SPECIAL CONFECTIONERY REPORT
DUTYFREEMAG.COM JULY 2020 · SPECIAL ISSUE
DISCOVER OUR BESTSELLER IN A NEW MINI FORMAT Colm McLoughlin’s words of wisdom in crisis p. 10 CircleSquare’s solutions in a post-COVID world p. 12 A picture of confectionery post-pandemic p. 24
SEDUCE YOUR SENSES
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Letter from the Editor
Solutions for changing times
s airports finally start opening up to international traffic, all eyes are on how travel retailers will engage with consumers. One thing’s for sure: times have changed. In this issue, we talk to creative agency CircleSquare, which is coming up with ideas for brands to consider as they tackle the challenges ahead. First of all, says Philip D. Handley, Executive Creative Director of CircleSquare, make sure consumers interact with your brands, as they are more likely to make a purchase if they are treated to an experience. Before the pandemic, research showed that penetration rates were low, with only 15-18% of passengers making purchases in travel retail stores, while only 14% of them said they enjoyed the in-store experience. Time to change tactics, he says. Handley also believes in taking the store to travelers while they are inside the airport. “If they're queuing, standing waiting, why can't we go and entertain them? Why can't we take the store to them?” he reasons. However, retail store solutions at the airport are only one part of the puzzle. CircleSquare wants to ensure that the traveler’s entire journey is covered. The aim is to extend the consumer journey and ensure that brands are communicating with shoppers before they’ve even set foot in the airport. While acknowledging that product sampling will be more difficult, CircleSquare is devising contactless solutions that appeal to all of the consumer’s five senses. Our July issue has a special focus on confectionery. According to research analyst m1nd-set, sales of confectionery may be less affected by the COVID-19 pandemic than those of other product categories – and the category may even be in a good position to capitalize on its relatively affordable price point compared to other items sold in duty free stores. m1nd-set, which has carried out an international study into future consumer shopping behavior and perceptions around duty free stores following the pandemic, found that the new hygiene measures will impact the confectionery category. Clarity on the hygiene measures in place is crucial for consumers, as m1nd-set’s research found that 45% of respondents interviewed will refrain from testing products in the duty free shop, and some of those are specifically concerned about the hygiene of food and drinks. But the survey also found that confectionery ranks down the list of product categories for which the household budget will be cut by those who have been hit financially by the pandemic. There’s further optimism about the outlook for the confectionery category from Mondelez, the Swiss maker of world-leading brands such as Toblerone. Interviewed in this issue, Jaya Singh, Managing Director, Mondelez World Travel Retail, says that confectionery is the most universal category and Mondelez brands continue to play a key role in the overall appeal of the channel to travelers. “Confectionery draws people in-store, provides travelers with accessible gift options, drives impulse purchases and prompts purchases in other categories. Most of all, though, it remains timeless – our brands are tried, tested and deeply embedded in the hearts of shoppers,” he enthuses. Kindest Regards,
HIBAH NOOR | Editor-in-Chief | email@example.com 4 JULY 2020
JULY 2020 · SPECIAL ISSUE Global Marketing Company Ltd., 26 Pearl Street, Mississuaga, Ontario L5M 1X2 Canada. It is distributed to duty free operators and distributors in the following countries: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Yemen, Algeria, Azerbaijan, Benin, Cameroon, Cape Verde, Djibouti, Egypt, Ethiopia, Gabon, Ghana, Guinea, Iran, Ivory Coast, Jordan, Kenya, Lebanon, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Niger, Nigeria, Namibia, Pakistan, Reunion, Senegal, Seychelles, South Africa, Sudan, Syria, Tanzania, Togo, Tunisia, Turkey, Turkmenistan, Uzbekistan and Zaire, as well as to duty free suppliers worldwide.
AMERICAS, GULF-AFRICA, ASIA DUTY FREE & TRAVEL RETAILING 26 Pearl Street Mississauga, Ontario L5M 1X2 Canada Tel: 1 905 821 3344; Fax: 1 905 821 2777 www.dutyfreemag.com PUBLISHER Aijaz Khan firstname.lastname@example.org EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor email@example.com DEPUTY EDITOR Jas Ryat firstname.lastname@example.org SENIOR EDITOR Mary Jane Pittilla email@example.com SENIOR WRITER Rebecca Byrne firstname.lastname@example.org WRITER Laura Shirk 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
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Lead Stories 24 Confectionery’s Future
7 Latin America Update
ASUTIL: Industry leaders brainstorm the challenges ahead In a pioneering online conference session, South American duty free association ASUTIL brought together key players to discuss the way forward in the region post-pandemic
Keeping consumers sweet Leading research agency m1nd-set has drawn an encouraging picture of the duty free confectionery category post-pandemic, based on a new global research study
30 Domestic Confectionery
10 Dubai Duty Free Update
McLoughlin’s words of wisdom Be patient and look after your customers, advises Dubai Duty Free chief Colm McLoughlin, as he steadies the ship as the leading operator
Confectionery Conundrum The duty free and travel retail business model is composed of exclusive products with special pricing. What happens to the products when there is a disruption in this ecosystem?
12 CircleSquare Talks New Norm
32 Lindt & Sprüngli’s
22 Sunglass Sector
Lindt & Sprüngli Global Duty Free shows resilience during global pandemic Peter Zehnder, Head of Lindt & Sprüngli Global Duty Free Division discusses plans to acclimate to the ‘new normal’ as the Swiss chocolate house celebrates its 175th anniversary
Putting on a show “Take the store to the traveler,” urges Philip D. Handley, Executive Creative Director of CircleSquare, as he puts forward solutions to the many challenges facing the travel retail industry
Maui Jim: “Every day we get a little stronger” Maui Jim’s duty free team is navigating through the uncertainty caused by the pandemic under the experienced leadership of Giles Marks
Features Focus on essentials Jessica’s Secret chief bets on big data PPE: Kid’s Edition The Mondelez WTR interview
16 18 20 34
Butlers to launch Café Collection Confectionery category: Strong contender Hands off for health Haribo’s fruitful exchange
36 38 41 43
Latin America Update
Industry leaders brainstorm the challenges ahead
ASUTIL Secretary General José Luis Donagaray
In a pioneering online conference session, South American duty free association ASUTIL brought together key players to discuss the way forward in the region post-pandemic
by HIBAH NOOR
ndustry collaboration, the importance of omnichannel and adapting to changing consumer behavior are among the challenges facing travel retail post-pandemic, according to South American duty free association (ASUTIL)-held webinar. On June 23, ASUTIL Secretary General José Luis Donagaray hosted the first of a series of online conference sessions for members and the press, titled “The Day After: New Beginnings”. The session brought together five key players from the airport, retail and supplier sectors to discuss what they see as the way forward for the industry post-COVID-19. Rafael Echevarne, Director General of Airports Council International - Latin America and Caribbean (ACI-LAC), gave attendees a forecast of passenger traffic numbers, but first noted
the “worrying situation” in Latin America, as contagion was growing “dramatically” in the region. This year, passenger traffic grew 3% in January and 4% in February but then around March 15 countries in the region imposed travel bans and traffic collapsed dramatically. In both April and May traffic was 95% down on the previous year, and for June passenger numbers would also be off by approximately 95%, Echevarne said. He noted that Mexico was the only country in the world that had no restrictions imposed on travel for both incoming and outgoing passengers. In Chile and Brazil there is domestic activity but not at the same level as before. Ecuador was the first country to restart aviation on June 1, where domestic and international travel is allowed, but quaran-
Passenger traffic in Latin America and the Caribbean grew in January and February 2020 but collapsed in March www.dutyfreemag.com
Latin America Update
State of alert
Dufry General Manager for South America Enrique Urioste began by painting a picture of changing consumer behavior in the face of the crisis. “We are all being confronted by something that is absolutely new to all of us. Some of us have experienced economic, political or scientific crises, but never the combination of the three together on a global scale,” he said, adding that when people start traveling again, they will be in “a state of alert”. “It means that people who used to feel comfortable testing, trying, talking to our BAs or to our store people, are now going to be in panic. ACI-LAC is forecasting that passenger traffic will return to 2019 levels by 2023
tine rules are in place, which had killed tourism. However, he added that Quito International Airport had seen “tremendous” sales in arrivals duty free. ACI-LAC is forecasting that the traffic for 2020 will be down by 50% compared to 2019, and that traffic will return to 2019 levels by 2023. This forecast is based on a number of premises that keep changing, he continued. They include when countries will allow people to travel abroad, noting that the governments of Argentina and Colombia won’t allow international travel until September; the airlines’ financial situation (citing carriers such as LATAM, Avianca and Copa Airlines) and the fact that there won’t be as many aircraft in service; and the economy, with the GDP growth in Latin America expected to be the lowest in the world in 2021. Another factor is when we will see the peak of COVID-19 cases. “On the other side is what sort of incoming passenger restrictions we will see, because that will determine tremendously the type of passengers that we can expect. In other words, will we have tourism if we impose quarantines? We know that tourism will not materialize,” he warned. Finally, he said ACI, along with the International Air Transport Association (IATA) and the International Civil Aviation Organization (ICAO) had approved strict protocols for airports and airlines to stop the spread of the virus and that these had been implemented in most airports. 8 JULY 2020
Dufry General Manager for South America Enrique Urioste
This state of mental stress and wellbeing is a concern all parties need to address, because it’s going to be there.” Urioste continued: “In order to address this, we have been working very closely with the airports. Airports and retailers are a key component in bringing a mental state of peace. From the moment the passenger arrives at the airport, he needs to feel safe.” Dufry has been working on establishing protocols, to ensure the whole travel environment is safe. He believes that if the industry doesn’t address the health
protocols properly, it will negatively impact retailing. The leading operator is also working on omnichannel initiatives. “We need to be creative and find new ways. One thing we are working on is omnichannel within the airport. Our industry is highly regulated; in most countries they cannot sell online, but we can reserve online, we can start communicating with our passengers online and try to bring the retail experience [to the passenger] in advance. The airport, the retailer, the food and beverage operators will start to connect with the passenger before the passengers start traveling. That is one of the milestones that we have defined at airports in some of our locations.” Dufry wants to achieve a systematic and consistent message for travelers, both online and offline. He also believes Dufry’s Red loyalty program will be a “great tool” in the omnichannel strategy. “We can take advantage of the social distancing at the checkin process by having our team with digital tools starting the retail experience at this stage, as the process will be much longer than before. We can also do that after they have been through security. The idea is to identify all of the touchpoints where we can interact with customers,” he said.
