product pre-ordering sites. These sites allow passengers to order duty-free and tax-free products in advance and then purchase the ordered goods at the duty-free shop before departing from the airport. During 2017, a new strategy is being implemented to publicize the attractions of Narita Airport, making use of the internet, social networking services and other electronic media to step up dissemination of information during Chinaâ&#x20AC;&#x2122;s National Day and Lunar New Year as well as holiday periods in other countries when travel to Japan peaks. Passenger figures were the highest on record for the second year in succession in 2016 due to a steady trend in Japanese passenger traffic, with a significant increase in non-Japanese passengers, and strong growth in domestic passenger numbers. Passenger numbers at 39.62 million were up 4.4% from the previous year, with international passengers up 4.4% at 32.41 million and domestic passengers up 4.7% at 7.21 million. It is predicted that 40.6 million passengers will visit the airport in 2017, which is close to the target for 2016-2018 of 43 million. The future for Narita Airport looks very positive. With the rise in visitor numbers to Japan and new shops, in particular the arrivals stores, and renovating existing stores, Narita Airport has set a target of 125.3 billion yen (US$1.1 billion) in airport retail sales for 2017, a 15% increase on the previous year.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Concessionaire Fa-So-La, already in T1 at Narita, will run the Arrivals store

Narita will open the first Arrivals store in Japan

Drawing in the Anime tourists In September 2016, the Anime Tourism Council was established to capitalize on the popularity of Japanese Anime. As a member of the council, Narita Airport helps to publicize areas in Japan for Anime pilgrimages, which helps increase tourism and revitalize local economies. As the first of a series of initiatives, Narita supplied information on the 88 Pilgrimage Anime Sites in conjunction with the announcement by the Japan Anime Tourism Association of of Japanese Anime during the last quarter of 2017. In the future, the airport is looking at the possiblity of setting up a booth for selling anime-related goods in its passenger terminals.

40 YEARS AND COUNTING

Over the years we have grown into a multi-faceted business organization; leading the space when it comes to operating Duty Free shops, Seamenâ&#x20AC;&#x2122;s clubs and Bonded Warehouses across seaports in UAE We strive towards our mission to be the partner of choice for our customers and suppliers ...and we are getting better at it everyday!

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ERAMAN

Meeting challenges

head on

Faced with challenging times, Eraman had to constantly adapt to unforeseen circumstances in recent years by

REBECCA BYRNE

90% of Eraman’s business is at Kuala Lumpur Airports

t has been two years since Zulhikam Ahmad came on board Malaysia Airports (Niaga) Sdn Bhd as General Manager. His appointment came after the three airline disasters in 18 months, which seriously impacted passenger traffic through Malaysia’s main airport, KLIA, in particular from China. His hiring also happened to be just at the time of the klia2 opening. It was as Zulhikam says “a tough year for us.” Up until then, growth had been double digit but 2015 was crunch time. “We had become comfortable as we were in a dominant position in our retail environment and the number of shops we operated had doubled. So when the downturn hit us, it was hard. We had to assess our marketplace and we had to rightsize the growth.” Just as Malaysian Airlines had to realign its routes to grow, Eraman reduced the number of outlets to become smaller but more profitable. Zulhikam Ahmad, General Manager, Malaysia Airports (Niaga) Sdn Bhd

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

In 2013 Eraman had become the main concessionaire in the newly opened klia2. However, due to the unforeseen disasters that ensued, passenger numbers did not meet expectations. Eraman had tendered aggressively for the contract at the airport, expecting higher numbers, and when this did not translate, tough decisions had to be made. Zulhikam points out that they were not the only retailer affected; other high profile names also had to close stores in the Emporium. This rightsizing strategy has already shown benefits as Eraman is now in a much more competitive position and made a double digit sales growth in 2016 in comparison to 2015 when Eraman still grew, but not profitably. During 2017 first quarter, KLIA international movements were up 12% as customer confidence in Malaysia Airlines recovered. Malindo Airlines’ move from klia2 to KLIA has also helped. 90% of Eraman’s business is at Kuala Lumpur Airports. However, the other international airports in which it operates are growing, in particular Kota Kinabalu. This is because of an upsurge in international flights, in particular from China due to the increasing popularity of the eco-tourism in the region. Penang also attracts Indonesian travelers for medical tourism. Eraman is implementing a far-reaching rebranding program that is being rolled out in a co-ordinated approach, covering the website, stores, brands and uniforms. This will be done in line with the end of tenancies, which come up for renewal in 2019. In the meantime, Eraman will upgrade where possible, refreshing layouts and bringing in new activations. Recently the company has opened Express, a newly renovated and rebranded store in KLIA. The company is also expanding its food and beverage franchise business under the Gloria Jeans Coffee brand, with two kiosks opening in August. These Gloria Jeans Coffee kiosks are located at level 3 International Arrivals hall and level 5 International Departures of KLIA.

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ERAMAN

Recent initiatives to drive business include the Eraman Shopping Extravaganza Buy & Win Campaign

The fastest growing categories remain perfumes and cosmetics followed by confectionery. Liquor & Tobacco is growing, but not as quickly as confectionery. Malaysians make up 60% of the purchasers followed by the Chinese, and increasingly business is done on arrival. Zulhikam points out that they are looking at maximizing arrival business with the use of digitalization and visual merchandizing. Eraman is also looking to reintroduce its ecommerce offering. Zulhikam says: “We have a big data analytics project looking from the airport perspective to improve the total airport experience for everyone. Zulhikam also has his eye on new partnerships. At the recent TFWA conference in Singapore he was particularly impressed with companies that had innovative new booths, such as Coty, as they made much more of an impact. He also commented on the companies that are now going direct to retailers. “It is exciting that we can now work direct with some brands such as Carolina Herrera, Paco Rabanne, Nina Ricci and Valentino under the House of Puig, so we can have a much closer collaboration. Access to brands is key for us.” In 2013 Eraman became the main concessionaire in the newly opened klia2

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

He enjoys the challenges of the ever-changing environment in which he operates, saying, “We have been forced to change, and I am very open and receptive to change, I always try to challenge myself, my team and my partners – I am always looking for ways to grow. We are always looking for new partners and opportunities to engage with them. Space is a constraint now; when we have more space we will go out and pitch for new spots.” Eraman contributes a significant portion on non-aeronautical business to its owner Malaysia Airports Holdings Berhad, of 17.7%. There has been a consolidation in the industry and Eraman is only present in Malaysia, so could the next step be overseas? Zulhikam is pragmatic in response to the question. “We have grown Eraman and we do need to grow more, but strategic partnerships will depend on our parent company, MAHB. But anything is possible in the future.” However for now Zulhikam says Eraman is concentrating on the present, working closely with partners and suppliers to grow profitably in the domestic market. Recent initiatives to drive business and reinforce the value it offers to shoppers include the Eraman Shopping Extravaganza Buy & Win Campaign held over 2017 and 2018. The company has been working with Malaysia Airports Holdings Berhad (MAHB) to create more excitement in the airport by offering a bigger and better prize like a BMW 318i car for each of the three cycles of the campaign: July/August 2017; November/December 2017; and April/May 2018. This Buy & Win promotion will also be part of Malaysia Airport’s 25th Anniversary celebration campaign, which is designed to create better experiences for travelers. Coveted prizes on offer for all customers in this anniversary campaign include a prestigious Lamborghini car. Zulhikam comments that since he has come on board, he has tried to do things differently and make Eraman more aggressive in its industry. “I came to Malaysia Airports for a challenge from five years at 7Eleven Malaysia. I believe that constant change is good. I am changing the way I run my business this year compared to last year. We like to challenge not just ourselves, but also our suppliers and our distributors. We need to move faster to grow better and capitalize where we can.” With Zulhikam at its helm, Eraman looks poised for a successful future. The fastest growing categories at the KLIA remain perfumes and cosmetics followed by confectionery

KOREAN DUTY FREE The Shilla Duty Free is a main concessionaire at Incheon Airport

Testing times ahead

im Bumho, Deputy Executive Director of Concessions Development Group, Incheon International Airport Corp, voices his concern about the increase in travel retailers who are targeting a decreasing number of shoppers saying: “Due to the numerous operators, competition between downtown, including online, and the airport could become severe. This will negatively impact the profitability of operators in the future.” However, in spite of difficult trading enviroment, half-year sales at Incheon Airport have increased by approximately 4% compared to 2016. Although the number of Chinese passengers visiting Korea has diminished due to the THAAD crisis, the balanced passenger demographic of

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Korean duty free retailers are facing difficult times with the well-documented decline in visitors from China and the increased competition from downtown stores. Asia Duty Free asked two operators, Incheon Airport and The Shilla Duty Free, how they are combatting the downtown by

REBECCA BYRNE

The Shilla Duty Free has a sizeable downtown store in Jeju, South Korea

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Korean (over 50%) and other nationalities visiting the airport has helped to increase sales. Terminal 2 is expecting to open early next year with newly furnished duty free shops. Kim is expecting to see quantitative and qualitative growth in Incheon’s duty free business during 2018. Furthermore, he hopes that the THAAD issue is settled in the near future and passenger traffic will continue to grow so that current struggles of duty free operators are alleviated. A spokesperson for The Shilla Duty Free (Shilla) commented that one of the major challenges for duty free operators will always be predicting and responding to the changes in customer demographic and tastes as businesses change drastically depending on economic and political situations. Operators must be able to

accommodate the changing trends and behaviours of certain customer groups. “To reduce risk from such changes, it is important not only to maintain diversity in customer groups, but also to be able to predict and adapt to such changes. Through continuous expansion into different regions of the world, The Shilla Duty Free has been able to diversify its customer base,” comments a spokesperson, who goes on to highlight the company’s ability to adapt to changing market trends. An example of this is Shilla’s introduction of popular Korean cosmetic products to the duty free market which attracted many new customers. Going forward, Shilla believes the travel retail industry should adapt to the ever-advancing digitalized world. Both airport duty free stores and downtown stores must compete with online stores.

“We have been quick to improve shopping environment at our stores by implementing a variety of technologies such as mobile cashier and location-based mobile promotions,” comments a spokesperson. “Our mobile application allows the customers to make a purchase on their way to the airport using our mobile preorder system.” Shilla will continue to innovate to provide the customers with a better, more personalized and convenient experience. Devices such as magic mirrors and interactive signages are already being implemented at beauty stores around the world. Looking to the future, the company believes operators will need to be able to provide tailored services through mobile devices such as tablets using data collection to show customers relevant and appealing items.

Half year sales at Incheon Airport have increased around 4% compared to 2016

Shilla’s flagship store in downtown Seoul offers a unrivalled range of perfumes and cosmetics

Kim Bumho, Deputy Executive Director of Concessions Development Group, Incheon International Airport Corp

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

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BHATIA TRADERS

Top performing categories across Bhatia Traders’ seaport locations are led by alcohol and tobacco, followed by electronics, gold jewelry and fragrances

Bhatia gears up

to go mobile

slowdown in regional ship movements isn’t putting the brakes on business for Bhatia Traders with the Sharjah-headquartered company buoyant about year-to-date performance at its eight seamen’s clubs, 10 duty free shops and multiple bonded warehouses at seaport locations. “We are busy developing our business with other projects in the works as well as ensuring that we have the right mix of products across different categories to satisfy the needs of our diverse client base,” says Rajeev Bhatia, Managing Director, Bhatia Traders. Its partnership with Fujairah National Group to support the Flying Angel floating duty free service at the Port of 38

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

The UAE’s diverse port operations demand a one-of-a-kind approach to duty free sales and Bhatia Traders has the answer by

CLAIRE MALCOLM

Fujairah anchorage is now in its third year and is just one example of Bhatia’s mobile approach to business development. “An ‘historic’ onboard experience for visiting seamen, the Flying Angel, which was recently renamed the FNSA-6, now has an even wider range of products, larger retail space footprint and a dedicated focus on meeting individual requirements with all the major categories covered including electronics, confectionery, fragrances, gold and watches,” he says. At Mina Zayed in Abu Dhabi, Bhatia Traders is celebrating its first year of operational success with performance already exceeding forecast, as he explains: “When we launched, Mina Zayed was in the first stage of development, with a lot of work being done inter-

nally as part of Abu Dhabi Ports’ portfolio development strategy. “Our role as a key service provider is set to enter a new phase of retail offering

Rajeev Bhatia, Managing Director, Bhatia Traders

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BHATIA TRADERS

in the first half of 2018 with a mobile duty free service in the final planning stages.” The 500-square-metre duty free shop and seamen’s club offers more than 5,000 products across the usual categories with onsite leisure facilities including multicuisine dining, entertainment with a live band, complimentary Wi-Fi, two pool tables, table football and an outdoor patio set-up for live barbecue stations for the cooler months. The diverse nature of port operations in the UAE comes with its own challenges. Says Bhatia: “We have a very comprehensive range of products and are still adding to our basic categories. Even though we are very experienced in terms of port operations we still learn ‘on the move’. You have to remember that the UAE has a unique maritime industry with different port operations from break bulk cargo to oil and gas, commercial cargo and car ships – and this obviously means a mixed demographic in terms of customer.” The new mobile service will see Bhatia Traders customer service agents visit individual vessels at multiple berths in the different port locations to service personnel duty free requirements with both physical products and pre-order via a customized hi-tech sales platform. Bhatia elaborates: “The team will have tablets with full details of all our products across the various categories linked to our new e-commerce portal, so they can take individual orders and then arrange for direct delivery. “Our new e-commerce platform is currently under development and we have already completed work on the payment gateways, the overall look and feel, and product category breakdown. The next stage is the test phase.” The support of Abu Dhabi Ports has also been instrumental in bringing the project fruition, as he explains: “The local authorities have been involved at every stage in terms of co-operating and collaborating with our team to develop the business. They take a very proactive approach in asking us what we believe can be done to make things better. “This extends from information sharing so we better understand the complexities of the port operation through to detailed analysis of the type of customer that comes through Abu Dhabi. By working together in this manner, we are able to

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

develop a tailor-made service that fulfills the needs of visiting seamen.” Bhatia Traders’ product portfolio is evolving in tandem with developments at Mina Zayed and elsewhere. “In the wines and spirits category, which is very trend driven, we are seeing increased demand for white spirits plus the Japanese malts are also coming into play as well as a resurgence in the cognac sub-category,” says Bhatia. “Gin is a key mover with more and more brands offering premium small batch labels, and the seaports are now asking for this,” he adds. Bhatia also lists Jim Beam and Jack Daniel’s’ diversified portfolios as a consumer hook with products like Jim Beam Honey and Jack Daniel’s Tennessee Fire driving additional sales. “Customers will always pick up their favorite products, but if they love a particular brand, they will also look out for new variations within that range; and we keep an eye on this in order to make sure that we are offering these products at relevant locations,” he remarks. The trend towards stronger perfumes, such as oud based fragrances, and a consumer willingness to experiment is also positively benefiting the perfumes and cosmetics category, with Bhatia also noting a “huge increase” in demand for gold and jewelery. “This category is always in demand, especially for new designs or new ways of

wearing accessories. We are also seeing more rose gold coming through from the various brands this year,” he notes. Top performing categories across Bhatia Traders’ seaport locations are led by alcohol and tobacco, followed by electronics, gold jewelery and fragrances. Bestselling products in H1 2017 from the top down were Fundador Brandy, Johnnie Walker Black Label, Marlboro Red cigarettes, the Apple iPhone 7, 22-carat gold jewelery pieces and Carolina Herrera Good Girl perfume. New launches for 2017 include JBL Bluetooth speakers, Monotheme Fine Fragrances and Zippo sunglasses. As 2017 enters its final quarter, Bhatia is gearing up for several new announcements in 2018. “We are in discussions with players in the industry for joint ventures and acquisitions,” notes Bhatia. “We are also in conversation with the port authorities to provide additional services, such as cafés and restaurants, to port employees and visiting seamen.” And expansion outside its traditional UAE border remit is still on the ‘to do’ list. Says Bhatia: “We see ourselves expanding into territories outside the UAE. Our seaport facilities are firmly in place with a continuous improvement process, which gives us time to expand into seaport opportunities within the wider GCC and seize any other duty free retail opportunities.”

