Global Travel Retail Magazine TFWA May 2022

GTRMAG.COM

MAY 2022 TAX FREE WORLD ASSOCIATION ASIA PACIFIC LIVE VOL 32 · NO 2

COVID wave in China p. 6 Lotte welcomes new spending allowance p. 16 NAA Retailing expands p. 20

Letter from the Editor

Optimism in Asia M

uch like last October when there was a real sense of anticipation and excitement ahead of the returning TFWA Cannes Exhibition and Conference, those attending the TFWA Asia Pacific Live event in Singapore this month (May 9-11) are no doubt relishing the opportunity to meet face-to-

face again.

Face-to-face events have been limited in recent years due to the Covid-19 pandemic so congratulations to the TFWA for giving us this opportunity to meet and network again in Asia Pacific.

Unfortunately, some parts of Asia Pacific, which was the first region to be hit by the Covid-19 pandemic and is likely to be the last to emerge, are still suffering.

China, for example, where the pandemic originated from is experiencing a surge in cases. This has prompted the shutdown of cities and towns across the country, including Shanghai which remained in lockdown at the time of writing.

That said, there have been positive developments in several places, notably in Australia which re-opened its borders to New Zealanders and other eligible travelers from anywhere in the world on February 21, 2022.

Positive steps towards reopening have also taken place in locations such as Bali, Cambodia, Vietnam, and Singapore, which is looking to remove all Covid-19 tests for fully vaccinated travelers in the coming weeks.

The Covid-19 situation also seems relatively under control in South Korea, where Lotte Duty Free is busy ensuring it is ready to capitalize on the eventual widespread resumption of overseas travel.

Lotte has launched its own ‘Travel is Coming’ promotion which offers online and offline incentives for Korean customers until May 31.

According to a recent report compiled by Collinson (a global end-to-end travel experiences, airport services and travel medical company) and CAPA (A global market intelligence provider for the travel and aviation industry), business travel in Asia Pacific is likely to take a little longer to rebound than leisure travel.

Survey responses contained within the report from aviation and travel experts and leading global brands found that just 24% of respondents believed short-haul corporate travel in Asia Pacific would recover to more than 61% of 2019 levels in 2022.

Long-haul business travel in the region is also unlikely to return for some time, with just under a third of survey respondents (30%) believing we won’t even reach 20% of 2019 level this year.

Remaining positive, however, is important especially during such turbulent times so here’s to a positive, safe and productive TFWA Asia Pacific Live event.

Kindest Regards,

HIBAH NOOR Editor-in-Chief hibah@gtrmag.com

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MAY 2022 · VOL 32 · NO 2 Global Travel Retail Magazine (ISSN 0962-0699) is published seven times ayear by Paramount Publishing Ltd. It is distributed digitally worldwide, with printed issues in April, May, June, July, September, October and November.The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. May 2022, Vol 32. No. 2.

Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. Paramount Publishing Ltd.

GLOBAL TRAVEL RETAIL MAGAZINE Tel: 1 905 821 3344 www.gtrmag.com PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@gtrmag.com MANAGING EDITOR Jane Hobson jane@gtrmag.com DEPUTY EDITOR Laura Shirk laura@gtrmag.com SENIOR WRITER Rebecca Byrne rebeccabyrne10@yahoo.com.sg SENIOR EDITOR Mary Jane Pittilla maryjanepittilla@hotmail.com ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca CONTRIBUTORS Andrew Pentol

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

12 WHAT’S INSIDE Lead Stories 6 Air Travel in China

16 Lotte Duty Free Update

12 Ever Rich Duty Free Shop Update

20 NAA Retailing

‘Big three’ Chinese airlines suffer as infections increase The emergence of the Omicron variant meant traffic results for Air China, China Eastern Airlines and China Southern Airlines dropped to their lowest levels in March 2022 since the start of the pandemic. We examine the impact this latest spate of infections is having on air travel and the Chinese travel industry in general

16

Ever Rich maintains existing operations amid new launches The onset of the Covid-19 pandemic has not stopped Taiwanese travel retailer Ever Rich Duty Free Shop from continuing to provide services at airports and pursuing development opportunities such as online shopping and home delivery concepts, as Andrew Pentol discovers

6

Lotte vows to ‘bring back the joy’ of duty free shopping As the Korean travel retail industry continues to recover from Covid-19, Lotte Duty Free has been boosted by the scrapping of the US$5,000 purchasing limit for outbound Korean nationals, along with the easing of quarantine restrictions. The re-opening of the borders in Australia was another positive for Lotte

Corporation Expands

Tokyo Olympics ‘a period of tremendous learning’ for NAA Retailing The rescheduled 2020 Tokyo Olympics allowed NAA Retailing Corporation to recognize future challenges through servicing large volumes of athletes and keep them safe at the same time. We discover how the Japanese retailer has left no stone unturned in trying to emerge stronger from the pandemic

26 Lagardère Travel Retail Update

“A shot of adrenaline” Amid the challenges caused by the Covid-19 pandemic, Lagardère Travel Retail has steadied the ship by managing everything as precisely as possible. This provided the perfect platform to secure key new Latin American contracts in places such as Peru and Chile

Features

20

FOREO seeks creative solutions Tourism Tech Beam bounces back Confectionery Report

32 34 36 40

Cloetta’s sugar solution Brown-Forman ready for recovery KTI king of tobacco Rituals achieves growth

44 46 48 50

Air Travel in China

‘BIG THREE’ CHINESE AIRLINES SUFFER AS INFECTIONS INCREASE

China Eastern, whose Shanghai hub remains under strict lockdown also reported similar declines in domestic traffic

The emergence of the Omicron variant meant traffic results for Air China, China Eastern Airlines and China Southern Airlines dropped to their lowest levels in March 2022 since the start of the pandemic. We examine the impact this latest spate of infections is having on air travel and the Chinese travel industry in general

by HIBAH NOOR

6 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

A

s China persists with its zero Covid strategy which includes significant lockdowns in major cities such as Shanghai and punitive travel restrictions, domestic air travel is deteriorating as a result.

At the time of writing (18 April 2022), China, which previously claimed it had stamped out Covid-19, was battling its worst ever surge of infections. This was sparked by the emergence of the more contagious Omicron variant.

Last month (March), traffic results for the ‘Big Three’ Chinese airlines (Air China, China Eastern Airlines and China Southern Airlines) plunged to their lowest levels since the early days of the pandemic (Source: FlightGlobal online news and information website).

Beijing-based Air China, for example, flew just over two million domestic passengers in March, a 70% decline year-on-year.

Air Travel in China

Throughout China, local authorities have been restricting traffic and subjecting travelers to strict testing requirements to curb the Omicron variant. But the recent surge in infections is forcing the country to reconsider how it deals with the pandemic

The figure is also nearly half the number of domestic passengers in February and is the lowest since February 2020, when the carrier flew just 1.3 million domestic passengers.

China Eastern, whose Shanghai hub remains under strict lockdown also reported similar declines in domestic traffic.

Passenger numbers in March plunged -71% year-on-year to around 2.5 million, the lowest since March 2020, when it flew 2.1 million domestic passengers. Traffic slumped -70% year-on-year, while capacity fell -63%.

China Southern carried four million passengers in March, a 64% year-on-year decline. The figure is about 45% lower monthon-month and is the carrier’s lowest passenger number since April 2020.

On the topic of lockdowns, the impact of the crisis in Shanghai, which remained 100% locked down at press time, was taking its toll on the rest of the country.

