TFWA WE 2019
DUTYFREEMAG.COM OCTOBER 2019 · TFWA WE · VOL 23 · NO 3
KrisShop: Omnichannel retailer of the future p. 10 Booming business for Prestige Supplies p.16 Guest writer: Jessica’s Secret CEO p. 28
Letter from the Editor
Welcome to the
he world is looking to Asia, as the China/US trade war rages. At time of writing, shares rose after China confirmed that it would hold fresh trade talks with the United States in early October. The news raises hopes that the two sides can de-escalate the damaging trade war that’s having an increasingly serious effect on global growth and has heightened concerns about recession. In this issue, we focus on omni-channel retailing – the buzzword in our industry right now. KrisShop, Singapore Airlines’ flagship travel retail operation formed as a joint venture between SIA, ground handler SATS and duty free retailer 3Sixty in 2018, has undergone a major website revamp to create a seamless, omni-channel shopping experience for consumers. Today’s shoppers are demanding ever more choice, speed and convenience. To cater to these preferences, KrisShop will be progressively launching a slew of new features in its enhanced website, including providing new payment options such as KrisPay, Samsung Pay and Alipay. Customers can also pre-order items up to 60 minutes before selected SilkAir, Singapore Airlines and Scoot flights with delivery to their seats onboard. This is a vast improvement, as KrisShop had previously allowed pre-ordering up to 24 hours before a flight. Explaining KrisShop’s business strategy, Chris Pok, KrisShop’s Chief Executive Officer, says: “KrisShop’s strategy is to position the brand as a premium omni-channel retailer through service excellence and innovation. KrisShop will ride on the Singapore Airlines Group’s strengths in customer service and focus on innovative culture and investments in digital capabilities to address fundamental issues with the traditional airline retail model.” Omni-channel retailing is also the ethos behind the Jessica’s Secret price comparison app for Chinese shoppers. The app is designed to harness data analysis in order to enhance sales for travel retailers. That’s the view of Mirko Wang, CEO of Jessica’s Secret, who, in this issue, gives his personal take on the challenges and – most importantly for operators – the opportunities presented by the internet and big data in travel retail. Digital and physical stores can coexist in harmony, he believes. I hope you enjoy this issue and I look forward to catching up in Cannes! Kindest Regards,
OCTOBER 2019 · TFWA WE · VOL 23 · 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 2019, Vol 23, No.3. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. ©2019 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.dutyfreemag.com PUBLISHER Aijaz Khan email@example.com EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor firstname.lastname@example.org DEPUTY EDITOR Jas Ryat email@example.com SENIOR EDITOR Mary Jane Pittilla firstname.lastname@example.org SENIOR WRITER Rebecca Byrne email@example.com ASIA CORRESPONDENT Elena Owyong firstname.lastname@example.org AMERICAS CORRESPONDENT Ronnie Lovler email@example.com ART DIRECTOR Jessica Hearn firstname.lastname@example.org CONTRIBUTORS Chris Madden
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What’s inside Lead Stories 10 KrisShop
KrisShop CEO: E-commerce will far exceed inflight sales in the next few years KrisShop Singapore Airlines’ flagship travel retailer, has undergone a major website revamp to create a seamless, omni-channel shopping environment for consumers
16 Prestige Supplies Inc
Business is booming for Prestige Supplies Inc The power of regional understanding and effective supply routes is at the heart of strong growth for retailer Prestige Supplies Inc as it eyes the continued growth of its travel retail operations in Indo-China
24 Delhi Duty Free Services Reaching new heights
After four years of planning and with an investment of around US$10 million, Delhi Duty Free Services, a joint venture between Delhi International Airport Ltd, Aer Rianta International’s subsidiary Yalorvin Ltd and GMR Airports Ltd, has launched its stunning, newly-renovated arrival and departure stores
28 Guest Writer: Mirko Wang The impact of the internet and big data on travel retail
Mirko Wang, CEO of price comparison app Jessica’s Secret, tells of the opportunities and challenges presented by the internet and big data
32 The Shilla Duty Free Redefining beauty
As Beauty&You by The Shilla Duty Free celebrated its first anniversary at the Hong Kong International Airport with great fanfare in July this year, Changha Shin, the Managing Director of Shilla Travel Retail Hong Kong Limited tells Asia Duty Free Magazine how the retailer redefines beauty and how it plans to stay ahead of competition
Features New beginnings for Brisbane Lotte Duty Free diversifies Foreo’s Chief talks Skintech
20 22 44
A woman’s world Moroccanoil’s global footprint
44 Lead Stories 36 Ever Rich Duty Free
Ever Rich Duty Free’s preorder business takes off
Asia Duty Free Magazine talks to Ever Rich Duty Free’s spokesperson to understand more about its pre-order service and its priority projects for this year
A jewel of a brand Ambitious brand TOUS launches its latest collection in travel retail as it aims to lead the world in affordable luxury jewelry
58 Sugar Confectionery Report Spatial awareness
Leading sugar confectionery suppliers spark an engaging debate about how to boost the space given over to the sub-category in travel retail and how to boost conversion
Universal power A powerful new travel adaptor from SKROSS® is highlighting the Swiss brand’s leading position in the travel adaptor category
72 Cigar Report
Building on stable foundations
With a solid consumer base, somewhat immune to the changes challenging other sectors, travel retail’s cigar market has found room to grow in the face of adversity
77 Oriental Trading
Features Editor’s Picks 56 Anthon Berg continues to reinvent 64 Cloetta spills the beans 66
Oris China looks to secure a bright future Nobeco delivers on industry trends 68 Diverse Flavours’ passion 76 Questionnaire: Jay Frame 78
The mounting restrictions on packaging are making branding difficult in the tobacco market, but Oriental Trading’s Oris China brand is moving with the times to keep growing
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E-commerce will far exceed inflight sales in the next few years
KrisShop, Singapore Airlines’ flagship travel retailer, has undergone a major website revamp to create a seamless, omni-channel shopping environment for consumers by ELENA OWYONG in Singapore
To celebrate the launch of the new website, KrisShop held a pop-up exhibition with multiple installations featuring the new categories on the website
I Chris Pok, KrisShop’s Chief Executive Officer
10 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
n recent years, major airlines such as United Airlines, American Airlines, Qantas and KLM Royal Dutch Airlines have stopped their inflight duty-free service. Yet, KrisShop is buckling the trend by pouring a significant investment to give its e-commerce website KrisShop.com a facelift, as it foresees a bright future for e-commerce and inflight sales. “In the recent two to three years, we have observed a strong growth in our e-commerce sales, while inflight sales are growing at a slower pace. We believe travel retail in general has a bright future and there are opportunities that exist in both e-commerce and inflight. In the next few years, we are confident of growing both, but foresee that growth in e-commerce will far exceed that of inflight sales,” said Chris Pok, KrisShop’s Chief Executive Officer.
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The revamped KrisShop website offers new features such as the option of pre-ordering up to 60 minutes before selected SilkAir, Singapore Airlines and Scoot flights
KrisShop was formed as a joint venture between SIA, ground handler SATS and duty-free retailer 3Sixty in November 2018. According to Pok, its core customers are from Southeast Asia, North Asia, India and Oceania. While Singapore remains its biggest market, KrisShop is seeing strong growth from India, China and Indonesia.
Omni-channel retailer of the future
At the official launch of the KrisShop website on August 21, Pok shared that work for the website revamp began two years ago, as part of Singapore Airlines’ broader transformation strategy. It was an opportunity to better tap on its massive database of over 35 million customers to develop an unparalleled shopping experience. This revamp also comes at a time where consumers are drawn to e-commerce, personalized experiences, greater choice and convenience. To cater to these preferences, KrisShop will be progressively launching a slew of new features in its enhanced website, including providing new payment options such as KrisPay, Samsung Pay and Alipay. Customers can also pre-order items up to 60 minutes before selected SilkAir, Singapore Airlines and Scoot flights with delivery to their seats onboard. This is a vast improvement as KrisShop had previously allowed pre-ordering up to 24 hours before a flight. The new KrisShop.com is also integrated with Singapore Airlines’ inflight entertainment system. In terms of collection,
nagement, with Chris KrisShop’s senior ma nch of the revamped lau the at le), dd Pok (mi tel in Singapore website at Raffles Ho
12 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
customers can opt for self-collection at designated POPStations Pok revealed that KrisShop is also concurrently working with or delivery to selected hotels. IT partners such as Microsoft and Avanade, a digital and cloud To give customers greater choice, KrisShop has created new services provider, to improve customers’ inflight services expericoncept stores, such as With Love, SG to highlight local brands ence and channels by analyzing its data. Another plan in the and KrisShop Moments, which offers travelers with a range of pipeline is improving the Silver Kris Lounge to feature KrisShop unique experiences such as spa services, dining and wellbeing in a more experiential manner at Changi Airport and selected offers in Singapore and around the world, among many others. locations around the world. Explaining KrisShop’s business strategy, Pok said: “KrisShop’s strategy is to position the brand as a premium omni-channel retailer through service excellence and innovation. KrisShop will ride on the Singapore Airlines Group’s strengths in customer service and focus on innovative culture and investments in digital capabilities to address fundamental issues with the traditional airline retail model.” “KrisShop also aims to tap on the strong brand trust associated with Singapore Airlines and work closely with brand owners to curate interesting retail offerings for its customers. In addition, KrisShop has the opportunity to capitalize on KrisFlyer as a loyalty programme that enables a KrisFlyer With Love, SG, highlights Singapore brands as part member to earn miles and redeem miles of KrisShop’s commitment to support local brands when they shop on KrisShop.”
14 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Prestige Supplies Inc
Prestige Supplies Inc has increased its focus outside the core categories to develop its business
Business is booming for PRESTIGE SUPPLIES INC The power of regional understanding and effective supply routes is at the heart of strong growth for retailer Prestige Supplies Inc as it eyes the continued growth of its travel retail operations in Indo-China
by CHRIS MADDEN
hink big, act fast” is the ethos of Prestige Supplies and the company is reaping the rewards of combining a global outlook with regional understanding as it reports double-digit growth for its operations across Indo-China.
Prestige Supplies Inc’s business in Indo-China has grown double-digits
16 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Founded in 2007, with the opening of its first travel retail store in Mongolia, the company grew fast, adding eleven stores across three countries in the next seven years. Prestige Supplies Inc is now number one in the Mongolian travel retail market and is one of the top border store retailers in the region. Mongolia remains the company’s biggest market, with airport, diplomatic and border shops, but Prestige has also seen impressive growth from its operations in Bavet, Cambodia and Boten in Laos. Like much of the travel retail market, the region’s operators are seeing the benefit of increased traffic from the wealthy and high-spending Asian travellers, with an influx of Chinese and Japanese tourists visiting the stores. “The business for all our operations across Indo-China is experiencing a double-digit growth which is very promising and encouraging,” says Tania D’Souza, General Operations and Marketing Manager for Prestige Supplies’ parent company Oriental General Trading Inc. “Our duty free stores based in Bavet in Cambodia, Boten in Laos and across Mongolia have seen a significant increase in tourist traffic and the influx of Chinese, Korean, Japanese invest-
Prestige Supplies Inc
ments in these area is bringing in customers with high purchasing power. These shoppers are looking for well-know, international brands, which we are able to provide them with.”
A broader scope
Local travellers remain a key part of the shopper demographic within the stores, but the influx of customers from further afield increases the pressure on Prestige to supply the popular and world-renowned brands, which are a key facet of the modern duty free market. In this respect, Prestige is well equipped to deal with the rapidly changing nature of its home market. Alongside its retailer operations, the company provides supply and distribution services to retailers in the Middle East and Africa region and has, D’Souza says, a “best in class supply chain to meet the demands”. The influx of new shoppers and changing consumer demographics will necessarily broaden the focus for any retailer. But despite holding a leading position in one market, D’Souza says the team will not make the mistake of putting too much focus on one specific country or location. She explains: “For us, all the markets are important as we service and deliver world-class brands and products with competitive pricing to suit all of our different customer profiles.” Unsurprisingly in a border store market, the core categories of alcohol, tobacco and perfume and cosmetics are central to Prestige Supplies’ offering in the region and have been a driving force behind much of the company’s growth. But variety is a vital prerequisite in the travel retail space and never more so than for border stores, which can see regular repeat traffic from shoppers.
The changing market
With that in mind, the Prestige team has increased its focus on the offering in categories such as fashion and leather goods in the past year. This includes a successful VIP outlet selling top names such as Adidas at the Free Zone store on the Mongolia-Russia border at Altanbulag. The result of this has been increased spend across the store. “We are very good with the traditional categories,” D’Souza explains “Last year we introduced and focused on other categories which has added to our sales and not cannibalized on the existing categories. This is increased our basket spend and the total sales.” The secret to Prestige’s growth, D’Souza believes, is the company’s ability to provide well-recognized and popular brands,
while also appreciating and catering to the individual needs of key shoppers at each individual location. While the travel retail industry sometimes applies regional rules across large areas, the Prestige team is equipped with the local understanding necessary to provide a more tailored service. “Understanding different customer needs, studying the various nationalities and keeping updated on their sought-after brands and products is vital,” D’Souza says. “For us, it depends on each market. For example, in Mongolia it will mostly be Mongolian, Chinese, Korean, Japanese and Russian shoppers, with some others. “In Bavet it is Vietnamese, Cambodians, Chinese and Koreans, while for Boten it is primarily Laotians and the Chinese.” Such understanding and flexibility are key when operating border stores in a regional market, where changes in politics, finance and climate can have an even greater effect on travelling and shopping habits. With no water routes to help supply the shops, D’Souza says the company’s logistics and supplier expertise is increasingly important. “For Mongolia and Laos, which are landlocked countries, logistics is always a challenge,” she says. “With extreme winters in Mongolia, we tend to have a seasonal market.” She continues: “Exchange rate can also be one of the challenges.”