The diverse nature of port operations in the UAE comes with its own challenges, namely portfolio diversity and logistics

Bhatia’s operation covers eight seamen’s clubs, 10 duty free shops and multiple bonded warehouses

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MOROCCANOIL

Striking

OIL

Moroccanoil is marking 10 years of success as an iconic brand in the hair care business with a global travel retail program

Moroccanoil signed Portugueseborn international supermodel Sara Sampaio in 2016 to promote the brand’s 2017 campaigns

M Moroccanoil started as a hair care company and has now evolved into a multi-category lifestyle beauty brand, as consumers demanded more from the brand than just hair care

The Moroccanoil booth at the IAADFS Duty Free Show of the Americas in 2014 – the year it began to aggressively target the travel retail channel

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

oroccanoil is celebrating a decade of pioneering oil-infused hair care – a trend that sparked a worldwide buzz. This young company has certainly enjoyed a huge amount of global success in a short time, so what’s its secret? John W. Gates, Moroccanoil Vice President, Retail and Travel Retail Sales, is crystal-clear about the brand’s USPs, as he tells Americas Duty Free: “We are a brand that truly delivers on its promise, to provide performance-driven, easy-to-use products that inspire confidence, transforming hair and skin. We also offer our clients an iconic signature scent.” Moroccanoil started as a hair care company and has now evolved into a multi-category lifestyle beauty brand, as consumers demanded more from the brand than just hair care due to the performance results, signature scent and ease of use, according to Gates. He continues: “A story of success, an impulse for innovation and a relentless pursuit of simple, high-performing oil-infused beauty products fashioned our iconic brand: Moroccanoil.” As the pioneer of oil-infused hair care, the original Moroccanoil Treatment created the worldwide buzz on argan oil and paved the way for an extensive line of premium oil-infused hair care products to address the needs of all hair types. By popular demand, Moroccanoil has since continued to innovate and extend the line to include Moroccanoil Body™ and Moroccanoil Sun™ luxurious oil-infused collections inspired by the sea, sand, breeze and scents of the Mediterranean. The products feature proprietary formulas that seek to rejuvenate and replenish, leaving the skin and hair nourished and naturally radiant. The company will be celebrating its 10th anniversary by offering a global, multi-channel program with a focus on its iconic hair and body oils categories, reveals Gates. The company launched its first travel retail location POS with leading German operator Gebr Heinemann in Copenhagen Kas-

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ASUTIL and IAADFS are collaborating to present the Duty Free and Travel Retail Summit of the Americas The summit brings together the best from the former ASUTIL and IAADFS events. Join us to take advantage of the vast potential of this vibrant market: The region includes 40 countries with a total population of more than 950 million. In 2015, 2.29 billion passengers traveled through airports in the Americas and Caribbean, up 5.3% from 2014. Total 2016 duty free and travel retail sales in the Americas and Caribbean were USD $10.7 billion (17% of worldwide market sales). No matter the size of your business, suppliers and store operators will have opportunities to meet, network, learn at executive education sessions, and conduct business, all under one roof! Save the date for THE most important business-to-business event in duty free & travel retail. www.2018SummitoftheAmericas.org

MOROCCANOIL

A rendering of the Moroccanoil stand at the 2017 TFWA World Exhibition located at Blue Village F12

trup Airport in 2014. “This channel has given us the opportunity for further exposure and a whole new audience and has allowed us to create branded shop concepts,” says Gates. There is still much to do in the channel. “We are committed to building stronger volume location per location, and further expand branded fixtures and shop concepts globally. We also want to work to create products and promotions that are exclusive to travel retail.” Travel retail is an important channel, Gates believes, partly because of its global reach. “It is important to me because it is here to stay and it allows us to provide consumers with convenience and easy shopability. It also opened opportunities within emerging countries such as Southeast Asia, Latin America and parts of Gulf Africa.” In the summer of 2016, Moroccanoil launched its travel retail business presence in Latin America with inflight offerings onboard Avianca and LATAM Airlines with DFASS and DFW, respectively. “Demand for Moroccanoil is particularly enthusiastic in Latin America, which has always been one of our leading markets in both brand awareness and sales volume,” Gates told Asia Duty Free earlier this year. Moroccanoil is now available in Argentina at Buenos Aires Ezeiza International and Aeroparque Jorge Newbery airports. In Uruguay, the brand has a presence at Carrasco International and Capitán de Corbeta Carlos A. Curbelo International airports, and has launched in Brazil at Galeão International Airport in Rio de Janeiro and Guarulhos International Airport in São Paulo with partner Dufry. In addition, the company has secured partnerships with Duty Free Americas, DFS, Gebr Heinemann and Kappe, as well as established an inflight presence onboard British Airways, KLM, Lufthansa, Swiss, Korean Air and Singapore Airlines. Moroccanoil confirms that it is actively involved in a number of CSR initiatives. Firstly, Inspired by Women™ is its global corporate campaign bringing about awareness of the brand’s influencers through various foundations and organizations. Secondly, it is becoming more and more environmentally responsible as a company. “We are so proud that this year to date we are on track to save almost 40% more trees than last year. Additionally, through the use of solar panels on our warehouse and factory in Israel,” enthuses Gates.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

In 2008, Moroccanoil Treatment was introduced, the single product that revolutionized the industry with oil-infused hair care

Moroccanoil has achieved a lot in a short time since its pioneering product launch in 2008. Here are some exciting milestones: • 2008: Launched Moroccanoil Treatment, the single product that revolutionized the industry with oil-infused hair care; • 2011: Opened its New York office showroom and Moroccanoil Academy in December; • 2014: Launched its Beauty/Retail Division, which includes resorts worldwide, retail and travel retail; • 2014: Launched its CSR initiative, Inspired by Women™, in September; • 2015: First exhibited at the TFWA show in Cannes; • 2015: Brand distribution reached 65 countries; • 2015: Signed its first supermodel as the face of Moroccanoil with Rosie Huntington-Whiteley. Signed Sara Sampaio a year later; • 2016: Launched local market retail and duty free through Hyundai and Shinsegae partnership in Korea; • 2017: Opened our first Asia-Pacific duty free downtown shop with DFS in Hong Kong.

SHISEIDO TRAVEL RETAIL

King Power Thailand’s main store at Bangkok Suvarnabhumi Airport featured a pop-up space offering complimentary skincare treatments and lip makeovers

The ultimate

Shiseido developed an exclusive skincare set curated by social media star Magic Yang and packaged in bespoke sleeves featuring art by Riety, available only at King Power Thailand stores

destination

Shiseido Travel Retail teamed up with King Power International on an impactful campaign focused on the beauty of Thailand for Chinese travelers

A At a photo booth installation, travelers could personalize their photos with Riety’s Thai-inspired visuals to be printed onto their own customized luggage tags

hugely successful promotional campaign staged earlier this year by Shiseido Travel Retail and King Power International that brought to life the beauty of Thailand has been reactivated. The campaign, which ran during April and May, saw the Shiseido brand collaborate with Thai artist Riety Darisa K and influential Chinese fashion and lifestyle blogger Magic Yang to target Chinese travelers through a program that included social media and digital content, high-profile in-store activations and travel retail exclusive products available only at King Power Thailand stores. With Thailand as one of the most popular overseas destinations for Chinese tourists, the campaign tapped into the power of influencer marketing to drive brand awareness among Shiseido’s key consumers, particularly the millennials. Magic Yang, a leading influencer in China, has a strong social media following of Chinese millennials who admire her personal style and her love for adventure. With Riety as her local guide, Yang went on a spectacular tour of Bangkok. Her eye-opening adventure was captured in an evocative promotional film, called ‘The Beauty of Thailand’.

Digital activation created buzz To build momentum for the campaign’s launch in April, Yang posted behind-the-scenes pictures of her trip to announce the collaboration and shared the film on her Weibo and WeChat 46

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

King Power’s Srivaree Complex downtown shop staged ‘The Beauty of Thailand’ activation, which proved hugely successful

accounts. Subtly featuring Shiseido products, the film attracted Yang’s followers who were intrigued about the skincare and makeup products she was using. Yang’s top three beauty picks – Ultimune Power Infusing Concentrate, Perfect UV Protector SPF 50+ and Rouge Rouge – were presented through three videos illustrating the product features. King Power Thailand promoted the campaign on its website and social media platforms, via a dedicated campaign micro-site, as well as in advertising that targeted travelers before departure. The digital activation created buzz ahead of the April unveiling of the activations in King Power Thailand’s main store at Bangkok Suvarnabhumi Airport and in its Srivaree Complex downtown shop. The airport activation, which ran until May 31, centered on a pop-up store offering complimentary skincare treatments and lip makeovers, as well as a photo booth installation where travelers could personalize their photos with Riety’s Thai-inspired visuals to be printed onto their own customized luggage tags. Riety created three intricate artworks to bring Thailand to life, blending traditional and modern influences. She drew inspiration from the country’s rich multicultural history in her depiction of Classic Thailand; brought the Swarga Loka to life using an opulent palette of colors and textures; and chose Bangkok’s tallest structure – the MahaNakhon building – to convey the city’s dynamic modernity. Adding to the Sense of Place theme, Shiseido developed an exclusive skincare set curated by Yang and packaged in bespoke sleeves featuring art by Riety. Available only at King Power Thailand stores, the limited-edition set included Yang’s skincare favorites: anti-aging product Ultimune Power Infusing Concentrate for Face; and Perfect UV Protector SPF50+/PA++++, featuring powerful sun protection technology. Customers received a selection of Shiseido cosmetics and a limited-edition Shiseido tote bag as a gift with purchase.

Compelling and engaging content At the time of the activation, Shiseido Travel Retail Vice-President Marketing Elisabeth Jouguelet said: “Thailand is one of the most popular destinations for Chinese tourists – it is not only a beautiful and enthralling country but a true retail destination in its own right. Through our strong partnership with King Power

International and collaboration with Riety and Magic Yang, we have been able to create a platform which brings a genuine sense of place to our retail activation. With compelling and engaging content driving awareness of the unique experiences to be enjoyed in Thailand, coupled with the appeal of TREX [travel retail exclusive] products and offers at King Power Thailand, we believe this initiative brings together the best of destination marketing and travel retail in a very powerful combination.” Commenting on the collaboration, King Power International Senior Executive Vice President Susan Whelan said: “King Power International Group has been the leading retailer and duty free airport and downtown operator for several decades, and have always championed partnership initiatives with our leading supplier partners. At the same time, we are passionate about sharing the Kingdom of Thailand’s rich history and unique culture with the world, and we have been instrumental in developing and supporting cultural initiatives throughout this time. This exciting collaboration initiated by Shiseido perfectly encapsulates the wonders of Thailand, as seen through the eyes of our talented homegrown artist Riety and prominent social media personality Magic Yang. We are delighted with this opportunity to not only strengthen our long partnership with Shiseido, but also enhance our all-important tourism links with key visitors from China.” The campaign was a huge success, generating high doubledigit sales growth for Shiseido and 13.5 million digital impressions. It took place during the peak travel season around the Songkran Festival, which also boosted sales and digital engagement levels. Continuing the positive momentum, Shiseido Travel Retail has reactivated the animation with King Power Thailand for three months from September, expanding the campaign scope with two new locations: Bangkok Don Mueang Airport, Departure Hall (running from October) and King Power Downtown Rangnam Complex (November). The activation also took place at Bangkok Suvarnabhumi Airport, Departure Hall (September) and King Power Srivaree Complex (September and November), where the main animation was staged. The reactivation continued to focus on Sense of Place and the collaboration with Magic Yang and Riety, further enhancing it with interactive and personalization elements, including a photo zone where consumers could print their photos on customized postcards to mail to their loved ones. www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

MOLTON BROWN

A totally

fragrant experience Building on its impressive 57% surge in travel retail sales for 2016, fragrance specialist Molton Brown is setting its sights on further growth

2017

has seen Londonbased fragrance expert Molton Brown continue to pursue its strategy of international travel retail expansion, aiming to strengthen its collaboration with key partners such as Dufry and Lagardère to meet its objective to be featured in the top 20 airports by 2020. Earlier this year, Molton Brown introduced a new, trendy marine olfactive, in line with trends in the fragrance category. The new Coastal Cypress & Sea Fennel Collection includes an edt, bath and shower gel and deodorant. As part of its omni-channel strategy, Molton Brown is focused on introducing new ways to offer its customers a luxurious experience in its travel retail locations, emulating the standards of its stand alone stores. For this new collection, Molton Brown offered an unexpected multi-sensorial experience for travel retail customers. “We offered an elevated version of our traditional hand and arm massage, with all senses being engaged, to immerse our customers in the story behind the collection,” explained Victoire Versluys, Brand Manager, Molton Brown. “We were also focused on raising customer awareness of Molton Brown in travel retail by engaging with travel bloggers, inviting them to discover the collection the next time they travelled through one of the airports where we are present. Our objective is to reach and align with potential customers in advance, so that we become part of their pre-planned journey. We want them to be looking for us on arrival at the airport instead of discovering our counter by chance while browsing in the shops,” added Versluys. 48

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

The new Coastal Cypress & Sea Fennel Collection includes an edt, bath and shower gel and deodorant

An exciting time of sustained growth Molton Brown posted a strong set of financials for 2016, reporting an impressive 57% jump in its travel retail business year-on-year and overall global growth of 9%. The travel retail results were driven by both strong organic growth – up 23% like-for-like – and the addition of new business with partners Zainab and Ambassadors Choice. These positive results contributed to Molton Brown’s overall three-year growth figures of 31%, showing the brand’s “fantastic” momentum, especially in the travel retail and duty free channel. Commenting on the figures, Versluys said: “Shoppers in every channel and region of Molton Brown’s business are embracing the brand more than ever, and it is a really exciting time of sustained growth. I’m delighted that travel retail is leading this increase through the close business partnerships we have, and our go-to-market strategy

for travel retail – yet there is still so much more we can achieve.” One of the key focuses last year was the improvement of its in-store execution. The brand concentrated its investment on increasing staffing and service; improving the look and feel of its counters through refits such as London Heathrow Terminal 4 and increased visual merchandising props; boosting the frequency of promotions; and driving footfall to its travel retail locations through a partnership with Condé Nast Traveller and collaboration with British Airways. 2016 also saw record-breaking launches for Molton Brown’s Dewy Lily of the Valley & Star Anise and Rosa Absolute collections. Said Versluys: “We’ve seen dramatic growth for our edt and home fragrance categories, showing that our strategy to offer an overall luxurious fragrance experience as opposed to just a bathing ritual is paying off.”