Aggressive promotions and offers
Dufry is also working on the product assortment, the promotional plan, and pricing strategy. “Our customer numbers are going to be much lower than before,” he said, noting that there would be fewer business and leisure travelers for some time. “We need to be, in an intelligent way, aggressive with promotions, aggressive with offers, aggressive with product mix and go back to that uniqueness of the packaging of the product in this channel. If we are still competing with the Amazons of this world who are now more and more all offering the same product and more or less the same prices, we need to bring something unique, something different, and something that made our industry what it is.” He stressed the need for the industry to work together to make the comeback successful and wrapped up by saying: “We have as the travel retail industry the unique opportunity to redefine things that we have all been talking about, but because of the state of the business, we have never done.” He said that for many years the industry had been advocating redefining concession contracts and the relationship between the airports, airlines and retailers. “This is the unique opportunity. It’s a chance to take what is good out of a very bad situation.”
A tipping point
Travel retail is one of the key battlegrounds globally for the leading spirits supplier Pernod Ricard, according to its Global Travel Retail Strategy & Insights Director Anuj Roy. The company believes the travel industry has always been resilient and will recover eventually from the unprecedented situation. “We believe people want to travel and travel is a fundamental part of modern life.” The company monitors consumer sentiment and social media and believes it saw a “tipping point” from April to May, in which people’s willingness to travel has been improving. “People are now looking forward to traveling,” he said, noting that people are talking about airports and duty free on social media. But people have changed their behavior, including their
shopping behavior, he said, citing social distancing. They will also change how they travel, so the industry needs to adapt to this. Things will normalize eventually but some changes will be permanent. People will be under stress when traveling and will need clarity and guidance. Addressing needs about safety and hygiene and messaging around these issues will be important for retailers, he noted.
L’Oréal Travel Retail Americas Strategic Business Development Director Gabriela Rodríguez called on the industry to work together and focus on the consumer. “Right now, the only certainty is the uncertainty,” she said. “We need to work all together, we need to focus on the consumer, because we’re seeing a consumer that has been going through a rollercoaster and we see that this emotional rollercoaster is the same all over the world. It doesn’t matter if you’re Chinese, Brazilian or British, you’re going from panic to ‘I don’t know what to do’ to national solidarity. You’re trying to find comfort, you’re trying to be part of a group.” There will be four major trends, Rodriguez said, including digital acceleration. Wifi is the most important need. “We need to combine the implementation of new technologies with how to welcome the passenger into the store. We’re working on a strong plan to combine phygital and digital, but we cannot do it by ourselves and we need to work together with the retailers, and the retailers will need to work together with the airport.” Other trends include transparency in front of the consumer and the need for meaningful experiences. “The key challenge that we will have is, we have been talking about the Trinity. I think we can do ‘quaternity’ discussions, because it’s the brand, the retailer, the airport authority and the associations,” she concluded.
Travel retail exclusives
Markus Suter, Sales & Market Manager for Americas Duty Free at Lindt & Sprungli, who is based in Brazil, said the Swiss confectionery company has a market share in Latin America of around 24% and 44% in Brazil for confectionery. Lindt plans to focus more on travel retail exclusives and core products and perhaps reduce the assortment. The chocolatier also aims to adapt more to local needs, and has already launched dulce de leche, which is popular in Argentina and Brazil. Souvenir and destination products such as Lindt’s travel suitcase tin will also be key. The company won’t launch a lot of new items in the next one or two years. Another important factor for consumers will be the issue of sustainability and the fact that Lindt produces its chocolate from bean to bar. In his summing up of the session, Donagaray spoke about the importance of sharing information as an industry: “This is the moment for all of us to share and to be very transparent and see how we can all be in the same boat, rowing in the same direction.”
Dubai Duty Free Update
WORDS OF WISDOM
BE PATIENT AND LOOK AFTER YOUR CUSTOMERS, ADVISES DUBAI DUTY FREE CHIEF COLM MCLOUGHLIN, AS HE STEADIES THE SHIP AS THE LEADING OPERATOR by HIBAH NOOR
Colm McLoughlin conducting the Dubai Duty Free Millennium Millionaire Draw at DDF head office
10 JULY 2020
olm McLoughlin, Executive Vice Chairman & CEO of Dubai Duty Free, hasn’t lost any of his trademark Irish good humor as he speaks to me via Zoom video conferencing from Dubai. He’s officially back in the office after 10 weeks of lockdown imposed when the COVID-19 pandemic struck. “I’ve been coming into office almost every day since the lockdown started for various discussions, but I’m now back at work officially,” he says. So how is Dubai Duty Free adapting to the crisis? “It is very difficult to adapt, to be honest, because this happened and eventually everything was closed down. We thought at that time it would be like one of those previous instances where it would be short-lived, short-term and over and done with, but of course we all know now that that is not the case.” He continues: “We reacted at the beginning like it was a shortterm thing but then we had to adjust our thinking into realizing it is much more elongated than that and much more serious. And of course, it’s still serious, because in most places in the world new cases are being identified as positive every day, although the numbers have come down. If you take the United Arab Emirates, for example, the government has been doing fantastic work here and the cases have reduced considerably from around 900 at a peak to 400 per day, with very few casualties. So, we just keep our fingers crossed that in time we will get back to normal.” But McLoughlin is prepared for a long haul ahead. “It will be a long time in our opinion before the business comes back to the 2019 level. Every airport in the world and every airline in the world is introducing safety measures, and testing where necessary, and so on. We just hope that they continue doing that. “In Dubai Duty Free, we have had a total of 266 positive cases amongst our staff, most of which thankfully have been asymptomatic. Currently there are around 24 staff in self-isolation. We tested over 4,200 employees and everything is under control and it’s been dealt with correctly.”
New shopping services
Dubai Airport closed down for passenger traffic on March 25. After more than two months, Dubai Duty Free reopened its retail area in Concourse B in early June, followed by its Terminal 2 operation two weeks ago, which is being frequented by customers. However, McLoughlin reports that a lot of the passengers at Dubai International Airport are people that have been repatriated, so their spending is not high. Dubai Duty Free has introduced a number of health and safety measures. There are two-metre controls for social distancing, and partitions have been installed to designate the store entrance and exit. All staff wear masks, and some are acting as ushers to help passengers. Several new services have been added, including a Concierge service. As part of this service, if a customer identifies products they would like to buy, staff will select them, pick them up and pack them. Dubai Duty Free has introduced a Home Delivery service, where people order online and the items are delivered to their home, thanks to an agreement with Customs. “We’ve had 46,000 hits since we started about seven days ago and we’re doing some sales with it,” enthuses McLoughlin. “We’ve sold 1.5 million dirhams (US$410,000) worth of merchandise, so we’re happy with that.” Also, the Click & Collect service has been reintroduced for passengers, where they can order online and pick up their items from a collection desk at the airport.
Traffic and sales hit
McLoughlin is expecting business to pick up soon. In the last week, the government has announced that from July 7 onwards, tourists and visitors will be allowed into Dubai potentially without a 14-day quarantine. They will be subject to a scan in Arrivals to ensure that they are virus-free. “We’re keeping our fingers crossed that it’s going to be very good,” he says. Dubai International Airport remains quiet in comparison to last year. Last year, the airport welcomed 89 million passengers, and the forecast for this year is now 25 million. Traffic numbers were up during January and about level in February, but since that time they have been going down. Traffic during June stood at about 83,893 people, whereas in the same month last year it was nearly 7 million.
Dubai Duty Free’s overall sales for the year are down by 57%, McLoughlin reports. The operator generated over US$2 billion in sales in 2019; on the traffic forecast it has for this year, its maximum sales will be about US$600-700 million. On a normal day a year ago, there would be 300-400 flights in both departures and arrivals, but the daily average is now about 40. “We’re hoping after July 7 an announcement that this will increase and we’re basing our forecasts on the fact that it will increase. But just like everything else, we’ll just have to wait and see what happens.”
Look after the customers
Sports sponsorship has always been an intrinsic part of Dubai Duty Free’s operation, and McLoughlin is delighted to report that so far, the company is going ahead with its preparations for the Dubai Duty Free Golf World Cup in November. “We’re planning for it, but it depends on the pandemic whether it happens or not,” he says. The Dubai Duty Free Irish Derby ran at The Curragh in Ireland on Saturday, June 27, but without any spectators. “We’ve been going to The Curragh in Ireland for 18 years; attendance was over 20-30,000 people, but there were no spectators this year.” The Dubai Duty Free Irish Open Golf, which was scheduled for the last week in May, has been postponed and it may be held sometime later this year. Meanwhile, the horse racing at Newbury in April was cancelled, as was the Dubai Duty Free Shergar Cup at Ascot racing scheduled for August. So what’s McLoughlin’s advice for other retailers? “The only advice is to be patient and do the best you can to look after the customers. And here’s a new word we invented last week – we’ll have a ‘re-success’.”