Mongolia’s emerging market
In spite of those challenges, Prestige’s own growth is not the only good news for the company and the region’s travel retail market as a whole. D’Souza believes Mongolia has potential as an emerging market in the travel retail industry and that can only be good news for its leading travel retailer. “The Mongolian travel retail market is growing at the rate of 10% year-on-year,” she says. “For the past 10 years, Mongolia has been emerging as a potential market with lots of business possibilities which are luring many foreign companies to invest and expand here.” The signs are already there; the New Ulaanbaatar International Airport is set to open in Mongolia later this year and D’Souza says Prestige is also eyeing the arrival of a new Free Zone on the Chinese Border, both of which present opportunities for expansion. With Prestige Supplies also set to open a new store at RussiaKazakh border, the company’s big ideas and fast execution look set to continue to provide strong results in its home market.
Chinese shoppers and Chinese border stores have been at the heart of Prestige Supplies Inc’s growth
18 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
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Seeds by Bruno Loubet restaurant was Brisbane Airport’s first new retailer to open as part of the airport’s Domestic Terminal redevelopment project
New beginnings Brisbane Airport to release final RFP for Domestic Terminal redevelopment at the end of this year
by ELENA OWYONG
risbane Airport will be releasing its final Request for Proposal (RFP) at the end of this year for two F & B and four specialty sites, as part of its AU$40 million (US$27.1 million) Domestic Terminal redevelopment project. In an exclusive interview with Asia Duty Free Magazine, Leonie Vandeven, Brisbane Airport’s Head of Media and Corporate Communications shared that the Domestic Terminal redevelopment is “progressing well”, with 10 out of 51 new shops opened. The refurbished Qantas Café court, two restaurants and 11 additional specialty retail stores are scheduled to open by the end of 2019.
Brisbane Airport Domestic Terminal redevelopment
Brisbane Airport embarked on its Domestic Terminal redevelopment in mid-2018 to create a world-class airport that reflects the unique identity of Brisbane and Queensland. The project, which focuses on levels 1 and 2 of the Domestic Terminal, will create more than 51 new tenancies consisting of upgraded food halls, specialty retailers, premium bars and restaurants. Other improvements are in wayfinding, lighting, terminal building services and toilet amenities. Explaining the rationale for the redevelopment, Vandeven said: “For the first time in 30 years, Brisbane Airport
20 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Corporation (BAC) is now in a position where it manages, maintains and operates the entire terminal. It was an exciting opportunity for BAC to undertake a deep review of the existing infrastructure and assets of the building and identify what aspects can be optimized, upgraded, and improved.” The project will be completed by December 2020.
Delivering world-class customer service
Even as Brisbane Airport continues to deliver operational excellence, customer service remains at the center of what they do. According to Vandeven, the key to doing that is by working with customers. This is done through four ways – understanding customers, customer care, communication and culture. Brisbane Airport uses various means to understand its customers, including social media data, stakeholder interactions and customer feedback surveys. This information is then used in designing their products and services. At the same time, the airport provides excellent customer care by having dedicated ambassador and visitor information services and accessibility changing facilities. All staff also receive customer service training. Brisbane Airport also has many channels for customer engagement, including
its official website, Twitter, Instagram, YouTube and popular Chinese channels such as Weibo and WeChat. In terms of culture, as the first airport in Australia to formally commit to a Reconciliation Action Plan, Brisbane Airport strives to celebrate and promote the traditions, laws and customs of Aboriginal Torres Strait Islander peoples through a number of ways, including Indigenous ‘Welcome to Country’ and performances in terminal, and acquiring major public art pieces by renowned Aboriginal artists, among other initiatives.
The future for Brisbane Airport
Vandeven shared that in recent years, the airport has seen strong growth from Air New Zealand and Singapore Airlines. EVA Air and China Airlines have also enjoyed “solid growth”. She also noted that China and USA continue to be key growth markets for the airport. In the case of USA, Vandeven added that it is like New Zealand as both have a balance of outbound and inbound point-of-sale, while China has a strong inbound leisure component. Although Brisbane Airport has seen its strong growth in its international visitor numbers, some challenges remain. “The greatest challenges will likely come from broader economic and global events that may have an impact on travel demand.” To address this, Vandeven shared that “it is important that Australia can be easily accessed by tourists. This means streamlined visa processes.” Brisbane Airport treats customer service seriously with dedicated ambassador and visitor information services to help improve customer experience
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Lotte Duty Free
LOTTE DUTY FREE diversifies its customers
Lotte Duty Free is reducing its reliance on Chinese customers, who have yet to return to pre-THAAD levels, by intensifying its efforts to attract customers from other Asian countries to spend in the Korean duty-free market by ELENA OWYONG
Lotte Duty Free’s VIP Star Lounge in Myeongdong has played host to brand launches, fashion shows and customer events as the retailer strives to provide the best service for its domestic and international customers
otte Duty Free’s (LDF) efforts to diversify its customer base in the competitive South Korea duty-free market, have begun to bear fruit. Jung Hyun Kim, LDF’s Marketing Division Managing Director tells Asia Duty Free Magazine that excluding China, its customers from other Asian countries have propelled its downtown store sales by 71% from January to July this year, as compared to the same period in 2017. The sales growth was primarily due to Lotte’s efforts in diversifying its customers. According to Kim, customer diversification is important because of the unpredictability of the daigou business and the lower number of Chinese tour groups as compared to pre-THAAD levels. Although the market has reorganized after the introduction of China’s new e-commerce law and large daigou companies that are capable of paying taxes have taken over the market, Kim said that this does not mean there are no more risks. “Anything can happen in this market and nothing is predictable particularly within the daigou business. That is why it is so important to reduce our reliance on it,” Kim said. 22 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Hyun Kim, Lotte Duty Free’s Marketing Division Managing Director
“Chinese tour group [numbers] are not back to normal. It is still far from certain when they will start returning,” Kim added. As a result of this situation, LDF has set up a “Big Market Team” that is tasked to woo customers from other Asian countries into its domestic market. The Big Market Team’s strategy is to partner more than 50 tourism-related companies in Japan, Taiwan, Vietnam and more, to provide customer benefits through LDF discount coupons, free gifts with purchase and tourist attraction tickets. These tourism-related partners range from travel agencies, airlines and hotels to financial services, banks and telecommunications. Additionally, the Big Market Team also builds the reputation of LDF as a leading travel retailer by holding influencer FAM tours to help influencers familiarize themselves with LDF, attending relevant conferences worldwide and shooting TV programmes to promote tourism in South Korea.
At the same time, LDF has expanded its presence in countries such as Australia and Vietnam with new store openings at Brisbane Airport and Hanoi’s Nội Bài International Airport, with plans to open more stores in these countries in the future. LDF has also announced its ambitions to become the largest duty-free operator in Vietnam, at the launch of its Nội Bài International Airport store. The store is its third one in Vietnam, with previous store openings at Da Nang and Cam Ranh International Airports. According to Kim, LDF’s sales at Vietnam’s airports have surged by 145% year-on-year from January to July this year. Chinese customers’ make up around 60% of its Vietnam customers, followed by South Korea, Russia and Thailand. The best-selling categories in LDF’s Vietnam stores are cosmetics and liquor. Kim shared that although LDF sees much potential in e-commerce in Vietnam, it does not have concrete plans yet. “Vietnam’s duty-free market is full of potential and e-commerce expansion is
With Lotte Duty Free’s latest opening at Hanoi’s Nội Bài International Airport in July this year, the retailer has announced ambitious plans to expand in Vietnam and become the largest duty-free operator in the country
essential. LDF will stabilize its Vietnam business before considering an online business subsequently,” Kim said.
Growing the domestic market
Even as LDF intensifies its efforts to lure foreign tourists, Kim said that the retailer continues to target its own customers as well as potential customers through various initiatives. Currently, the Korean market generates approximately 94% of LDF’s sales, followed by Japan, Australia, Vietnam and Guam, United States. One strategy LDF uses to increase its domestic market share is by providing premium service for its VIP customers through its Myeongdong Star Lounge. Opened last year, the 1,339sq m Star Lounge is South Korea’s biggest travel retail VIP customer facility. Kim shared that around 1,000 VIPs visit the lounge daily. Explaining the rationale for setting up the Star Lounge, Kim said: “Since more and more customers prefer online shopping for its accessibility, we needed
something new to bring the customers, especially VIPs, back to our offline stores.” Kim noted that the Star Lounge offers a high-class experience for VIPs by organizing brand launches, fashion shows and customer events. To date, around 50 brands including Yves Saint Laurent Beauté (YSL), Chanel Beauty, Shu Uemura, Cartier, Montblanc, and Gucci hold their events at the Star Lounge. These VIP-exclusive brand parties are one of the main reasons why LDF’s VIPs renew their membership. To target potential customers, LDF created its “Let’s Do Something Fun” or “Yum” campaign which aims to increase customer satisfaction in various ways. As part of the campaign, LDF actively used its online platforms to provide various
digital content such as web series, brand videos of its Korean celebrity ambassadors and shopping guide videos to attract the younger generation and improve its brand image. Beyond that, LDF has also been holding many customer events such as its Family Concert with K-pop performances, Halloween parties, make-up shows and more. “Through such differentiating strategies, LDF has succeeded in improving its brand image, especially among the younger generation,” Kim said.
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Delhi Duty Free Services
Both arrival and departure stores feature a walk-through concept
Reaching new heights After four years of planning and with an investment of around US$10 million, Delhi Duty Free Services, a joint venture between Delhi International Airport Ltd, Aer Rianta International’s subsidiary Yalorvin Ltd and GMR Airports Ltd, has launched its stunning, newly-renovated arrival and departure stores by REBECCA BYRNE
Liquor remains the largest category in both arrivals and departures
24 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
ravelers to Terminal 3 at Delhi International Airport can enjoy state-of-the-art, premium shopping at the largest duty-free space in the Indian sub-continent. According to Abhijit Das, Head of Marketing DDFS, the two stores are a cut above the competition, offering “the widest range in all categories, responsible pricing, superior marketing campaigns, meaningful value offers for customers, and significant investment in employees leading to very knowledgeable and helpful staff ”. Both arrival and departure stores feature a walk-through concept. While the overall space remains the same, with 1,191 square meters in arrivals and 2,778 square meters in departures, the walk-through stores enable consumers to access all key categories easily. There has also been significant investment in digitalization of stores with 91 video screens and seven video walls using real-time, contextual messaging to communicate with customers. Liquor remains the largest category in both stores. However, this offering has been revamped and extended. In arrivals, for example, the section features a new ‘Whisky Collection’ showcasing the largest collection of single malts in India. Aimed at both whisky connoisseurs and novices alike, the store offers an extended range of whiskies, including rare and vintage expressions.
Delhi Duty Free Services
Perfumes and cosmetics sales rose 30% in arrivals during the 2018/2019 financial year
Departures has a bigger perfumes & cosmetics footprint than arrivals, accounting for 35% of the floor space. In fact, overall, DDFS boasts the largest collection of P&C of any airport in India. More than 14 new brands have been added in both departures and arrivals, including top-sellers such as Sulwhasoo, Benefit, Amouage, Laneige and Maroccanoil. This is in addition to the wide array of luxury and premium brands such as Jo Malone, Kiehl’s, Michael Kors, Hugo Boss, Tom Ford, La Prairie, Estée Lauder, Bobby Brown, Chanel, Dior and many more. The remodelled arrivals store opened over a year ago and has been a runaway success in all areas. Das commented: “We have exceeded all KPIs set for arrival stores and our customer feedback is outstanding. The liquor and perfume sections have delivered above expectations and we have witnessed double digit growth in sales.” While perfumes and cosmetics sales rose 30% in arrivals during DDFS’ 2018/2019 financial year, this was not the category with the biggest increase. Fashion was the top contributor and DDFS expects this to be as popular in departures, where con-
Departures has a large perfumes and cosmetics footprint accounting for 35% of the floor space
sumers now have the choice of top fashion boutiques such as Hugo Boss, Armani Exchange, Victoria’s Secret, Mont Blanc and Swarovski. Liquor and confectionery also saw increases. Within the 28% surge in liquor sales in arrivals, it should be noted that 86% of liquor purchasers are utilizing their full allowance. The 16% increase in confectionery sales was due to the significantly improved confectionery section. DDFS showcases chocolate from countries like Belgium, Switzerland, UK, Denmark, Sweden and Austria. Capitalizing on the popularity of this category, the new departure store has dedicated 269 square meters to confectionery brands. Finally, marketing activity and promotions are underway to promote the new look stores. A mega-bloggers campaign was initiated and delivered 1.55 million engagements in just 12 days. As Das concluded: “With sales looking healthy for the new stores, it is anticipated that the business will grow by more than 15% over the next year.”