M1ND-SET RESEARCH

Peter Mohn, Founder & MD, m1nd-set

Buying on impulse Travel retail analyst m1nd-set has probed the fashion buying habits of millennial travelers – and other age groups – in a new survey by HIBAH NOOR

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

ravel retail research specialist m1nd-set asked 1,500 travelers about their purchasing behavior in the fashion/accessories category – and the results may surprise you. m1nd-set surveyed 1,500 respondents during Q1 and Q2 of 2017 about their fashion buying habits in duty free. Covering nationals and residents from all continents, the participants had traveled internationally in the last three months. Participants of this survey were recruited using m1nd-set’s unique database of international travelers, and the data was extracted from m1nd-set’s Business 1ntelligence Service (B1S). More than half (53%) of shoppers surveyed who purchased fashion/accessories were going on holiday, while 32% were on business. The main reasons for buying fashion and accessories in travel retail was firstly value, cited by more than 80% of the people surveyed, followed by the experi-

ence in the store (cited by nearly 70%), suitability for specific purpose (62%), and the item was exclusive or different (61%). Almost 40% cited convenience. It’s important to note that “experience in the store” meant the person surveyed had tried and liked the item/had enough time/the display caught their attention/bought the item to indulge themselves/saw the brand outside the store/liked the packaging. The main reasons for not buying fashion/accessories in travel retail were high prices/lack of promotions, cited by almost 40% of people surveyed, followed by lack of assortment – including no interesting or new products (31%).

Path to purchase Regarding where the products purchased were destined, m1nd-set divided the responses into three age groups. Around 60% of millennial travelers aged between 18 and 35 bought the items as a treat for themselves, with fewer than 30% buying

the item as a gift, under 10% sharing the item, and fewer than 7% buying the item on request. Turning to middle-aged passengers aged between 35 and 55, just under 60% bought the products for themselves, around one-third bought for gifting, fewer than 7% shared the item, and fewer than 5% bought the item on request. For seniors, aged above 55, around half bought the item for themselves, fewer than 55% bought the item as a gift, with fewer than 4% buying the item to share. m1nd-set also studied the path to purchase in the fashion and accessories category. Nearly one-quarter (23%) of millennials carried out their retail research at home before leaving for the airport; one in 10 did research on the way to the airport or in the airport; and almost 30% researched the category in the store after looking around. For middle-aged consumers, around one-fifth carried out their retail research

at home before leaving for the airport; about 7% did their research on the way to the airport; 15% researched the category in the airport; and a high number – almost 40% – undertook research in the store after looking around. Turning to seniors, 16% did their research at home before leaving for the airport; 5% on the way to the airport; 13% in the airport; and more than half researched the category after looking around the shop. Asked if they compared prices when shopping in duty free, around 65% of all people surveyed who purchased an item did compare prices. Among people who did not buy an item, 60% compared prices. Of the buyers who interacted with store staff, more than 60% were positively influenced by the staff.

Internet research is key Turning to shopping behavior, 37% of all travelers surveyed planned their visit, 74% planned their purchase, around 56% bought items on promotion, and 57% bought unique products. Significantly, more than 60% (63%) of people surveyed visited the fashion/accessories store on impulse. Turning to why they decided to visit the fashion/accessories store, just over one-third said to browse around. Around 25% of people visited the store to buy a gift for someone, with the same number saying the price advantage had attracted them to visit; they wanted to see if there were any promotions; or to kill time before their flight. Out of those who inform themselves in advance, the vast majority of people (95%) used the internet to research fashion/accessories brands before shopping in duty free, with nearly 70% researching brands onboard their flights; almost 70% using billboard advertising; 56% using traditional media; and 52% citing other sources (mostly speaking to friends and family). Breaking down the internet brand research, 50% of people used the internet when they were booking their trip; 38% said they used the duty free store website/ smartphone app; 30% used ads on other websites/online banner campaigns; 26% used the brand’s own website/app; 25% used social media posts; 18% used ads on social media; and around 12% used specialist websites or blogs.

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SHORT COMMENT

The ever-changing face of fashion

Bryan Crisfield, CEO, CRISLU Corporation Q: How long have you been in the fashion and duty free industry? A: We have been in the fashion retail business for over 55 years and we have been in the duty free industry for over 20. Q: How do you think the fashion/lifestyle category has evolved in the last few years in the duty free market? A: With consolidation of concessionaires globally, the challenge for the supplier is to continue to offer high quality products with a point of difference at the best possible pricing. The continued pressure on margins has dictated that only the companies that have sharpened their production and delivery systems without affecting their focus on richness in design and quality of materials have been able to continue to compete successfully in the travel retail sector.

Travel retail industry executives deliver their verdicts on the development of the fashion category over the years – and hot items to buy now

We feel that the duty free shopper consistently looks for fashion and bridge jewelry with that perfect combination of high quality and design coupled with a value proposition. CRISLU continues to be the brand in travel retail that creates exquisite classic and contemporary jewelry in a range of fashion designs, while providing unparalleled quality and unprecedented affordability. Our jewelry designs combine the traditional techniques of fine jewelry craftsmanship – hand polishing and setting by hand of flawless, exquisitely-cut cubic zirconia in precious metals. Our attention to detail and our consistent introduction of designer updates allow CRISLU to be the go-to high quality fashion and bridge jewelry brand worldwide. Q: What is the most sought-after fashion item in duty free, in your opinion? A: For the inflight category, the CRISLU Brilliant Cut Tennis Bracelet Set continues to perform year in and year out, and the 2017 special edition Travel Retail Exclusive Tennis Bracelet Set offers a 60% reduction off local market pricing. For our airport stores, cruise and Caribbean shops, we combine our core CRISLU Look of Real program (our continuing best-sellers in earrings, bracelets and necklaces) with timely introductions of our Designer Collections such as Champagne on Ice and Swinging Hoops, and Gems in Motion. Miss Crislu is our value proposition for airport stores, cruise and Caribbean shops where space is limited and the customer/ passenger is decidedly more value-driven than our core department store purchaser.

Q: How do you think the fashion/lifestyle category has evolved in the last few years in the duty free market? A: There has been a huge shift away from consumer interest in luxury fashion to affordable luxury and lifestyle brands. Furla has moved significantly towards being a lifestyle brand over the past three years and that is a trend we continue to embrace.

Gerry Munday, Global Travel Retail Director, Furla Q: How long have you been in the fashion and duty free industry? A: I have over 30 years’ experience in fashion and travel, joining Furla in 2011.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Q: What is the most sought-after fashion item in duty free, in your opinion? A: In my opinion, the most sought-after fashion item is a practical yet fashionable handbag that is affordable without forsaking quality and craftsmanship. Consumers also want something unique, something that not everyone else has. To cater to this need, we created My Play Furla – a concept which allows the consumer to customize their Metropolis bag. The starting point is a basic Furla Metropolis bag in black, white or rose that, thanks to the snap closures in the back, can be personalized with interchangeable flaps, available in 12 variants sold separately.

Marin Grandjean, Global Duty Free Sales Director, Frederique Constant SA Q: How long have you been in the fashion and duty free industry? A: I have been in the duty free industry since 2007 (seven years in the cosmetics industry and three years in the watch industry). Q: How do you think the fashion/lifestyle category has evolved in the last few years in the duty free market? A: The fashion and lifestyle category has been growing quite impressively in the past years, especially in the watch business,

Brianna Amoroso, Manager â&#x20AC;&#x201C; Travel Retail Americas, Daniel Wellington Q: How long have you been in the fashion and duty free industry? A: After entering the fashion industry four years ago, I shifted from the local market to travel retail just last year. After this transition, my first initiative has been launching Daniel Wellington in the Americas. Q: How do you think the fashion/lifestyle category has evolved in the last few years in the duty free market? A: The shopper within this space has evolved, which has naturally driven the industry to adapt. In this category specifically,

where we have seen a strong development of the license brands on the entry price point segment. In addition to the license brands, fashion brands such as Daniel Wellington has impressively emerged through a social media and online campaign model. I remain very amazed by these brands and their ability to build a very impressive brand awareness in such a short time. Q: What is the most sought-after fashion item in duty free, in your opinion? A: From my point of view, the most sought-after fashion item is the connected watch. We have seen in the past 12 months already a huge attraction for watches with connectivity functions such as activity monitoring and sleep tracking. Our Frederique Constant CEO Peter Stas already anticipated the trend for this type product a few years ago. As one of the industry pioneers in Baselworld 2015, we have launched our first horological smartwatch with style, keeping our brand DNA as a classical elegant Swiss-made timepiece. Thanks to a full gents and ladies collection, a new caliber launched at the end of last year. We have sold far more than 42,000 horological smartwatches all over the world.

many of the business and leisure travelers are millennials. Daniel Wellington, along with many others, have focused on marketing to this demographic by implementing store concepts within airports and other travel retail outlets that offer more than just a product, but also an experience. The growth of the digital and social media spheres has played a role in shaking [up] the traditional nature of the industry and complementing the brand experience. I believe this evolution will continue to have a positive influence on brands resonating with customers as we move forward. Q: What is the most sought-after fashion item in duty free, in your opinion? A: Products that are accessible, attractive, and relevant to the traveler. There must be a strong incentive to buy, whether through pricing, gifting with purchase, or offering an experience â&#x20AC;&#x201C; especially since we are now in constant competition with e-commerce. Accessories, specifically, complement this need and/or impulse to buy while traveling â&#x20AC;&#x201C; replacing something if left behind, passing time if a flight was delayed, or of course, securing a last-minute gift!

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HALAL SOCKS INC

Halal Socks caused a media frenzy when Canadian Prime Minister Justin Trudeau wore its colorful Happy Eid socks at Pride, Toronto

Stepping out Newly created company Halal Socks Inc aims to spread peace and joy across the world – including travel retail – one sock at a time, according to its founders 54

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

alal Socks Inc may only have been formed earlier this year, but the Canadian sock brand has already hit the headlines across the globe with its unique and meaningful designs. Shehryar (Sherry) and Sara Qureshy are the husband-andwife team behind the Toronto-based company. Halal Socks was formed after Sara had difficulties finding a festive gift for her husband, Sherry, during the last Eid Ul-Fitr festival. Knowing his passion for socks, she went looking for Eid-themed ones. “After hours of searching online, I couldn’t come across anything even remotely close to what I was looking for. This is when Sherry and I had a light bulb moment and Halal Socks was created.”

Halal Socks has been mentioned in the Times Magazine, Washington Post, New York Times, Toronto Star, Al Jazeera, Huffington Post, and Vogue

The start-up company extends beyond the sole purpose of traditional socks, as Sara Qureshy, Co-Founder and Lead Designer of Halal Socks, explains. “While keeping your feet warm with the highest quality fabric, our designs represent the values and ideals of the modern Muslim. That means promoting tolerance and acceptance of people from all walks of life, inclusivity, and pride in being Muslim at a time where the political climate is often very anti-Islam. Hoping to unite people one step at a time, Halal Socks donates a percentage of every sale to charities that align with the company’s vision.” The couple say their greatest fun comes from creating something fresh, fun, and – most importantly – respectful to the Muslim community. They hope Halal Socks is part of the first wave of better representation for Islamic choices for holidays, celebration, and clothing that showcases Muslim pride. “As socks are clearly visible when praying, the Halal Socks brand lets you add a little bit of individuality and celebration of Islam with every step,” says Qureshy, who, along with designing the socks, also markets the products through social media and endorsements. “Our socks are made from the world’s finest combed cotton and are crafted with pride. While impossible not

to notice, the luxurious feel of the material is a dream to wear and are guaranteed to fit you better.” Immediately after launch, the brand caused a media frenzy when Canadian Prime Minister Justin Trudeau wore its colorful Happy Eid socks. “Our first and biggest achievement was to see Canadian Prime Minister Justin Trudeau flaunt our Happy Eid socks at a publicized event,” says Qureshy. “To see an honorable leader like Trudeau connecting with and showing support for the Muslim community on such a personal level, it was incredibly humbling to say the least.” Then in July, the CEO of Toronto-based Paramount Fine Foods, Mr Mohamad Fakih, was seen wearing the world’s first pair of Shawarma Socks – by Halal Socks – while gifting the second pair to Mr Trudeau. “To have these two prominent individuals wear our socks was definitely one for the books,” she smiles. The above achievements led to Halal Socks being mentioned in the Times Magazine, Washington Post, New York Times, Toronto Star, Al Jazeera, Huffington Post, Times Magazine, and Vogue. In addition to these articles, the Qureshys were interviewed by Ben Mulroney on ETalk. Halal Socks has also been featured in MacLeans, MangoBaaz, and The National. “While these accomplishments are quite impressive for a start-up, our ultimate goal is to spread peace and joy across the world, one sock at a time,” she says. The Qureshys believe the brand will do well in duty free because due to high demand, the brand’s unique designs are rapidly gaining international attention. Having them available at duty free locations would make them more easily accessible. In addition, the Solidarity collection consists of designs that are specifically catered to creating awareness around anti-Islamophobia in western countries. While they make great conversation-starters, souvenirs, and gifts, these socks seek to promote peace and unity. Currently, Halal Socks is available at five retailers in the Greater Toronto area: The Date Palm, Modah, Isna Canada, Studio 89, and Nur Shop. The brand is also available at Siraj Store in New Jersey, US. Halal Socks is looking for distributors in the travel retail market, as Qureshy explains. “The global travel retail market was valued at US$63.5 billion in 2014 and has only increased since. As we continue to expand internationally, we would love to have distributors in the travel retail market so that Halal Socks can be a small portion of that growing figure.”