The number of journeys taken over China's three-day Tomb Sweeping Festival holiday (3 April to 5 April) tumbled by nearly two-thirds from last year (Source: State media/Transport Ministry).

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“

China’s travel retail sector, which includes domestic airports and Hainan’s offshore duty free business have been severely impacted by the fall in travel due to the surge in infections.”

Total trips, including rail, air, waterway, and road reached an estimated 53.78 million over the three-day period beginning on 3 April, down -63% (Source: China Economic Daily).

The figure was also about 10% lower than 2020, when parts of China were still recovering from the first coronavirus outbreak.

Air travel was worst hit, with total passenger numbers falling to an estimated 562,000, down -87% from a year ago and -54% down compared to 2020. Road journeys fell -53% on the year and were also slightly lower than 2020.

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Air Travel in China

China's transport ministry expected road traffic to drop -20% and flights to fall -55% during the three-day holiday.

Overall, the decline in travel was worse than expected and comes as analysts warn that the economic cost of keeping infections to a minimum is likely to soar, with sectors like tourism bearing the biggest brunt.

Throughout China, local authorities have been restricting traffic and subjecting travelers to strict testing requirements to curb the Omicron variant. But the recent surge in infections is forcing the country to reconsider how it deals with the pandemic.

That said, infection rates remain low compared with the United States and Europe. In the week prior to 1 April, there were about 54,000 new cases in the whole of mainland China. In the

“

Overseas travellers with permission to enter China are screened and sent to government-designated hotels for a mandatory quarantine period of at least two weeks, followed by a further period of monitoring.”

On the topic of lockdowns, the impact of the crisis in Shanghai, which remained 100% locked down at press time, was taking its toll on the rest of the country

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US over a similar period, there were over 180,000 new infections, according to official data.

As more infections are detected across the country, China's strict zero-Covid strategy is becoming increasingly difficult to sustain. However, most of its principal elements remain in place.

Travel to and from China, for example, remains strictly limited and there are also restrictions on internal movement.

Overseas travellers with permission to enter China are screened and sent to government-designated hotels for a mandatory quarantine period of at least two weeks, followed by a further period of monitoring.

China’s travel retail sector, which includes domestic airports and Hainan’s offshore duty free business has been severely impacted by the fall in travel due to the surge in infections.

All three downtown duty free stores in Sanya were temporarily closed, while the Sanya International Duty Free Shopping Complex, including the CDF Mall also closed for nine days due to a small Covid-19 outbreak in Sanya on Hainan Island.

The Sinopharm-owned China National Service Corporation for Chinese Personnel Working Abroad (CNSC) also reopened in Sanya on 15 April after a 13-day closure due to the Covid-19 outbreak in Sanya.

Hainan Tourism Duty Free Shopping Complex, which also closed because of the outbreak, reopened on 17 April.

Time will tell in terms of how things play out in China amid this latest wave of infections, but one thing is certain. The ban on foreign nationals entering China (exceptions apply) is unlikely to be lifted any time soon.

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Ever Rich Duty Free Shop Update

At the time of writing, no Ever Rich Duty Free Shop staff had been relieved of their duties due to the pandemic

Ever Rich maintains existing operations amid new launches The onset of the Covid-19 pandemic has not stopped Taiwanese travel retailer Ever Rich Duty Free Shop from continuing to provide services at airports and pursuing development opportunities such as online shopping and home delivery concepts, as Andrew Pentol discovers

by ANDREW PENTOL

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s Taiwan strives to control the impact of Covid-19, travel retailer Ever Rich Duty Free Shop remains defiant despite a surge in new cases.

At the time of writing (17 April 2022), The Central Epidemic Command Center had recently announced 1,303 new confirmed cases of Covid-19, of which 1,210 were local (a record high) and 93 imported.

One thing is certain. Ever Rich Duty Free, which runs stores at several airports across the country including Taoyuan, Songshan, Taichung and Kaohsiung, along with a downtown complex in Neihu, Taipei, will continue fighting the pandemic and doing everything possible to emerge stronger.

Local tourism boom

Offering a snapshot of the impact of Covid-19 on business, an Ever Rich Duty Free Shop Spokesperson tells Global Travel Retail Magazine. “With the nation’s borders remaining virtually closed due to Covid-19, more than one million [local] tourists travelled

Those visiting this Ever Rich Duty Free Shop pop-up could learn more about the company's commitment to sustainability.

to Penghu, one of Taiwan’s offshore islands, [where Ever Rich Duty Free Shop has been present since 2018] in 2020.”

Three years ago, Ever Rich soft-opened its resort duty free shopping complex in Penghu, an archipelago of clustered islands located in the Taiwan strait between Taiwan and China. The duty free and travel retail facilities in the Profond Pier 3 Duty Free Complex and Discovery Hotel span around 27,000sqm and the opening marked the end of a three-year project.

The onset of the pandemic cut visitor numbers to Penghu in the first half of the year, but a period of ‘revenge travelling’ followed, prompting an influx of local tourists. Penghu Airport, therefore, had to take certain measures to ensure it could operate smoothly amid the anticipated surge in flights.

New measures included the implementation of three security lines for departing traffic and extra check-in counters. Ever Rich Duty Free no doubt had to implement its own new initiatives downtown to accommodate the higher footfall and increased demand across its duty free and travel retail business.

A new series of NFT products was launched by Ever Rich Duty Free Shop in April 2022

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE

13

Ever Rich Duty Free Shop Update

Face-masks have been sold by Ever Rich Duty Free Shop without a profit

Last year, however, the numbers of visitors to Penghu fell almost by half during the heart of the pandemic to around 618,000 (Source: Central News Agency – Taiwan). In May 2021, the number of new local Covid infections for the whole of Taiwan soared to more than 400 a day (Source: Taiwan News). This prompted the cancellation of flights to Penghu and banning of mass events to prevent the spread of the virus.

‘Shouldering its responsibilities’

On how the Taiwanese retailer has navigated the pandemic in general, the Spokesperson comments: “Ever Rich Duty Free Shop 14 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

has faced the severe impact [of Covid-19] and is continuing to do so while shouldering its responsibilities.

“Not only has Ever Rich Duty Free Shop continued providing services at airports and cooperating with government and airport measures, but it has also launched online shopping and home delivery services in a brief period.

“Product strategies for the Taiwan market continue to be adjusted and the membership system has been upgraded to provide further customised services.

“Ever Rich Duty Free Shop is also actively developing multiple online platforms including podcasts and diverse YouTube chan-

Ever Rich Duty Free Shop has a comprehensive Environmental, Social and Governance strategy.

Digital diversification

In addition to launching online shopping, home delivery services and multiple online marketing channels, Ever Rich Duty Free ventured into the non-fungible token (NFT) market for the first time this year with the release of a digital artwork on trading platform OpenSea. The catalyst for the launch was the exclusive Year of the Tiger Chinese imperial jade seal kaoliang liquor item on OpenSea, which claims to be the world’s largest NFT marketplace.

“The NFT market continues to gain momentum. After launching experimental NFT products on OpenSea in February 2022, Ever Rich launched a new series of NFT products in April and announced the creation of its own NFT platform. The aim of these initiatives is to provide a different metaverse shopping experience to customers.

“I addition to launching the God Metaverse Series, the retailer has introduced 100 sets of blind box products (packaging which keeps the content inside hidden) to integrate online and offline.”

“The official release platform will eventually combine Environmental, Social and Governance (ESG) and charitable initiatives, along with other rich and diverse themes, while continuing to explore various cross-boundary possibilities.”