Any other messages for our audience? “We miss them and we’re looking forward to their full return,” he says. Family-wise, his wife Breeda is well, having been locked down for 10 weeks, as has his son Niall and his wife Sherly, who live in Dubai. McLoughlin, now 76 years young, is getting used to the ‘new normal’ of life in a pandemic, “obeying the rules” by wearing masks and gloves. He’s new to Zoom video conferencing – “somebody else comes and presses the buttons for me!” he smiles. He finishes our interview with a tale of his failed visit to a shopping mall. “The over-60s were not allowed into malls. I went to one and they looked at me like I had six heads. I said, ‘What makes you think I’m over 60?’ and the young man replied, ‘I’ll need to see your ID’.” We’re hoping to hear his roars of laughter in person very soon.
CircleSquare has experimented with filling bubbles with aromas, which burst when caught. The bubbles can drop from the ceiling, so no one touches them
Putting on a show “TAKE THE STORE TO THE TRAVELER,” URGES PHILIP D. HANDLEY, EXECUTIVE CREATIVE DIRECTOR OF CIRCLESQUARE, AS HE PUTS FORWARD SOLUTIONS TO THE MANY CHALLENGES FACING THE TRAVEL RETAIL INDUSTRY
by HIBAH NOOR
ever has travel retail needed the services of a creative agency more than now. As the impact of the COVID19 batters the industry, Philip D. Handley, Executive Creative Director of CircleSquare, is brimming with fresh, disruptive ideas to lead brands out of the morass. In an interview with Americas Duty Free, Handley identifies three key areas where travel retail can improve results. This involves fixing things that were wrong before the pandemic, namely increasing footfall, boosting dwell time, and “stop talking about prices”, he says, “because 95% of people that travel through the airport take out their cellphones and check pricing. I've seen people in China bringing two phones checking on pricing. If you increase dwell time, you increase sales, there's a direct correlation between these two points.” Handley goes on to explain that 36% of purchasing decisions are made in-store, not at home. If people interact with your brands, their dwell time increases by 130-150%. Handley speaks from experience. He founded UK-based CircleSquare 17 years ago, as he “absolutely loved what travel retail
12 JULY 2020
stood for”. He knew it was a way to grow a brand internationally, but realized it was a challenge because the people who enter the stores aren’t really shoppers, but travelers, and shopping is not their number one priority. The company’s first ever presentation was about experiences and how essential it was to bring those experiences to life. Not much has changed since all those years ago. “People feed off experiences, it's a human touch. Even to this day we talk about irresistible experiences. We want people to come and have a really positive and memorable engagement with the brand, and we want them to buy the product and feel good about it. You have to have them by the heart. It's much easier to ‘pull’ them with positivity, fun and experience rather than ‘push’ them through force.”
Adding to the theatre
As part of its comprehensive services, CircleSquare undertakes everything from the strategic thinking through to the original creative ideas. The company’s team encompasses 3D, 2D and digital content designers, all in-house, specialist project managers, and crews that install retail designs to ensure everything looks perfect. “We even work with actors and entertainers. This adds to the theatre and ultimately that's what we're all about. We like putting on a show. Creating irresistible experiences is our mantra.” Undoubtedly, COVID-19 has had a profound effect on the travel retail industry, and that requires fresh thinking, Handley believes. That starts with analyzing footfall and conversion rates.
When it comes to learning about how brands engage with their customers, CircleSquare, says the travel retail industry should look to the local markets
“We're referring to this as our ‘new normal’. I think it's really important to look back at what we were doing so well and things we weren't doing so well. If we look at the number of people that were actually buying in travel retail or even entering the stores, those percentages were relatively low. The numbers might look good in terms of what they were spend-
ing but penetration numbers weren't all that great... like 15-18% of passengers were making purchases. I’ve seen numbers showing that less than 40% of travelers were entering stores. I believe those percentages can be improved quite dramatically. Also when interviewing people who had visited travel retail stores, only 14% of them said they enjoyed the in-store
experience. That's unbelievably low.” Furthermore, half of the people interviewed said they would have gone into the store had there been some experiential retail. “Even if our numbers post-COVID are significantly lower than before, if we can entice those people in by giving the experiences they crave, they will come,” he argues.
“When interviewing people who had been in-store, only 14% of them said they enjoyed the in-store experience. That's unbelievably low.” - Philip D. Handley, Executive Creative Director of CircleSquare www.dutyfreemag.com
“We've been looking at doing drinks sampling where ambassadors hold two-meter-long poles like fishing rods, that hold individual samples at the end.” - Philip D. Handley, Executive Creative Director of CircleSquare
There will be challenges around how to entice people back into stores, he admits, particularly with the issue of social distancing and standard retail configurations, where gondolas are placed 1.2 meters apart from each other.
Connect via smartphones
But reconfiguring stores is only one solution. “There's more we can do,” he asserts. “There will be people who are simply afraid to go into the store, [so] it's time for us to take the store to them. From what I’m hearing, people will be asked to arrive up to four hours before the departure of their flight. Let's say that might be true. That's two hours longer than you would normally arrive at the airport… If they're queuing, standing waiting, why can't we go and entertain them? Why can't we take the store to them? The airport needs the retailers, so they need to allow them to leave the footprint of their store.” Retail store solutions at the airport are only one part of the puzzle. CircleSquare wants to ensure that the traveler’s entire journey is covered. The aim is to extend the consumer journey and ensure that brands are communicating with shoppers before they’ve even set foot in the airport. If travelers are checking out the stores online before they travel due to the restrictions, that provides brands with an opportunity to connect with them via their smartphones to “take them on a brilliant journey all the way through. We can help them through the problems associated with airport travel at the moment.” There’s a huge challenge ahead, acknowledges Handley, and that includes tight budgets. But even this can be overcome. “I look at things we used to do years ago, like for example the Hendrick’s [gin] brand, when we launched in travel retail. That stuff was all big cardboard cut-outs and stage scenery. We didn't spend substantial money on it. But the consumers loved it, they loved the vibe and the emotion that went with it. You don’t have to have big budgets to do that, you just need to be smart.” 14 JULY 2020
So how will people touch and engage with products in the post-COVID-19 era? Handley and his team are working hard to find a solution to this conundrum, as tastings and samplings reassure consumers that they are buying the right item in key categories such as liquor, beauty and sunglasses. “We've been looking at doing drinks sampling where we have ambassadors holding two-meter-long poles like fishing rods, that hold individual samples at the end. The samples are pre-created, so no one touches them.” Another potential solution lies with using all our five senses. The company has experimented with filling bubbles with aromas, which burst when caught. The bubbles can drop from the ceiling, so no one touches them. Motion sensors can also be used, where the aroma is emitted when you pass your hand in front. “We need to work with the other senses,” says Handley. “They're there and they’re available. It doesn't matter if they look a bit weird and unusual. People are always asking for something disruptive – well, this is going to be really disruptive!”
Describing today’s global climate as a “defining moment” for the channel, CircleSquare has called on the travel retail industry to challenge the status quo of customer engagement & consider a new extended customer journey approach
Contactless travel aids like face recognition will comfort travelers nervous about flying in a post-COVD-19 environment
essentials Now, more than ever, passengers need a caring, genuine face on an airline to lure them in and keep them coming back, says Dr. Stathis Kefallonitis, Founder & President branding.aero
priority for airlines in the days and weeks to come will be to recognize and thank passengers for their loyalty. Rewarding passengers for their continuous business in a tangible way becomes way more important than what it was before the outbreak of the COVID-19 virus. As an example, offering incentives: American Airlines was among the first carriers to offer loyalty bonuses for passengers that booked travel within a given timeframe. Furthermore, this is not the time to reduce the product offering. A lot of airlines in the name of ‘safety’ have eliminated or reduced service dramatically. Security and safety are taken for granted. Passengers do not expect any incidents when they fly. That is why they have selected to fly with a given carrier. There are ways to still provide exceptional and memorable service by keeping employees and customers safe. No passenger would want to continue flying (or fly more) if the product is not 16 JULY 2020
the same or better! Oil prices are at an alltime low yet tickets in certain parts of the world are still unusually high and service is gone. With business travel reduced, a lot of that revenue would come from independent passengers, small business owners, etc. No passengers in these categories will continue being loyal if there is no value in travel experience. This is the time to go beyond expectations. Improving passenger loyalty cannot be achieved by the things that airlines were doing previously. Revisiting the passenger contact points provides an avenue.
An opportunity to excel
Incorporating the latest technology can help shape-up the future of air-travel. This is the time to ‘attack’ passengers with love and demonstrate ultimate care. Being genuine, trustworthy and compassionate speaks loudly to passengers. This passenger care can be translated as doing something extraordinary for those loyal passengers. This can be in a form of a new
initiative that makes headlines. A good example is the Private Room by Singapore Airlines. A distinctive lounge within a lounge that offers room for customization, privacy, and comfort. American Express is revamping their first ever AMEX Centurion lounge in Las Vegas. The expansion is taking into consideration the post COVID-19 limitations and reflects the changing needs of popular travelers. Editor’s Note: Both lounges are currently closed but plans are to re-open soon. The last few years we have seen an increase in contactless airport infrastructure from self-check-in, to self-passport scan, to biometric terminals. These are gradually being enhanced. We will see a greater influx and variety of these that is going to be implemented at airports around the world. Contactless transactions are here to stay, and these will be further enhanced with eye-tracking and face-recognition techniques as part of biometric terminals that are getting implemented.
Dr. Stathis Kefallonitis, Founder & President, branding. aero
The American Express Centurian Lounge at McCarran International Airport in Las Vegas
Stocking memories is what keeps an airline brand alive. Providing emotionally-charged travel experiences help passengers relive those memories and strengthen the airline brand”
Airline and airport regulators have made advances so that we can build on successes and create safe and seamless experiences. Combining these developments with progress in connectivity can be very useful.