Halal Socks Inc Founders Sara and Sherry Qureshy donate a percentage of every sale to charities that align with the company’s vision

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NICE AIRPORT: FASHION

UK firm The Design Solution handled the master planning for category layouts

Surprises in store at

Nice Côte

d’Azur The airport’s aim was to offer a surprising brand experience

The airport that is the gateway to one of the world’s most fashionable coasts – the French Riviera – has also enhanced its own retail fashion offer to widen its appeal. Filip Soete, Chief Commercial Officer, tells Asia Duty Free how by

KEVIN ROSARIO

Fashion brands play a vital role in presenting NCE as a vibrant, fashion-forward location

ice Airport (NCE) has undergone a head-to-toe revamp of its retail business lasting more than three years to create an all-new duty free and travel retail environment in both Terminal 1 and Terminal 2. The operator, Aéroports de la Côte d’Azur (which also runs the much smaller Riviera airports of Saint Tropez and CannesMandelieu), was keen to increase the potential from what had been an under-utilised commercial revenue stream, and Chief Commercial Officer Filip Soete set about achieving this in a process that involved numerous tenders as well as some terminal restructuring. While the DF&TR stores in the two terminals are the main focus of the new offer, fashion brands plays a vital role in presenting NCE as a vibrant, fashion-forward location to both

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Chosen brands are the result of detailed analysis

French travellers – the main nationality at the hub – and international passengers, key in retail terms being the Russians. With 12.4m passengers in 2016, NCE is France’s third busiest airport after Charles de Gaulle and Orly. As a regional gateway, it serves a solid 111 direct destinations and 38 countries giving it a strong international dimension. For example, outside Paris, it is the only French airport to offer daily flights to New York and Dubai. Atlantia and EDF Invest acquired a 64% stake in the business of Aéroports de la Côte d’Azur last autumn and will leverage the retail side in the coming years. The fashion offer at NCE – influenced in part by the French Riviera’s magnetic draw for the international jet-set – will no doubt be a factor in lifting that retail component.

Some of the high-end boutiques are performing in line, though not exceptionally; the Russian customers have returned but are not spending as they did before

ing results. Soete admits that some of the high-end boutiques in T2 “are performing in line, but nothing exceptional” but some bedding in is needed as they were only open for a matter of two months at the time of writing. Russians, who used to be a major shopping nationality before the country went into an economic tailspin, are back in numbers but not in spend per passenger. “They are still big spenders but not the same as before,” says Soete who adds that they nevertheless remain fans of high-end Zilli, as well as Etro. The key change for NCE is in T2, a terminal with a large number of French travellers. “We are very pleased there: they are buying in the walkthrough and in the fashion shops. As they are a big part of the traffic in T2, that is very good news. If you have a wide offer, people – even on domestic flights – are buying,” notes Soete. By increasing the spending levels of the core French traveller (despite these spends being well below that of Russians), NCE is proving that having a wider and more appealing fashion offer across several price bands is working. “This is attractive to shoppers and they are buying more in the new mix and we’re happy with that,” Soete says.

Seeing red Soete comments: “We had a master plan with all the categories, but the space for fashion is in line with what an ideal fashion offer should be.” UK design and architect practice, The Design Solution, handled the master planning for the category layouts and the splits between the core DF&TR business, F&B and other categories. “Talking specifically about the fashion offer, Soete says: “Our aim was to have a surprising experience, and an offer that was different to other places, so we worked on attracting brands that we wanted.” Those brands – which include The Kooples and Etro – were not a list of random ‘likes’ from the commercial team but the result of a detailed analysis in tandem with Paris-based trend agency Martine Leherpeur Conseil. “In that big study – in which we looked for a sense of place, points of differences, and a trendsetting offer – a lot of brands were proposed. When we launched the tenders we gave operators access to the study.” This way, the fashion operators – essentially Dufy and Lagardère Travel Retail – were able to make direct approaches. The end result is a wide array of luxury and mainstream brands among them two Hermès stores, Emporio Armani, Ferragamo, Maxmara, Paul & Shark, Versace and Zilli. NCE has also taken the step of having two brands that are directly-operated at the airport: Versace and The Kooples (which is a world first for an airport having just opened this summer at T2). “We did our homework to have a fashion offer that is perhaps a bit more ‘looked after’ than in other airports,” says Soete. “The Kooples is working very well as is the luxury shop in T2 with Etro, Paul & Shark and Zilli.” The more mainstream fashion multi-brand in T2 is also a good performer while a beachwear store in T1 has had promis-

It was red carpet time at Nice Côte d’Azur Airport (NCE) in May when the gateway held its own fashion show to showcase the best pieces from the collections at its existing and new fashion stores. Coinciding with the dates of the Cannes International Film Festival and the Monaco Grand Prix – which attract passengers responsive to the themes of glamour (fashion, beauty, luxury) – the T1 departure lounge hosted models wearing outfits and items from The Kooples, Salvatore Ferragamo, Michael Kors, Emporio Armani, Etro, Zilli, Zegna, Paul & Shark and Tumi among others. NCE invited bloggers covering travel, fashion and Côte d’Azur lifestyles to write about the event called Operation Glamour, and they were pampered by stylists especially for the occasion. The shows were broadcast on giant screens within NCE’s two terminals and linked to an events website to allow access for anyone who missed it.

NCE held its own fashion week during the Cannes Film Festival

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MCM

Made to

The new MCM Dieter two-pocket backpack in monogrammed nylon is lightweight, waterproof and luxurious

move Luxury lifestyle brand MCM is forging ahead with key openings in major airport locations worldwide while targeting the on-the-move millennial generation by

MARY JANE PITTILLA

Additions to the Patricia bag for AW17 include a feminine studded outline, making this icon of everyday glamor a little dressier and edgier Fresh for AW17, the Dieter travel range is lightweight and waterproof in a series of monogrammed and camouflage options

erman luxury brand MCM is celebrating another year of double-digit growth in travel retail, despite the well-documented challenges facing the industry amid the Chinese spending slowdown and other geopolitical disruptions. “Overall, our duty free business is doing well with doubledigit growth,” says Nicolas Roptin, Global Travel Retail Director, MCM Worldwide. “Countries that are performing well for us are China, Thailand, Singapore, Japan, Malaysia… they are all doing very well, and Canada is a growing market.” The brand sparked the fashion trend for backpacks when it unveiled its best-selling studded canvas backpack several years ago, and this hands-free style remains a favorite among the millennial age group, as well as appealing to urbanites seeking a functional bag for their on-the-move lifestyles. Additionally, MCM’s top-selling products are small leather goods, including its range of animal-themed bag charms, crossbody bags and leather bags. Roptin is seeing “a very positive trend” and high demand for cross-body bags – again offering a hands-free, practical solution for everyday life. Looking ahead, the company is set to launch more ready-towear and shoes. “We’re developing more categories to cater to a whole lifestyle,” explains Roptin.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Seasonal travel exclusive products During the TFWA World Exhibition in October, the Spring/ Summer 18 collection will be unveiled. “Feedback [from travel retailers] on the collection has already been great,” enthuses Roptin. The collection will incorporate seasonal travel retail exclusive products, such as backpacks and small leather goods, offering different colors and prints from the domestic market. Turning to the outlook, MCM is forecasting double-digit growth for 2017, buoyed by its prominent presence in Asia. “We’re in all the key airports across Asia, and we want to strengthen our position in the region. We also want to grow our presence in targeted locations in Europe, the Middle East and North America,” he says. Recent travel retail store openings in Europe have taken place at Frankfurt and Munich airports, and the company is working on projects in France, the UK and the United Arab Emirates. The new store hit-list for North America includes Los Angeles, Toronto and Vancouver airports. A pop-up shop featuring MCM’s new pop-up concept is set to begin trading in New York JFK Terminal 4 at the end of September, and new store openings are in the pipeline for mainland Chinese airports, including Shanghai, Wuhan and Beijing. MCM’s latest store opening in

China travel retail is located at Shenzhen Airport in the Terminal 3 Domestic Departures area. Millennials – or “Global Nomads” as MCM’s owner and Chief Visionary Officer Sung-Joo Kim describes them – are important to the New School Luxury brand, so it uses all the social media channels to target these consumers, but Roptin notes that other age groups are also important. “In travel retail we always adapt our range to the specific customer profile traveling through a particular airport, and we analyze the traffic flows. In Europe, for example, we see a mixture of nationalities as well as age. They have different tastes, so we have to fine-tune the best assortment for each airport.”

New MCM classics made to move MCM’s Autumn/Winter 2017 collection is described as a series of modern classics designed for global nomads on the move. Taking inspiration from the more subtle and refined colors of autumn, the new collection features a range of muted tones and discreet camouflage patterns. Understated monograms abound, while even the flashier elements of the new line incorporate a more restrained elegance. Key to the new collection is the introduction of hard-wearing yet soft and supple form of nylon. The new Dieter Nylon range includes a series of clever new MCM classics made to move. Lightweight, waterproof and luxurious, it comes a series of monogrammed and camouflage options.

MCM’s top-selling products include its range of animal-themed bag charms, alongside small leather goods, cross-body bags and leather bags

All new for Autumn/Winter 17, the Essential Boston takes inspiration from the bold, utilitarian travel bag silhouette, combining a weekender style shape with a handbag. Based on MCM’s heritage Princess Kyoto style, it joins a range available in muted new autumn colors and the company’s iconic Cognac Visetos pattern. The Boston comes in a full range of soft leathers, Visetos monogrammed finishes and new colors: delicate new coral blush, refined rustic brown and elegant loden green. MCM’s best-selling Patricia and Milla bags get a subtle makeover in the form of soft new burgundy and green colorways, accented by discreet gold studs and other highlights. Revived from the MCM Green Book archives, the Patricia takes inspiration from the company’s glamorous Patty bag. Additions for Autumn/Winter 17 include a new embellished Visetos option and a feminine studded outline, making this icon of everyday glamor a little dressier and edgier. The Milla Studded Outline shares this stylish addition, and is available in classic rustic brown or black, while the Patricia Embellished Visetos adds a splash of color and vibrancy to a modern style icon. Meanwhile, an unexpected combination of spangles, thread and crystal chain endows the Milla Tweed with a uniquely subtle pink blush for the season. Born amid the glamorous heyday of Munich’s jetset in 1976, MCM’s travel heritage shines through for Autumn/Winter 17 with a series of updates and edits to its tried-and-tested travel pieces. Fresh for Autumn/Winter 17, the Dieter travel range brings a bold new finish in the form of a luxurious, hard-wearing yet soft form of nylon. Lightweight, waterproof and made to move, the range features a series of monogrammed and camouflage options across a clever and utilitarian yet fashionably shaped collection. Endowing the entire collection with a fun, playful range of on-brand options, MCM’s new charms and straps allow for endless customization, according to the brand. Made from luxuriously cozy, soft-to-the-touch materials with voluminous details, MCM’s cute charms enrich the season’s collection with a playful choice of 2D and 3D animals and accessories. Whether finished in subtle camo or glittering crystal, MCM’s smart straps add a touch of flair and functionality to any piece. The straps can be mixed and matched for the ultimate in madeto-move style.

MCM’s latest store opening in travel retail is located at Shenzhen Airport in the Terminal 3 Domestic Departures area

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FURLA

One of a kind Travel retail shopping must provide value-added services combined with good merchandising, says Gerry Munday, Global Travel Retail Director of Italian brand Furla

The Spring/Summer 2018 collection focuses on intense colors, ranging from vibrant and dark lagoon-like blue and green tones to more feminine bright pinks that reflect Venetian terraces

his year Furla has been continuing to build its presence in travel retail with the opening of new travel retail stores globally. Gerry Munday, Global Travel Retail Director, notes that since 2011, the Italian company has grown from 30 travel retail locations globally to having 262 doors in 63 countries. “All regions are performing well for us, particularly Asia, and we haven’t perceived any location to be especially challenging. Obviously some regions perform better than others,” she says. Furla expects travel retail sales growth rates to continue in an upward curve as they have done over the past six years. The strategy is to continue growing the brand’s presence, where the space and environment enable it to reflect its DNA.