DDFS Executive Team from left: Company Secretary & Head of Legal Parveen Gupta; Chief Financial Officer Rajiv Madan; Chief Operations Officer Ashish Chopra; CEO Philip Eckles; ARI CEO Ray Hernan; Head of Marketing Abhijit Das and Head of HR Siddhartha Jain
26 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
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THE IMPACT OF THE INTERNET
and big data on travel retail by MIRKO WANG
The application ‘Jessica’s Secret’, which establishes a global duty free luxury price monitoring system, can provide users with price information, price comparison, and promotions for well-known duty free shops and brands all over the world
Mirko Wang, CEO of price comparison app Jessica’s Secret, tells us of the opportunities and challenges presented by the internet and big data
Mirko Wang, CEO of Jessica’s Secret
28 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
nconsciously, Jessica’s Secret is now in its fourth year, and in those four years, I’ve witnessed the digital evolution of the travel retail industry. Four years ago, I could only see a few travel retailers like Lotte and Shilla of South Korea go online. The websites of duty free stores like Heinemann and Lagardere in Europe were just opened, which were inadequete in terms of technology and user experience. Now, there are more than 100 airport duty free shops opening e-commerce sites, and I deeply feel that the travel retail industry is undergoing earth-shaking changes. In the past, duty free retail was a very traditional business. At that time, a tourist flew from one country to another, selected goods at one airport, saw the price and promotional information of the retailers, and then went to the duty free shop at
the airport of another country, compared between two retailers, and then decided where to buy. And these customers will often encounter inventory problems. For travel retailers, they can only wait for tourists to enter their stores at the airport and recommend products to customers through their sales staff. After the internet-based development of travel retail, e-commerce has entered the industry rapidly, and the competition has quickly evolved from the previous “on-trip” to “pre-trip” competition of tourists to retailers. Once the outbound trip is confirmed, tourists can log on to the websites of travel retailers, check the prices and promotional details of goods, and place orders in advance to ensure that they could purchase the products they want as well as the hot-selling ones. For travel retailers, if their competitors have e-commerce websites and apps, but they
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themselves don’t, they will become very passive in the industry competition. The form of battle has changed, and it is transforming the industry tremendously. Also, the categories operated by travel retailers depend on the retail area, which is limited by the airport and leasing cost. No matter how large the retail area is, there will be an upper limit on commodities display. Meanwhile, the larger the leased area is, the higher the cost of labor, hardware and other costs will be. A new brand can only hit the shelves until the withdrawal of the previous brand. The development of the internet and e-commerce are gradually changing this business model. E-commerce sites do not have space limitation, tens of thousands or even hundreds of thousands of items can be displayed on the e-commerce sites, allowing tourists to have more choice as well as improving the purchase experience and transaction amount. Customers place orders in advance, helping retailers to optimize inventory and prepare ahead of time. Such an e-commerce website only requires a small team to maintain in addition to certain development costs in the early stage, and labor costs are much lower compared with the traditional offline business model. Nowadays, the e-commerce websites of international retailers such as Dufry, Lagardere, Heinemann, King Power, China Duty Free Group, Lotte, Shilla and so on, are providing an excellent user experience and functions like multilanguage to serve tourists worldwide. Brands have also set up specialized digital departments. For instance, L’Oreal, SK-II
30 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
and many others established independent travel retail auxiliary websites to support regional retailers. Brands such as Estee Lauder, Shiseido, and Pernod Ricard have attached high importance to online marketing and achieved fabulous digital marketing performance. Advertising through the Internet and data analysis can find the target audience more effectively. Data becomes more and more transparent and visible as the internet thrives, and the price is no longer a “secret”. Both tourists and travel retailers can find out the duty free retail price on the internet. Before the internet emerged, retailers had to collect prices of competitors’ products offline, but now this has changed. Here, I want to clarify something about Jessica’s Secret. Some travel retailers are not fond of Jessica, believing that Jessica is a disruptor that makes the whole industry prices transparent. But in fact, Jessica is merely helping tourists sort out the prices which can be found on the internet, thus to save time and improve their purchasing efficiency. To quote the comment on Jessica which was given by a CEO of a famous travel retailer: “In the travel retail industry, even if there is no Jessica, there will be Lucy or Nancy to help tourists compare prices. Even if there is none, tourists will compare prices themselves through the internet since the internet has made us completely transparent.” Jessica is not an enemy; we have been honored to work with many retailers and driving traffic and sales for them each year. In addition, the emergence of the internet makes tourist demographics increasingly clear. Many consulting
companies provide analysis reports for retailers with data they collect through offline questionnaires and other means. But nowadays, the “Internet + Big Data” analysis makes our once-vague tourists become clearly visible. From the hundreds of traditional paper questionnaires in the past to millions, even tens of millions of internet users’ data analysis. Through the data analysis of these internet consulting companies as well as our own e-commerce sites, we can acquire customers‘ gender, age, preference, behavior track, purchase inclination, search behavior and consumption ability, which help us identify the market quickly with more targeted customers, higher conversion rate, and acquire more support for marketing. The rapid development of data has multiplied the efficiency of information collection exponentially. Numerous opportunities have been created alongside the internet and data development in the travel retail industry, whether it is for traditional retailers, brands or companies like Jessica that emerge with this trend. Opportunities and challenges coexist, which is exactly the impact of the internet and data on the travel retail industry.
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The Shilla Duty Free Since opening in 2018, Beauty&You has organized more than 60 customer engagement activities at its Curated Zone (pictured). The zone is a dedicated area with monthly themed displays of the latest cosmetics, perfumes and fashion accessories
As Beauty&You by The Shilla Duty Free celebrated its first anniversary at the Hong Kong International Airport with great fanfare in July this year, Changha Shin, the Managing Director of Shilla Travel Retail Hong Kong Limited tells Asia Duty Free Magazine how the retailer redefines beauty and how it plans to stay ahead of competition by ELENA OWYONG
eauty&You by The Shilla Duty Free has had a stellar 2018. Its sales had surpassed KRW 380 billion (US$312.8 million) in its first year at Hong Kong International Airport (HKIA) and this trend looks set to continue growing. Changha Shin, the Managing Director of Shilla Travel Retail Hong Kong Limited revealed that in the first quarter of this year, Beauty&You’s sales has exceeded KRW 110 billion (US$90.5 million). Shin shared that the promising sales growth is due to Beauty&You’s efforts to introduce various collaborations and crossover promotions with retail, F & B and travel lounge operators within the airport to provide added shopping privileges to targeted passengers. Since its launch, Beauty&You has been actively collaborating with payment providers such as Union Pay, Alipay and WeChat Pay on promotional campaigns. It also offered exclusive shopping incentives to drive traffic conversion and sales during peak and low travel seasons.
Providing value to customers
Beyond that, Beauty&You has introduced the “Super Price of the Month”, a year-long initiative offering more attractive savings as compared to downtown stores, on a monthly basis to create momentum for spending. The Shilla Duty Free’s global membership programme, S.Rewards also made shopping more attractive for customers as members can earn points with purchases at The Shilla Duty Free’s stores in Hong Kong, South Korea and Singapore. Points earned can be redeemed for the next purchase. Apart from promotions, The Shilla Duty Free also strived to create memorable experiences for customers through in-store engagement activities. To date, the retailer has organized over 60 customer engagement activities such as make-up shows
32 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Popular South Korean girl group Red Velvet performing at Beauty&You’s first anniversary celebrations at HKIA on July 30
from brands like Chanel, Dior, MAC, NARS, as well as fragrance layering workshops and digital game with Diptyque, Hermes and more.
Targeting travelers’ entire beauty experience
According to Shin, Beauty&You is a new retail concept in The Shilla Duty Free’s portfolio. Prior to Beauty&You’s launch, the combination of perfume, cosmetics, fashion and accessories had not been explored in any airport that The Shilla Duty Free operated in. Explaining that the “Beauty&You” brand symbolized the retailer’s commitment to the entire beauty experience of travelers, Shin said that The Shilla Duty Free wanted its stores to appeal to customers who are interested in beauty and fashion, as well as those who are keen on a wider offer. “‘Beauty’ and ‘You’ together represent beauty tailored to each individual customer and the infinite combinations available
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The Shilla Duty Free
Changha Shin, the Managing Director of Shilla Travel Retail Hong Kong Limited said that skincare products have enjoyed higher demand at Beauty&You, as compared to make-up and perfumes
through the multitude of brands and experiences. Crafting the notion that beauty retail can surpass the limitations of cosmetics and skincare products and become associated with fashion and accessories, this retail concept gives room for all definitions of beauty. The ‘You’ in our brand represents our consumers, their individuality and the idea of a tailored offer for them. The unique offer of “Beauty&You” should go well beyond their expectations from an airport retail beauty and fashion store to providing them a chance to mix and match unusual product combinations. Essentially, we’re giving them a mix that is ‘all about you,” Shin said.
Booming skincare business
According to Shin, in the first quarter of 2019, the top 10 bestselling products are skincare sets. These include iconic products from major brands, such as Estée Lauder’s Advanced Night Repair, Lancôme Genifique, SK-II Facial Treatment Essence, Shiseido’s Ultimune, and Clarins’ Double Serum. “Over the past year, we noticed that brands that were new to HKIA also performed well in their own specific category, for example Cosme Decorte for skincare, Find Kapoor for fashion
Beauty&You plans to refresh its New Generation zone to meet customers’ needs and market trends. The zone currently carries a selection of Korean and Japanese cosmetics lines
34 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
accessories, NARS and Gucci Makeup in the makeup category, Atelier Cologne for perfumes, etc.” One reason for their excellent sales performance is the new brands’ innovative use of displays in the curated zones to promote their brand identity, alongside strong promotional strategic programs such as free sampling and travel exclusive items and savings. Citing the successful example of French skincare brand Filorga, Shin said the brand used to be a pop-up store at HKIA. Now, it has a permanent space in Beauty&You. “For new brands, we will continue our approach by strengthening the activities through online and offline brand stories such as ‘storytelling’ about new brand launches, tailor-made special display setups and in-store digital advertisements to bring brand experiences to life,” Shin said. At present, the majority of Beauty&You’s customers are from China. But Shin has observed that international customers are growing. “For customers in China, price comparison is a common practice. There are multiple channels where customers exchange information such as price, promotions and events. These channels include Weibo, Dian Ping and live-streaming by Chinese Key Opinion Leaders (KOLs), Facebook and Instagram by key beauty and travel KOLs in Hong Kong.” To tap on this trend, Beauty&You has strengthened its social media strategy by creating content-driven posts to highlight the store’s uniqueness as compared to other downtown dutyfree stores, getting KOLs’ to share their Beauty&You shopping experiences, as well as providing tips on great savings, exclusive products and in-store brand activities. Shin also revealed that The Shilla Duty Free is in discussion with more than 10 brands that are new to HKIA in preparation for a launch in the second half of 2019. There are also plans to invite affordable to entry-level luxury fashion brands to expand Beauty&You’s customer profile. Another plan in the pipeline is the refresh of the New Generation zone’s concept to harmonize their assortment of products. The New Generation zone currently showcases the most popular Korean and Japanese cosmetics products.
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Ever Rich Duty Free
Ever Rich’s President Kevin Chiang, ViceChairman Sam Wu, celebrity ambassador and Taiwanese actor Sunny Wang and Marketing Manager Markus Chang at the launch of the retailer’s pre-order service
EVER RICH DUTY FREE’S pre-order business takes off
Asia Duty Free Magazine talks to Ever Rich Duty Free’s spokesperson to understand more about its pre-order service and its priority projects for this year by ELENA OWYONG
n the recent years, Ever Rich Duty Free has seen promising results for its pre-order service launched in 2016. The retailer’s spokesperson revealed that last year, its pre-order website traffic doubled as compared to 2017. The number of registered members on the website also increased by more than 50%. In response to this, Ever Rich has added a pre-order pick-up counter in Songshan Airport, Taipei, in August this year. For the past two years, customers could only pick-up their pre-ordered items at Taoyuan International Airport’s three pick-up counters.
36 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Turning business challenges into opportunities
When Ever Rich Duty Free decided to launch its pre-order service in 2016, two key factors contributed to its decision. In 2016, the number of arrivals and departures at Taoyuan International Airport surpassed 40 million, which was a nearly 11% jump as compared to 2015. At the same time, the Taiwan market also saw an increasing number of people travelling abroad due to the rise of budget airlines. While all these may mean good news for airports, increased passenger volume affects immigration clearance so travelers have less time to do duty-free shopping.
Ever Rich Duty Free’s pre-order service is seeing great demand from customers
On Ever Rich’s pre-order website, the most popular items among female customers are perfume and cosmetics
The refurbishment of Taoyuan Airport Terminal 2 is Ever Rich’s most challenging project currently
“Given that duty-free shops in Taiwan do not operate 24 hours a day, the rise of budget airlines which fly in the early morning or midnight will cause the loss of potential customers,” Ever Rich’s spokesperson said. In response to these business challenges, Ever Rich Duty Free leapt at the opportunity to launch its “Ever Rich Duty Free Pre-Order Website” which allows travelers to pre-purchase goods online, eliminating time and location constraints. The website lets traveler place orders any time from seven days to four hours before departure. Collection can be done at the Ever Rich airport counter around the clock. Since there, Ever Rich has seen a strong demand for its pre-order service, in line with the growing passenger traffic at Taoyuan International Airport. According to Taoyuan International Airport Corporation’s January 2019 information, passenger volume hit a record high of 46.5 million in 2018. To improve the customer experience, Ever Rich’s pre-order website has a number of innovative features. One of them is “Shop Perfect”, a feature that works like a wedding register. Once passengers with a confirmed flight schedule log in to the preorder website, they can share a link with their friends or family members who will be able to add items to the shopping cart. The passenger can review and edit the list of items before
38 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
making payment and collecting the goods from the airport. This allows passengers to be sure that the gifts that they purchase will be appreciated by their family members and friends. Ever Rich’s spokesperson said that on the pre-order website, the most popular items among female customers are perfume and cosmetics. For men, there is a high demand for electronic products.
Appealing to different nationalities
Although Ever Rich’s main customer base is the Taiwanese, its spokesperson said it has started to diversify its customer sources in the past three years. “In recent years, we have gradually seen an increasing number of Japanese and Korean customers. There is also a large percentage of South East Asian tourist arrivals, which is growing,” the spokesperson said. Taoyuan International Airport remains Ever Rich’s most important operation spot. To appeal to customers of different nationalities, Ever Rich also provides multiple popular payment options such as WeChat Pay and Alipay to make it easier for customers to shop. While Ever Rich continues to woo customers of different nationalities, customer service remains its priority. In June this year, the retailer won the “Best Service in Taiwan” and the gold
medal in the outlet or duty-free category, for the second consecutive year. In a press statement, Ever Rich’s vice-president Samuel Woo said: “In addition to complying with the principles of ‘Integrity, Professionalism, Innovation, Philanthropy’, the key reason that our Ever Rich service staff has been able to win the hearts of our customers lies in proactively approaching each customer and traveler and magnifying the sense of mission while offering our service.”