Perception of risk
In uncertain times, passengers need travel brands that they can rely on. Having faith in dependable airlines — that are there for passengers — helps strengthen loyalty. Relying on reputable airline brands provides less surprises and risks. Dependable airlines should not only project lifestyle characteristics of being safe and reliable but become airlines that enhance passenger lives. Promoting an unrealistic and unattainable lifestyle may hurt the airline brand in the long term. A reliable and realistic airline brand helps me live more responsibly by recycling, by customizing my onboard experience, by using my feedback to create a better flying experience.
This is certainly the time to be proactive rather than reactive. Making positive news and leading in the travel industry is perceived as a good thing. When a company is making changes to accommodate the changing needs of passengers, it is instantly compared with competitors. The airline that does something first or goes beyond the call of duty to help, will be remembered. Taking the necessary steps to create value by implementing changes is perceived positively by passengers. Airlines that take the lead and reward or aid passengers earn their loyalty. Being there during times of crisis translates to immeasurable customer loyalty. Loyalty goes both ways and is not only the benefit of airlines. Passengers may well switch carriers if they feel that their loyalty is not being appreciated.
The ‘new’ tomorrow
A large majority of travelers will be price-sensitive in the new travel normalcy.
Passengers will be looking for the next big deal when planning trips. These pricesensitive passengers are more likely to be purchasing additional services when they fly in economy class (additional luggage allowance, buy-on-board, etc.). This payas-you-go concept is not new but needs to be revisited to create greater value. Creating bundles that may speak of value would help airlines sell additional buy-onboard services. One-off premium-class fare purchases may be more common as passengers may be more selective. Identifying flying segments that are more likely to be booked in Business/First will allow airlines to plan accordingly (fleet, onboard services, etc.). Many travelers may continue to use frequent flyer miles, credit card points, promotions, and/or a mix of all the aforementioned. Airlines can plan experiences that can be purchased using miles and money offering passengers greater choice and variety of services. It is often the little things that may bring back happy memories of flying. The stronger those memories, the stronger the engagement with passengers. Stocking memories is what keeps an airline brand alive. Providing emotionally-charged travel experiences help passengers relive those memories and strengthen the airline brand. www.dutyfreemag.com
Jessica's Secret App
B I G D ATA
Jessica’s Secret offers real-time price trend information for popular products
Mirko Wang, Chairman & CEO of price comparison app Jessica's Secret, offers his honest insights into the COVID-19 situation and the path ahead
S Jessica’s Secret gives detailed price information for Giorgio Armani’s Chinese Lacquer lip product. App users can find out the highest price, lowest price, and average price, and the price score for this product at the retailer they are currently browsing
18 JULY 2020
App users can browse the retailer's product list, quickly understand the price score of the product, and judge what is worth buying
ix months ago, the Jessica’s Secret price comparison app had a huge following among globe-trotting Chinese tourists. But the COVID-19 pandemic has had a “huge” effect on the business, according to Mirko Wang, Chairman & CEO of Beijing-based Jessica's Secret. Speaking to Asia Duty Free in June, Wang says that his family and colleagues are all in very good health following the pandemic. He reports that the overall situation on the Chinese mainland is good, but occasionally there are new
The Jessica's Secret price monitoring system can provide users with real-time price comparisons for retailers all over the world
coronavirus cases. For example, nearly 80 new cases had recently appeared in Beijing in just two days. Beijing's traffic has now returned to normal, often with traffic jams, he says. Many companies have begun to resume normal work, but the impact on the tourism industry has been more severe, and some tourism companies have begun to close down. Wang describes the impact of this pandemic on his own company as “relatively huge”. Compared with six months ago, monthly user activity on the Jessica’s Secret app dropped by 57%, and advertising business from retailers and brands stopped in February this year. Occasionally, overseas students returning to China use the company’s coupons, which generates some income, but the number is “very small”. So, during this time, the firm has shifted its focus to providing big data services to the duty free and general retailing industry. The company recently introduced some new big data features for travel retailers. It has upgraded its artificial intelligence (AI) tracking global duty free price monitoring system. In addition to the daily price update, more analysis tools and functions have been added to enable retailers and brands to better understand the industry’s price data changes. For example, with the new "Jessica simple index" calculation tool, they can instantly learn about the changes in the price index of retailers around the world every day, and calculate the relevant rankings. This aims to help retailers and brands better understand the effect on pricing of promotion strategies and exchange rates that can lead to changes in the ranking. This system is only open to the industry, not tourists.
Creating value for retailers
Although the number of active users of the Jessica’s Secret shopping app has declined dramatically, the company continues to provide new functions for tourists. Recently, it has developed a new tool in the app, called Jessica's elf. In the past, to know the price details of a product, users had to click on the detailed page of each product, which Wang admits was a little tedious. Now they just need to check the retailer's shop and product list in the
app, and they can quickly learn what is worth buying in the duty free shop through ratings, which is more obvious for the user. Now that markets are opening up post-pandemic, Wang is looking forward to the rapid recovery of tourism and the travel retail industry, and he hopes the company can create value for travel retailers. He cautions that COVID-19 has changed the consumer behavior of many tourists, and he has witnessed the role of the internet and the e-commerce industry during the outbreak. For example, in the early stage of the pandemic, many urban stores, including airport shops, could not operate normally, but online stores held out until the end and were most able to mitigate the impact. “We believe that the first thing to recover after the epidemic is the online business of retailers,” says Wang. “Tourists can pay before they travel, which can effectively guarantee the retailer's cash flow recovery in advance. We also believe that e-commerce in the duty free industry is a trend in the future. Recently, we are also helping retailers accelerate the upgrading and construction of Chinese e-commerce.” Wang is cautious about the recovery of the duty free business going forward, post-pandemic. “There is a saying in China that after the epidemic, there will be a retaliatory increase in outbound tourism. But I think the tourism and travel retail market should be a gradual recovery process, not as optimistic as expected. The first [reason] is that there are still some fears about the new coronavirus and the second outbreak. Second, the epidemic really has had a great impact on the economy and family income, and it will take a while to recover. So I think even after the outbreak, it needs a process to gradually restore the industry to its previous state.”
PPE: KIDS’ EDITION by JANE HOBSON
The ‘In S+FE Little Hands’ range by Galileo Watermark features a collection of characters repeated across the PPE, packaging and fun activities
Industry suppliers share updates on what kids’ personal protective equipment they have to offer
This kids’ mask by AK-Service doubles as a sleeping mask and face mask with a filter insert for respiratory protection
hey may be small in stature, but child passengers are a huge priority for the airlines and suppliers tasked with keeping them safe and healthy inflight. With future air travel standards and protocols unclear, suppliers are preparing to fulfill their airline customer’s demands for personal protective equipment (PPE) made specifically for children. From colorful face masks to cartoon information cards and games, these companies are mastering the border between providing fun and engaging PPE while simultaneously protecting air travel’s littlest passengers from COVID-19.
After years of designing kids’ kits for airlines such as Aeroflot, Uzbekistan Airways, Rossiya Airlines and Yakutia Airlines, AK-Service Group of Companies has lots of experience with keeping wee ones engaged inflight. Now, the company is making special changes to its kids’ offerings, Nadia Krupskaya, Business Development Director, tells PAX International. AK-Service has added child-sized gloves and masks with a safety information card to some of its existing kids’ kits. The card features fun cartoon characters and easy instructions for use. The oppo20 JULY 2020
“If PPE products like facemasks will be part of kids concepts in the future, only the future will show us,” Gade says when asked about the future of children’s onboard amenities.
The “SP3” personal protective equipment kit for kids by Kaelis features playful illustrations and games to make it more appealing to children
site side of the card has games and some safety kits come with board games, says Krupskaya. The design team also developed a 2-in-1 mask that can be used as an eye mask or a face mask to protect the respiratory system. A special filter included with the kit can be inserted when used as a face mask, which are available in different sizes per age group: three-to-seven or eight-to-12 years old. “We’ve combined our ideas and designed funny prints on the masks for kids so they will feel excited to wear them all the time,” says Krupskaya, adding, “We have realized it is very hard to find PPE in children’s sizes, and it is not working properly if the mask doesn’t fit well.” Krupskaya says AK-Service predicts airlines will have to add PPE to their amenities and children’s kits at least until the end of this year.
When it comes to developing kids’ concepts with the airline, Denmark-based kids and family concept agency KIDZinflight has more than 40 years of experience in kids’ entertainment, marketing and brand optimization for airlines. The company studies how children play, their behavior and the needs of the whole family while traveling in order to provide kids’ concepts that create a friendly cabin environment. Based on insight from working with families, there is an increased stress level for parents when traveling with kids, explains Charlotte Gade, Head of Consulting and Concept Development. Parents tend to stress when traveling with children about how they will behave, possible scenarios at the airport and aboard the aircraft and how they will keep their children protected, healthy and safe, she adds. Combining this insight with its research findings about kids enjoying engaging in dress up, wearing play masks and having their faces painted, KIDZinflight is helping airlines develop face masks for the post-pandemic cabin. The masks are designed with expressions that make children feel comfortable and secure, resulting in a more positive experience for the children and parents, Gade explains. Each concept is developed to fit the airline’s requirements, including age group.