Dramatic change in how consumers shop Gerry Munday, Global Travel Retail Director of Furla

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Turning to consumer shopping behavior, Munday says that the combined effect of the digital world and globalization is dramatically changing how consumers shop. “We’ve long talked about travel retail being a global shop window for a brand, and that’s as true today as it has ever been, but equally, we all know the high operating costs of the travel retail footprint for a brand, particularly at the airport. An empty travel retail shop with no sales can

lagoon-like blue and green tones to more feminine bright pinks that reflect Venetian terraces. Floral brocades and jacquards are interpreted in bright colors that give a fresh look to materials created by traditional machines. The collection plays with both solid and hollow designs, inspired by the architecture of Venetian buildings. Geometric forms mix with softer shapes, such as the new scallop shield closure lock featured on the new Ducale line that resembles a noble family emblem. Trendy and contemporary, the Ducale line features saddle bags and satchels. The leather shoulder straps are adjustable so the bag can be worn on the shoulder or as a cross-body. The delicate scallop design gives a romantic touch to the Merletto and Scoop lines, both inspired by the famous Museo de Merletto (Burano Lace School). Scoop has a luxurious look, enriched by an iconic closure system, contrasting metallic details and reversible functionality. The second delivery features a more delicate color palette that is lighter and transparent like Murano glass. Its print themes celebrate seasonal summer fruits, and are feminine and playful, yet with a twist of irony. A new addition to the Stacy line is the Casanova bag, available as a drawstring or tote. The woven panel of Vit. Venice smooth calf leather creates an eye-catching color-block and is available in both squared or striped graphics. The popular Metropolis line has been updated with special variations and a new small cross-body featuring a leather and chain strap with a phone pocket. New Metropolis bags feature a variety of prints and fabrics, including Jacquard, Butterfly and Rainbow, to create a unique look for Furla’s most successful line to date. The fun Candy line also returns with a new mini crossbody style. be a very high price to pay for image awareness. But conversely, there is an argument to say that retailers who are digitally savvy, offering e-commerce, social media, etc, as does Furla, do this in part to help drive traffic into stores. It works both ways.” She continues: “The difference between the high street and travel retail is, of course a mindset. Airport shopping is now part of the travel experience and the mindset is different. In travel retail we have to target the consumers who may have been made aware of a brand digitally and now find it ‘live’ at the airport. The consumer who wants to explore the shopping opportunities at the airport, or downtown, or on the cruise ship, ferry, inflight. Who looks for newness, innovation, something different. We need to focus on the traveling consumers for whom shopping is because of want, rather than need, and who enjoys the personal service and experience of live shopping that he/she simply can’t get online. I believe travel retail shopping must provide valueadded services combined with good merchandising.”

Bringing a touch of Venice to Cannes During the 2017 TFWA World Exhibition, the company will bring a touch of Venice to Cannes. The Spring/Summer 2018 collection focuses on intense colors, ranging from vibrant and dark

More focus on men’s products Furla is also putting more emphasis on its men’s collection in travel retail. The latest range follows the same theme and trends as the women’s collection. The best-selling Atlante line sees the addition of new Arazzo, Ippocampo and Grifone prints created exclusively by Furla’s design team. New styles and sizes join the Marte business line, with a new cross-body zip-top, small messenger and a new briefcase with collapsible handles for increased functionality. The Ulisse leisure features revised shapes and functionality, including nylon bags in solid and printed versions with animal animations that provide a fun and quirky feel. A new four-ways bag has been added to the Icaro collection, offering practical and multifunctional usage. There are also many handcrafted designs typical of the Italian tradition, such as baskets and crochet in multicolored variants. “The Furla Spring/Summer 18 is absolutely fabulous, and just screams summer,” Munday enthuses. “The design team have worked extremely hard to bring unique and trendy prints to truly make the collection one of a kind. We are thrilled to be showcasing it at TFWA World Exhibition and look forward to a rewarding week with clients, colleagues and friends.”

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MISAKI

Timelessly fashionable This Marimba handmade pearl, rhodium-plated necklace is dedicated to the Principality of Monaco, where Misaki is based

There’s lots in store at Misaki for its 30th birthday this year, including a new travel retail strategy, glamorous collections, and a fresh logo

“M Misaki’s Marimba earrings are made from handmade pearl, and rhodium plated

isaki was born in travel retail, so the channel is part of its DNA. It already has a great presence onboard airlines and in airports, aiming to become a must-have brand in the market.” These are the confident words of Axelle Alech, Misaki’s Communication Director, which celebrates its 30th anniversary this year. Since Misaki was acquired by the French group NSH in late 2014, new projects have emerged in Europe with partnerships such as KLM and Air France, supported by the development of the local market, in particular through a new distributor for France, heralding large openings this year. Asia and the Middle East are following the growth trend with a recent opening at Lotte World in Korea, and new collaborations with Singapore Airlines and Qatar Airways. Last but not least, Misaki will open in September its very first mono-brand shop in Beijing, unveiling its new concept in line with the glamorous and modern image of the brand.

A special anniversary year at Cannes The TFWA World Exhibition at Cannes promises to be quite special this year, says Alech, as Misaki celebrates its 30th anniversary. On this important occasion, the brand will unveil its fresh visual identity, with its new logo Misaki Monaco. “The brand is establishing its legitimacy and know-how by linking its image directly to its home town, Monaco, visibly marking and underlining its origins, which make it an integral part of the Principality,” says Alech. The upcoming collection is therefore dedicated to Monaco. Befitting the allure of its world-famous capital city Monte Carlo,

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

The Smooth collection is made from goldplated 925 sterling silver, with cultured pearls

the collection reveals a woman’s glamor and seduction through what the company calls a “New-wave pearl”: timeless yet fashionable. With its new strategy and new collections, Misaki expects to grow its total sales by 30% this year. Alech explains the reasoning behind this optimistic forecast: “The brand boasts a unique positioning, as it offers classical and essential pearl jewelry, together with new fashion collections at an affordable price, hence answering customers’ needs in the watch and jewelry market. While strengthening its current partnerships, the flexibility and involvement of the brand will greatly support its growth.” Alech has observed a number of trends in the jewelry market. “Affordable luxury is definitely a substantial trend that has become a keyword in the industry. Customers are looking for a shopping experience and want to enjoy their time in airports with purchasing pleasure: premium products at affordable prices.” This is why Misaki’s new travel retail strategy has been shaped around the idea of attracting customers and providing them with the opportunity to enjoy the act of shopping through novelties, travel exclusivities and dedicated furniture so that they can live a full experience. “All of that without being constrained by the price,” says Alech.

Unique and distinctive products Travel retail exclusives are another important trend Misaki wants to focus on, in a bid to offer customers unique and distinctive products they won’t find on the high street. “They need to feel special and embrace the opportunities,” Alech says of the engaged and captive traveling shopper. Misaki is very comfortable targeting the millennial audience. “Misaki is well known for its know-how and expertise in pearls,

which can address a large audience, hence a broad target. Our jewels are composed of collections that can please all kind of generations.” Speaking in-depth about this demographic, Alech says it’s obvious that millennial consumers have fully integrated the travel retail market as they travel more and more, traveling being an essential part of their work-life balance. “These new star targets have a way of consuming that is specific and highly connected. They are looking for travel exclusive products – gifting sets and good deals – as well as a real shopping experience that Misaki is able to provide them with a different and attractive offer.” Digital and social media are key in an environment where not only the millennials, but everyone is in some way connected; and travel retail is obviously touched by this phenomenon, Alech adds. This is also the reason why TFWA will dedicate a whole village to digital during the October fair and why travel retailers are increasingly investing in their digital strategy. Aware of this challenge, Misaki has taken the opportunity to review its website and create Instagram and Facebook accounts in order to strengthen the Misaki community and foster a sense of belonging, which is crucial for any brand. “We are very confident about digital, as Misaki is now turning 30 and has a brand recognition worldwide due to its expertise and history in the pearl jewelry market.” To support its ongoing growth, the brand has decided to engage the services of a travel retail expert team from the company Immediat Boarding, managed by industry veteran David Dayan, who also handles other leading brands Lacoste, Wolford, Rituals, Nuxe, Eden Park, Vilebrequin, and Guess jewelry. “We are looking forward to further very promising developments,” concludes Alech.

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TATEOSSIAN

Getting personal Tateossian’s new Lucky Me jewelry collection can be personalized with letters, charms and flags for a unique look

K-based jewelry specialist Tateossian London has unveiled the Lucky Me collection, tuning into the trend for product personalization. “Personalization is the ‘It’ trend of the season, and we have evolved our Montecarlo style into our new Interchangeable collection, with matching cufflinks, pendants, key rings and bracelets,” says company Founder Robert Tateossian. “Each product offers the opportunity to personalize for any occasion with the use of letters, charms and flags, making a perfect and thoughtful gift for a friend or special someone or a treat for yourself.”

A sense of playfulness To personalize the product, the wearer pulls on either end of the cylinder for the initial disc to come loose, allowing them to choose and change the rings to another motif of their preference. The cylinder has a sleek duo-tone plating of rhodium and black rhodium plated silver, adding a contemporary finish. The bracelets are made with fine Italian leather, braided into the brand’s classic style. They are available in four classic and timeless color options of black, navy, red and brown, and come in different sizes for men and women. Jewelry and key chains come without rings. Rings are purchased separately for the wearer’s convenience and personalized preferences.

Tateossian London was founded by Robert Tateossian in 1990 with the aim of offering men and women a distinctive way to express their personality and style through refined and meticulously crafted accessories. A sense of playfulness and free movement are part of the brand’s DNA, and are often reflected in the designs. Innovation, creativity and quality are the brand’s core values.

The Lucky Me collection allows consumers to personalize their jewelry

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{ NEW COLLECTION }

misaki.com

HEINEMANN TAX & DUTY FREE

A flair for fashion Heinemann has brought a wide and varied range of fashion brands to Sydney Airport

Seafolly, a local Australian brand, helps create a sense of place

Chinese passengers have higher spending patterns and favor luxury brands such as Fendi

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Global travel retailer Heinemann Tax & Duty Free has reinvented the Fashion & Accessories category at Sydney Airport since taking over the concession by REBECCA BYRNE

wo years ago Sydney Airport was looking to transform the airside experience for its then-13-million international passengers, and chose Heinemann Tax & Duty Free (Heinemann) to help realize this ambition. For Heinemann this was its first high-profile concession success in the Asia Pacific region and an ambitious move. In a statement at the time, Max Heinemann, Asia Pacific Chief Executive Officer, said that the company was “particularly encouraged by Sydney Airport’s challenge to rethink all the elements of its duty free business because this aligns precisely with Heinemann’s philosophy of constantly challenging the status quo.” He also promised to “create an authentic and living representation of Sydney that breaks away from tired stereotypes, by delivering an environment that is an extension of the city of Sydney in all its exuberance.” In February 2015 Heinemann opened its operations at Sydney Airport, and over the past two years the company has excelled at transforming the travel retail offering, particularly in the Fashion and Accessories category. A significant extension and redevelopment of the entire airside shopping emporium to 8,000 square meters has allowed Heinemann to introduce a wide and varied range of luxury and fashion brands to the airport. This includes notable names such as Fendi, Salvatore Ferragamo, Bally, Longchamp, Ermenegildo Zegna, MCM, Furla

Some of the luxury brands have their own standalone boutiques within the store

Ladies handbags are the number one best seller at the Heinemann store

and UGG Australia. With an eye on the local market and to offer a sense of place, Heinemann also offers a range of successful local fashion and leisure/lifestyle brands such as Seafolly and Alice McCall. Within the floor space, brands popular with tourists and locals such as Fendi, Salvatore Ferragamo and Longchamp have their own standalone boutiques of up to 100 square meters each. These have been performing extremely well. Constantin Wiesmann, Managing Director Heinemann Australia, has headed up the operation at Sydney Airport since July 2015. During this time he has seen significant passenger growth, especially from Asian destinations, with Chinese passengers being the secondlargest nationality visiting the airport after Australians. Other Asian nationalities such as Korean and Japanese have also had a strong increase over the past two years. This, combined with an improved product range and overall shopping experience, has led to significant sales growth at Sydney Airport. However, this varied demographic also brings its challenges. Chinese passengers have higher spending patterns and favor luxury brands such as Omega, Fendi, Longines and Salvatore Ferragamo whereas Australian customers tend to have higher spend on accessories, with the popular brands being Ray Ban, Longchamp, TAG Heuer and Furla. Ensuring the fashion mix in terms of assortment, sizes and seasons cater to both the Aus-

tralian and Asian customers with their significantly different shopping behaviours can prove difficult at times. Over the next five years, Wiesmann sees a further challenge from the rapid growth of online retail businesses particularly those within the Fashion and Accessories category. He believes that to counter this Heinemann’s main focus needs be in fostering customer engagement and excitement within its stores. Key to success is long standing relationships that Heinemann has with their brand partners and buyers as well as a strong collaborative relationship with Sydney Airport. This includes creating innovative campaigns together that will continually surprise their customers as well as be at the forefront of travel retail in Asia Pacific. The company makes sure to remain up to date with what’s going on overseas and locally via social media and competitor checks and also benefits from its close collaboration with brand partners. If there was a message Wiesmann would like to give to suppliers to ensure that the offering remains current, it would be that airport customers are now looking for high fashion items that are sold domestically and not just the usual ‘travel retail’ ranges that are currently sold in airports. He adds that: “Competition is fierce and the brands need to keep up with the latest trends as well as have a strong core offering. Outstanding visual merchandizing, pop ups, customized products and more

interactive experiences will also be key to drive sales.” When asked about best-selling ranges within the Fashion and Accessories category, Wiesmann says: “Ladies handbags are our number one category in the boutiques, followed by shoes and small leather goods. There is also growth in textiles, as customers are looking for silks and outerwear, and we will be strengthening these categories next year. When buying for customers we need to consider both tourists and locals. We also invest in classic core pieces and look for new opportunities in latest trends and consumer behavior.” Looking at the category in more detail, standout lines include Fendi Peekaboo, 2Jours and Bugs which have performed extremely well. There has also been significant interest in the new Kan I bags. Salvatore Ferragamo classics such as the Vara range and the men’s belts remain best sellers. Longchamp Le Pliage 1899 sells extremely well to both locals and visitors. MCM backpacks are very popular with students from around the world. Australian UGG boots and Helen Kaminski hats have also worked well. Heinemann continually looks for opportunities to introduce new fashion brands and products both inside its concession space and elsewhere in the airport where it can add value. More recently Heinemann joined Sydney Airport’s prestigious luxury precinct when it opened a stunning 120-squaremeter Hermès Boutique. Heinemann has a long-standing relationship with Hermès in Europe and was able to bring the brand to Sydney International Airport. This new store has already far exceeded customers’ expectations. As for Heinemann’s future at Sydney Airport, Wiesmann is clearly happy with the strong partnership, which has enabled its operation to go from strength to strength. He concludes: “Sydney Airport has done an incredible job in extending the brand offering and brought in a huge line up of international premium brands. Sydney Airport and Heinemann are working closely to develop further improvements in this area. We look forward to some exciting times ahead that will strengthen Sydney Airport as the number one Airport shopping destination.”