Prioritizing the Taoyuan Airport refurbishment
Ever Rich’s spokesperson said that the Taoyuan Airport Terminal 2 refurbishment is its most important and challenging project currently. “We are prioritizing Taoyuan Airport Terminal 2 by expanding the air side commercial space, and focus on improving customer experience and traffic flow. The first phase is expected to be done by the end of this year,” she said. According to the spokesperson, the Taoyuan International Airport’s refurbishment is challenging because of its new design. “It is an entirely new design and has a totally different traffic flow. The difficulty is that you have to continue the duty-free shop operations and service during the construction period,” she explained. Last year, Ever Rich won the competitive dual duty-free tenders to run mixed duty-free concessions at Taoyuan Airport’s Terminal 2 for 12 years, with an option of a three-year extension. The concessions involved a 34,000 square meters North Wing Area D where incumbent Tasa Meng operated and the 27,000 square meters South Wing Area C where Ever Rich operated. However, as the tender terms stipulated that the top bidder, Ever Rich, can only operate one area, the retailer decided to continue operating its existing 27,000 square meters space.
Taipei’s Songshan Airport expansion is one of Ever Rich’s priority projects for this year
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Riri in Asia by ELENA OWYONG
Fenty Beauty by Rihanna is available in downtown T Galleria stores in Macau and Hong Kong from September 3 onwards
DFS debuts Fenty Beauty by Rihanna in Macau and Hong Kong
FS has launched Fenty Beauty by Rihanna in its downtown T Galleria stores in Macau and Hong Kong on September 3. The retailer will stock the brand exclusively in Macau, while in Hong Kong, it is one of the first retailers to introduce the brand. Fenty Beauty by Rihanna is the result of a 2017 partnership between singer Rihanna and Kendo Brands, an LVMHowned beauty developer. The latest expansion will allow the brand to be more accessible to Asian consumers. Designed with Rihanna’s vision of being inclusive, Fenty Beauty offers products for skin tones that are traditionally underrepresented in the beauty industry. Some of its popular products include the Profilt’r Soft Matte Longwear Foundation and the Invisimatte blotting powder. “I created Fenty Beauty because I
40 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
wanted to make a beauty brand that is inclusive for people everywhere. I want everyone to feel beautiful, recognized and EMPOWERED, no matter their ethnicity, culture, skin tone or style,” Rihanna said. Commenting on the launch, Ed Brennan, Chairman and Chief Executive Officer, DFS Group said: “DFS Group is proud to unveil Fenty Beauty by Rihanna exclusively in Macau, and to be one of the first retailers in Hong Kong to debut Rihanna’s critically acclaimed cosmetic label.” “We are delighted to partner with this multi-talented entrepreneur who embraces diversity, applauds curiosity and instils playfulness – qualities that we at DFS also value and promote.” The Fenty Beauty by Rihanna collection is available at select DFS downtown gallerias and airport stores from September 3.
The Profiltr Soft Matte Longwear Foundation is touted as one of Rihanna’s favorite make-up products
Lagardère Travel Retail
The new Stuart Weitzman airport boutique is located after the security check-in at the Hong Kong International Airport
Stepping up by ELENA OWYONG
Lagardère Travel Retail opens first Stuart Weitzman boutique in HKIA
Stuart Weitzman’s new futuristic-inspired Fall 2019 Collection is available at its new Hong Kong International Airport store
42 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
agardère Travel Retail has opened Stuart Weitzman’s first global airport boutique at the Hong Kong International Airport (HKIA) on August 16. Located after the security check-in at HKIA, the boutique boasts a modern and sophisticated look that is aligned with the brand’s aesthetics. According to Lagardère, the boutique’s collection includes Stuart Weitzman’s new futuristic-inspired Fall 2019 Collection as well as other items from the SW Logo series such as the NUDISTSONG stilettos and NEARLYNUDE block-heel sandals. Established for over 35 years, Stuart Weitzman has been a red-carpet favorite. It currently operates 128 retail stores globally and it is also available in licensed international stores and international shop-in-shops, fine retailers and specialty stores and e-commerce sites in the United States, Canada, Europe, China, Japan and Australia.
Skintech is the new tech, says Foreo chief
Foreo’s Founder and CEO discusses the latest updates to the company’s top-selling beauty tech device that has taken China by storm
fter four years in the making, the best-selling Foreo beauty tech device has been updated. Filip Sedic is the Founder of Foreo and brains behind the successful beauty tech gadgets Luna, Issa and UFO. Relentlessly inquisitive, Sedic’s thirst for invention has seen him file more than 200 international patents across multiple categories. Now, as part of a proven track record of investing in industries long overdue an overhaul, the inventor is turning his attention to transforming the beauty tech industry not just for good, but for better. Ever since establishing Foreo in 2013, Sedic, a Bosnian-born Swede, has been active in all aspects of the now-multinational brand. In particular, this consummate ideas man plays a pivotal role in product development, heading up a team of R&D professionals collectively known as the Foreo Institute. Although the name may conjure images of a centralized, secretive laboratory, the brand’s technical experts are based across no fewer than 10 countries. Why? Because, as its name suggests, Foreo is “for everyone, and wellbeing knows no borders”. The team’s achievements include the Luna range of facial cleansing brushes. On the debut model’s release back in 2013, its material – medical-grade silicone – marked a world first for a skincare tool of this kind. Later, in 2014, the Foreo Institute made the biggest, boldest step forward in toothbrush design in 60 years with Issa: a sonic, silicone brush combin-
44 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
ing comprehensive cleaning with a gentle, non-abrasive touch. Sedic, the CEO and founder of Foreo, admits the launch is just the latest in a spate of innovation from the Luna range, which has put the term “skintech” firmly on the beauty map. He explains: “Luna generally transformed the way the world tends to skincare way back when we launched in 2013. Today is a new era for Luna and marks a special place in history for Foreo. This is the best Luna we have ever invented and is the biggest technological update to the best-selling beauty gadget of all time – the Luna mini 2.” The new Luna mini 3 follows the success of the Luna mini 2, the company’s top-selling beauty gadget, and is part of the signature Luna range of cleansing devices. Currently, 20 million people around the world use the gadgets as part of their daily cleansing ritual. Last year, the Financial Times reported that the popularity of the Luna mini 2 was so great in China that the product ranked second in Tmall’s Shopping Wishlist before the Single’s Day shopping-fest – beaten only by the iPhone 8 and proving once again that skintech is the new tech. Demand for the next wave of innovative cleansing is driven from the upgraded technology. This includes the Find My Luna feature on the app-enabled device and the never-been-seen-before glow boost – a 30-second glow boost feature designed to rejuvenate skin immediately. The device also carries the trusted
hallmarks of the Luna range, including a smart Swedish design, 650 uses in a single charge, high-grade hygienic silicone body and customized power levels. Compact, lightweight, colorful and 100% waterproof, the device needs no replacement brush heads and is designed for skincare anywhere. The new Luna mini 3 will launch in travel retail on October 1 globally after pre-launching on September 1 in South Korea.
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Women in the Spirits Industry
A woman’s world In a traditionally male dominated spirits industry, there seems to be a shift occurring where we are seeing women taking on high-ranking roles. We here at Americas, Asia and Gulf-Africa Duty Free magazine feel it’s important to celebrate this evolution by sharing stories about successful women in the duty free industry by JAS RYAT
CAROLE SOULARD, Customer Marketing Manager at Beam Suntory
EKATERINA SMEKHUNOVA, Head of Global Travel Retail Department at Beluga Group
How long have you been in the industry? 16 years in travel retail, including three years in spirits.
How long have you been in the industry? Since 2013.
Are you able to share some of the professional obstacles you have faced being a woman in the spirits industry? I have been very lucky to work for a company that really does champion diversity and inclusion. I have seen countless examples, both within our brands and our business, of celebrating and empowering women for their contribution to the industry. Beam Suntory has always trusted women, from the days of Margie Samuels with Maker’s Mark to Bessie Williamson at Laphroaig, and will continue to recognize the huge value they offer. I have always been very lucky to have incredible mentors to show me the way.
Q: Are you able to share some of the professional obstacles you have faced being a woman in the spirits industry? The spirits industry is traditionally a man’s world in Russia. However, in travel retail I see more women in key positions. It means we are becoming more and more professional. In fact some of companies have special programs to support women to be key managers in parity with men, for example at LVMH.
How has the industry changed in regards to women seen in decision-making roles today vs 10 years ago? Where do you see it heading in the future? I believe we are now in an era where the sky is the limit as more and more companies understand the path that was pioneered by companies such as Beam Suntory to use diversity and inclusion as strengths and to build on their employees’ diverse passions. In the future, I see women becoming ever more present in decision-making roles and I am confident this will only be a good thing for the industry.
46 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
How has the industry changed in regards to women seen in decision-making roles today vs 10 years ago? Where do you see it heading in the future? Currently I see more women in the industry and in key positions than six years ago. I see in the future a minimum of 50% of key positions in the industry worldwide being held by women. Are you able to share a recent professional “win” that you want to celebrate with readers? I’m happy to announce how business in Asia and the Americas has increased over the last two years. It is not my “win”, however, it is a result of the huge amount of work by our export and marketing team. We have a lot of new listings and promotions worldwide. We are creating new design concepts, special products and looking for new opportunities to increase our business in travel retail.
AUDE BOURDIER, Vice President Marketing, Global Travel Retail & Developed Asia Pacific at Brown Forman ANNA-KAI TORS, Export Marketing Manager at Liviko As, Estonia
How long have you been in the industry? I have been working in the spirits industry for 30 years now, which includes 27 years with Bacardi and going on seven months with my current employer, Brown-Forman. How long have you been in the industry? I was first at the advertising agency that served Liviko´s brands and then back in 2011 was invited to “switch sides” and come to Liviko instead. I started as the brand manager for Vana Tallinn liqueurs. At the end of 2016, I was promoted to my current position – Export Marketing Manager. I take care of Crafter´s Gins, Vana Tallinn liqueurs and our vodka brands’ marketing activities in travel retail and in more than 30 export countries where we sell our products. Are you able to share some of the professional obstacles you have faced being a woman in the spirits industry? Overall, our region – the Nordics – has always been more open-minded compared with some other places in the world. Personally, I do not believe that being a woman has ever been a major factor in my career. Everything that I do, I do with passion, believing in our products with full heart. Sure, the spirits business has always been more male dominated, hence the look in people’s eyes sometimes, hearing what I do. Unfortunately, in this business I guess women still have to prove themselves more than men. Being a female, you also get more comments and judgment based on your looks, I suppose. How has the industry changed in regards to women seen in decision-making roles today vs 10 years ago? Where do you see it heading in the future? I guess the answer is also above.
Are you able to share a recent professional “win” that you want to celebrate with readers? It is always a pleasure seeing our new products entering the market, in which birth I was involved from the scratch. Crafter´s Gins just a few years back or the recent launch of our very first travel retail exclusive product: Vana Tallinn Coffee Fusion.
Are you able to share some of the professional obstacles you have faced being a woman in the spirits industry? As you can imagine, when I started in the spirits industry 30 years ago, it was overwhelmingly dominated by men. The atmosphere then was very different from today. I saw myself as a professional who was willing to work as hard and be as productive as anyone and therefore gender shouldn’t matter. But by far my greatest frustrations came from the frequent, unwarranted promotions given men over women and the common, but usually unspoken, concern as to whether a mother can handle both a family and a demanding career. How has the industry changed in regards to women seen in decision-making roles today vs 10 years ago? Where do you see it heading in the future? While, regrettably, the wine and spirits industry has lagged behind other business endeavors in women having decision-making opportunities and responsibilities, it quite honestly has come a long way during my tenure. Women are now truly considered an asset in supervisory and executive positions, as opposed to the past, when they were more often than not a mere exception that happened from time to time. Are you able to share a recent professional “win” that you want to celebrate with readers? After 27 years with my former company, a unique opportunity presented itself that was a perfect fit for me based on my qualifications and past experience. Brown-Forman, had recently conducted a business reorganization that combined global travel retail with the domestic markets of Australia, New Zealand, Japan, Korea and Taiwan. A new position was created to oversee the marketing activities in what was a major geographic region and they were interested in talking to me. All the hard work put me in a position to accept and welcome this awesome responsibility. It is a “win” for my career and, thus far, one of my best professional decisions.
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Well groomed for success After five years in travel retail, Moroccanoil has built a strong global footprint for its beauty products with multiple partners and retailers, and now plans to be ultra-strategic
48 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Body Polishing Scrub is a revitalizing, gel-based scrub including argan shell powder and lava stone pumice, while a blend of six precious oils nourishes and hydrates the skin
The dual-benefit Color Depositing Masks combine care with color, depositing pure pigment while providing the treatment benefits of a deeply conditioning mask
oroccanoil, the leader in oil-infused beauty, continues its worldwide distribution strategy in duty free channels, focusing on the latest innovations for hair color and body care at the 2019 TFWA World Exhibition in Cannes. The iconic, head-to-toe beauty brand, which entered travel retail in October 2014, is poised for continued growth in the channel with two new product offerings. The dual-benefit Color Depositing Masks combine care with color, depositing pure pigment while providing the treatment benefits of a deeply conditioning mask. Available in seven curated shades, this collection of nourishing, temporary color masks is designed to enhance tones, refresh existing color, or allow experimentation with fashion shades, while restoring hair health. The result is commitment-free, beautifully colored hair that looks and feels healthy, the company said. As part of the Moroccanoil sustainability journey, Color Depositing Masks are sold in tubes made from 50% post-consumer recycled plastic. The Body Polishing Scrub replaces Body Buff in the Moroccanoil Body product line-up. This revitalizing, gel-based scrub reveals renewed, brighter-looking skin with natural exfoliators, including argan shell powder and lava stone pumice, while a blend of six precious oils nourishes and hydrates the skin.