Since the outbreak of COVID-19 began, Kaelis has been using its experience in supply-chain management to develop a PPE Catalogue that includes masks, face covers, gloves, sanitizer wipes and gels, goggles and shields, gowns, clothing sets, aprons, caps and shoe covers. When it comes to children’s PPE, Creative Director Manoj Pridhanani tells PAX the company played on kids’ natural creativity when designing kits. “Adding color and illustrations to the kit makes it more appealing to them. We added a little game inside for them to make sure they are entertained for some time,” Pridhanani says. “However, the main objective is to ensure the kids are safe and wear the mask which has been specifically adapted for children [face sizes.]” The “SP3” kits are based on research and development to increase safety and hygiene on board post-COVID-19, Pridhanani says. The sets include sanitizer wipes, mask, gloves, an informative leaflet to explain simple safety measures, and the packaging includes a “surprise element.” The sets are custom made per airline and can be adapted for age groups zero-to-six and six-to-eleven. When asked who will be responsible for teaching children how to use the products safely and correctly, Pridhanani says “the crew will hand out the kits, but it will be the parent/guardian’s responsibility to follow the instructions.” “PPE will be mandatory for the travel industry to operate in the short-run and that regulation will apply to adults as [well as] to the children,” he says. “The travel industry needs to be trusted again, now more than ever and there is nothing that matters more to the parents than children, so changes must be made in order to ensure their safety.” The company has also launched the SP3 pouch for adult passengers.
Galileo Watermark’s ‘In S+FE Little Hands’ kids’ range features a collection of characters repeated across the PPE, packaging and fun activities. The offering includes special kid-sized face masks, alcohol wipes for use with adult supervision, activity books, stickers and other items to keep little ones engaged. Beyond just providing a smaller size, the supplier has taken an after-flight approach to kids’ face masks. “Beyond this practical [inflight] need, we think there is also a social need to have something more appealing and less intimidating for children,” says Galileo Watermark Chairman Ian Linaker. “The key is to normalize what is a relatively new and unfamiliar product group for children. Using characters and including material in the kits to tell the story of the products and their purpose will help do this. We need to remove the fear and medical factor and try to make the products as playful and engaging as possible.” While crew will need to be trained, Linaker says it will be up parents to ensure the child is supervised and using items correctly. The range includes instructions on how to use each item. www.dutyfreemag.com
M AU I J I M :
“Every day we get a little stronger” Maui Jim’s duty free team is navigating through the uncertainty caused by the pandemic under the experienced leadership of Giles Marks by HIBAH NOOR
iles Marks has spent 17 years building up the travel retail operation of US-based sunglasses supplier Maui Jim from scratch. Now, after considerable success in this channel, the Toronto-based Director, Duty Free Sales finds himself in an extraordinary position, as COVID-19 throws all his plans up into the air. “Business is very challenging and very uncertain,” says Marks, with remarkable honesty. “We’re obviously in a situation where it's very hard to organize and plan specifically when we are in a position where we are very much reactive instead of proactive. “In today's marketplace, we are in a wait and see situation. That's what we're doing, we’re in survival mode, we're a small company. Priorities in sequence are survival and the welfare of our employees. We’ve had to put many of them on furlough but I'm proud to say that we've 22 JULY 2020
I think the general theme seems to be that the whole travel industry, including aviation, hotels, restaurants, etc, will ideally be back to 2019 levels in three years.” - GILES MARKS, DIRECTOR, DUTY FREE SALES, MAUI JIM
brought many of them back into the workplace.” On a global level, outside of travel retail, the company’s business is showing some positive growth, which he describes as very encouraging, especially in areas that were particularly soft, such as Europe.
The China challenge
Marks adds that Asia has always been a bigger challenge in comparison to other regions due to the lack of brand awareness for Maui Jim, and the pandemic may
reinforce this perception. “It doesn’t mean we haven’t had success,” he says. “Asia is a region that presents different challenges. A common point that comes back to me in the last 17 years of working in this channel and working in support of my colleagues in Asia is – specifically for PRC – that people will not buy what they don't understand. Now, with the post-COVID environment out there, the challenges for Maui Jim are greater than they were before. I feel that the Chinese are going to be a little more timid trying on a pair
of sunglasses than they used to be for a brand they know very little about.” But Marks is determined to continue to build the company and the sunglass category as a whole in travel retail. To this end, he is involved in a Zoom meeting with other sunglass suppliers, organized by design agency FILTR, to discuss the way forward. For many years, Maui Jim has been a key player in the annual Sunglasses Workshop and Awards, held during the TFWA World Exhibition in Cannes to recognize excellence in sunglasses retail. As the crisis evolves, Maui Jim aims to work in partnership with its retailers to ensure that travelers are comfortable with trying on sunglasses before they make a purchase. In domestic markets, Maui Jim is ensuring that its products are as clean and safe as possible. It is sanitizing products after each use, and using POS signage to reinforce to the consumer that they should feel very comfortable when trying on a pair of Maui Jims. Maui Jim is a small, monobrand private company so the internal dynamics are very different from the multinational groups that dominate the sunglass category, notes Marks. When the pandemic struck, its priority was the safety of its employees and ensuring a workplace for them. The company had to furlough a certain percentage of its employees, but because of its global growth outside of travel retail, it has been
able to bring those employees back into the offices.
A learning curve
Because company expenses are coming under a microscope, Maui Jim will continue to look at investing in travel retail and other channels of business much more closely than it has in the past. “We understand the importance of investing in the business. This comes from Walter Hester, the owner of Maui Jim. He’s been sending directives to the whole company in the last few months, reinforcing, encouraging and endorsing the future and the growth of Maui Jim.” How will the sunglass category emerge from the crisis in comparison to other categories? Marks believes that the core categories such as beauty, alcohol and tobacco are in a position to emerge the quickest, as they create the highest revenue stream. “I think the challenge for the sunglass category will be potentially we may lose very valuable airport retail estate to other [core] categories as retailers scramble to re-establish cash flow.”
Looking to the immediate future, Marks is optimistic and believes the company is in a much better position now compared to where it was in the middle of May. “I’m privileged that the company I work for is very transparent with the global sales. I see the growth in all our international subsidiaries. Travel retail is by far one of the slowest to recover. I feel very confident that we have full support from finance, management and ownership, they understand the dynamic of the channel of business that I'm responsible for with my team. We'll remain patient and supportive as we get through this crisis together.” He concludes: “I have been working with this company for 22 years, I've never experienced anything of this magnitude. Every day is a new day, a learning curve, and every day we get a little stronger. It doesn't mean there aren’t more curve balls ahead of us. Let's hope we don’t have a relapse of this virus, it would be a huge setback for all of us beyond the business world. A vaccine would put most of the population at ease. I'm confident about the future.”
I think the challenge for the sunglass category will be potentially we may lose very valuable airport retail estate to other categories as retailers scramble to re-establish cash flow.” - GILES MARKS, DIRECTOR, DUTY FREE SALES, MAUI JIM
S N O C G N I KEEP
S R E UM
Big brands such as Mars and Nestle will have an advantage post-COVID as travelers will gravitate to well-known and trusted names
Leading research agency m1nd-set has drawn an encouraging picture of the duty free confectionery category post-pandemic, based on a new global research study
by HIBAH NOOR
How Covid-19 has changed our customers
saw a negative impact on their household income
will refrain from testing / trying products in the Duty Free shop
will refrain from unnecessarily touching products in the Duty Free shop
expect to find more digitalization and technology offers when shopping
A majority of consumers will expect more use of digital/technological innovations which will contribute to overcoming any fears or concerns m1nd-set.com
24 JULY 2020
romising news for confectionery suppliers and retailers. Sales of confectionery may be less affected by the COVID-19 pandemic than those of other product categories – and the category may even be in a good position to capitalize on its relatively affordable price point compared to other items sold in duty free stores. That’s the view of Peter Mohn, owner and CEO of Swiss research analyst m1nd-set, who has carried out an international study into future consumer shopping behavior and perceptions around duty free stores following the pandemic. Firstly, the new hygiene measures that travel retailers will be implementing will certainly impact the confectionery category. Clarity on the hygiene measures in place is crucial for consumers,
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or concerns. Mohn gives the example of QR codes for both payment and also to learn more about brands or products, and interactive and engaging digital screens to deliver information.
Virtual reality experiences
Clarity on the hygiene measures in place is crucial for consumers, as m1nd-set’s research found that 45% of respondents interviewed will refrain from testing products in the duty free shop, and some of those are specifically concerned about the hygiene of food and drinks
as m1nd-set’s research found that 45% of respondents interviewed will refrain from testing products in the duty free shop, and some of those are specifically concerned about the hygiene of food and drinks. This is also confirmed by the fact that half (51%) of passengers interviewed said they would avoid unnecessarily touching products in the shop. Of those, 30% said they would touch them if necessary, but would definitely disinfect their hands afterwards, and 9% would wear gloves. Asked about the outlook for the confectionery category, Mohn is generally optimistic, while acknowledging the fact that consumers have been hit financially by the health crisis. m1nd-set’s latest research shows that 57% of respondents have seen a negative impact on their household income. Moreover, 37% claim to be generally more inclined to spend less in the near future and 42% to cut expenses for specific items. Fortunately, confectionery ranks down the list of product categories for which the budget will be cut in daily life.
m1nd-set’s latest research shows that 51% of travelers will probably visit the duty free store on the next occasion to look for promotions and special offers. Next in line is the willingness to check and discover what is new in the store (49%). This suggests that actions such as heavy and clear promotions will drive purchases across several categories, including confectionery, and that surprising and inspiring travelers with new assortments and offers will be key. Turning to the type of offerings confectionery companies should make available post-crisis, technology will be key, says Mohn. Importantly, 89% of people surveyed expect to find more digitalization and technology offers when shopping. Brands and retailers should therefore take action towards a more contactless shopping experience. Use of digital/technological innovations is therefore expected and will contribute to overcoming any fears
Based on his findings, Mohn recommends profiling consumers based on consumption occasion or shopping mission; usage of one-way 3D glasses to project shoppers into a virtual environment; and the introduction of augmented reality (AR) and virtual reality (VR) experiences to picture the product usage in real life, for example a chocolate gifted to children during a birthday party. As mentioned above, chocolate sampling will be affected by the crisis, but perhaps less than in other categories. m1ndset’s latest research shows that the share of travelers who will avoid touching/testing products has reached 73%. However, of those, only 36% mentioned chocolate and 25% mentioned sugar confectionery. “The good news is that passengers are still open to buying special offers (e.g. duty free exclusives), even if sampling and tasting are not available. Surely having the right price and appealing packaging is crucial, but also being able to provide the right information about ingredients, country of origin, history, etc, in an appealing and interactive way.” Survey respondents mentioned a combination of aspects which would encourage them to visit the duty free store. Interestingly, attractive prices, promotions and special offers remain the top motivator, followed by hygiene-related aspects.