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EDITOR’S CHOICE

Fit to travel

These must-have products are the latest travel-friendly items from top suppliers

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1. Rituals Vata Dry Oil: Rituals’ new Ayurveda Collection features Vata Dry Oil. This 100% natural dry oil with sweet almond oil and basil is enriched with nourishing herbs. The unique formula gives a silky soft sensation and a delightful aroma

4. Leonidas Manon Collection: This new travel-exclusive gift box is inspired by the original walnut kernel dipped in melted sugar. The Manon is transformed in a white chocolate praline with walnut, then filled with a secret buttercream recipe

2. Mediactive Active 20+ Multi-balm: A versatile skincare solution from AstraGrace for chapped, dry or broken skin, this multi-balm contains antioxidants, natural nutrients and antibacterial properties to protect, hydrate and soothe the skin

5. Loacker Mini Suitcase: This colorful suitcase is full of 12 different bite-size treats that are sure to please everyone. The suitcase makes it easy to share and the keepsake box promises to bring out the nostalgia in kids and adults alike

3. Beluga Hunting Herbal: This Russian bitter contains malt spirit and artesian water. The harmonious blend includes wormwood, anise, oak bark, St John’s wort, cedar nuts, pine buds, cherry-tree leaves, hop, ginger and coriander

6. Butlers Mini Chocolate Bars: This popular tablet range features milk, dark and white mini bars in six flavors. Each mini bar is individually wrapped in vibrant descriptive packaging to reflect the flavors inside, perfect for gifting

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

7. Everytime Royal Ginseng: CheongKwanJang Korean Red Ginseng Extract Everytime Royal is a convenient style of red ginseng extract produced by blending only 100% of red ginseng and purified water. You can take this natural booster anywhere 8. Dyrberg/Kern Compliments Bracelet: This bracelet can be changed according to the design and style required by the individual. The variety of toppings to this bracelet allows the advantage of versatility 9. Lego Thunder Hollow Crazy Race: This Lego Juniors set allows kids to experience the world of Disney Pixar’s Cars 3 movie. The combination of classic bricks, larger elements and child-friendly instructions allow Lego fans to build the eight new products in a flash

10. NARS Cosmetics Powermatte Lip Pigment: This lip formula features a liquefied pigment that delivers an infinite matte color saturation with ultra-flexible long wear. It is available in 18 lip-sealing shades to flatter all skin tones 11. Gucci Bloom: Italian luxury brand Gucci offers a scent as thriving as a garden full of flowers and the rich perfume it emits. The scent is made to celebrate the authenticity, vitality and diversity of women 12. Konik’s Tail Vodka: Konik’s Tail is distilled using spelt, golden rye and early winter wheat grown by farmers close to Poland’s Bialowieza Forest. This triple grain vodka is available in 70cl bottles and has an alcohol content of 40% www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

DESIGUAL

The Spanish fashion brand plans on showcasing its latest travel retail exclusives at TFWA, Cannes

Desigual’s Accessories Collection AW17 offers bags, ponchos and scarves ideal for the urban traveler

Lending color to

travel retail Spanish fashion brand Desigual continues to make headway in the travel retail with its customer-focused strategy

esigual has plenty to celebrate as the Spanish fashion brand known for its colorful collections forges a distinctive path in the travel retail channel. At present, the best performing market for Desigual in travel retail is North America, despite the strength of the dollar, and its Latin America business is expanding, with new openings in Rio de Janeiro and Bogota this year. The brand’s home market of Spain, including both its directlyrun operations and wholesale business, are also performing well, especially in the Canary and Balearic Islands. “Recently, we were incredibly proud that our Desigual standalone store was awarded Best Retail Team by Tallink-Silja Line,

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

showing that fashion and ready-to-wear really can perform on cruises and ferries,” says Marco Gadola, Head of Travel Retail, Desigual.

New travel retail exclusive products Several innovations will be highlighted at the TFWA World Exhibition in Cannes this year. From a product perspective, Desigual will be showcasing its latest travel retail exclusive, as well as two new inflight exclusive products to complement its existing inflight range. Equally, the company continues to be focused on finding fresh ways to present the brand in travel retail, and engage with

consumers to give them an unforgettable customer experience. It recently launched its new exclusive shopper magazine, which embodies Desigual’s differentiated approach to communicating with consumers by placing the latest collections and styles within entertaining editorial content that is fun, colorful and engaging. Cannes will also provide an opportunity to continue educating retailers about the brand’s new Wearing Occasion strategy. Having listened to its consumers, through more than 15,000 surveys worldwide – a significant number of whom would be classed as millennials – one of the key takeaways was the need for greater product renewal during each season. Consumers would previously encounter the same collection during the entire season, but now, from its Spring/Summer and Autumn/Winter 2017 collections, it is implementing a new phased launch strategy based on Wearing Occasions and the concept of Always New. The outcome is that consumers will be able to live a new Desigual experience four times per season, through a four-phased drop of the new collection during each season. Gadola notes that with total travel retail sales growing +2.5% in 2016, according to Generation, it demonstrates that the fashion and accessories category technically underperformed in 2016. However, total travel retail sales were dramatically dis-

Desigual continues to expand its Spanish flavour with new store openings in Rio de Janeiro and Bogota this year

can continue to innovate and execute on our strategy,” he adds.

Fashion plays a role in driving growth Gadola has firm views on the industry trends he is seeing. “I would say a major trend is a gradual realization amongst retailers of the role ready-to-wear fashion can play in driving Desigual Head of Travel Retail, growth. That said, they are Marco Gadola also increasingly becoming aware that this is a specialist category which requires certain expertise and capabilities. “What we see is that retailers dip into ready-to-wear, often treating it in a similar way to leather goods, and find it does not perform to expectations, and they pull the brands. Ready-towear requires specialist knowledge and a unique approach in travel retail. Desigual is ready to support retailers to improve their knowledge and approach to ready-to-wear, to make the sub-category a long-term and sustainable success in the channel,” he says. Millennials make up a good part of Desigual’s shopper base, but from day one the company has treated its customers as individuals. “The Desigual shopper is an authentic traveler with her own way of being and dressing. She could be from any nationality, but likes experimenting with different styles and looks; she buys unique items to create original outfits and she wants to stand out with her fashion style. She is independent, impulsive, sensual, extrovert and loving,” says Gadola. He continues: “Finding new and innovative ways of appealing to these different types of consumers – perhaps less well-catered for by many of the luxury fashion brands in travel retail – is perfectly aligned with our strategy of ‘Making Women Happy in Travel Retail’.

Uniting in-store activity with rewarding experiences

torted by the phenomenal performance of the beauty category in Asia Pacific. Not even global passenger traffic growth of +5.5% in 2016, according to Airports Council International, buoyed the travel retail industry or the fashion and accessories category. “These are challenging times, not helped by geopolitical crises and currency fluctuations,” he says. “That said, we remain positive. We are a distinctive brand in the channel and have put in place a differentiated and robust strategy that paves the way for growth. We cannot influence economic and political factors which can affect our business, but we

Social media is one of the primary ways that consumers interact with the brands they’re passionate about, and few categories generate the level of interest and engagement online that fashion does, observes Gadola. “At Desigual, we use social media to inform and inspire our fans with content they love and our results show this. Desigual has industry-leading organic reach and engagement rates, supported by a 100% response rate, which means we value and reply to every single fan comment.” Although social media is global, the company also acts locally, and unites the store activity with rewarding experiences that are subsequently broadcast online. For example, its Desigual Sailing Experience campaign offers locals and visitors to Barcelona the chance to enjoy a scenic sailing trip when they make a purchase in one of its stores. “The social media buzz around this project has been exceptional,” concludes Gadola.

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WILD TIGER RUM

Wild Tiger’s Gautom Menon accepts GQ magazine’s award from Bollywood superstar Ranveer Singh

Earning his

stripes As he scoops a GQ Award for his business achievements, the young founder of Wild Tiger Rum thanks the duty free industry for its help

autom Menon, the Founder and Brand Owner of Wild Tiger India, has received an accolade from GQ magazine recognizing him as one of the 50 Most Influential Young Indians for 2017. And the young businessman says he is indebted to the duty free industry for his success in business so far. The glitzy ceremony took place in July at the Hyatt Regency hotel in New Delhi, where Bollywood superstar Ranveer Singh handed Menon his award. Menon, who was born in Coimbatore in South India, created the Wild Tiger brand a decade ago, eventually launching in February 2016 – against all odds. He had to fight a legal case against the state government in order to start exporting. Already available in 22 countries and with numerous listings on land, air and sea in duty free shops across the world, Menon is a firm believer in the power of relevance and provenance. “GQ are chic, contemporary, cosmopolitan and bold, they believe in recognizing alternative careers too, and those who rewrite the rule books, hence I were chosen as a worthy recipient,” says Menon. “It’s very humbling and motivating indeed. We are from a country where the very constitution itself is not favorable

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

for liquor and hence only an entity like GQ could recognize this. I must thank the rum industry and duty free industry for much of this early success – I am indebted to them forever.” He continued: “I dedicate this award to my late grandfather, Mr. Krishnan Nair, whom I didn’t give much to be proud of when he was alive, but I am sure he must have enjoyed a nice glass of rum on hearing this news, wherever he is.”

Innovation and social responsibility Wild Tiger Rum, India’s first and only premium rum, is made in Kerala, South India. The brand has two USPs: each of its handcrafted bottles bears unique tiger stripes, and it supports the cause of wild tiger preservation. Menon explains: “Innovation and social responsibility are at the heart of everything we do at Wild Tiger. We approached this with the mantra ‘Think Out of The Bottle’.” As a part of its core CSR policy, the Wild Tiger brand donates 10% of its profits towards tiger conservation

in Southern India, where it has set up its own non-profit initiative called Wild Tiger Foundation (WTF). WTF works with other established wildlife organizations and prominent tiger experts to save the tiger and its habitat in Southern India. Building on its initial success, Wild Tiger recently launched a second rum variant, which Menon dubs Asia’s first premium spiced rum, using only natural spices handpicked in the state of Kerala. For Wild Tiger consumers, the brand has developed recipes for “Roaring Cocktails” on its website at www.wildtiger.in and is an active user of the social media hashtag #WildTigerRum.

ANTHON BERG

Buying chocolate

experiences In an exclusive interview, André Haunsø Kampmann, Senior Brand Manager of Anthon Berg International, reveals the confectionery company’s recipe for success

Celebrating the 50th anniversary of its Chocolate Liqueur Bottles, the new Chocolate Liqueur Collection comprises 21 favorite miniature bottles from Anthon Berg’s three concepts

Two of Anthon Berg’s latest concept products, Chocolate Liqueur Bottles Drinks Time and Chocolate Cocktail - Cocktail Hours, are presented in a premium gold sleeve as a dual pack

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nthon Berg is one of the leading suppliers of chocolate containing alcohol. Its Chocolate Liqueur Bottle concept is “a silver bullet line” with very few competitors, according to André Haunsø Kampmann, Senior Brand Manager, Anthon Berg International. The firm targets both male and female consumers and has created a strong range within formal and informal gifting, sharing, self-indulgence and trial purchase situations. “We continue to work around this sure-shot product line, by developing new items we know the consumers want. Our strong partnership with the leading liqueur brands in the market puts us ahead of the game,” he says. When speaking about the company’s recent performance, Peter Dige, Travel Retail Director, offers: “We came out of 2016 with quite acceptable sales figures with a very strong Q4 performance. And we have had a fantastic seven months so far in 2017. We are seeing a steady growth in all regions despite some challenges for certain customers. Qatar has been challenged on sales because of the unfortunate boycott by the Arab Emirates. This has resulted in a decrease in number of passengers and, due to this, fewer purchases. Despite this we are generally very satisfied.”

50th anniversary milestone In 2018, Anthon Berg celebrates the 50th anniversary of its Chocolate Liqueur Bottles. At this year’s TFWA World Exhibition, it is launching two new products in the category. The Chocolate Liqueur Collection comprises 21 favorite miniature bottles from the three concepts: Chocolate Liqueur Bottles, Chocolate Cocktails and Chocolate Coffee Liqueurs. This broad-targeting product is aimed at gifting, trial, sharing and self-indulgence. In addition, two of its latest concept products, Chocolate Liqueur Bottles - Drinks Time and Chocolate Cocktail Cocktail Hours, are presented in a premium gold sleeve as a d ual pack. Each box contains 12 liqueur-filled chocolate bottles – one for every hour around the clock. “Together they give consumers 24 hours of luxurious chocolate liqueur moments,” enthuses Kampmann. Another new product for 2018 is the Deluxe Series (Travellers Exclusive), in Sweet Caramel and White Nougat flavors. The Deluxe Series make up a large percentage of the brand’s Nordic sales. The Travelers Exclusive line contains three sleeved boxes of individually wrapped, chocolate-covered marzipan treats. “The two newcomers have big global potential, as we are basing the taste on nougat and caramel rather than marzipan – a Nordic favourite,” Kampmann says. The new products are targeting non-alcohol requirements and can stand alone as a dual concept as well as part of the full range. The Deluxe Series targets informal gifting, sharing and self-indulgence.

Travelers Exclusive products in demand Looking at the latest sales figures, the company has great expectations for growth this year. “We are seeing a steady rise in number of passengers throughout the regions. The big job for the stores is channeling the traffic through the stores and creating ideal purchase situations. As a supplier, our job is to create

more experiences for the consumers. We work closely with the concessions’ owners in doing this to create innovative concepts to attract the attention in the shops,” explains Dige. As low-cost airlines are driving the majority of the growth in passenger numbers, Anthon Berg is continuing to develop luxury products at a price point suited for the more price-conscious consumers. “So from where we stand this year looks good so far,” says Dige, adding that one uncertainty is the impact another terror attack would have on the travel retail business. Going forward, the company’s strategy to drive growth this year is to deliver the best chocolate products on the market that contain alcohol, notes Dige. Turning to consumer trends, Anthon Berg continues to see a demand for premium products at different price points and tailored to various purchase occasions. Travellers Exclusive products continue to be in demand, so it is also a focal point in developing new products. Kampmann has a lot to say on the importance of millennial consumers and their mindset. “Millennials do not buy stuff, they buy experiences, which is just what Anthon Berg products are all about. Our brand universe Generosity (You Can Never Be Too Generous) is tapping right into the mega-trend of generosity, which is a big driver for millennials’ self-perception. We bring this brand to life by running promotions that tap into millennials’ demand for exclusivity, authenticity and diversity, which encourages them to interact and which sparks conversations. The latter being key to life they lead on social media. “A few years back certain media was targeted at specific markets, but the global citizens millennials represent are crossing physical borders online by the minute. This means that everything we put out there is instantly available to consumers on all markets. This allows us to interact e.g. via Facebook with all markets at once and gives us the opportunity to create a scene for brand engagement by global ‘virtual tribes’ of Anthon Berg fans,” says Kampmann.