Philanthropy has always been an important core value of Ever Rich Duty Free Shop. Between March and April, the retailer has worked with local Taiwanese green brands (eco-friendly brands), had its own pop-up shop, and sold Taiwanese green products online.

“The pop-up shop does not have a printed illustration board,” the Spokesperson explains: “Members of the public can scan a QR code on site and access information about the shop, green products available and Ever Rich’s ESG vision.

“This year, Ever Rich is continuing to place a strong emphasis on ESG under the motto ‘It is our Duty to Travel Green.’ It also has specific goals relating to energy saving and plastic and carbon reduction.”

nels to communicate with Taiwanese customers. It hopes to be innovative and make breakthroughs when it comes to digital development.”

Encouraging employees and offering them opportunities to learn new professions and digital skills has been a prime objective during the pandemic. “No staff members have been relieved of their duties over the past two years. We have even opened new temporary domestic shops in this period to penetrate the Taiwanese market.”

Ever Rich Duty Free Shop has remained pro-active during the Covid19 pandemic by continuing to offer services at Taiwanese airports

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE

15

Lotte Duty Free Update

Building 'a much brighter future' is the objective for Lotte Duty Free

LOTTE VOWS to ‘bring back the joy’ of duty free shopping As the Korean travel retail industry continues to recover from Covid-19, Lotte Duty Free has been boosted by the scrapping of the US$5,000 purchasing limit for outbound Korean nationals, along with the easing of quarantine restrictions. The re-opening of the borders in Australia was another positive for Lotte

by HIBAH NOOR

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T

his March was certainly significant for Korean travel retailers such as Lotte Duty Free and the Korean duty free and travel retail industry.

In December 2021, the Korean government revealed it would introduce a series of new policies to boost the country’s tourism industry in the wake of the coronavirus (Covid-19).

One of these policies was the abolition of the KRW6,127 (US$5,000) purchasing limit for outbound Korean nationals at Korean duty free stores. This was scheduled to take place in March 2022.

Lo and behold, the purchasing limit was removed by the government on 18 March, but the separate US$600 inbound purchase limit for Korean nationals shopping in Korean arrivals duty free stores remained intact.

Easing of quarantine restrictions

Things got even better for the Korean duty free and travel industry three days later (21 March) when the government permitted fully vaccinated overseas visitors to enter the country without having to quarantine for seven days.

A Lotte Duty Free Spokesperson, who described both developments as ‘good tidings’ for the industry, tells Global Travel Retail Magazine: “The abolition of the duty free purchase limit will benefit Korean travellers as they can now buy high-priced luxury fashion products and jewellery items etc. at Korean duty free shops.

“This will also boost domestic consumption and help Korean travel retailers build up their competitiveness when overseas travel returns to normal.”

Lotte Duty Free has created a new visual identity in its refurbished Korean downtown duty free stores

While Lotte welcomes the scrapping of the US$5,000 departures allowance for Korean nationals, the retailer would be further satisfied if the previously mentioned $600 duty free allowance (for outbound Korean tourists) was abolished as well.

“Further relaxation of regulations is needed for the Korean travel industry to grow,” the Spokesperson emphasises.

On the relaxation of quarantine restrictions for overseas visitors, the Spokesperson is adamant this will help the industry rebound and mean it must no longer rely on daigou traders (Chinese shuttle traders).

“Free Independent Travellers will be our main target consumer group. Lotte has been proactively preparing to welcome them over the past two years and is now ready,” the Spokesperson added.

At present though, the Korean travel retail and duty free market continues to rely on daigou traders. The Spokesperson says: “The whole market is relying entirely on daigous since the market situation is not yet back to pre-Covid levels. As Free Independent Travellers start to visit, dependency on daigous will gradually reduce.”

Further afield in Australia, where Lotte runs airport stores in Brisbane, Darwin and Wellington and a downtown outlet in Melbourne, the re-opening of the borders on 21 February was another major positive.

“We are very excited that we can finally welcome back international tourists to airport stores in Australia,” the Spokesperson remarks: “The teams in our stores waited two years for this to happen.

An exterior shot of Lotte Duty Free's main store in downtown Seoul

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE

17

Lotte Duty Free Update

“

Our stores have been well maintained and are ready to excite the travelling passenger with new installations, brand launches and offers to bring back the joy of duty free shopping.”

LOTTE DUTY FREE SPOKESPERSON

“What is most exciting is that we have been able to finally welcome back many of our team members who were unable to work [due to the pandemic] but remained loyal to Lotte Duty Free.”

Business re-starts in Australia

Amid the anticipated gradual return of international tourists and business travellers to Australia, Lotte will continue working with airport partners to ensure passengers are exposed to its offer through airport marketing channels and terminals.

“Our stores have been well maintained and are ready to excite the travelling passenger with new installations, brand launches and offers to bring back the joy of duty free shopping.

“We all feel very relieved that the worst is behind us and that we can build for a much brighter future.”

As consumers become increasingly tech-savvy and particularly interested in the digital experiences provided by different

companies, Lotte Duty Free is striving to capitalise. The Spokesperson explains: “Lotte Duty Free’s online store offers a virtual sunglass fitting service using augmented reality. It also presents a virtual experience space for Korean beauty brand Sulwhasoo’s flagship store and provides many other customer-oriented digital services.

“At the industry’s first fully-digitalized Smart Store shop located in our main Seoul store, customers can obtain product information through augmented reality and artificial intelligence technologies and complete their purchases via mobile.”

Diversification in terms of customer touchpoints is not limited to more offline sites. It also includes virtual channels such as social media, live commerce and metaverse (a network of 3D virtual worlds focused on social connection).

Last March, Lotte Duty Free also became the first travel retailer to partner with a home shopping platform to sell products. The Korean superpower partnered with Lotte Homeshopping’s mobile television channel to sell to Korean customers who could purchase without leaving the country.

“This was below our expectation, but still meaningful in that we were able to collaborate with a subsidiary company,” the Spokesperson emphasised. “We will continue partnering with various retail channels to lure domestic and international consumers.”

In the meantime, Lotte Duty Free recently refurbished its Korean downtown duty free stores and created a new visual identity. “The new visual identity celebrates the return of our customers and welcomes them.

“On top of that, we are hosting our first big promotion since the onset of the pandemic targeting domestic consumers.

“Since 18 March, we have been offering customers up to KRW960,000/US$783 worth of Lotte Duty Free Pay rewards if they spend over US$5,000 in our downtown stores.”

The duty free and travel retail industry's first digitalised Smart Store shop is located in Lotte's main downtown store

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NAA Retailing Corporation

Japanese sake is a prominent part of the NAA Retailing Corporation offer at Tokyo Narita Airport

Tokyo Olympics ‘A PERIOD OF TREMENDOUS LEARNING’ FOR NAA RETAILING

The rescheduled 2020 Tokyo Olympics allowed NAA Retailing Corporation to recognize future challenges through servicing large volumes of athletes and keep them safe at the same time. We discover how the Japanese retailer has left no stone unturned in trying to emerge stronger from the pandemic

T

by HIBAH NOOR

he rescheduled 2020 Tokyo Olympic and Paralympic Games which took place in Japan last year (July 23 to August 8 and August 24 to September 5) would normally have been an opportunity for NAA Retailing Corporation to boost profits and demonstrate its retailing prowess to high volumes of foreign visitors.

On this occasion, the focus was different and more concentrated on safety due to the devastating impact of Covid-19.