Top aspects to encourage Duty Free visits in the future
Interactive and engaging
When it comes to airport shopping, most travelers won’t change their behavior for confectionery, he continues, meaning that they will continue buying it in the same way; however, 34% of chocolate buyers and 40% of sugar confectionery buyers will continue purchasing it but spend less. “Indeed, despite the fact that travelers have become more careful with the money they spend on shopping, categories with a lower price point such as confectionery will see some advantages, and it will probably turn out to be a better option for very common shopping missions in travel retail such as gifting,” says Mohn. 26 JULY 2020
Very attractive price, promotions and special offers
Compulsory face masks and gloves for the staff
Disposable hand sanitizer to customers
Strict distance between customers (e.g. min 2 meters)
Compulsory face masks and gloves for customers
Attractive prices, promotions and special offers remain the top motivator for consumers entering a duty free store, followed by hygiene-related aspects
BIG PACK One pack six worlds of pleasure. Pure goodness!
B Corporation certification by JAS RYAT
With 88.3 points, Valrhona is now the largest chocolate maker for professionals in the world to achieve B Corporation certification
Establishing a guide for an inclusive, engaging and sustainable model, Valrhona is now the largest chocolate maker for professionals in the world to join the community of B Corp certified companies
aving achieved B Corp certification, Valrhona is officially recognized as one of the top teams in the world committed to performance, transparency, social and environmental responsibility. As shared online, 200 questions have to be addressed over five specific areas: governance, stakeholders, clients, community and environment. At the conclusion of the study and audit, the final grade must be over 80 points in order to be certified. Of the 80,000 corporations that have so far applied only 3,200 (less than 4%) have earned the status in 130 industries and 60 countries. Launched in the United States in 2006, the B Corp community brings together corporations around the world who place their societal mission at the core of their purpose. They meet the most demanding standards in terms of social and environment impact. Valrhona has therefore joined the ranks of Patagonia, Innocent and The Body Shop. For all of these companies, the challenge is not
28 JULY 2020
only to be the best in the world, but also the best for the world through a progressive approach that is both active and responsible. With 88.3 points, Valrhona is now the largest chocolate maker for professionals in the world to achieve B Corporation certification. Since the average score of the audit is 50.9 points, the team delivered an impressive performance. The certification highlights the goals and strategies of the transformation policy that Valrhona has been developing for several years. As part of the status framework, the company has changed its articles of incorporation, by adding that Valrhona will take into account the impact of its decisions on the planet and its stakeholders. The objective: to place social and environmental requirements at the same level as its profits. According to Valrhona, the following tangible actions have made it possible to go further and obtain the certification:
• Long-term partnerships between Valrhona and its cocoa partners Guaranteed, 100% traceability of cocoa with 18,208 producers • A lower environmental footprint of the company Reduced carbon emissions of its production facility in Tain I’Hermitage by 57% • Equal representation at work 55% of employees at Valrhona are women (including its Managing Director) • Company mission Actions to create a just and sustainable cocoa sector & practices to inspire more responsible gastronomy An opportunity to accelerate the company’s roadmap and create a more resilient model, to maintain its certification, B Corp businesses must continue (and progress) their actions and practices over time. They are re-evaluated every three years.
W White and refined in appearance, Raffaello surprises with a delicate combination of different layers: a crunchy white almond, surrounded by velvety smooth cream in a crispy wafer shell, covered with coconut flakes. Raffaello unveils its new travel edition pack aiming to present a thoughtful gesture that is sure to be appreciated as an expression of sincere feelings and emotions.
This novelty is already available at the best Duty Free stores.
Confectionery Conundrum The duty free and travel retail business model is composed of exclusive products with special pricing. What happens to the products when there is a disruption in this ecosystem? by JAS RYAT
ith so many continued unknowns, it is difficult to give an accurate prediction for the timeline of post-pandemic recovery in travel retail, and exactly what that recovery might look like. As an impulse category at an accessible price point, confectionery lends itself to emerge more quickly than other categories when travel resumes. A study recently conducted by m1nd-set shows that of the 35% of travelers who would consider purchasing during travel once bans are lifted, confectionery remains the number one category.
Travel retail exclusive
Confectionery has had a unique challenge in dealing with its excess stock during this time. Duty free is known for exclusive products paired with special pricing, and so items meant for this channel often
have travel retail-focused packaging with looming expiry dates. Given the sudden global travel bans, most orders for this channel were cancelled, leaving companies with stock that was not distributable. Germany-based Ritter Sport has been transparent with its distribution of duty free stock. The chocolate company’s export department sold this displaced stock to domestic distributers as a onetime offer, according to Jan Pasold, Ritter Sport Managing Director Global Travel Retail. “Before we are forced to destroy the products we try to sell them even to domestic markets in this very special time. We at Ritter Sport never destroy these products since we believe it is food. Therefore as a last option we donate,” says Pasold. During this pandemic, the company has generously donated stock to local hospitals and children’s charities.
Longer shelf life
In contrast, Sweden-based Cloetta has not been forced to sell its travel retail exclusive stock in the domestic channel because at 24 months, the shelf life of its sugar confectionery items is much greater than that of chocolate. Berend-Jan van Egmond, Sr. Global Travel Retail Manager at Cloetta International Markets, says: “It might be possible that some of our distributors offered some stock to domestic markets with our approval, but the quantities would be very low. We are also not planning to sell our travel retail exclusive products to domestic retailers, as I believe that would harm the point of product differentiation, which is important to travel retail.”
Product and price differentiation
Pasold says Ritter Sport has adjusted the
m1nd-set shows the Confectionery category lands top spot for 35% of travelers who would consider purchasing during travel once bans are lifted
30 JULY 2020
pricing of its travel retail stock to align with price sensitivity in the domestic market, but did not change the packaging. He explains that the volume of travel retail stock sold in the domestic market has been so low that he feels there will be no long-term effects on business. This has just been an “exemption made by manufacturers due to the pandemic,” he says. Although Cloetta has not made any adjustments to pricing due to the pandemic, the company is working on new packaging in an aim to offer more sustainable options. This has no relation to Covid-19, instead being part of the movement towards greater sustainably going forward. Egmond stresses that travel retail requires differentiation from domestic markets as this is what consumers are trained to expect. Cloetta is taking this time to “make sure we have a [travel retail] portfolio that is in line with consumer needs, now, but also in a post-covid world. Also, we have to make sure that we monitor those consumer needs very closely, and that we are on the same page with the retailers,” says Egmond.
Every confectionery brand in travel retail is making pandemic-related choices based on its current position and travel restrictions applied in its domestic and travel channels. While exclusive items
and packaging are a challenge in the short term, this category is in a position to respond quickly to future demands, putting it in an especially strong position going forward.