Successful promotional campaigns The promotional strategy is to run various types of activations. This year, it has had great success with its gwp promotion ‘Buy three Anthon Berg products and get a free wine cooler’. Another successful campaign called The Generous Teaser took place in spring 2017 in Copenhagen Airport. The promotion was a spin-off of its brand universe You Can Never Be Too Generous. When buying two Anthon Berg products or more, shoppers got a pink gift bag for the products to write a generous teaser message for the recipient. A photo wall of one of the most famous tourist scenes in Copenhagen (Nyhavn) was put up with a classical Copenhagen bench in front. The consumers could take a selfie holding the bag with the message and tagging the recipient on social media. In September 2017, Anthon Berg ran a branding promotion at Copenhagen Airport titled Spin The Bottle. Travelers were invited to spin the bottle physically at the airport and win plane tickets to a destination of their choice. A similar promotion took place when the Chocolate Coffee Liqueurs were launched, which proved a great success.

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WILLIAM GRANT & SONS The revamped Glenfiddich Cask Collection, which debuted in Cannes last year, reflects the brand’s own pioneering history

Looking beyond the label From Glenfiddich distillery tours using virtual reality goggles to Hendrick’s bicycle-powered cucumber slicers, William Grant & Sons doesn’t disappoint when it comes to engaging an audience

hile Taiwan, Australia and Singapore hold court as high performing markets for William Grant & Sons (WGS), geopolitical issues in the region and a shifting retailer landscape mean that the challenge of constantly looking for opportunities to excite shoppers remains crucial to the company’s continued travel retail success. “We are in growth across the entire ASPAC region and our key brands are flying. For example, Monkey Shoulder is growing really fast in Australia and we also recently learned that it’s one of DFS’ fastest-growing products in Singapore,” says Ifan Jenkins, Head of Marketing, Global Travel Retail. “It definitely plays to a few trends at the moment, and hits the target market of the younger travel retail consumer, plus it has an accessible price point,” he adds. William Grant & Sons uses travel retail as a global stage for building brand equity with airport activations as part of its strategic focus. “If we’re talking single malts then the Glenfiddich Cask Collection plays into this. We want to win over new customers and get them in at entry level, and then travel with them on their whisky journey as they evolve,” explains Nigel Ng, the company’s Singapore-based Regional Marketing Manager. The revamped Cask Collection, which debuted in Cannes last year, is distinctive on shelf, and this reflects the brand’s own

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pioneering history, according to Ng. “It’s really important to us as Glenfiddich represents a significant proportion of our business, and the Cask Collection is the number one travel retail single malt; so making it easy for shoppers to identify helps grow the whole single malt category,” notes Jenkins. The emotional connection is the cherry on the cake for Jenkins, as he explains: “If we can build that on top of an amazing tasting product, then people will love the brand even more. “Hendrick’s is a really great example of something that tastes amazing but where consumers have really bought into the surreal Victorian world and quirky story around it. So when we run activations around things like annual World Cucumber Day, this strongly resonates with the public.” The current cocktail trend in Southeast Asia is another area where Ng sees unbridled opportunity. “We are riding on this wave with Monkey Shoulder, Hendrick’s and Sailor Jerry, which are all great cocktail-making brands and play a big part in our success,” he says. With a younger cocktail quaffing demographic the new breed of travel retail consumer, WGS is also putting considerable effort into online presence. Says Jenkins: “We have web presence for all our brands and are really active on social media with a lot of video content shot around our activations calendar, both

for domestic and travel retail markets. We also work closely with retailers to ensure that our content is on their sites as well. “In Asia particularly, people do a lot of pre-planning and will research brands in advance of travelling, so the more exciting, engaging and emotionally relevant, then the stronger the connection when they finally enter the shop.” The team measures its social media engagement success by keeping a close watch on likes, comments, shares and other metrics, and a recent digital campaign for its Glenfiddich 21-year-old, that told the story of its origins, generated over 15 million global views. Commenting on its latest travel retail exclusive, The Balvenie Peated Triple Cask Aged 14 Years, Ng says: “This expression will only be launched in markets where our consumers are very close to The Balvenie brand, so they know it through the core range and we can then introduce them to a more unique flavour profile.”

WGS reports that Monkey Shoulder is growing really quickly in Australia and is also one of DFS’ fastestgrowing products in Singapore Changi

EDRINGTON

Innovations such as The Macallan Rare Cask Black and its Masters of Photography series continue to intrigue and entice the whisky’s aficionados

Constant evolution Since creating its own travel retail division in 2014, Edrington continues to make waves and grow sales, all while by WENDY MORLEY

ver the past few years, in travel retail at least, Edrington has appeared to be in a constant state of flux. But this by no means implies a lack of progression. Quite the opposite. Performance has been strong in all regions, fueled primarily by the company’s “crown jewel”– The Macallan. “Product innovation, retail initiatives such as The Macallan Boutique, the continued strong performance of prestige bottlings and a focus on premiumization and storytelling are collectively providing a level of resilience against the discounting trends affecting buoyancy in the category,” says Igor Boyadjian, Managing Director GTR. “Highland Park is also growing at a similar rate, with our investments in channel exclusive product innovations resonating well with consumers.” Regionally, Asia continues to be the major growth driver for Edrington’s travel retail business, with The Macallan being a particularly strong performer. While the company is not seeing growth in Europe, which tends more toward blends, it is holding steady. The Middle East has shown strong performance, driven by Edrington’s strong partnership with Le Clos, which has resulted in several worldrecord sales of The Macallan over the last 12 months.

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

New retail experience In terms of innovation at the retail level, for Edrington the highlight of the past year was the unveiling of The Macallan Boutique at Taiwan Airport. “Consumer engagement and storytelling is at the heart of the strategy for growing The Macallan in travel retail, and the concept embodies this approach by delivering the ultimate Macallan experience in the world’s first mono-brand single malt Scotch whisky boutique,” says Boyadjian. “A number of detailed design elements and interactive digital installations take travelers on a journey of discovery and exploration, giving them unique insight into the DNA of The Macallan.” Elements within this retail environment include: Master of Wood, which highlights the importance of wood in the maturations process and introduces shoppers to the three cask types that The Macallan matures in; Master of Taste, which allows consumers to explore the prominent flavors and aromas of The Macallan through interactive nosing; and Master of Convenience, which includes a sliding interactive digital screen offering information on the core range. “This retail experience is supported by a strong focus on product differentiation – resulting in the largest range of The Macallan in travel

Edrington’s strong partnership with Le Clos, in Dubai, has resulted in several world-record sales of The Macallan over the last 12 months

retail,” says Boyadjian. “We’re extremely pleased at the performance to date, with sales and average transaction values up significantly.”

Other news Earlier this year, Edrington re-acquired The Glenrothes brand. “Edrington and Highland Distillers have owned the Glenrothes Distillery & Cooperage since 1887,” says Boyadjian. “Reuniting the brand and distillery will allow us to accelerate Glenrothes’ growth in international markets though a more consistent approach.” Edrington also just bought out WEBB, its partner in the Americas since January 2015, following a similar strategy in other parts of the globe. “Our joint venture with WEBB proved exceptionally successful, delivering high double-digit growth,” says Boyadjian. On the horizon Edrington will be announcing something big with its biggest brand. “We will be sharing some major news from The Macallan,” says Boyadjian. “We are committed to investing in our brands to keep them relevant in this channel, and the innovation we will be delivering around The Macallan this year will be a major step in the brand’s evolution in travel retail.”

ENJOY RESPONSIBLY. SAN TA T E R E S A A N D I T S T R A DE DR E S S A R E T R A DE MA R K S

LIQUOR NEWS

Second edition of Patrón en LALIQUE is released In 2015, renowned luxury tequila distiller, Patrón, and illustrious French crystal art glassmaker, LALIQUE, together created a breathtaking collaboration, Patrón en LALIQUE. That limited edition crystal decanter was influenced by founder René Lalique’s early Art Nouveau style, which he pioneered in the late 19thth century. This year, once again the two esteemed companies will release a beautiful collaboration. For Patrón en LALIQUE: Serie 2, LALIQUE’s master artisans have created a stunningly elegant crystal decanter inspired by Lalique’s signature Art Déco design, which has both a French and Mexican pedigree. Only 299 bottles of Patrón en LALIQUE: Serie 2 have been created, each skillfully handmade and individually numbered at LALIQUE’s glass factory in Wingen-sur- Moder, in Alsace, France. The bottle, inspired by the Weber Blue Agave plant, from which tequila is produced, displays the lines that are both straight and offer the feel of delicate curves – quintessential Art Deco. The decanter’s rounded crystal stopper is amber in color, to complement the extra añejo tequila inside the bottle, and features Patrón’s iconic bee emblem, detailed in pure gold enamel. The elegant display case rotates to reveal the bottle and stopper, making for a truly dramatic presentation. The bottle and display case are just the beginning. Tequila is challenging to age, but Patrón’s master distiller Francisco Alcaraz

Mexican luxury meets French luxury in the new release: Patrón en LALIQUE: Serie 2

and his talented team have created a masterpiece, aging the tequila for, on average, over seven years in three different types of barrels: American oak, French oak, and Spanish Sherry. The exceptional liquid has the perfect balance of oak and roasted agave flavor, with notes of apple, banana, pear, vanilla, light agave, raisin and pecans.

Tito’s releases new gift bag for the holiday season

Now that the territory of Tito’s Handmade Vodka is expanding globally, the company will have more airport activations and gift bags such as this fun, photographable and shareable “Ugly Sweater”

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

After seeing its success with two previous exclusive gift bag releases, Tito’s Handmade Vodka is playing with the holiday season’s “ugly sweater” trend with a fun “Ugly Sweater” gift bag, available exclusively in global travel retail. Previously this year, the company released a Chinese New Year gift bag, which was available in key travel retail locations in Asia, and then in a much larger campaign, the “Red, White and Blue” gift bag to celebrate the United States’ Independence Day in July. Social media has been key for the company’s ability to capture the millennial shopper, and the company describes this gift bag as “a fun, photographable and shareable package.” It is the Chinese Year of the Dog beginning early in 2018. As “The Vodka for Dog People,” Tito’s is very involved in helping dogs live better lives, through rescue, vet support and more. The company will therefore have an extra-special themed release coming out early next year as a travel retail exclusive. John McDonnell, Tito’s International Managing Director, says as territories expand, the company will work toward building its in-store presence, with expanded facings, improved shelf positions and more bottle formats. Tito’s has also begun activations that bring attention to the brand’s craft heritage; these activations will play a key role in brand expansion.

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MBWS The company’s “Are you Liqueurious’ activations introduced the renewed brand to travelers in airports in France. The campaign will roll out further in coming months

by no means a guarantee – nor are they affordable for many companies. “Innovations show no signs of slowing down. This is largely an effort to create more profitable products that are not restricted by benchmark domestic prices,” he says. “Retailers’ margin pressures also continue to bite into suppliers’ bottom line. Building a profitable new business in travel retail is extremely difficult,” says Baker.

Continued progression by

WENDY MORLEY

Despite “some of the most difficult trading circumstances” he’s experienced in GTR, MBWS Global Travel Retail Director Kevin Baker says new signings and increased sales bode well for the company

ravel retail tends to be more heavily affected by sociopolitical trends than other industries, and the past couple of years have had their share of difficulties. “Economic and political situations have affected Russian travelers, Chinese passengers’ spend levels and the economy in Latin America,” says Kevin Baker, Global Travel Retail Director at Marie Brizard Wine & Spirits (MBWS). “Add to that the increasing number of terrorist attacks in Europe, the decisions affecting Qatar, the knock-on effects of Brexit, and now the uncertainty in the US following the president’s travel ban – these have conspired to create some of the most difficult trading circumstances I’ve experienced in travel retail.” Against this demanding backdrop, MBWS managed a better start to 2017 than 2016. The company has recently achieved new listings in Europe, Americas and the Middle East. “The Middle East continues to be uncertain,” says Baker. “The situation regarding Qatar is destabilizing, and the

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

US travel ban will certainly have considerable effect. Despite this I believe sales in this region will continue to rise, driven by the tremendous infrastructure investments in airports around the world.”

Changing times Baker feels Brexit offers opportunity. “Although duty free sales for EU passengers will not return to those departing to/ from the UK next year, currency changes mean the UK has now become very good value for money for tourists. So we may see a positive knock-on effect to sales at UK airports.” He adds: “Although having said that, there may be a reduction in British passengers traveling abroad because Europe and the US are now much more expensive!”

Keys to success “Success in the crowded and competitive liquor category demands a combination of innovative and exclusive products supported by engaging activations that appeal to the savvy consumer,” he says. “These can be prohibitively expensive for smaller brands, but there are always opportunities for growth. Many smaller brands offer unique, niche, different and interesting products with real appeal to travelers seeking alternatives. It’s up to the retailers to make it financially possible for us to work within the channel.” MBWS will exhibit in Cannes, Blue Village D12, with a brand new stand featuring the “Are you Liqueurious” activation, supported by a cocktail bar on the stand and a great Marie Brizard sensory feature.