Founded with the privatization of Narita International Airport Corporation in 2004, it began operating duty free shops under the Fa-So-La branding.

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NAA Retailing Corporation operates more than 89 shops in the areas before and after outbound passport control, as well as the international arrivals area in the passenger terminals at Narita International Airport. It also operates two stores in airport-related facilities at Narita and one store in the international terminal at Haneda Airport.

Expanded trading operations

“Not being able to welcome foreign visitors during the Tokyo Olympics was a huge blow to our profits and also to staff motivation,” an NAA Retailing Spokesman tells Global Travel Retail Magazine. “That said, we did manage to expand our trading operations at almost all stores to accommodate athletes and did our best to make their stay in Japan as enjoyable as possible.”

In a pre-Covid-19 world, NAA Retailing would no doubt have focused on special Olympic promotions and collaborated with suppliers to fine-tune assortments in the build-up. In this instance, preparations revolved around preventing infection.

“All stores which resumed trading during the Olympic periods took precautions with the use of acrylic sheets to guard against airborne droplets so customers could enjoy shopping with peace of mind.”

NAA Retailing Corporation

NAA Retailing Corporation sales during FY2021 are expected to be slightly above FY2020

“

Not being able to welcome foreign visitors during the Tokyo Olympics was a huge blow to our profits and also to staff motivation.”

SPOKESPERSON, NAA RETAILING CORPORATION

On reflection, the Olympics were a period of tremendous learning for NAA Retailing, from the preparation to welcoming customers. The Spokesperson explains: “Faced with the difficulty of balancing infection control while servicing large numbers of customers, we were able to recognize the challenges that lay ahead in a post-Covid environment.”

Aside from the Olympic periods, NAA Retailing, like most other industry stakeholders, has been forced to think out of the box to ensure it emerges stronger from the pandemic. The number of international passengers passing through Tokyo Narita Airport was 6% of FY2019 figures as of February 2022 (Year-todate based on NAA Retailing’s new fiscal year beginning in April), so ensuring it is ready to capitalize once traffic improves remains a prime objective.

“Sales have fallen sharply,” the Spokesperson acknowledges, “but sales during FY2021 are expected to be slightly above the figure of FY2020.”

Maximizing revenue

Despite the sharp decline in passenger numbers, NAA Retailing Corporation has maximized revenue by ‘vigorously’ analyzing flights and passenger traffic. “We maintained flexibility in adapt-

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Safety was the main focus for NAA Retailing Corporation during the Tokyo Olympic periods

NAA Retailing Corporation

An interior shot of the reopened Fa-So-La Tax Free Akihabara outlet in Tokyo Narita International Airport Terminal 2

ing store trading hours to the periods of heavy passenger traffic to ensure an efficient business framework.”

Renewing its facilities with a strong focus on digital has also been a priority. Improvements centered on operations that are fundamental to retailing. These included new payment terminals to increase the efficiency of cash register operations and RFID technology to enable more accurate inventory management.

NAA Retailing Corporation also made the most of the pause period, to conduct some key commercial projects. The Spokesperson recalls: “We refurbished and reopened the Fa-So-La Tax Free Akihabara outlet in Terminal 2 as our new flagship store.

“Currently, we are preparing for the resumption of passenger traffic with an attractive shop offering encompassing a wide selection of Japanese souvenirs.”

On the assistance provided by airport landlord NAA International Airport Corporation during the pandemic, the Spokesperson adds: “NAA International Airport Corporation is helping us reduce the cost of maintaining stores by reducing or exempting us from paying rent on shop sites.”

Looking ahead to 2022, NAA Retailing is expecting a steady recovery in passenger numbers from the second half of the year

NAA Retailing Corporation has refurbished and reopened the Fa-So-La Tax Free Akihabara outlet in Tokyo Narita Airport Terminal 2 as its new flagship store

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“

We maintained flexibility in adapting store trading hours to the periods of heavy passenger traffic to ensure an efficient business framework.”

SPOKESPERSON, NAA RETAILING CORPORATION

as the impact of Covid-19 subsides and border restrictions are eased. It is also anticipating changes in purchasing trends.

“As demand recovers, we will continue analyzing sales data as required to identify new purchasing trends.”

From a product category perspective, the Spokesperson is unsure which segments will dominate sales in this new era. “It highly depends on which flights (destinations) recover more and which nationalities travel more.

“The situation might be fast-changing during the recovery period, so we need to be ready to demonstrate our flexibility.”

Creamy pleasure in a pouch bag made of paper!

Pure goodness!

Lagardère Travel Retail Update

Speaking candidly to Global Travel Retail Magazine, Dag Rasmussen, Chairman and Chief Executive Officer, Lagardère Travel Retail says: “I am extremely proud of what our teams have done. Profitability increased, but the result was still negative, which is why I said [at the time the results were published] that 2021 was not our best year but was certainly a great one.”

A shot of

adrenaline Amid the challenges caused by the Covid-19 pandemic, Lagardère Travel Retail has steadied the ship by managing everything as precisely as possible.

This provided the perfect platform to secure key new Latin American contracts in places such as Peru and Chile

by HIBAH NOOR

Dag Rasmussen, Chairman and Chief Executive Officer, Lagardère Travel Retail

26 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

Lagardère Travel Retail secured a long-term concession in 2021 to open three Aelia Duty Free stores at Jorge-Chávez international airport in Lima, Peru. The shops, which began trading in January, cover 3,000 square meters and are spread across arrivals and departures

L

agardère Travel Retail revenue may have increased by 33.1% on a reported basis (+34.3% like-for-like) to €2,290 million (US$2.4 billion) in full-year 2021, but the improved performance may not have been possible if it wasn’t for surging Q4 reported sales of 97.1% (+94.1% like-for-like) to €749 million (US$829.4 million), major cost control efforts and the optimisation of opening hours in its reopened shops.

According to Lagardère Group’s full-year 2021 results released in February, the travel retail division (duty free and fashion, travel essentials and food service), which still posted a -46.1% revenue decrease in full-year 2021 versus 2019 prepandemic levels, saved €1.698 million (US$1.9 billion) in costs compared to 2019.

The decrease in the cost base included a €563 million (US$623.3 million) reduction in fixed costs – of which €381 million (US$421.8 million) linked to fixed lease concession payments. Concession terms were renegotiated, point of sale operations were adapted in line with air traffic trends, and nonessential costs were slashed.

“

Contents

The pandemic was more like a shot of adrenaline, and we really wanted to make the most of this crisis to come back even stronger.”

DAG RASMUSSEN, CHAIRMAN AND CHIEF EXECUTIVE OFFICER, LAGARDÈRE TRAVEL RETAIL

Speaking candidly to Global Travel Retail Magazine, Dag Rasmussen, Chairman and Chief Executive Officer, Lagardère Travel Retail says: “I am extremely proud of what our teams have done.

Profitability increased, but the result was still negative, which is why I said [at the time the results were published] that 2021 was not our best year but was certainly a great one.”

Rasmussen also pinpointed the company’s ability to keep flow-through under 12-13% (the actual flow-through figure was 11.8% in full-year 2021) as ‘an extremely good result.’

Flow-through is calculated by dividing the change in recurring operating profit of fully consolidated companies (recurring EBIT) by the change in revenue. This indicator is used by the Group in the context of the Covid-19 pandemic to measure the impact of the revenue decline compared with 2019 on recurring EBIT. After the initial shock following the onset of the pandemic, focus turned to rebounding stronger. “The pandemic was more like a shot of adrenaline, and we really wanted to make the most of this crisis to come back even stronger.