Lindt & Sprüngli’s 75th anniversary
Lindt & Sprüngli Global Duty Free shows resilience during global pandemic
Brand Ambassador Roger Federer celebrates Lindt & Sprüngli’s 175th anniversary
32 JULY 2020
PETER ZEHNDER, HEAD OF LINDT & SPRÜNGLI GLOBAL DUTY FREE DIVISION DISCUSSES PLANS TO ACCLIMATE TO THE ‘NEW NORMAL’ AS THE SWISS CHOCOLATE HOUSE CELEBRATES ITS 175TH ANNIVERSARY by JAS RYAT
Americas Duty Free: What is the mood at Lindt & Sprüngli at the moment? Peter Zender: As for all of us, we are finding this to be a new business environment for us at Lindt & Sprüngli. We’ve never seen a crisis comparable to COVID-19, which has caused a complete worldwide halt of travel. Our focus at Lindt and Sprüngli is to ensure the safety of our staff, partners and business. We’ve faced some challenges with payment, inventory management and YTG planning, but remain optimistic and hopeful that recovery will begin soon. Chocolate, as well as strong brands, will always be part of people’s lives, therefore we feel well positioned as we recover from this crisis. ADF: How has business been affected by COVID-19? PZ: 2020 started on a strong note for our business, with high double-digit year-to-date growth in February. The subsequent fall began in March, starting in Asia and spreading later to Europe, MEIA and the Americas as lockdowns came into force, with sales falling by half. This figure fell further to almost naught in April in May, as stores closed. To ensure a quick recovery, we’re working towards recovery plans with our clients, as well ensuring we have an efficient and flexible supply-chain management in place. We’re also focusing on our bestselling items designed for self-treating, sharing and gifting, such as LINDOR Tubes, LINDT Naps Carrierboxes, 300g bars and items with smaller price points. ADF: Sustainability, supporting farmers, quality ingredients were all a major focus for your brand. Do you see the focus shifting going forward due to COVID-19? PZ: As the European Commission has rightly said: ‘recovery will be green, digital and resilient’. Our focus on sustainability initiatives and high-quality premium chocolate will become ever more important. Sustainability has been a top priority for Lindt & Sprüngli since the foundation of the company, because our long-term success depends on an intact and well-functioning environment. Lindt & Sprüngli is one of the few chocolate makers that manage production from bean to bar – from the selection of the fine cocoa varieties through to the finished product. This is one of the most fundamental criteria for a sustainable and traceable supply chain. Cocoa beans are the heart of our premium chocolates; therefore we make considerable efforts to ensure a sustainable and socially responsible supply chain. In 2008 we established our own sustainable sourcing model in Ghana – The Lindt & Sprüngli Farming Programme – which enables us to trace cocoa beans back to their origin. The goal of our programme is to improve the livelihood of farmers and their communities according to their specific needs. The progress made in Ghana encouraged us to expand the program to other regions we source our cocoa beans from; Ecuador, Madagascar, Papua New Guinea and Dominican Republic. 78,425 farmers are now part of the programme and by end of this year we will achieve a fully traceable and externally verified cocoa bean supply chain. But our engagement goes beyond cocoa. For example, firstly our entire cocoa supply will be free from deforestation by 2025 and secondly, we achieved a 10% reduction of greenhouse gas
emissions in the production process by 2020 per ton produced (base year 2015 = 100%). ADF: What are some challenges you’re anticipating once duty free stores re-open? PZ: We’re still in the early stages, but inventory management on both sides is dominating most conversations. Once duty free operators begin preparations for the second half of the year, we expect they will have to focus on new priorities such as ordering fresh products, and selling off older stock quickly. Our plans at Lindt & Sprüngli include focusing on bestsellers and smaller price points, providing more focused seasonal assortments and recovery activations, as well as remaining flexible. Regular update calls are crucial to keep in touch and solve challenges together with our customers. Digital video calls have become a “new normal” for our daily business life. ADF: This was a big anniversary year for Lindt & Sprüngli’s. What were the plans and how have celebrations been affected due to the current state of the world? PZ: Yes, this year marks Lindt & Sprüngli’s 175th anniversary, and we’re very proud to reflect on what our organisation and people have accomplished over the years. Throughout our history we have established a reputation for providing exquisitely manufactured and creative chocolate products. In celebration of our anniversary, we were set to open the Lindt Home of Chocolate in May; however this now has been postponed until autumn due to COVID-19. ADF: 2020 was going to set the stage for the global opening of Lindt Home of Chocolate. Please tell us about this project and how you will be moving forward. PZ: Due to restrictions surrounding COVID-19, the official opening of the Lindt Home of Chocolate is currently postponed to early autumn. Nevertheless, we are very much looking forward to welcoming visitors once we are able to do so. The Lindt Home of Chocolate is an interactive world of chocolate suitable for any ages. Special attractions include the world’s largest Lindt chocolate shop (500m2), the spectacular nine-meter tall Lindt chocolate fountain and a Lindt Chocolateria in which chocolate educational courses and tours will take place. For more information, visit the website https://www.lindtspruengli.com/about-us/lindt-home-of-chocolate/ ADF: Lindt is famous for its activations and demonstrations. How do you think the interactions with confectionery brands in duty free will change going forward? PZ: Staying safe while traveling will certainly remain a priority for passengers and staff alike. In the short term, we expect samplings and tastings to be more difficult to execute, and most likely suspended until it becomes safe. We plan to go ahead with activations in 2021, but we will of course remain flexible according to on-location requirements. We certainly feel digital assets and online shopping will be on the rise for duty free brands and operators, but we hope that we can also meet our customers soon safely “face-to-face”.
Mondelez World Travel Retail
The latest travel retail exclusive flavor from Toblerone – Gingery Orange – offers a unique and delicious twist for travelers
s international travel resumes, confectionery will need to remain exposed and visible to travelers to leverage its universal appeal, highly impulse nature and potential to generate cross-category purchases. That’s the view of Jaya Singh, Managing Director, Mondelez World Travel Retail, who discussed the confectionery category post-pandemic in this interview with Duty Free & Travel Retailing Magazine.
Jaya Singh, Managing Director, Mondelez World Travel Retail
“BRANDS CONSUMERS LOVE, PRODUCTS CONSUMERS KNOW AND VALUE CONSUMERS APPRECIATE” WILL BE THE KEYS TO THE CONFECTIONERY CATEGORY POST-COVID-19, ACCORDING TO JAYA SINGH, MANAGING DIRECTOR, MONDELEZ WORLD TRAVEL RETAIL by HIBAH NOOR
34 JULY 2020
Duty Free & Travel Retailing Magazine: How will the new hygiene measures and smaller customer base impact sales of confectionery? Jaya Singh: Mondelez World Travel Retail (Mondelez WTR) is reviewing the emphases and mechanisms for all touchpoints to respond to new health and safety measures as well as travelers’ demand for improved shopping convenience. Our Delighting Travelers vision for confectionery that was built on the three pillars of more shoppers, more spend, more often continues to provide the ultimate direction in this process. As international travel resumes, confectionery will need to remain exposed and visible to travelers to leverage its universal appeal, highly impulse nature and potential to generate crosscategory purchases. In addition, we are collaborating with our retail partners on new display and merchandising arrangements that can allow for better distancing of shoppers while maintaining the ease of navigating what is on offer and making purchase decisions.
Mondelez WTR’s plans have been adapted in order to emerge stronger together and accelerate recovery in the channel, says Jaya Singh
Robust omnichannel approach
DF&TRM: Is confectionery a category you feel will bounce back quicker than others? What do you foresee for its future? JS: Confectionery has an incredible amount to offer to travel retail. As the most universal category, our brands continue to play a key role in the overall appeal of the channel to travelers. Confectionery draws people in-store, provides travelers with accessible gift options, drives impulse purchases and prompts purchases in other categories. Most of all, though, it remains timeless – our brands are tried, tested and deeply embedded in the hearts of shoppers. Mondelez WTR is in the fortunate position to leverage globally recognized brands including Toblerone, the channel’s #1 chocolate brand, as well as diverse experience, skills and insights to help our retail partners optimize the visibility of the category, as international travel resumes. DF&TRM: With the reopening of some airports especially in Asia, what type of consumer behavior are you seeing? Are there any specific innovations? How will chocolate sampling be affected? JS: Travelers might perceive some physical engagement and promotional activities to be of higher risk than others, and we are prioritizing those that rely on less physical interaction. We have individually wrapped pieces of chocolate that enable our loved consumers to sample and taste in a very safe environment. Trusted brands like ours are very reassuring; a detail that should not to be overlooked in such uncertain times. We also have a holistic digital strategy based on e-commerce and online communications beyond in-store engagement. When travelers resume their journeys, they will return with a fervor to connect and to engage in unique and memorable experiences. Our award-winning digital team and robust omnichannel approach will help us deliver the exciting digital engagement solutions that can substitute for physical touchpoints.
Evolving consumer preferences
DF&TRM: What type of offerings should confectionery companies make available post-COVID-19 crisis? JS: Mondelēz International has been successful in the domestic markets despite the crisis. This is the result of the changes in our operating environment that we have noticed over the last couple of months; demand has been heavily concentrated on trusted, top-selling products. At Mondelez WTR, we believe that every crisis comes with an opportunity. We are transferring our insights from the domestic market into travel retail to continue being successful and adjust the confectionery offer to what counts once international travel recommences: brands consumers love, products consumers know and value consumers appreciate. Our plans have been adapted to seize the opportunities to emerge stronger together and accelerate recovery in the channel.
The collaborative work with our commercial partners is starting now to streamline the confectionery portfolio to build an offering that is aligned with the evolving consumer preferences and their readjusted value equations. DF&TRM: What are some of Mondelez’s new initiatives for post-pandemic? JS: Despite the challenges that we’re currently facing, our product launch plans are on track with a fine-tuned timeline to help the channel’s recovery. Our new products are the result of bold, research-driven experiments with new sub-categories and flavors to give traveling consumers exactly what they are looking for. Along with our strong existing portfolio from beloved global brands Toblerone, Cadbury, Milka and Oreo, we are confident that the new additions will play an instrumental role in helping both our partners and us to re-establish the category as an industry growth driver. The latest travel retail exclusive flavor innovation from Toblerone – Gingery Orange – offers a unique and delicious twist for travelers, combining signature Toblerone milk chocolate with honey and almond nougat with natural orange peels dusted in ginger. The flavor delivers an unexpected sweet-and-spicy taste experience as well as an unconventional texture combination, with almond nougat meeting soft oranges. Gingery Orange is available in the shareable Tiny bag format in mono or mixed flavor, as well as in the iconic 360g bar.
DF&TRM: Is there any other information that would be interesting to our readers regarding the confectionery segment? JS: In 2019, we sustained solid growth on the already high base that we’ve established through continuous year-on-year growth over the last few years. In the last 12 months, we have been recognized by the industry across various platforms and business principles on more occasions than ever before. We entered 2020 with great momentum, a solid position as confectionery category leader, our enduring dedication to our partners and the winning spirit of our resilient team to ensure that we’re prepared to seize every opportunity to get the category back on the growth trajectory as swiftly as possible. We’re closely monitoring developments across the globe and remain steadfastly committed to our retail and distribution partners as well as our traveling consumers, by resuming operations when and wherever possible. We’re in this business to delight travelers and contribute to the growth of a very special and dynamic channel through strong and collaborative relationships. The COVID-19 crisis has not changed that; in fact, as major crises often do, it has only placed that which is important into even sharper focus – firmly cementing that we are stronger together. www.dutyfreemag.com
BUTLERS TO LAUNCH Café Collection Butlers rekindles its romance amongst travelers with new Café Collection range by JAS RYAT
Butlers Salted Caramel Collection, Caramel + Nut Collection and Butlers Milk Chocolate Café Collection make up the exclusive Café Collection
36 JULY 2020
utlers Chocolates prepares to launch its new Café Collection range into Global Travel Retail as airports re-open over the coming months. Butlers Salted Caramel Collection, part of this new range, secured a worldwide exclusive launch at Dubai Duty Free in March earlier this year. The new Café Collection range was inspired by favourites chosen every day by customers at Butlers Chocolate Cafés. The three boxes in this range are presented in gift boxes with modern elegant metallic finishes. The varieties are Salted Caramel Collection, Caramel + Nut Collection and one created for milk chocolate lovers everywhere: Butlers Milk Chocolate Café Collection. All of these are presented in metallic embossed square boxes with matching sleeves depicting images of the chocolates inside. Each box contains 16 chocolates. Popular flavors include milk and dark chocolate salted butter caramel, Crème Brulee, hazelnut truffles and pink Himalayan salted caramels. All of the chocolates are alcohol free.