The fast-growing company, whose products are available in over 65 countries around the world, has undergone a reorganization because of the global footprint it has laid in a big way over the last four years, in order to be able to fulfil that commitment. Sebastien Levi joined the company late June 2019 to head up global travel retail as Vice President, reporting into John Gates as Senior Vice President, and its new CEO Jay Elarar. The company will have extra travel retail support with Levi for the travel retail beauty division. Elarar has worked up the ranks within Moroccanoil. He was the Director of professional sales for the Americas for many years, and then went onto become Vice President of Professional Sales over the last one-and-a-half years. And now he has been appointed to the CEO role at Moroccanoil. After being in travel retail for five years, where Moroccanoil has a strong global footprint with multiple partners and retailers, the next evolution within the channel is to be ultra-strategic with the foundation it has already laid, in terms of product assortment, and the programming of eventing. The latter includes the pop-up at Amsterdam Schiphol Airport. More such events are in the pipeline.
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Color Depositing Masks are designed to enhance hair tones, refresh existing color, or allow experimentation with fashion shades, while restoring hair health
Additionally, the firm plans to layer in an additional headcount with its new Vice President Global Travel Retail, who will be entirely focused on the channel. Moroccanoil is seeing new opportunities in the Middle East, Indonesia and Asia Pacific markets in general – and it’s looking carefully at these opportunities. For 2020/2021, the focus is to look at the existing distribution and build the volume strategically through its supply chain, product assortment, travel retail exclusive, pop-ups in major airports, and beauty consultant/beauty advisor development. The plan is for capital expenditure expansion in 2021/2022 for brand fixtures and brand expression. Levi has returned to the brand for precisely this purpose, after making his mark in the travel retail channel in the last 12/15 years before joining Moroccanoil. This seeks to show the company’s commitment to the channel and how it’s looking to grow it. John Gates, Moroccanoil Senior Vice President of Retail and Travel Retail Sales, said: “We have three strong divisions – haircare, which is the bedrock of the business; retail beauty, which has really grown in volume and footprint, now representing
50 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
20-25% of revenue over the last four years; and our e-commerce channel – one of our major revenue streams. Jay Elarar is conscious of all three channels and what they do for the whole organization. Coming from the professional side of the business, he understands the sensitivity of growing the brand within three channels of operation, and knows how to navigate those conversations in order to support the ecosystem we’ve created.”
Global distribution plan
“The expansion of Moroccanoil is supported by continued consumer and industry excitement and demand for the brand,” continued Gates. “Moroccanoil is more than a leader in the oilinfused beauty industry; we are a lifestyle beauty brand that is able to offer consumers multiple categories including hair care, body care, and sun care.” In 2019, the team continues to work closely with existing partners on aligned strategies to further strengthen overall sales volume, enhance brand awareness, and open new points of sale/ points of distribution to further engage the travel retail customer. The brand is offered in new locations through the Americas with
Dufry and DFASS, with further expansion in Asia including Korea, Singapore, Thailand and Japan. With the ever-increasing consumer demand for the brand, Moroccanoil has doubled its footprint within the cruise ship channel through Tairo International and continues to offer the iconic Moroccanoil Treatment with select global inflight listings. Moroccanoil is exploring partnerships to be onboard through first and business-class amenity kit programs. To further engage the travel retail consumer, Moroccanoil debuted its very first travel retail pop-up at Amsterdam Airport Schiphol in March 2019. The experiential pop-up shop, created in partnership with Kappé, offered consumer activations such as hair consultations with dry styling, a larger-than-life Moroccanoil Treatment bottle for an Instagrammable moment, and a hydration station, where the client could create a custom threepiece gift set. During this time, the brand experienced a 125% lift in sales, with the body category contributing 40%. Moroccanoil has plans to roll out this concept to key markets globally.
Partnering Eurovision Song Contest 2020
Moroccanoil has announced that it will be Presenting Partner of the Eurovision Song Contest 2020, organized by the European Broadcasting Union (EBU). As the exclusive main sponsor of the annual event, which reaches up to 200 million TV viewers around the world, Moroccanoil has been granted extensive global media and digital rights as part of a long-term partnership for the next five Eurovision Song Contests until 2024. Moroccanoil will send out its team of world-class professional hairstylists to provide expert haircare and innovative styling for participating artists at Eurovision dress rehearsals and the live TV shows, which are broadcast to more than 40 markets in Europe and beyond.
Jon Ola Sand, the EBU’s Executive Supervisor of the Eurovision Song Contest, said: “We are delighted to welcome Moroccanoil as Presenting Partner for the Eurovision Song Contest 2020 and beyond. This is a perfect partnership between the world’s largest live music event and one of the top global beauty brands. We look forward to working with Moroccanoil to ensure all the artists at next year’s Eurovision Song Contest look, as well as sound, incredible.” Moroccanoil Executive Chairman David Cohen, said: “Moroccanoil is honored to be chosen by the EBU as Presenting Partner of the Eurovision Song Contest and excited to share our premium brand and values throughout Europe and Australia through this groundbreaking event. As a professional haircare brand that is focused on supporting the creative community of hairstylists, we believe the Eurovision Song Contest is the perfect partner and platform to support creative artistry and help Moroccanoil bring the oil-infused beauty revolution to consumers all around the world.” The partnership with the Eurovision Song Contest builds on the brand’s success as a celebrity and fashion industry favorite, with top stylists using Moroccanoil products for high-profile magazine shoots, fashion shows around the globe, and award shows like the Oscars and the Grammys. Moroccanoil was represented by Tali Eshkoli in the agreement with the European Broadcasting Union. Eshkoli, TV producer and a Eurovision expert, is a senior member of the Israeli delegation to the contest for 16 years and was the Head of Event for the Eurovision Song Contest 2019 and one of its executives. The Eurovision Song Contest 2020 will take place in the Netherlands, with the host city and show dates to be determined in due course. The shows will be co-produced by the EBU and Dutch public broadcasters NPO, NOS, and AVROTROS. Moroccanoil’s first travel retail pop-up at Amsterdam Airport Schiphol in March 2019 resulted in a 125% lift in sales, with the body category contributing 40%
52 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
C A R A N
D â&#x20AC;&#x2122; A C H E
N E S P R E S S O
The exclusive 849 ballpoint pen is born of the encounter between two iconic Swiss companies, sharing common values: sustainable development, innovation and Swiss design quality. Caran dâ&#x20AC;&#x2122;Ache, Swiss Made excellence since 1915.
A jewel of a brand
Yellow gold and semi-precious stones light up the Mini Ivette pieces
Delicate colored gemstones decorate the Glory collection
Ambitious brand TOUS launches its latest collection in travel retail as it aims to lead the world in affordable luxury jewelry
Each piece in the Nocturne collection represents a brand icon
ine jewelry and accessories brand TOUS has unveiled its Fall-Winter Collection in travel retail, a portfolio of pieces which focus on the beauty and durability of jewels. As it approaches its centenary, familyowned TOUS, whose ambition is to lead the world in affordable luxury jewelry, creates pieces that will be treasured, gifted and passed on to be loved again, generation after generation. For Fall-Winter 2019 TOUS reveals seven new collections which are set to dazzle the traveling consumer. Designed to be the star collection this Christmas, the most important gifting occasion of the year, Light Mesh is a range of classic mounted pieces in 18ct rose gold and white, which sparkle with diamonds. The Nocturne Collection, made for the first time with a combination of sterling silver vermeil and sterling silver, makes heroes of the TOUS brand icons. A delicate piece in the shape of a cross 54 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
represents tradition, the bear symbolizes tenderness, the moon is interpreted as a symbol of femininity, the heart embodies love and the bar signifies security. Mounted on fine sterling silver vermeil chains, the Glory Collection presents different motifs in colored gemstones.
Small and bright
Ivette, an iconic brand collection, is reissued this Fall in a smaller version in 18ct yellow gold decorated with brilliant topaz, amazonite, opal and amethyst stones. Full of energy and light, the Mini Ivette collection is sure to entrance travelers with its bright colors and unusual pieces. The Mini Fiore collection is inspired by the artisan crafting process of Murano glass, the ancient trade handed down from father to son on the island of Murano in Venice, using secret formulas and techniques that only the master glaziers are permitted to learn. Interlinking rings are the defining
elements of the TOUS Hold Collection and this season the brand adds two new versions to its catalogue. The Hold Metal range features pieces of precious metals such as sterling silver, sterling silver vermeil and rose gold vermeil decorated with the some of the brandâ&#x20AC;&#x2122;s most iconic symbols, namely the bear, star, heart, flower and bar. Hold Color introduces colored leather pompoms that invite the wearer to have fun and adapt the jewelry to suit the occasion or the time of day.
The first century
The origins of TOUS date back to 1920, when the young apprentice Salvador Tous Blavi started out in the watchmaking business. A decade later he moved to Manresa near Barcelona and opened his own establishment, where he was joined in 1953 by his son, Salvador Tous Ponsa. He, with his future wife Rosa Oriol and their four daughters, transformed the business into the company we see today. Three generations on, the Manresaheadquartered house now employs over 4,000 people worldwide, is present in 53 countries with more than 700 stores, and is making steady progress in travel retail.
DOUBLE-LASH Night Care
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For fuller and longer lashes ● A natural extract, rich in vitamins and proteins that revitalises the growth process. ● Gives lashes a natural, silky shine. ● Also recommended for eyebrows.
Fuller lashes* after 28 days Longer lashes** after 56 days
Apply Double Lash every evening on clean lashes and allow it to work overnight.
* Results measured on 23 women aged 19 to 64, daily application. ** Results measured on 21 women aged 19 to 64, daily application. Survey satisfaction index : fuller lashes = 72% ; longer lashes = 81%.
Ophthalmologically tested. Fragrance free. TFWA 2019 – RIVIERA VILLAGE RG16 www.mavala.com
Off to a flying start TFWA, Cannes sets the stage to unveil newness among global brands
3 4 6
1. My Anti-Ageing Program: Laboratoire Nuxe helps consumers replenish skin, even after a long trip, with the My Anti-Ageing Program travel set. With these global anti-ageing formulas, prominent wrinkles are smoothed and facial contours appear lifted and reshaped. A daily anti-ageing program with Nuxuriance Ultra includes Replenishing Rich Cream 50ml, Replenishing Night Cream 50ml and Eye & Lip Contour 15ml (free).
4. Classic Remix Collection: Travel-inspired bag specialist CabinZero unveils the Classic Remix Collection, in collaboration with the V&A, and combines innovative all-weather, durable bags with beautifully designed, unique patterns. The range of six backpacks and hip bags includes the Azar design. Orange flaming lotus flowers are entwined with deep indigo stems and leaves, on a vintage sand background.
2. Ron Cihuatán Nikté: InnoTRI presents a limited edition rum crafted as homage to the mystique of Kay Nikté, the Mayan festival of flowers. In an enchanting celebration held beneath the light of a crescent moon, the Maya would offer a sea of sacred petals to the moon goddess. Only 17,914 bottles of this rum will be released globally.
5. Sunday by Belle & Beau: Originally only focusing on jewelry, for the first time Kurate is introducing watches by Belle & Beau. Having already tried and tested the watches in the domestic market, with extremely positive results, Kurate is highlighting four watch collections: ‘Cosmetica’, ‘Sunday,’ ‘Blossom,’ and ‘Velvet Crush’.
3. Lexingham Dual USB charger: Lexingham, a professional range of mobile accessories aimed at tech-savvy consumers, introduces a powerful Dual USB charger to keep your Smartphone charged on the go. Using intelligent technology to optimize charging, with a powerful USB PD 3.0, two devices can be connected at the same time. It can be used safely across USA/China/Japan and any other compatible countries that use Type A plugs.
6. Geisha Tin box 158g: Fazer brings you Geisha milk chocolate wrapped around a hazelnut nougat filling. Thick milk chocolate coating complements the soft yet crispy filling of the pralines in this new heart-shaped tin box. This attractive heart-shaped tin makes it perfect for gifting and the contents are made from 100% responsibly produced cocoa.
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7. The Jelly Bean Factory Pop-A-Bean: The Jelly Bean Factory brings colorful Gourmet Jelly Beans that defy reality. 36 flavors punch way above their size and weight in this ‘Pop-A-Bean’. Filled with the iconic 36 Huge Flavour mix, travelers will be surprised every time they pop. A fun and interactive way to enjoy this gourmet treat. 8 Loacker Big pack 45gx6: Loacker introduces a handy pack that goes wherever you go, for a quick snack no matter where you are, at any time of the day. Each pack contains eight crispy wafers to munch at work, at the gym, in your free time. Six flavors include Napolitaner, Cremkakao, Vanille, Milk, Cocoa&Milk, Double Choc. 9. Manchester United Club Collection: Maui Jim brings football fever to life with the launch of its global travel retail limited edition collection of Manchester United branded frames. The polarized sunglass brand, official vision sponsor of the famous club, has created the Manchester United Club Collection by Maui Jim, consisting of four of its most popular frames with the legendary Manchester United devil logo emblazoned on the temple and ‘MAN UTD’ etched on the lens. 10. Caran d’Ache Nespresso ballpoint: Nespresso and Swiss writing and drawing instruments company Caran d’Ache have partnered once again to produce a second limited edition Caran d’Ache Nespresso ballpoint pen made with recycled aluminium coffee capsules. The result gives environmentally-conscious coffee and design fans something to write home about.