Precise management

“We managed everything precisely on a store-by-store and hourby-hour basis, optimizing everything, reviewing processes, and prolonging our contracts.

“I have always believed in the strong future of this industry. It is the ultimate brick and mortar retail experience. We are lucky enough to not have to ask people to spend their Friday or Saturday afternoons in our stores. They are here already.

“Our challenge is to bring the greatest store to them, the best digital experience, the best product offer and assortment and best service.”

Coming to terms with falling business again following the emergence of new Covid-19 variants was a challenge. The emergence of the Omicron variant last year, for example, came at a time when the retailer was beginning to recover in places such as the US and China.

“We always knew the industry was great and that we would survive,” Rasmussen remarks. “Right from the start, we were confident that things would return to 2019 figures in 2023. With our new business development and acquisitions globally, we will be able to reach those 2019 numbers.”

Making inroads in Latin America

The openings in Peru were soon followed by the unveiling of five foodservice outlets at Arturo-Merino Benítez airport in Santiago de Chile, in partnership with Chilean company Global Group Corporation.

Since March 1, 2022, passengers passing through the new international terminal at Santiago Airport have been able to dine in the La Maestranza, La Picá, Uncle Fletch, Lulupok and Yogen Früz restaurant and food concepts.

The announcement in March also revealed that three additional concepts were soon be implemented, the exact timings depending on traffic recovery. These are the Krossbar beer and pizza concept, Kaki (Asia woks) and Beercode (beer concept).

Looking ahead, Lagardère Travel Retail is hoping to be operating 20 restaurants at the airport by 2023.

On the expansion of the retailer into Latin America, Rasmussen enthuses. “Today in Latin America, we have duty free in Lima and foodservice operations in Santiago. There is room for more exciting growth opportunities in the region.

“It is a continent that is very new to us, but in both countries, we entered the market in such a way which maximized our chances of being highly successful.

“We have also entered into a pioneering profit-sharing business model with our partners in Peru, and so we are sharing risks and rewards.”

Another important continent for Lagardère Travel Retail is Africa. The French travel retailer first entered Africa in Dakar, Senegal at Blaise Diagne International Airport, which opened in December 2017. This was after securing the 10-year contract to run a 1,000 square meter duty free store and 100 square meter Relay outlet.

Rasmussen comments: “Africa has enormous potential. We entered through Dakar, with the idea of having great stores. We want to offer travelers on the continent the best level of travel retail experience, and deliver the same operational excellence we deliver elsewhere.

“We decided that if we entered Africa, we would do so with retail excellence. We have a significant foot print in Africa with stores in Senegal, Gabon, Mauritania, Gambia, Tanzania and Kenya. We continue to grow and are looking for new opportunities as well.” www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE

27

Lagardère Travel Retail Update

At the time of writing in early March, the operations in Mauritania and Gambia were just a month old, so further expansion on the continent was not the main priority.

The company’s global international coverage remains important as it tries to recover from Covid-19, with China at the forefront. “We continue to have this holistic worldwide strategy focusing on China where we have this great partnership with JD.com and started working with the China National Service Corporation (CNSC).”

The partnership between Chinese e-commerce player JD.com and Lagardère was first established last year when JD.com and two Chinese public investment firms secured a minority stake in Lagardère Travel Retail North Asia.

North Asian acceleration

From a Lagardère Travel Retail perspective, the strategic partnership helps accelerate its growth into North Asia (Mainland China, Hong Kong, and Japan) through digital and omnichannel retailing.

In February this year, Lagardère Travel Retail and JD.com strengthened their alliance by partnering with CNSC. The purpose of the co-operation with CNSC is to build a more convenient and reliable duty free shopping experience for customers, according to a JD.com statement seen by Global Travel Retail Magazine.

Reflecting on the evolution of the operator’s Chinese business, Rasmussen is satisfied with how things have progressed since beginning to operate in the country in 2007.

Last year, Lagardère Travel Retail also made a significant statement as far as its Chinese operations are concerned with the opening of the second largest downtown duty free store in Sanya on Hainan island.

Opened in partnership with Hainan Tourism Investment Development, the 30,000 square meter complex is spread over five floors and offers product categories including perfumes and cosmetics, fashion, accessories, watches, jewellery, wine, and spirits.

China aside, things are developing well in the US and Europe.

“The US is a very strong strategic focus,” Rasmussen explains.

“It is one of our largest businesses, and we are developing very nicely with travel essentials and food.

“In Europe, we will continue to grow. Our strategy is based on strong local empowerment. That is how we manage all these developments. If everything was centrally run, we would be unable to do everything simultaneously. Our strategy is operational excellency.”

He adds: “In the past 10 years up to 2019, we registered sales growth of 10% per year and profitability of 18%. It would be great if we can continue like that.”

Corporate Social Responsibility is another key part of the company’s strategy. In partnership with Geneva Airport, Lagardère Travel Retail opened the world’s first eco-responsible store in the Aelia Duty Free network in March.

The concept has been designed to embed lofty standards of sustainability, from store materials and furnishings up to the product offering, according to Lagardère. It also features a popup developed in partnership with the United Nations’ Perception Change Project to raise passengers’ awareness of Sustainable Development Goals.

The outlet is located in the airport’s new East Wing, developed to meet the highest standards of energy performance using advanced technologies.

Rasmussen says: “Corporate Social Responsibility has been within our strategy for a while. It is not just the environmental aspect. We have developed a program called PEPS (Planet, Ethics, People and Social). We are really committed to having a positive impact on the environment, but also on the communities we serve.”

28 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

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PEOPLE NEWS

Rob Marriott to head ARI Middle East Aer Rianta International (ARI) has announced the appointment of Rob Marriott as Chief Executive of ARI Middle East (ARIME).

Currently CEO at Muscat Duty Free (MDF), Marriott will start his new position once a replacement is appointed and upon the departure of Richard Gray, who announced news of his retirement in late 2021.

With over 30 years’ retail experience, Marriott has a strong record in developing and delivering long-term strategy, driving global retail operational excellence, and leading teams to success, ARI said. This includes leadership roles at Morrisons and Safeway in the UK, before joining ARI in 2019 as CEO at Muscat Duty Free.

“Since joining the business, Marriott has firmly embraced ARI’s ethos of collaboration, agility and determination to create a bespoke sense of place for its customers, brands and partners,” said the company. “Marriott is renowned for his customer-centric approach, adopting a policy of choice, superior quality, and brilliance when it comes to the travel retail experience and building successful partnerships.”

Speaking of the appointment, ARI CEO Ray Hernan said: “We warmly welcome Rob Marriott into his new role as Chief Executive of ARIME following his successful tenure leading the team in Oman. His in-depth knowledge of the business and strong sense of leadership makes him the ideal choice.

“The Middle East is a core focus of the ARI business, and Rob’s expertise in building and nurturing successful partnerships and razor-sharp focus on retail standards will help ARIME continue to deliver world-class propositions.”

Marriott commented: “I am honored to take on this prestigious role and look forward to immersing myself with the teams locally. At ARI we pride ourselves on creating the best customer experience possible and with my new appointment, I hope to continue to build an unrivaled offering. I am humbled to take over the position from Richard and hope to emulate his renowned high standards of retail excellence.”

Rob Marriott is named Chief Executive of ARI Middle East

David Rodiek named new Head of Brown-Forman Global Travel Retail Brown-Forman Corporation has announced the appointment of David Rodiek as Vice President, Managing Director, Global Travel Retail (GTR), effective June 1, 2022.