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C O N F E C T I O N E R Y C AT E G O R Y A STRONG CONTENDER POST COVID-19 The duty free and travel retail industry is realigning its plans to manage the new landscape. We ask confectionery experts, will the confectionery category emerge stronger post COVID-19? by JAS RYAT
Steve Bentz General Manager, World Travel Retail, The Hershey Company “The confectionary category is the most impulse driven and price accessible category in the channel making it more attainable than other categories for most traveling consumers. We believe the category will return stronger post Covid 19, it will continue to drive basket size for retailers and meet the needs of consumers looking to treat themselves or gift to another. We plan to be a big part of the category recovery, working closely with our retail partners to provide programs and innovation to bring consumers back to the confection category sooner. “
Raghav Rekhi Global Category Director, Mars Wrigley “The COVID-19 pandemic has immersed us in a situation unlike anything we’ve seen in the last 100 years. It’s forcing everyone, including Mars, to work together to solve this global crisis and find new ways of working. As far as I am concerned, we must be careful to stay realistic and cautious. Some European countries are opening back up to international travel now and time will tell how effectively this will work. For those who do travel, their purchasing behaviors are likely to change. We’ll need to monitor traveler purchase behavior and demand patterns as people start traveling again and react as appropriate.”
Aisling Walsh Marketing Director, Butlers Chocolate “The confectionery category will certainly face fresh challenges post Covid-19. One major one will be around in-store sampling and customer engagement. This will especially affect lesser known brands where sampling offers the opportunity to convert new customers through great tasting chocolates and having the ability to share brand stories with people. The nature of confectionery lends itself so well to in store activity, most people love to taste chocolate, so there will be a challenge to educate and inform customers, particularly new ones.” 38 JULY 2020
THE CAFÃ‰ COLLECTION
w w w. b u t l e r s c h o c o l a t e s . c o m
Stewart Dryburgh General Manager , Nestlé International Travel Retail “Travel retail has historically shown its resilience; however consumer confidence in travel has been severely impacted by Covid-19. The subsequent negative economic impact will exacerbate the problem. m1ndset research indicates that recovery will be gradual, returning to 2019 levels by late 2022 at the earliest. The game-changer here would be the swift discovery and global roll out of a Covid-19 vaccine. Long term we remain confident in the food category, of which confectionery plays the leading role. Confectionery has broad appeal in travel retail, offering affordable indulgence and giftability as well as snacking and sharing options. That should place confectionery in a strong position to support the industry’s recovery.”
Andreas Reckart Head of Middle East and Travel Retail, Ricola AG Ricola “It is hard to know yet. We are still in the midst of the pandemic and - while European travel is beginning to open up again, signs in China make it clear that a second wave is possible. Nevertheless, we are hopeful for a gradual recovery from Q3 onwards. Travellers certainly do want our products. Ricola enjoyed a really good start to the year; by the end of February volumes were almost 150% ahead of the same period last year. There is no doubt that consumers will be looking increasingly for value and product that meets their immediate traveling needs. Confectionery is well placed to fill that requirement, particularly items such as Ricola herbal sweets which are perfect for impulse purchase. This may place it in a strong position going forward.”
Marc Panara Vice President Sales & Operations, Otis McAllister Inc. “We have strong partnerships with global leading confectionery companies that share our commitment to category growth within travel retail. We are all adapting our strategies and focus for the near term without sacrificing our core competencies and long term vision for the category. Our category has shown to be impulse driven and adds dollars to the shopping basket under normal shopping experiences. With presumed less disposable income for most shoppers we feel that they could pivot their somewhat limited purchasing power to confectionery in the short term aiding in the recovery and emerging stronger post Covid-19.”
Femke van Veen Travel Retail Manager, Perfetti Van Melle “We truly believe PAX recovery will come but the main question still is when? As mentioned in m1ndset’s research the Confectionery category will remain one of the most purchased categories. We are confident that travelers will continue shopping for a snacking or, lower priced, gifting item. Additionally the need for a refreshment item like gum or a Powermint while traveling will remain. We see that airport authorities and retailers are taking tremendous steps to create a safe travel and shopping environment. This gives us a very reassuring feeling and we hope travelers notice all taken measurements and trust will be restored soon.” 40 JULY 2020
German brand Haribo will focus on growth in Americas with new partnerships in travel retail’s nonchocolate confectionery channel by JAS RYAT
Elisa Fontana, Haribo Head of Marketing Global Travel Retail
he year started off with a bang for confectionery brand Haribo. With an uptick in sales following a successful conclusion to 2019, 2020 looked promising. However, as international travel came to a virtual standstill in March, demand fell and, as with many international brands, the Haribo team became concerned with the current market environment. Elisa Fontana, Haribo Head of Marketing Global Travel Retail, shares the brand’s plans to push forward during these transitional times. “Haribo’s full-year turnover will be significantly lower than last year, and that is [even] in the best case scenario, in which international travel returns to something like normal in Q3/Q4. “Moving forward we will continue to develop exciting products to suit the traveler and liaise with buyers to keep Haribo at the forefront of their minds when they plan their non-chocolate portfolio,” says Fontana.
The sweet and sour Haribo Twin Snakes 700g is the latest travelexclusive available in a convenient resealable pouch
The Summit of the Americas tradeshow in Orlando was going to support the official launch of the brand’s new Twin Snakes travel edition line in the Americas. As this show was cancelled, the company will instead promote the launch globally through the Haribo catalogue. Says Fontana: “The new sweet and sour Haribo Twin Snakes 700g is the latest travel-exclusive resealable pouch in our collection, for which we had prepared a global launch and roll-out this spring. It has been added to our product catalogue and is being actively promoted to our customers globally, including those in the Americas.”
Americas-based master franchisor Duty Free Dynamics (DFD) approached Haribo for the first time in Cannes at the TFWA Exhibition 2018. The team explained its target was to extend their portfolio of activity, and identified confectionery as the category to drive growth in the future. The goal of the DFD team was to approach different confectionery brands during that show and discuss a possible collaboration. Three suppliers were identified by DFD as those with the highest development potential in South America, and Haribo was one of them. “On our side we were already operating in the region but several distribution gaps needed to be filled. DFD, being one of the key operators for travel retail and duty free distribution in South America, appeared to us to be the potential solution
provider to develop our business in this area,” says Fontana. She continues, “Once the interest was confirmed from both sides, we then had to set up together the basis of our relationship, including commercial conditions and marketing strategy. This process was finalized at the beginning of 2020 and we are now looking forward to a fruitful collaboration with DFD in the region.”
A positive approach
The element of theatre that activations and tastings bring to the airport setting is extremely effective at attracting the attention of the shoppers. For hygiene, health and safety reasons, however, Haribo feels these activities may intimidate travelers rather than be perceived as a welcome treat. Therefore the company’s current focus is to find an alternative way of interacting with the customer. On the bright side, Haribo’s unique sampling products have always been offered in pre-packaged portions. “Fortunately, given that all our sampling products are individually wrapped and securely portioned, passengers will soon be able to try our yummy fruit gums again in complete safety and with peace of mind,” explains Fontana. “In the second half of 2020 international travel may be limited and demand will be unpredictable,” Fontana concludes. “The Haribo team will continue to work closely with its partners and retailers to deliver strong promotional plans and assortment efficiency that meet the retailers’ needs without risking overstocking.” www.dutyfreemag.com
A passengers uses the contactless AirAsia kiosk at klia2
Hands off for health by RICK LUNDSTROM
AirAsia has entered what many consider an important component to future air travel with a series of features that utilize technology and help passengers feel safe getting back in the air
t has been said that in order to see air travel return in significant numbers, passengers need to feel confident that every possible step is taken to ensure a healthy experience when traveling; and that the confidence needs to begin at the airport level. One of Asia’s more daring airlines over the years has been Malaysiabased AirAsia. The low-cost carrier took a chance with a new company selecting the Hawk seat from Mirus in the United Kingdom four years ago. Its subsidiary company ROKKI’s platform partnered with Inmarsat for its high speed connectivity. Now after two months of careful planning, AirAsia is rolling out high-tech features to move towards contactless payments and other similar procedures at several airports. 42 JULY 2020
“AirAsia has always been a pioneer of new technologies and we are proud to be able to provide a contactless solution in a short period of time,” says Javid Malik, AirAsia Group Chief Operations Officer. Indeed, work on the contactless check-in and boarding procedures started in earnest in mid-March. The airline concentrated on several areas: check-in and boarding procedures using its current digital kiosks and self-bag drop machines. By the end of April much of the work had been completed and the airline threw the switch on operations May 13. At that time, the contactless kiosks were also waiting for passenger service to resume at airports outside Malaysia in Thailand, the Philippines, Indonesia and Japan. The airline has also implemented a Passenger Reconciliation System (PRS)
at its home airport, known as klia2, that allows airport security staff to verify that the passengers who have presented tickets at the check-in desk are the same passengers who are boarding the plane. At klia2, this can be done through a digitized boarding pass that does not have to be exchanged with airport security AirAsia is also enhancing features on its mobile phone app where passengers can scan their passports via the app itself. Visa scanning capability is also in the airline’s plans. What is needed now is a steady flow of confident passengers. So far, AirAsia has resumed scheduled domestic flights with reduced frequency, and in early-May added flights to Thailand. “Once AirAsia’s other operating countries commence operations with gradual restrictions lifted, we plan to have an advanced contactless procedure by July 2020,” says Malik. “As we have to take into account other external parties involved such as airport operators and other relevant authorities.”
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