11. Caffarel: Caffarel presents its new premium line dedicated to travel retail in partnership with Lindt & Sprüngli. The collection offers chocolate with Italian hazelnuts in two different products: discover the velvety pleasure of Gianduia 1865©, and the delicate contrast of creamy chocolate and crunchy hazelnuts of Piemonte, both available in a 180g gift-box and a 125g self-treat bag in milk or assorted flavors. 12. Emirates Licensed Toy Range: Premier Portfolio expands its offerings with the addition of a new range to its licensed Airplane Toy Travel Retail selection. Emirates Airline has joined the portfolio alongside the existing partnerships with British Airways, KLM, Virgin Atlantic and SAS and stocks will be hitting stores very soon. 13. Tateossian’s SS20 Duty Free Collection: The company introduces two exclusive bracelets inlcuding globes made of a mosaic of semi-precious stones that feature golden longitude and latitude lines available in a choice of black agate or blue lapis. These specific semiprecious stones represent stability, grounding and support; appropriate for the frequent traveler. 14. Asia Collection by Haute Fragrance Company Paris (HFC): Building on its success in the Russian domestic market, HFC is now targeting global travel retail. This fragrance is created in collaboration with Kim Zu with a concentration close to Extrait de Parfum, featuring a large percentage of natural and noble raw materials. www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Sugar Confectionery Report
Spatial awareness N
o ifs, no buts – sugar suppliers have a bone to pick with travel retailers. In a nutshell, they have an issue with space – or lack of it. The sugar sub-category still accounts for only a 20% share of the total confectionery category in travel retail, with chocolate taking the lion’s share of space, while in the domestic market sugar has around a 50% share of space. All the leading suppliers we talked to for this feature agree: there’s a big disparity here, and while they know that the hallowed half share will never be reached in travel retail, they’re gunning for more space. And here’s how they plan on going about it. Part of the solution to the spatial conundrum lies in the impulse purchase arena of the checkout, many sugar suppliers believe. According to Andreas Reckart, Vice President Sales Middle East & Travel Retail at Swiss herb drop manufacturer Ricola, gifting and sharing are big in travel retail, but the really big potential is impulse purchases for individual consumption. He points to the small products that Ricola has developed specially for cashpoint in travel retail stores – namely, a 75g tin of sugar-free herbal drops in different flavors. “It’s very difficult to get space at the cashpoint,” Reckart admits. “Some retailers understand the potential of this space – they see that it has been maxed out in the domestic market. In travel retail, we are far, far away from that. There’s a big opportunity, in my opinion, to generate additional business – on top of their regular sales. The impulse business is not planned. I believe there’s a lot to be done as an industry.” To make further progress in the ongoing battle for store space, Reckart thinks a joint effort is called for among sugar suppliers. “As a [confectionery] category we talk – but in sugar, there’s no real alignment in our portfolios. For example, some companies are targeting the children’s gifting sector and want big category space, not just at the checkout. Confectionery is a niche and sugar is a niche within that, so we find it difficult to find a voice and to be heard. If there something we can do together, that would be good.”
Driving gum sales
For confectionery giant Mars International Travel Retail (MITR), whose biggest sugar line is Skittles but gum has a lot of potential, and this product line in particular has a role to play at checkouts.
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Leading sugar confectionery suppliers spark an engaging debate about how to boost the space given over to the sub-category in travel retail and how to boost conversion by MARY JANE PITTILLA
Ricola taps the big potential of impulse purchases for individual consumption by offering 75g and 200g tins
Maud Geerbex, Corporate Affairs Director, MITR: “There’s a big opportunity at the checkout in general, and gum is a checkout item – it adds a few extra dollars to your basket. People won’t necessarily buy it from a wallbay. As an industry we can do much more at the checkout, and that will also drive gum sales.” For Perfetti Van Melle (PVM), whose best-selling item is the travel retail exclusive Mega Chup lollipop, the company has specially selected the 10 items that are its top-sellers – including smaller items for the cash till area. Says PVM Brand Manager Travel Retail Femke van Veen: “We have to make sure our new travel retail exclusive products are listed, and cash till items also – it’s a focus for retailers. Consumers expect to find gum at the cash till, and that’s also our focus.” Another part of the solution, some suppliers believe, is listening to what consumers actually want. Cloetta aims to offer a full category solution with both sugar and chocolate products, including its travel retail exclusive ranges. Its best-selling travel retail (hero) brand is The Jelly Bean Factory, targeted
at millennial consumers aged from around 20 to 40, not children. The brand is an all-natural confectionery brand, and is Gluten-free, GMO-free, gelatine-free, free of artificial flavors and colors (i.e. NAFNAC), suitable for vegetarians, and Kosher certified, all big pluses for this choosy demographic group. Besides all these benefits, the brand offers a high-quality taste sensation, and the products include a huge punch of pure flavor. Berend-Jan van Egmond, Senior Market Manager, Cloetta International Markets, believes that the industry needs to follow the trends in consumption. “Everyone loves confectionery and it won’t disappear, but you need to make sure you follow the trends. We see globally a rising demand for more responsible and natural snacking, and our target demographic group is much more aware and conscious on what they consume, and that’s something we as suppliers need to communicate and act on as well. We need to make sure our products are in line with their expectations, and I think it will work.” In 2016, Ricola undertook consumer research at Frankfurt and Hong Kong airports to understand what people would expect to find in travel retail. Both airports – though different – came up with the same results. “Consumers expect small, exclusive packs – different products in a small format. They said they would purchase even more if this were the case,” says Reckart. “We gained a good understanding of the consumer through our research. People are clear about what they expect; as an industry, we don’t want to impose things on consumers that they don’t find relevant.” Following this consumer research, Ricola developed small products and scaled back its gifting and sharing ranges. “We’ve seen a really good response thanks to our findings. We came back to the market with a new portfolio and it’s really falling into place with important retailers such as Gebr Heinemann, Dufry, Lagardere and Dubai Duty Free.” Haribo came quite late to the confectionery category party in travel retail, having only created a dedicated unit some four years ago. Since then, the company has scored two major product hits in the channel. The Haribo Pick and Party variety pack comes in attractive packaging and contains a mix of different brands and flavors. For portion control, the pack contains small sizes.
Perfetti’s Chupa Chups brand has obtained impressive global-recognition
The Haribo Pick and Party variety pack contains a mix of different brands and flavors
Haribo is anticipating good feedback with its latest range of resealable pouches in exciting flavors including sweet Peaches and zesty Tangfastics
The second top-seller is the company’s iconic Goldbears line – the gummy bears that everyone knows around the world. The company is looking for similar success with its latest range of resealable pouches in exciting flavors including sweet Peaches and zesty Tangfastics. Haribo’s Elisa Fontana, Marketing Manager Travel Retail, believes retailers are aware of the progress the category has made and are happy with what suppliers are offering. “It’s an impulse-driven category and the retailers are trying to give us more checkout space or different locations in-store to allow us to exploit this impulse.” However, Fontana notes that the fine food sector forms part of the confectionery category as a whole and sounds a warning note: “We hope fine food won’t take the space of [sugar] confectionery in-store.”
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Sugar Confectionery Report
Cloetta’s all-natural The Jelly Bean Factory brand targets millennial consumers
Space isn’t the only area of concern among sugar suppliers. For Mars’ Geerbex, the subject of conversion – turning passengers into shoppers – is a pressing issue. According to travel retail data specialist Generation, sales of the confectionery category as a whole have been flatlining in the past few years, with little or no growth. The suppliers we spoke to think this is an issue that must be addressed. Geerbex says the issue of non-conversion is not going away. “In the next few years there will be a lot more passengers, but more will travel with low-cost carriers. We need to think about how we drive confectionery. There might be more opportunity for confectionery as it is a lower-priced product – but how do we really transform the category so that that can happen? It’s not a new challenge, but we have not addressed it. The fact is: the amount each passenger spends on confectionery is not going up.” PVM’s van Veen reports that in general, the sugar confectionery market is showing slight growth, but in the Asian region the confectionery market dipped by 0.2% last year. This was a topic people were talking about at the TFWA Asia Pacific show in Singapore, she says, adding that PVM itself showed “very good growth” in the region of around 10% in 2018. “We grew in a declining market, but we believe there is a great potential for sugar confectionery in the region.” Another challenge for sugar manufacturers is the issue of labeling on product packaging. Driven by the obesity epidemic, regulations are being passed in many domestic markets to try to tackle the problem. For Mars’ Geerbex, this is also a matter For confectionery giant that the industry needs to take in hand,
Mars, whose biggest sugar line is Skittles says gum has a lot of potential in the travel retail channel
60 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
and she warns that travel retail is not being taken into account when these regulations are being made. “No-one really thinks about travel retail or about the specifics of the category. We won’t be able to comply with hundreds of regulations in different countries – we need to start talking about that.” She continues: “The measures governments are taking will only continue – we need to act as an industry, and consider how do we speak up? How do we sell in a responsible way and tell the regulators this is what we are already doing, were not oblivious to the issue. We’ve excluded trans fats and saturated fats, for example, and we do not market to child under 12, etc. We need to sell confectionery responsibly – this industry is not immune and we need to wake up to that. Up to now we haven’t responded strongly enough.” Geerbex notes that the European Travel Retail Council has a confectionery group that meets for regular discussions and has initiated a labeling pilot. During the TFWA Asia Pacific fair in May, the Duty Free World Council confectionery group kicked off. In Latin America, the industry body ASUTIL is also tackling the issue. Despite these concerns, suppliers agree that there is also a bright side to the story. It’s a fun category that can drive excitement on the shop floor, and they all agree: everyone loves confectionery and we shouldn’t forget that.
SKROSS SKROSS has launched its most powerful high-end travel adaptor compatible in 205 destinations around the world
Universal power A powerful new travel adaptor from SKROSS® is highlighting the Swiss brand’s leading position in the travel adaptor category
wiss brand SKROSS is making powerful strides in the travel adapter solutions arena with the Alpha travel adapter, its most innovative universal adapter yet. Designed in partnership with Danish design agency Jacob Jensen Design, the Alpha by SKROSS® combines a contemporary, elegant design with state-of-theart components. Not only does it boast the minimalist design that the Scandinavian designer is known and recognized for, the adapter can be used with high-performance devices from every continent. It is compatible with more than 205 global destinations and seven different international socket standards, making the adapter both stylish and practical, something Pia Kautz, SKROSS Communication Manager, says was missing until the Alpha was introduced. “Adapters always needed to be functional and problem-solving but like with many other travel accessories, people place more and more value on fashionable travel companions that are stylish and underline a specific kind of lifestyle,” says Kautz. “SKROSS wanted to be the first brand to offer a luxury version.” Kautz says partnering with Jacob Jensen Design was the most original way to bring the Alpha by SKROSS® to life. The Swiss brand’s affiliation with the industrial designer was thoughtfully planned to revitalise it’s its core products’ design while creating an innovative collaboration
62 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
in travel retail, which Kautz says, is an industry known for its pioneering spirit in the field of electronics and accessories. “SKROSS® and Jacob Jensen Design uphold great value in similar attributes such as providing authentic, lasting and reliable products,” she says. “This premium travel adapter is made for all kind of people who love to travel in style, no matter which origin, gender or age.” Sam Gerber, SKROSS Managing Partner, says the new adaptor highlights the value of the travel adapter product company and the potential of the SKROSS brand altogether. And, with this great power comes great risk, Gerber acknowledges. “The biggest challenge has been to convince ourselves of accepting the risk of creating a top end product for which we are not sure if there is any market acceptance,” Gerber says. To Gerber, the fact that no other adapter compares to the Alpha by SKROSS® is justification enough for price-conscious shoppers. “We have invested a large amount of financial and technical resources in creating the Alpha...which ultimately result in a higher price but also with a substantial differentiation in quality, design and technical features compares to what is available in the market otherwise,” Gerber says. “Perceived as a leader in technology, SKROSS is a perfect solutions provider renowned for its functional and safe products. With this joint project, we aimed to
further strengthen our position as global leader in premium travel adapters,” Kautz agrees. The Alpha brand is currently being listed in Crystal Media and Capi, with further listings planned in other retailers within the travel retail and duty free industry. Outside of travel retail, the Alpha brand is also listed in Smartech highend tech stores, e.g. in Selfridges in London, KaDeWe in Berlin and Printemps in Paris.
The Alpha by SKROSS®, in collaboration with Jacob Jensen Design, is the Swiss brand’s newest universal premium travel adapter yet
CRAFTED WITH 100 % RESPONSIBLE COCOA
Hero products and new concepts Anthon Berg continues to reinvent its recipe for success by updating packaging and celebrating new partnerships by JAS RYAT
nthon Berg, global leader in bottle-shaped chocolates, continues to prosper with existing and new partnerships with some of the most famous original liqueur brands in the world. Launched in 1922, Chocolate Liqueurs continues to be the brand’s hero product. This was followed by the Chocolate Cocktails line, launched in 2004, and most recently the Chocolate Coffee Liqueurs in 2014. The three lines are now being relaunched for the 12-pieceand the 21-piece pcs Chocolate Liqueur Collection which is a mix of the three concepts.