Rodiek replaces Aude Bourdier who has been named Vice President, Managing Director, Brown-Forman France/BeLux. Thomas Hinrichs, Senior Vice President, President, Emerging International, Brown-Forman, said: “I would like to thank Aude who successfully led the Brown-Forman GTR division through the low points of the pandemic and the more uplifting recovery that is happening now. I feel optimistic about the opportunity ahead and the path that she and her team laid out. Aude now moves on to an exciting new opportunity leading France and BeLux, key markets for Brown-Forman.”

He continued: “The leadership change from Aude to David is done in the spirit of continuity with our strategy and plans for GTR, and it reinforces the commitment that we are making to the GTR channel and our customers for the long term. We are confident that we have the key strategies and initiatives in place to fully fuel that growth with David Rodiek at the helm.”

Rodiek joined Brown-Forman in 2005 and most recently served as Vice President, Managing Director, Developing Europe, where he led strategies to grow in the company’s 30 European distributor markets. Rodiek gained leadership experience in commercial and marketing roles, including General Manager Southern/Eastern Europe; General

30 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

Manager South Africa; Area Director Nordic/Baltics & Nordic Travel Retail; and Brand Director Finlandia Vodka CEE, Russia, CIS & MEA. Prior to joining Brown-Forman, Rodiek worked in the spirits and consumer packaged goods industry at Unilever, Wella, Mars and Bacardi.

David Rodiek is named Vice President, Managing Director, GTR, BrownForman, effective June

Aude Bourdier becomes Vice President, Managing Director, Brown-Forman France/BeLux

DFS Group & WHO

DFS launches vaccine campaign

D

FS Group has joined forces with the World Health Organization (WHO) Foundation to support Go Give One, a global campaign to provide access to COVID-19 vaccines in lower-income countries.

In addition to a donation, DFS will use its extensive store network to raise awareness about vaccine inequity as well as provide a mechanism for customers and staff to donate to the campaign.

Created by the WHO Foundation, the Go Give One campaign calls on everyone, everywhere to play their part in helping to vaccinate the world against COVID-19, asking individuals to donate US$5 for a single vaccine. The money raised goes to an international financing mechanism – Gavi COVAX Advanced Market Commitment (AMC) – which buys COVID19 vaccines for the world, prioritizing countries that cannot afford them.

DFS will make an initial donation of

US$100,000 towards the campaign. It will also match donations up to a further US$100,000 received in its participating T Galleria locations in Hong Kong, Macau, Sydney, Cairns and Auckland, with further stores planned for rollout later in the year.

Benjamin Vuchot, DFS Group Chairman and CEO said: “COVID-19 is undoubtedly the most serious threat in the history of the travel industry. Ongoing border closures, complex quarantine requirements and social distancing have hampered peoples’ ability and enjoyment to travel as they once did. To beat this pandemic, we need to make vaccines affordable and accessible for all. By supporting Go Give One, our staff and our customers are able to make a small contribution that makes a big difference.”

WHO Foundation CEO Anil Soni stated: “Vaccine inequity is morally unjust and economically and epidemiologically

THE TRAVEL RETAILER IS ENCOURAGING DONATIONS TO FIGHT VACCINATION INEQUITY self-defeating. Unless we support lowerincome countries in accessing vaccines, we will see more waves of COVID-19, and potentially more variants. We are grateful for the support of DFS in leveraging its global store network so that its customers can learn more about Go Give One and donate directly to the campaign.”

The WHO Foundation estimates that around 69% of all distributed vaccines around the world are concentrated in 10 countries. Many people around the world have yet to receive their first shot due to the disparity in access to vaccines.

Vuchot added: “Go Give One harnesses the power of companies like DFS to engage employees, customers, partners and networks in addressing global vaccine equity. We encourage our own partners, suppliers and friends to also join Go Give One in helping countries who are denied access to vaccines due to economic disadvantage.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE

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FOREO

FOREO seeks creative solutions to remain at the forefront of digital expansion

FAQ Hyundai Counter; over the last 18 months, the beauty-tech brand has established 16 FOREO counters and 11 FAQ counters across Hainan

Gary Leong at FOREO discusses its online exploration via partners such as Sunrise Duty Free and Korean e-commerce site Naver

by LAURA SHIRK

Sourcing internal talent

Gary Leong, Global Travel Retail Director at FOREO

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O

ver the last 18 months, FOREO has relied on its inhouse team made up of coordinators and designers to quickly and effectively establish a presence in Hainan.

The result: the building of 16 FOREO counters and 11 FAQ counters across the province. As a company that embraces digital exploration and a steep learning curve, it’s likely the team will find 2022 to be as challenging (and rewarding).

As a longtime partner of Sunrise Duty Free (SDF), FOREO recently launched via SDF Members’ App and took part in its monthly livestream. Re-enforcing the beauty-tech brand’s travel retail presence in China, the online event featured the debut of Bella Ding, Product Training Manager at FOREO, as livestream host and multiple hero products from its line. Keeping in mind variables such as time of day, FOREO has the opportunity to reach 100K+ app users via this channel.

Gary Leong, Global Travel Retail Director at FOREO, sheds light on the company’s preference to cultivate its “own talent” and allow employees to serve as brand ambassadors. Having extensive knowledge of the product line, numerous functions and key benefits, he says as opposed to KOLs, employees are better suited to act as representatives, facilitate online engagement, convey the brand message and educate the public. Within the office pool across departments, employees have the ability to volunteer to join a key anchor and co-host a livestream segment.

This advanced approach leads to the flexible training of a rotating group of people and the potential for unexpected opportunity.

According to Leong, Ding has also been featured via livestream

by FOREO’s China retailer Global Duty Free Plaza.

Benefits of an online flagship store

Following the same route as FOREO, FAQ launched a smart store exclusively via Korean e-commerce site Naver at the end of March. Although FAQ would have preferred to open a physical store in Korea’s domestic market, the sister brand of FOREO recognizes the majority of Koreans continue to work from home at least on a partial basis. Speaking about the benefits of developing its first official flagship store online, Leong notes it allows the company to deliver a personalized experience and monitor the continued recovery of travel and tourism.

“Our strategy is to start by developing FAQ’s online presence and then progressively roll out offline in the local market.

Having a FAQ flagship store on Naver gives users the chance to experience a dedicated professional anti-aging treatment from the comfort of their own home. FAQ devices provide an aesthetic and clinical level of quality. Our goal is to spread this message across to Koreans,” says Leong.

Earlier this year, FOREO was invited by Naver to upgrade to brand store level. This invitation requires the achieving of a certain amount of traffic and online promotional success via the site. Following the change in status, FOREO has benefitted from an increased benchmark – now that it’s competing with many big names.

Returning to its social media model, Leong explains it’s equally important that both brands take advantage of Naver’s livestreaming opportunities as the site offers its own pool of traffic. At the beginning of May, FOREO conducted its first livestream as a Naver Brand Store and highlighted its sister brand FAQ during the event.

Dianping x digital exploration

Described as disruptive by nature, FOREO is constantly seeking ways to expand its digital footprint. Offering further insight into its willingness to learn and explore, Leong refers to a two-week period at the end of last December when FOREO experimented with advertising via the Chinese mobile-lifestyle app Dianping.