New look, new activations The company has been running a new promotion at French airports, called: Are you Liqueurious? Baker says: “During April and May, an eye-catching Marie Brizard wall-bay featured in Paris Charles de Gaulle Terminal 2E together with a ‘Marie Zest’ tasting event in Paris Orly South, supporting ‘BuY PARIS DUTY FREE’s French Riviera’ promotion, in partnership with Lagardère Travel Retail. This was followed in June by ‘Are you Liqueurious’ tastings in Bordeaux Airport. And we are seeking to roll these out further.” According to Baker, innovations and activations are the key to success in the crowded spirits market, though they are

MBWS recently executed a complete redesign of its packaging, ensuring all Marie Brizard items have a similar look and feel

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DIVERSE FLAVOURS

Trading on

diversity by

Diverse Flavours is in the right place at the right time with its strategy of supplying South African wines to operators seeking something different

Ernie Els Proprietor’s Blend and Big Easy Red are two of Diverse Flavours’ best-selling wines in Asian and Middle East duty free shops

Diverse Flavours Managing Director Anthony Budd trained 200 promoters in a series of training sessions carried out in Everrich and Tasa Meng duty free shops at Taoyuan, Kaohsiung and Taichung airports in Taiwan

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

JAS RYAT

nthony Budd, co-founder and Managing Director of South African wine supplier Diverse Flavours, has built a niche for his products in the Middle East and Asia, chiming with the consumer’s desire for newness in these travel retail markets. Diverse Flavours prides itself on catering to all levels of the Middle East market. “We cater to the varying tastes and price points that the diverse consumer segments require in the core Middle East locations. “We are very excited by the future, as we see very good and growing demand for our range of South African wines. We are also very lucky that the operators we work with in the region are very keen to explore new products and ideas,” says Budd. Diverse Flavours has a wide range of South African wines selling very well in Dubai Duty Free, including wines from the Ernie Els Winery from Stellenbosch; Cederberg, the highest winery in South Africa; Avondale, the top biologic/organic wine; Groot Constantia, the oldest winery in South Africa dating back to 1685; 88 Vineyards, a medium sweet Merlot for consumers seeking an easy-drinking wine; Tamboerskloof award-winning Syrah; and the Raats Family Wines, one of the top Cabernet Franc wineries. In the inflight market, Emirates is pouring the MR Compostella from Raats Family Winery in First Class; and Etihad has been pouring the Delaire Graff Banghoek Reserve Chardonnay across First and Business Class.

Cederberg Cabernet Sauvignon currently being poured on Singapore Airlines in Business Class)

The unique and successful Groot Constantia Rood and chocolate pairing pack is available at Dubai Duty Free

At the TFWA World Exhibition, Diverse Flavours will be showing and tasting wines from: Avondale, Cederberg, Delaire Graff, Ernie Els, Groot Constantia, Ghost Corner, Kleinood, Mt Vernon, 88 Vineyards and Napier. In addition, it will also showcase Japanese sake from Sakuramasamune – one of Japan’s oldest sake producers – and finally, Scots Gold Scotch whisky from Charles Edge London.

Tremendous room for growth

Tamboerskloof Viognier has been selected by All Nippon Airways for First Class pouring from later this year

The company also has a wide range of wines in the Barracuda shop, Sharjah Airport, and Oscars retail shop. Dubai airport retailer Le Clos is also listing Eagles’ Nest Syrah and Merlot from Constantia, and Ghost Corner wines from Elim, the southernmost location for producing wines in South Africa.

Special chocolate pairing and wine pack Among the best-performing wines in the Gulf and Asia regions, Budd cites Ernie Els Wines, which are well known among Europeans, Americans and golf lovers, as the winery is owned by the famous golfer and four-time Major winner Ernie Els. Cederberg wines are also well known with European and Asian consumers, and its wines have been poured on many airlines. Budd cites as examples its Sauvignon Blanc onboard All Nippon Airways (ANA) and Asiana; Chenin Blanc – Etihad; Shiraz – Cathay Pacific; Merlot-Shiraz – ANA; and Cabernet Sauvignon – Singapore Airlines. Groot Constantia is widely known by Chinese consumers – over 100,000 mainland Chinese visit the winery in Cape Town every year. “We launched the special, unique chocolate pairing and wine pack with Groot Constantia Rood and this is now selling in Dubai Duty Free. The chocolate is specially made to match only that wine – very unique,” he enthuses. 88 Vineyards Merlot Medium Sweet is also performing well as it caters to consumers seeking an easy-drinking experience.

On the company’s future performance, Budd is optimistic: “Because we are in an emerging category in our offering of South African premium wine, the future growth expectations are very exciting. We are still only distributing our wines in Asia and the Middle East, and not in all parts yet, so we have tremendous room for growth. “In addition, we are yet to talk to anyone from the Americas (North or South), or even Europe – a well-established market for South African wines – so this is really an open book.” He adds that the company’s business model of flexibility, speed and service offers its customers the opportunity to consolidate great wines from multiple wine estates with ease and reliability. The strategy is to be a long-term partner, where its service is built to fit the individual client requirements. One recent example was a series of training sessions carried out in Ever Rich and Tasa Meng duty free shops at Taoyuan, Kaohsiung and Taichung airports in Taiwan. Budd trained 200 promoters over four days. “I really believe we need to educate the promoters in the shops, so these sessions which last two hours are great. I give them info on South Africa, the South African wine industry, the wine estates, the wines, and of course we have a tasting. Great interaction and all the promoters are really enthusiastic!” he says. When it comes to what consumers are demanding, the company is in the right place at the right time. “I believe we are in a very good space with our offering of South African wines, as the demand for wine by the traveling consumer is increasing and they are looking for new experiences, which South Africa offers. The diverse range of consumer groups from different countries and cultures makes it very exciting, as we see a broad range of consumers buying our wines,” he enthuses. The strategy remains one of regional focus but the company is looking at the possibility of offering its South African premium wines to Europe and the Americas. It is also targeting the interest in Japanese products through its sake range. Speaking about how different the Gulf duty free consumer is compared to other markets, Budd says they’re a perfect fit for his company. “Because of its geographical position and the entrepreneurial nature of the region and the development of hubs, the Gulf duty free consumer is one of the most diverse in the world. This is perfect for Diverse Flavours!” Please find the Diverse Flavours team at booth L34 Red Village during TFWA WE in Cannes.

www.dutyfreemagazine.ca ASIA DUTY FREE & TRAVEL RETAILING

ROYAL DRAGON VODKA

Making

a splash The 2017 TFWA World Exhibition promises to be a memorable event forthe Royal Dragon Vodka brand, as its founder explains

f you’re attending the TFWA World Exhibition in October and aren’t familiar with the Royal Dragon Vodka brand, you soon will be. That’s according to the ebullient founder of Royal Dragon Vodka, who is planning a “truly spectacular” happening at the Cannes show. Hong Kong-based Michel Morren, Founder and President of Royal Dragon Vodka Worldwide, explains. “Especially in the duty free industry, most people do not know me nor are they perhaps familiar with our brand. However, this will change as we are showcasing something truly spectacular which will be revealed at the Frontier Awards during the TFWA World Exhibition. When I say spectacular, I actually mean ‘world news’. This might sound euphoric, but we like to differentiate ourselves from the crowd, and for that reason you have to come with something unique.”Bold words indeed. The brand is busy working on its duty free distribution, as this is only its second year of being active in the industry. “Even though we are penetrating the market relatively fast, there are always challenges to face, especially markets and locations with an economic downturn or local instability need more attention,” acknowledges Morren.

Building relationships with customers The firm aims to grow steadily while also wanting to demonstrate faster growth than established brands. The brand still has important territories with highgrowth potential to cover, says Morren. “Our strategy in a nutshell: on-time delivery, good service, and building nice and trustworthy relationships with our

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

customers. Furthermore, we like to make sure that our brand is always a topic for discussion.” The company’s Royal Dragon Vodka Imperial Collection and the Elite 6 x 50ml miniature gift sets are by far its star performers, he reports. When it comes to the vodka category, Morren observes several trends. “Our category is highly competitive and it has different segments and price points. Your brand strategy, pricing policy and marketing initiatives have to be in line with your brand image and DNA. For Royal Dragon Vodka, it’s clear as we started our brand from scratch and we haven’t changed our DNA and believe in our roadmap, although we keep our eyes open and always look around to see what’s happening to stay ahead of our competition. We consider ourselves trendsetters in our own segments, being premium and ultra-premium.” In terms of consumer trends, millennials have been the main focus and target group since day one for Royal Dragon Vodka. Together with two other highprofile target groups, millennials are the

The Royal Dragon Vodka brand – including the Imperial and Elite 6 x 50ml miniature gift set– is aimed at the luxury gifts market in travel retail

“The ultra-premium Royal Dragon Vodka Imperial Collection is a star performer” says Michel Morren, Founder and President of Royal Dragon Vodka Worldwide

current and future customers for each premium brand, he believes. For Royal Dragon Vodka, it’s important to pursue an active digital media and social media channel strategy. “For liquor brands and vodka brands it’s crucial these days,” notes Morren. “Budgets have already shifted drastically during the last years from traditional media into digital media and social media. I also see new digital media and clever loyalty program initiatives popping up with a special focus on the duty free and travel retail environment. I can guarantee that we will soon see the first results of specialized companies with great new opportunities for the industry.” In other news, the company reports that at the end of this year it will launch a new limited-edition version based on its successful Imperial Collection. Morren says further details will be revealed later, but we’re guessing it should be spectacular as well.

KAVALAN

Constant innovation

Kavalan’s extraordinary World Whiskies Awards win of World’s Best Single Malt Whisky for Kavalan Solist Vinho Barrique in 2015 set the stage for global expansion by

WENDY MORLEY

Currently, the distillery is conducting experiments that further improve the quality of its whiskies matured in Taiwan’s subtropical climate

aiwan’s Kavalan whisky was prominent in Cannes during TFWA WE 2016, and has found a welcome channel in travel retail, with sales moving upwards. “Our overall sales in GTR in 2017 have increased by about 25% compared to the same time last year,” says Ian Chang, Director of Global Export. “We believe the travel retail market could provide us with a platform to promote our brand to a broader group that may have little or no knowledge of our whiskies. We are currently expanding our travel retail business and are on the lookout for more travel retail partners.”

Open minds Kavalan may have found the perfect time to establish itself globally. Taiwan is known as a strong market for single malts, and in recent years the popularity of Japanese whisky has been exploding, helping to legitimize and open the global market to new world whiskies. “More and more curious and open-minded drinkers have a thirst for information behind our label and other ‘new world’ labels,” says Chang. “This creates a huge opportunity. We also feel that there are a growing number of whisky consumers within the new world distilling nations who are game to try locally home grown brands, making the market for new labels even broader.”

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

Prestigious awards After Kavalan’s whirlwind win at the World Whiskies Awards in 2015, the company went on to win “World’s Best Single Cask Single Malt Whisky” for single malts drawn from one cask rather than multiple barrels for its Solist Amontillado Sherry Single Cask Strength in 2016. “This most prestigious award has set a new milestone in the history of Kavalan distillery,” says Chang. “The accolades we’ve received have made people within the industry and consumers alike seriously take notice. Both awards together have boosted sales and also company morale, as we all work hard to deliver the best whisky we can. Thanks to the demand for our whisky worldwide, Kavalan now exports to 66 overseas markets. We commissioned our second distillery and second maturation warehouse last year and we now have plans for a third warehouse to ensure we are able to meet rising demand into our second decade.”

Known for single casks This distillery is becoming especially well known for its single cask expressions. “Back in 2009, we officially launched our first single cask strength, Kavalan Solist ex-Bourbon Single Cask Strength. Since then, we have received lots of positive feedback from the consumers and they are very impressed with our ‘Solist Series’,” says Chang. “Of all our cask strength

Kavalan Solist Amontillado Sherry Single Cask Strength Single Malt Whisky won the distillery’s second big World Whiskies Award for “World’s Best Single Cask Single Malt Whisky” in 2016

expressions, Kavalan Solist Oloroso Single Cask Strength is our best seller in overseas markets. However, Solist Exbourbon Single Cask Strength is gaining in popularity as it recently won its second ISC Trophy and another Trophy from the IWSC, making it a third time winner for the biggest award in its class.” While the company is not launching anything in Cannes this year, its staff is continuously experimenting. “We have been working on some experiments that further improve the quality of our whiskies matured in Taiwan’s subtropical climate,” says Chang. “At the moment, we cannot reveal more than that, other than to say that this research was something Dr. Jim Swan and the R&D team began together, and will form a major part of his legacy within Kavalan.”

TFWA 2017 CANNES 01 - 06 October, 2017 Stand A11 - Blue Village www.bottegaspa.com

TOBACCO NEWS

Asian beginnings Asia has become an increasingly important market for KT International. Taiwan is one of the company’s strongest markets currently, along with Vietnam and Singapore. Last year KTI entered Malaysia, both domestically and at Kuala Lumpur International. The company introduced the exclusive shell pack for its Corset brand at TFWA AP in Singapore earlier this year, but Teodor Penev, Trade Marketing Manager MENA, KTI, says Cannes is an important place to introduce the unique format to Europe and the rest of the world. Penev says the company overall has experienced high doubledigit growth in Asia as consumers start to see the value of KTI’s business philosophy: Premium Quality Products at an accessible price. “Corset continues to grow globally,” he says. “Our new globally exclusive shell pack is now available in a few Asian markets and shows the same potential as the rest of the world. We recognize that consumers in Asia are often after a little extra exclusivity so we have recently launched our new Tahitian and Akoya Pearl versions exclusively for duty free in the region. Falcon, our premium brand, has recently launched a new filter innovation – Focus Filter ™ – which has shown immediate response in consumer acceptability and is showing incremental volume growth.”

New releases Davidoff is never short of new releases to excite the cigar aficionado, and the company has introduced a great selection lately, including the Limited Edition Davidoff Year of the Rooster, created to mark the Chinese New Year. The company continues to see success with its Davidoff Discovery line, and other new releases bring attention from cigar lovers both new and established. One of the most recent launches is Davidoff Winston Churchill – The Late Hour. Like other cigars in the Davidoff Winston Churchill line, The Late Hour is inspired by Sir Winston Churchill, one of the most celebrated cigar lovers in history. When most people were thinking of going to sleep, Sir

KTI recently introduced both the exclusive shell pack and duty free exclusive Tahitian and Akoya Pearl versions of Corset in Asia

Winston Churchill was thinking how best to govern and inspire a nation. This cigar has been crafted to reflect this facet of Winston Churchill’s character, and the dark hours during which he was at his most creative. The cigar is a complex, flavourful, Scotch cask aged, multi-origin cigar blend, with tobaccos from the Dominican Republic, Nicaragua, Ecuador and Mexico. A real innovation created this year is the first Davidoff Culebras Limited Edition, which will be distributed selectively. A very interesting taste experience, this edition is composed of Davidoff’s latest Brazilian Escurio, Nicaragua and Yamasá cigars braided together in the unconventional Culebra format. Late this year and early in 2018 the company will launch the new limited edition for 2018 Chinese New Year.

One of the company’s new releases this year is Davidoff Winston Churchill – the Late Hour, inspired by the great leader’s habit of solving problems late at night

ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2017

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