Window of opportunity
The strategy for this relaunch is a trinity of attracting attention, sparking curiosity and convincing consumers to buy. The main tool to increase shelf-impact is the unique window front. This allows the consumers to see that they are buying actual miniature bottle-shaped chocolates wrapped and labeled like real bottles. The
Anthon Berg presents the perfect match: The Baileys Irish Cream collection is to launch as a travel retail exclusive
64 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
The Cognac Selection presents a partnership with five of the world’s most renowned Cognacs, Rémy Martin VSOP, Camus VSOP, Courvoisier VS, Louis Royer VSOP and Gautier VSOP
bottles are now lined up, as on the shelf in a liqueur cabinet, which gives the boxes a more compact and filled appearance. The company has also resized the boxes to suit the product range better and differentiate it from the 21–piece box. The Anthon Berg Chocolate Liqueur Collection is being relaunched as a slide sleeve rather than a lid box for a more premium feel which gives the impression of sliding open the bar cabinet. A quality seal, showing the unwrapped bottle with liqueur inside and stating ‘The Original Chocolate Liqueurs – since 1922’, has been added to help the consumers understand the concept quickly. This also underlines the fact that Anthon Berg is the world’s leading brand within liqueur filled chocolate. The product’s USPs are also added on the front in hot foil reading ‘premium dark chocolate’ and ‘genuine spirits in liquid centres’.
Where Cognac reigns
Following the success of the Single Malt Scotch Collection, Anthon Berg has partnered with some of the world’s best-known brands to present The Cognac Selection. Teaming up with five of the world’s most renowned Cognacs, Rémy Martin VSOP, Camus VSOP, Courvoisier VS, Louis Royer VSOP and Gautier VSOP, the firm promises to take the consumer on a tasting journey through the world’s most famous wine region - Cognac on the west coast of France. Chocolate in combination with Cognac
creates the perfect culinary marriage, according to the brand. With the Cognac Selection, Anthon Berg has continued the journey that started in the Scottish Highlands with the Single Malt Scotch Collection into the French countryside while creating a strong concept equally suitable for gifting, sharing and self-consumption.
Match Made In Chocolate Heaven
With one of the most anticipated partnerships of the year, Anthon Berg has announced it is teaming up with Baileys Irish Cream to launch a travel retail exclusive range. Five of the bestselling varieties of Baileys Irish Cream are transformed into pralines with creamy fillings encased in Anthon Berg premium chocolate. The milk chocolate pairings consist of Baileys Original, Baileys Coffee and Baileys Salted Caramel; while the dark chocolate pairings include Baileys Chocolate Luxe, and Baileys Strawberry & Cream. In the Baileys Irish Cream Collection the five pralines are to be found in different combinations in a choice of six products.The premium gift box Treat Collection is a mix of the five different pralines. The Chocolate Treat is a ‘tower’ with a window on the front, which shows off the twist wrapped pralines inside. This pack comes in two varieties: Original, Salted Caramel and Coffee; Original, Strawberry & Cream and Chocolate Luxe. The Baileys Irish Cream range is completed by three mono gift boxes of Original Flavour, Salted Caramel and Strawberry.
Spilling the beans on strategy
The Jelly Bean Factory brings colorful gourmet jelly beans that defy reality. 36 huge flavors punch way above their size and weight
Confectionery firm Cloetta sells more than 35 brands in over 50 markets and is now bringing those with the most international appeal to travel retail by JAS RYAT
loetta is a leading confectionery company in Northern Europe known for manufacturing and marketing confectionery products. Founded in 1862, it has established a strong hold on domestic markets, and is now looking to replicate this success for its growing travel retail presence.
Berend-Jan van Egmond, Senior Market Manager, Cloetta International Markets
explained to Asia Duty Free what he can offer the confectionery category: “It is our aim to offer a complete category solution to the trade.” “In Cannes we will present some interesting product line extensions on Läkerol, Malaco, and The Jelly Bean Factory, that will strengthen the current Nordic travel retail portfolio,” van Egmond said. Outside of Scandinavian travel retail, the firm has tailored the assortment with a more international appeal, stepping away from the Nordics travel retail portfolio. The Jelly Bean Factory, Red Band (with iconic sub brands such as ‘Swedish Fish’, ‘Sour Suckers’ and ‘Tutti Frutti’), KEX (short for Kexchoklad) and Läkerol have been chosen as part of the global travel retail portfolio. “At TFWA World Exhibition we will present our travel retail exclusive range for our hero brand, The Jelly Bean Factory, just as we did during the TFWA Asia Pacific exhibition in Singapore. One specific item, a 700g jar, will be added to the range of The Jelly Bean Factory, which will play a role in the gifting segment. For Red Band and KEX we will present our travel retail exclusive range of sharing bags, and for Läkerol we will present an iconic Nordic flavor pack,” commented van Egmond.
Popping up in travel retail
Cloetta brings and interactive 3D holographic display for The Jelly Bean Factory
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Cloetta introduced The Jelly Bean Factory’s Pop-A-Bean during TFWA Asia Pacific exhibition in Singapore this year. The unique packaging caught the eye of retailers looking to offer shoppers a one-
of-a-kind experience, leading to new listings. The Jelly Bean Factory’s beans are not your average jelly bean. The colorful, flavorsome jelly bean is high quality, taking up to two-weeks to produce one single bean. The beans are all natural, with no artificial colors or flavors, glutenfree, gelatin-free, GMO-free, nut-free, veggie-friendly, kosher-certified, and halal-compliant. “From a category perspective, we see a huge opportunity to add value to the category by growing the sugar confectionery share. Currently the confectionery category is still dominated by chocolate, while the ‘chocolate: sugar’ ratio in domestic markets is a bit different. We believe that The Jelly Bean Factory can play a role in this growth opportunity.” Cloetta has invested in a highly innovative 3D holographic display, which provides Cloetta with a unique and creative way to activate its brands, according to van Egmond. The holographic technology is now able to bring the brands to life in shops to tell the brand story and to create a magical consumer experience. The 3D display is currently available for The Jelly Bean Factory. It will be showcased during the TFWA in Cannes. The consumer in travel retail expects a certain level of experience once they are in a shop, van Egmond concluded, and interactive displays tap into that need. The confectionery category is finally catching up by adding a-‘pop’ of immersive experience. The Cloetta team will be showcasing at the TFWA Habour Village.
Company delivers on industry trends Nordic Beverage Company gives travelers brands that offer balance
ordic Beverage Company (Nobeco) is set to introduce its first trend-led product launches into the travel retail channel. Launching this fall will be two flavored gins, a flavored vodka, an organic vodka and two shots with low ABV. Nordic Beverage Company, or Nobeco, is a Swedish company operating primarily within the wine and spirits industry. Co-founded by Alexandra Rasmusson Rankloo, Head of Sales & Marketing and Mathias Landin, Head of Export & Travel Retail, the company controls the entire production process. “We strive to always keep sustainability in mind in all aspects of the business,” said Alexandra Rasmusson Rankloo. “A goal of ours is to act as a modern company, always considering the latest trends as well as building a range of brands and products that will live over time.” “We believe that alcoholic beverages and an active lifestyle necessarily don’t need to be two separate ways of living, but a healthy balance is the key to a long and happy life. This is reflected in our brands as well as our relation to our employees, partners and customers. A substantial part of our focus lies within innovation and to constantly strive to meet our customers’ demands and expectations. We thrive in a creative environment and get inspired by amazing people around us.”
Company born over a bottle of wine in Cannes
Rasmusson Rankloo said the idea of an eco-friendly and trend-led company that 68 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
Mathias Landin, Head of Export & Travel Retail
operates in the wine and spirits industry came to life “just the way a company within this industry should” – over a bottle of Sauvignon Blanc on a terrace overlooking the ocean in Cannes. She continued: “One thing led to another and the small family business quickly recruited another member. Although not related by blood, Landin was simply the most obvious member of their newly founded business family. And that’s what we became – family.”
What does Nobeco do?
The company is based in Stockholm, Sweden, the center of all strategic brand management and innovations for its portfolio. “One of our many strengths lies in the fact that we collaborate with a local production facility located in Sweden,” Rasmusson Rankloo explained. Nobeco’s brands will be represented in a number of markets across the globe. The production company produces products from guidelines and instructions given by Nobeco, which then defines the global marketing strategy and adapts the strategy to the local markets.
The Nobeco portfolio
Nobeco will produce a number of skus, but the core range will consist of affordable products with a premium look and feel. “Products that our consumers should feel confident about putting out on display, whether they are having a quiet dinner or a raging party,” enthused Rasmusson Rankloo.
Besides the core, the range will consist of several “trendier” products such as flavored gin and fun shots. In addition, Nobeco will produce a number of premium products that are clearly separated from the first launches. “Our firm belief is that consumers will not stop drinking alcoholic beverages, despite the current health trend. However, we will take it into consideration and produce products with a lower alcoholic content as well,” she said. Alexandra Rasmusson Rankloo, Head of Sales & Marketing
Come visit us at TFWA Cannes, Green Village, Level 01, M67
Edrington releases exclusive Macallan Aurora Scotch Whisky for Taiwan duty-free operators Ever Rich recently announced that together with other dutyfree operators in Taiwan, it has partnered Edrington to release an exclusive Macallan Aurora Scotch Whisky. Edrington owns The Macallan brand. The retailer said in a press release that the whisky was “inspired by the dawn of the Macallan Manor in the sunrise time”. Commenting on the Macallan Aurora, Marcelo Colombo, General Manager of Edrington Asia, said “ Macallan Aurora is the first time that the Quest collection to create a nation exclusive whisky. Each whiskey in the Quest collection is a journey of exploration of oak casks, flavor and aroma”. The Macallan Quest Collection is limited to global duty-free channels, while the Macallan Aurora is a Taiwan exclusive. Macallan Aurora is priced US$80 each and will be sold with Ever Rich and Tasa Meng from September 2019.
Macallan Aurora is a Taiwan exclusive which will be sold at Ever Rich and Tasa Meng from September 2019
Amarula unveils a taste of the exotic with new African flavors Amarula Raspberry, Chocolate and African Baobab Cream liqueur brand Amarula has unveiled a new addition to its range of unexpected flavors: Amarula Raspberry, Chocolate and African Baobab. The variant will pre-launch in August with Big Five Duty Free before rolling out to other duty free locations in autumn. Natasha Maharaj, Global Marketing spokesperson at Amarula, said: “Our new Raspberry, Chocolate and African Baobab blend is the latest in our continued journey to explore the unexpected, modern and exotic side of Africa.” Maharaj explained that a spirit infusion of tropical fruit, berries, citrus and botanicals is a growing trend both in South Africa and internationally. “We put the time in to find out exactly what our discerning customers are looking for in terms of modern flavor profiles in the context of a premium liqueur. What we discovered is an overwhelming appetite for unexpected and interesting tastes. “Flavor varieties such as berries have long been known to evoke this type of experience, and, naturally the luxurious flavor of chocolate also resonates well with our customers. As for the unexpected, we couldn’t go wrong with Baobab, which is the personification of Africa.” The new variant exclusively uses ethically-sourced, African ingredients. It is infused with creamy chocolate, raspberries and botanicals derived from the African baobab tree to create a full-bodied flavor with notes of raspberry and a hint of citrusinfused baobab. This is blended with Marula fruit cream liqueur.
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Amarula Raspberry, Chocolate and African Baobab can be served neat, chilled over ice, in exotic cocktails or over baked desserts. Maharaj said of the bottle design: “The vibrant, colorful label leads customers further on their journey with its dusty pink shades that evoke the image of an African sunset.” Luke Maga, Distell Global Travel Retail Managing Director, commented: “Amarula has seen strong growth recently in travel retail, driven by range extensions such as Amarula Vanilla Spice and the travel retail-exclusive African Range. Now with the exciting introduction of Amarula Raspberry, Chocolate and African Baobab – which meets the growing trend for exotic flavors – we are confident that the brand will continue on an upward trajectory. Amarula Raspberry, Chocolate and African Baobab highlights exotic African flavors in travel retail
Final edition of The John Walker Last Cask goes on sale at $3,500 Johnnie Walker has announced that the latest release of The John Walker Scotch whisky will be the last. Only 330 bottles have been released worldwide as a limited edition. A portion of these will be available in travel retail from October 2019, the company said. It will retail at £2,900 (US$3,500). The John Walker Last Cask (40%abv) is presented in a handblown Baccarat crystal decanter, with a bespoke design by Hand Engraver of Glass to Her Majesty the Queen, Philip Lawson Johnston. Every hand-drawn image decorating the bottles is unique, with no two engravings the same. Anna MacDonald, Marketing and Innovation Director, Diageo Global Travel, said: “This is a very special release from Johnnie Walker that we are excited to be able to share with our travel retail consumers. It has provided us with an exceptional opportunity to offer whisky connoisseurs the finest luxury collectable.” For over a decade, The John Walker has been crafted with some of the finest and most valuable casks of whisky from Johnnie Walker reserves. These whiskies are hand-selected from nine distilleries that were in existence during the lifetime of Johnnie Walker founder John Walker (1805-1857). The whiskies are then matured with a special triple maturation technique,
which includes a final marrying in a bespoke cask made from 100-year-old oak staves. Johnnie Walker Master Blender Jim Beveridge believes that this special cask, essential to balancing the flavors of The John Walker, will soon no longer bring the balance and depth of character that is so important for this elegant whisky. He has therefore decided to withdraw it from use, meaning only one final cask of The John Walker will ever be released. Beveridge, recognized this year with the awarding of an OBE for services to the Scotch whisky industry by Her Majesty the Queen, said: “It has been a privilege to work with such rare and valuable whiskies to create the balance and depth found in The John Walker, and this beautiful new presentation is a fittingly elegant swansong for a superb Scotch.” The last release of The John Walker Scotch whisky will retail at US$3,500
www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
Building on stable foundations by CHRIS MADDEN
The luxury aspect of the cigar market is providing stability for brands such as Habanos
With a solid consumer base, somewhat immune to the changes challenging other sectors, travel retail’s cigar market has found room to grow in the face of adversity by CHRIS MADDEN
J Cortes is seeing a shift towards new world and exclusive products
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ravel retail’s cigar market is, in many ways, unique. While other sectors battle to come to terms with a new digitallyminded and balance Millennials with the traditional spending of Generation X travelers, cigar brands are enjoying a reliable customer base. Brands within the sector say they can rely on shoppers who are still buying in the face of health warnings and restrictions on both shelf space and advertising. The category’s luxury aspect and the willingness of brands to create something different for shoppers is keeping this group of customers coming back for more. “The market is staying strong because the cigar lovers continue to look for great products especially in travel retail and duty free,” enthuses Royal Agio Cigars Global Travel Retail Manager Gertrude Stormink. “They know that new and interesting concepts are being offered which they cannot find in their domestic market.” The secret, Stormink and many of her colleagues and competitors believe, is to keep reinventing new ideas for shoppers when they arrive in the airport or store. Like many luxury sectors, customers in the cigar market know the brands they like and will look for new and exciting varieties from those whose produce they trust. This luxury aspect is key for the sector as health warnings and packaging restrictions are causing endless branding problems, which are further exacerbated by the lack of advertising opportunities in many countries.