Developing its first official flagship store online, FAQ gives users the chance to experience a dedicated professional anti-aging treatment at home

During this period, the brand targeted those in travel mode (predeparture) and achieved 2.3M+ impressions. At the conclusion of the trial, FOREO was left examining ways to capture the attention of travelers on the ground.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE

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TravelMate

TOURISM

TECH Travel guides are easy to come by, but Stratos Baschenis came to realize that finding comprehensive, interesting, easy and knowledgeable content in one’s own language at an affordable price was another matter altogether

In the airport in Bergamo (near Milan) flights go to Athens, Amsterdam, Berlin, Rome, Madrid, Prague and more, thus the products sell in departures for these locations

T

ravelMate owner Stratos Baschenis launched the app two years ago with the goal of providing a richer travel experience offered in the user’s own language. TravelMate acts not only as a tour guide but also as a concierge, providing information on services and virtually anything you might need when visiting a city — something you can’t get from a guidebook. And all this at an affordable price point.

“We don’t want to be a traditional audio guide as the one you can find in a museum but something different like a touristic companion who tells you the most important things of the most important venues of the city visited,” says Baschenis.

More than 200,000 people have now used the company’s apps, with more than 3 million files listened to. The products are performing especially well given that the company launched just as the pandemic was beginning.

“Given that our products were all brand new and launched in the COVID period, we’ve had strong sales. We have been performing well in airport shops, in travel agencies, money change companies, with tour operators, and with ticketing companies that combine our products in the ticket entrance —for example in museums, parks, leisure venues,” he says.

34 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

by WENDY MORLEY

Current cities available: Amsterdam, Assisi, Athens, Barcelona, Beijing, Bergamo, Berlin, Cinque Terre, Dubai, Florence, Hong Kong, Lecce, London, Madrid, Miami, Milan, Moscow, Naples, New York, Palermo, Paris, Pisa, Prague, Rome, Saint Petersburg, Santorini, Singapore, Tokyo, Trento, Turin, Venice, Verona and Washington DC Languages available: Italian, American-English, Spanish, French, German, Mandarin and Russian

Why TravelMate

Baschenis says while you can find audiocontent within the Google Play store and Apple store, it’s mainly in English. “We have invested in translating and speaking with professionals in seven languages.

Then we decided to sell our content not only via apps on the App stores but also to allow people to find our audiocard and audiopack in physical shops.”

The audiocard is simply a card with a hidden pin code that allows the user to download the app and enable the content of the city he will want to visit. The audiopack is a box that contains earphones for Android smartphones, an adapter for Apple smartphone plus the audiocard.

Baschenis feels the TravelMate audiopack can capture some earphone sales, as it offers not only the earphones but also a digital companion for the city the traveler will visit. While TravelMate is a tech product that competes with earphones,

however, it’s also a hybrid in that it could compete with the Lonely Planet book. “In our airports we have a specific place at the entrance of the store,” he says.

Easy integration

Because of the company’s innate tech abilities, it has developed API integration to allow partners to integrate the sale of its digital content through their booking engine. “In this case we don’t ask for money to buy any PIN code in advance, but we work with a win-win method,” Baschenis states. “For example we are integrated in Booking.com, so travelers can buy our TravelMate audiocontent in the experience sector. In this case the user pays Booking.com directly, and Booking pays us and keeps its commission.

We could certainly replicate the same business model with airlines, hotels, air booking agencies and more.”

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Beam Suntory

Bounce

back

Beam Suntory introduced the uniquely global blend, House of Suntory’s Ao, in 2020

After an all-but-silent 2020 in the channel, Beam Suntory’s Global Travel Retail Marketing Director Manuel González and his team brought exclusives and activations back in 2021; that will continue at an even stronger pace in 2022 and beyond

by WENDY MORLEY

Beam Suntory Global Travel Retail Marketing Director Manuel González says after some tumultuous times the world is shifting into a ‘new normal’

A

s with virtually all companies worldwide who operate in travel retail, Beam Suntory went “through some tumultuous times,” says Manuel González, Beam Suntory Global Travel Retail Marketing Director. “Fortunately, in the past year we have seen a welcome bounce back, with fewer restrictions and an increase in the overall number of international travellers across all regions, with the world shifting into this ‘new normal,’” he says.

He adds that historically the Americas has been a key focus area, especially for American Whiskey. This category is well represented within the company’s portfolio, as Beam Suntory owns such brands as Jim Beam and Maker’s Mark in addition to other premium whiskeys such as Booker’s and Basil Hayden’s.

Traffic in the region is returning, and when asked about how the pandemic and the recovery might affect the company’s plans, González says, “Our focus remains to support our customers and bring our business back to pre-pandemic levels of success.”

The company had several initiatives in the works over the past year in preparation for this day, including bringing the ultra-premium Jim Beam Lineage to market. “We also introduced category solutions to ease consumer navigation through our portfolio. An example is the recent JBBDCo units recently installed in Chicago Airport.”

González reports that the company is sharing its attention equally on popular destinations around the world, including Asia where, he says: “A tailored strategic approach is required to successfully target key demographics in the likes of China.”

Premium channel

Travel retail has recognized the value of premiumization, and that focus steadfastly remains. “We will continue to drive our 36 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

Beam Suntory

In line with the travel retail trend toward premiumization, limited edition exclusive Bowmore Design by Aston Martin has proved to be very popular in the channel

marketing initiative was virtually nonexistent in 2020; González says the company lost the ability to bring the brands to life and provide an immersive experience at this time.

“Fortunately, in 2021, we saw the return of these initiatives, from launching a Sipsmith Wimbledon activation in London, to global activity for Bowmore and Maker’s Mark in Chicago and New York. With more passengers returning to airports, we expect and look forward to partaking in even more airport activations in the near future,” he says.

2021 brought activations back to airports, such as this one in Changi. Activations in the Americas include Bowmore and Maker’s Mark in New York and Chicago

premiumization strategy by offering a combination of exclusive products, limited editions and lucrative activations for our shoppers,” says González. “We will also concentrate our efforts on expanding our brand presence through unique premium shopper experiences and brand visibility.”

In the Americas, Jim Beam and Maker’s Mark are the most popular brands in the company’s portfolio, but González says that in line with the company’s global portfolio approach, it is dedicated to driving other categories forward. “We introduced Ao to this market towards the end of 2020, which is of course a supreme liquid developed by our well-known House of Suntory brand. Working alongside our colleagues in the domestic markets we will also address booming categories, such as gin, through our different brands, like Roku and Sipsmith.”

Travel exclusives

González says Beam Suntory will indeed be offering exclusive items to travelers. “Providing exclusive items to global travel retail is a big focus for us as we continue to strive to address our shopper needs to purchase extraordinary products while travelling,” he says. “Some recent examples of our limitededition exclusives include the launch of Bowmore Design by Aston Martin, which has proven extremely popular with our customers. Innovations and line extensions are a key driver on our portfolio strategy, and something we will continue working on in the future.”

Airport activations

Activations are an essential part of airport marketing, which in turn helps drive sales of new products globally. This type of

38 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

A better tomorrow

While borders are opening and air tickets are selling, 2019 numbers remain a distant vision. “Based on current trends and assuming a certain level of volatility, we are confident 2024 will be the time where our industry will return to its former glory,” says González. “Of course, with the global scope of our channel, this will differ across regions, and we need to remain cautious of any further developments in the ongoing pandemic that might impact the travel industry.”