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The power of artisan
Royal Agio Cigars saw a 40% boost in sales with its Balmoral activation with Dubai Duty Free
Artisan and handmade products are set to be the key growth drivers as travel retail’s cigar market eyes the future
Creating something unique
But in a market like this, luxury shoppers are demanding something special. J. Cortès & Oliva Cigars Export Manager and Travel Retail Coordinator Thomas Gryson says: “The market is staying strong because the cigars are still a luxury product despite the negative perception of tobacco in general and the more strict regulation. “Nevertheless, we could say that the market for premium cigars is stable while the market for machine made cigars and cigarillos are declining. The mass-market products are suffering more under the regulation but also the retailers are limiting the available space at the shops.” The limitations imposed on the market are forcing brands to work harder to create something shoppers will want to get their hands on. Habanos Director of Marketing Operations Ernesto González is clear on what he thinks is needed: “It is very important for the cigar industry to develop an aggressive policy of innovation and development of new products. “[Especially] cigars being the focus of anti-tobacco and antismoking laws and campaigns all over the world.” Habanos, the state-owned tobacco company which controls the distribution and export of Cuban cigars worldwide, holds a unique place in the market. The aura of Cuban cigars carries beyond the traditional cigar buyer and into the wider market and Gonzalez and his team have worked to create “Habanos moments” for shoppers to enhance the exclusive and premium aspect of the brand and the sector at large. It is an idea which is prevalent throughout the sector. 74 ASIA DUTY FREE & TRAVEL RETAILING OCTOBER 2019
“What performs well in the travel retail market are new and exclusive cigar concepts, premium quality in attractive and handy packaging,” Stormink says. Agio has recently invested heavily in the idea, with a rebrand of its Balmoral Dominican line’s packaging to boost on-shelf and in-store branding and a high profile activation with Dubai Duty Free earlier this year. The campaign during Chinese New Year focused on the Balmoral Añejo XO Gran Perfecto FT line. Limited edition boxes bearing the number 8 were promoted in a high visibility location and boosted sales across the Balmoral line by 40% in the airport. Stormink explains: “Our partners, the operators, are increasingly interested in special and limited editions and travel exclusives.” Other brands have experienced similar success. Oettinger Davidoff saw good results for its annual Chinese New Year release and recently debuted its first travel retail exclusive with the Winston Churchill Traveller collection. Gryson agrees that the market’s focus is shifting to the artisan and unique. “I think in duty free for cigars we are moving into a market which is changing from the traditional brands to more new world cigars and travel retail exclusives,” he reflects. “We have recently launched the NUB Travel Retail Exclusive and are now rolling out this product in different airports. In October of this year we will launch another exciting product for duty free.” The creation and development of new products requires branding to boost awareness among less savvy shoppers and, in that respect, the cigar category faces the same problems as its other tobacco stablemates. “Plain packaging is a bigger threat for luxury products because consumers tend to ask for the brands they know,” Gryson says. “Branding is the only way to advertise our product in the humidor or shop.” Stormink concurs but believes building brand recognition and awareness outside the store can offset the problem. “Branding is always important to become and maintain a strong demand brand,” she says. “Thanks to our focus on our Balmoral premium cigars in travel retail in recent years, international brand awareness has grown considerably. Travelers ask for Balmoral cigars at the airports which makes us less dependent on changing legislation.”
Branding is becoming even more vital for the category with the arrival of the Chinese shoppers who are increasing their spend within the sector, across both gifts and personal purchases. Gryson says that alongside Europe, Asia is set to be a key driver for the company this year. “We expect a lot from Asia,” he reflects. Asia Marketing Services Director Hans Rijfkogel, who is Royal Agio Cigars’ agent for the Asia market, adds: “In Asia the markets are staying strong. Key reasons for the strong markets are the number of airline passengers in Asia continues to grow and more Chinese consumers are buying cigars in duty free.” He continues: “In Asia we expect our sales to continue growing. Well-known cigars brands like Balmoral continue to do well and demand for gift packs and travel retail exclusives is strong.” With a constant supply of new products and the arrival of travel retail’s most sought after shoppers, the cigar sector looks set to build in the face of any challenges.
A selection of Groot Constantia wines
Patience, Perseverance and Passion Promoters and sales staff are key to the in-store experience and the one interaction consumers really remember, according to Anthony Budd, Managing Director, Diverse Flavours
f the sales and promotion staff at the airports understand your brand, are knowledgeable about the product, know where it comes from, know how it is made and know the taste of your product, then they have more confidence to sell and promote it,” stated Anthony Budd, Managing Director Diverse Flavours in an exclusive interview with Gulf-Africa Duty Free. “That’s why training is important, to literally attach a face, a character, and an emotion to the brand so that it’s not just another brand on the shelf.” Budd explained that at Diverse Flavours, which markets an eclectic portfolio of premium South African wines in duty free, their philosophy revolves around the three ‘P’s: patience, perseverance, passion. “To get your first listing you need to be extremely patient and persevere and never give up,” revealed Budd. “When you get that listing you need to show everyone
that you are passionate about your brands. One of the best ways to do this is through the training of those staff that will ultimately be helping to decide whether your brand is a failure or a success, showing them support and that you care about them, and your brand.” Putting his philosophy into practice, Budd conducts training programs to share his passion with frontline staff who are selling the Diverse Flavours wines in duty free. In July, he flew to Asia to run training sessions with JATCO at Haneda and Narita Airports, followed by five sessions in Taiwan, three with Ever Rich at Taoyuan Airport and Neuhu Downtown store and two with Tasa Meng at Taoyuan Airport. Moving on to the Middle East, he ran two sessions with Dubai Duty Free. “In total I trained over 200 sales and promotion staff who work at the sharp end of the business, dealing daily with the
real consumers and purchasers of our products.” As South African wines are fairly new to duty free, Budd’s training starts with some basics. “I introduce the country, South Africa, where it is geographically, its diversity through the people, its culture, topography, climate, wildlife, nature and so on,” Budd said. “Secondly, I introduce South Africa as a wine producer, where it sits in the world of wine and what makes South African wine special. Thirdly, I introduce the wine producers or estates from which the wines come and their unique characteristics, and lastly, of course, we taste the wines!” During the tastings, Budd introduces around 20 wines from different makers and varietals, including the Estates of Avondale, Cederberg, Deetlefs, Ernie Els, Groot Constantia, Tamboerskloof, Napier and 88 Vineyards. Budd emphasized that training should not be considered a one-off investment: “You must invest your time continually in the people who are supporting your brand.” In-store experience is a major factor in countering the threat from online sales, according to Budd. “The key is to give the consumer a strong range of products from which to choose, which obviously includes your mainstream brands. However, I think the consumer also expects duty free shops to bring them interesting new products, products they don’t necessarily see every day, and don’t necessarily think they will buy, but which on a special travel occasion do in fact catch their imagination, challenge them and add to the travel experience.” “We have great wines,” he concluded. “I am delighted when we can have people taste them as then they can appreciate the quality and understand how to sell and benchmark them when they talk to their customers.” Judging by the results – increased sales and new listings – the strategy is working.
Cederberg winery in the snow
Anthony Budd hard at work with staff from Ever Rich Duty Free at Taoyuan Airport
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looks to secure a bright future
The mounting restrictions on packaging is making branding difficult in the tobacco market, but Oriental Trading’s Oris China brand is moving with the times to keep growing by CHRIS MADDEN
einvention is the key to building a young brand in the duty free and travel retail tobacco market. That is the view of Oriental General Trading Inc General Operations & Marketing Manager Tania D’Souza. Three years ago, Oriental released its Oris China cigarette brand into the market and since then the line has gone from strength to strength. Late last year the company released a new orange peel flavor variety, as well as the double-capsule, super slim Oris Fashion to tap into consumer trends for innovative flavors and slimmer cigarettes. Keeping pace with the latest trends is vital for D’Souza and her team. “Business in duty free is doing well in 2019,” she says. “Oris China is gaining recognition amongst consumers and the sales of the brand is growing at a steady pace. “With changes in smoker trends and preferences as well as changes in regulations we are constantly reinventing our brand by introducing new SKUs or modifying the packaging to suit the markets we are present in.” Chief among those changes is a growing desire among Chinese smokers for super slim and capsule cigarettes, as well as the rise of electronic cigarettes as the demand for innovation grows. D’Souza explains: “The young smokers prefer to purchase international brands when they travel and prefer to experiment with flavored cigarettes.” For most shoppers taste is linked to color, but it is here that Oris is facing its
Flavored and smaller cigarettes have been an important part of Oris’ growth in duty free over the last year
Restrictions on packaging are making life difficult for newer products which rely on color for their branding
biggest challenge in the form of the growing number of packaging restrictions. With many countries requiring health warnings on tobacco products and others implementing plain packaging laws, the challenges for a new brand have never been greater. “Plain packaging makes it difficult for consumers to identify the brand, so it is much harder to introduce new brands or rely on colorful packaging as a point of differentiation,” D’Souza says. “There are many new challenges all tobacco companies have seen this year. The introduction of the Digital Tax Stamp in the UAE, the track and trace system being implemented in certain markets as well as the switch to plain packaging regulations in several countries have affected tobacco businesses.”
Cornering new markets
With challenges growing, Oriental is seeking new opportunities for its Oris lines and has turned its attention to the booming cruise market in China. With
figures from the Cruise Lines Association suggesting between 8 and 10 million Chinese passengers will be heading to the high seas by 2025, the time to tap into the region’s cruise market has never been better. “We will focus on promoting the brand in cruise ships and cruise terminals as cruise holidays are becoming popular amongst the Chinese,” D’Souza enthuses. Special promotions and travel retail exclusive packaging for some SKUs will also feature heavily in Oriental’s plans for Oris in the year ahead as the company looks to build on its foundation and tap into other growing markets such as the increase in non-Chinese shoppers for the brand at Dubai International Airport. With innovations such as Oris China Orange Peel already joining Oris Panda Black and Oris Peace Res Queen Size as top sellers, D’Souza is confident the brand is still on the up, but she is under no delusions over the obstacles ahead: “With track & trace and plain packaging it will be a challenging year for us.” www.dutyfreemag.com ASIA DUTY FREE & TRAVEL RETAILING
All about Jay Frame,
Vice President Corporate Communications & CSR / Consumer Marketing and Branding, DFS Group Limited Where were you born and raised? I was born and raised in Port Moresby, Papua New Guinea, and lived there until moving to Hong Kong in the early 90s. What motivates you in life? Love, laughter, and a job well done.
What’s the best thing that’s happened to you this year/month/week? I spent a few days at a wonderful spa resort recently in Koh Samui, getting fresh air and exercise, and not checking my emails. (Well, hardly at all, anyway!) What would you choose as your last meal? The delicious roast lamb at Bukhara restaurant in New Delhi, followed by my mother’s fabulous orange and almond cake. What’s your favorite ’90s jam and why? As a proud part-Aussie-part-Kiwi, I think some of the best music came out of those countries in the 90s! INXS and Crowded House are my soundtrack for that decade. How would you rate your memory? Increasingly more selective, nowadays… What were you like in high school? Exactly as I am now, which probably explains a lot!
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What do you think about when you’re alone in your car? I’m always listening to something in my car – a podcast, the news, music. Are you more of a hunter or a gatherer I’m a Gemini, which means I can do both! Do you prefer country or city? Neither – I like the beach best.
What is your favorite place to vacation? I am fortunate to live in Asia, where a weekend away might mean a trip to Cambodia or Laos to see their beautiful temples, or to Kyoto in Japan to experience the vast silence of a bamboo forest, to Singapore for delicious hawker food or to Thailand to laze on the beach. There are too many choices! What do you work toward in your free time? Planning my next holiday.
Q: What in the world would you most like to change? Our arrogant assumption that our planet can handle anything we do to it. What about yourself would you most like to change? My procrastination about finding time to learn something new.
What is the most important piece of advice anyone ever gave you? Define success on your own terms, achieve it by your own rules, and live a life you’re proud of. What is something about you that most people would find surprising? I used to earn a living diving with sharks in the Coral Sea. If you could know the absolute and total truth to one question, what question would you ask? I’d be asking for more questions! But if it really was only one, then I’d want to know where our universe ended, and what lies beyond that. If you had the opportunity to meet one person you haven’t met, who would it be, why, and what would you talk about? I am impressed by the many young women who are working to change social perceptions in their countries and create opportunities for the next generation, and I am proud to have started working recently with the Asian University for Women in Bangladesh which is dedicated to the development of female leaders. For that reason I would love to meet Malala Yousafzai, who inspires me with her courage and implacable commitment to moving all of us forward.
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