While the pandemic may not have been brought about by the world’s unsustainable practices, somehow it brought their reality to the surface. Sustainability has become a hugely important issue for humans around the globe, including not only consumers but also those involved in the businesses that serve them. Beam Suntory is no exception. “A major pillar for our business is our commitment to making sustainability a real long-term focus for ourselves and our partners. Having announced the Proof Positive initiative last year, which involved pledging to invest US$1 billion as part of a new sustainability initiative, we are fully dedicated to our longterm 2030 environmental targets as a business. From employee impact groups driving change, to our leadership team being accountable for their own individual sustainability goals, we are doing everything we can on both a micro and macro level to turn these goals into a reality,” says González.

Confectionery Report

Lindt & Sprüngli believes the most important communication channel is its point of sale – enabling it to bring its brand to life. The company is set to launch core promotions tailored to the different airports in APAC with a strong focus on core products

CONFECTIONERY SUPPLIERS GET A TASTE FOR DIGITAL After a tough few years, three major confectionery groups are working on fresh and innovative ways to engage and convert shoppers using the latest platforms and digital tools

Peter Zehnder, Head of Lindt & Sprüngli Global Duty-Free division

40 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

I

by MARY JANE PITTILLA

n challenging times, leading confectionery suppliers quizzed

by Global Travel Retail Magazine have agreed that business is on track for a strong comeback in Asia Pacific.

All three confectionery players are optimistic about business in the region when travel fully opens up again. Peter Zehnder, Head of Lindt & Sprüngli Global Duty-Free division, says: “We are convinced that APAC will see a strong recovery after being affected so heavily these past few months – people are looking forward to meeting their family and friends, reconnecting with business partners and discovering new places again.

We believe that we will see the impact of increasing options of affordable travel coupled with the rising number of young and

Nestlé ITR’s KitKat-branded red bus will be appearing in the revamped Cocoa Trees outlets at Changi Airport, including digital communication to highlight the new products

affluent consumers that are looking for premium and unique high-quality brands.”

For Marcus Hudson, Sales Director at Mars Wrigley ITR, the recovery that the company is seeing in other regions in the world has been above expectations, and he expects more of the same in Asia. “We see people traveling, travelers buying, and buying more when they do, and we expect to see the same in Asia Pacific.”

And Stewart Dryburgh, General Manager of Nestlé, agrees: “We are confident that once consumers can travel, they will be keen to purchase and we will be quick to react with HPPs and activations to drive food and confectionery sales.”

Customers are key

The importance of maintaining customer relationships is key as the business recovers from the Covid-19 pandemic. Lindt & Sprüngli’s Zehnder says that during these volatile times, the Swiss supplier stays closely connected with its partners in the APAC region to rebuild the business together and to be prepared for

rebound. This means collaborating strongly in understanding channel dynamics and staying flexible with order planning. From a strategic point of view, the company continues to grow distribution into key locations and drive premium category growth for the region.

Mars Wrigley ITR’s Hudson says that “the desire has always been to grow out of the pandemic with better relationships with its key customers than we went into the pandemic. We have been able to maintain this, and as and when the passengers come back, we are ready to work with our trade partners to drive category growth to fuel the recovery.”

Hudson adds that Mars Wrigley is just as committed to the Asia Pacific region as it ever has been. Future plans include innovations, limited editions and a focus on driving impulse beyond just the check-out. This will be fueled by mutual investment to support growth and recovery, he says.

Nestlé ITR’s Dryburgh believes that while China will remain challenged – in part due to ongoing lockdowns in various cities at time of writing – the Swiss firm is confident that the second half of 2022 will see “real recovery” throughout the Asia Pacific region.

This May Nestlé ITR plans to introduce an HPP promotion with Cocoa Trees at Singapore Changi Airport, offering a free backpack with a minimum spend of S$45 (US$33) on KitKat products. As borders open within Asia, this GWP will be extended across the region. And the KitKat-branded red bus will also be appearing in the revamped Cocoa Trees outlets at Changi Airport, including digital communication to highlight the new products.

A key ambition for all suppliers continues to be reaching the valuable Chinese shopper. Nestlé has been focused on building engaging solutions for its core travel retail brands (KitKat, Nestlé SWISS and Smarties) at key Chinese airport locations such as Beijing, Shanghai and Guangzhou as well as more recently in Hainan. Since 2019, the company has been testing various social media platforms to engage with the Chinese audience.

Nestlé plans to build on its successful showcase at the Chinese Expo in May last year which saw it present 29 new products to the Chinese market. In the meantime, the favorable policies of Hainan will enable Nestlé to introduce more quality brands to China, which in turn will raise awareness and appeal to Chinese travelers, explains Dryburgh.

He believes that one of the reasons for Nestlé’s success in this region is its ability to understand local nuances and consumer tastes, which are changing rapidly. Regional R&D centers, including a new facility in Singapore, aim to keep the company updated with new products that will appeal to regional consumers.

Conscious consumers

Post-pandemic, travelers’ buying behavior will evolve, Zehnder believes. He reckons that there will be an even stronger demand for premium and high-quality brands. Also, travelers will be more and more conscious about ingredients and how brands “contribute to a sustainable tomorrow”. And while Lindt & Sprüngli is currently seeing a trend towards self-consumption offerings, gifting will remain relevant and the sector will see an increasing demand again soon.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE

41

Confectionery Report

Hudson adds that Mars Wrigley is just as committed to the Asia Pacific region as it ever has been. Future plans include innovations, limited editions and a focus on driving impulse beyond just the check-out

Nestlé’s Dryburgh agrees about the importance of gifting, particularly in the Chinese market. He expects to see more onlineto-offline/omnichannel retail campaigns tailored to the Asian audience, whether this is focused on physical retail promotions (for example in Hainan), that have digital interaction to drive engagement and capture CRM data, or livestream events that promote the company’s premium gifting opportunities around the many Chinese holidays when gifting is “so important”.

Mars does not expect the buying trends to drastically change, but will remain similar to what the company has observed in other regions. “We will need to continue to maintain a category offer that covers all need-states of Recharge, Reward, Connect and Celebrate,” notes Hudson. “We do expect transaction values to be up, signaling that passengers are willing to spend, and we will need to ensure we work closely with our trade partners to offer a value proposition to the consumers to drive this uptrading, whilst remaining sustainable enough for us to mutually scale.”

42 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

Turning to the subject of the best communication channels to drive sales, and how best to engage travelers, Lindt & Sprüngli believes the most important communication channel is its point of sale – enabling it to bring its brand to life. The company is set to launch core promotions tailored to the different airports in APAC with a strong focus on core products, while emphasizing seasonal activations, specifically for Chinese New Year with a new campaign featuring its Lindt testimonial Xin Zhi Lei. Mars works with its trade partners to achieve its goal “to put a smile on the face of every traveler that interacts with our worldleading brands, wherever they may travel”. Retailtainment plays a

Immersive experiences

In October 2021 Nestlé launched KitKat Senses with King Power Thailand, leveraging the travel retailer’s strong social media presence to communicate the launch to travelers

large part in the confectionery giant’s communications strategy: “What will be important is to provide an entertaining experience to the travelers to disrupt them, and convert them,” enthuses Hudson.

Meanwhile, Nestlé’s strategic focus for 2022 and beyond is to drive overall sales by building food into the number one most purchased category in travel retail. Food and confectionery is already the top driver of cross-category purchase and the second most purchased category, which the company thinks is a very strong platform from which to build growth. “Our goal is to leverage the currently untapped potential of food, ensuring it is in 50% of baskets by the end of the decade. Crucially, that means not just focusing on the traditional and highly attractive confectionery category, but also exploiting the opportunities across the food category, encompassing local foods alongside global food brands not yet widely present in global travel retail.”

Travel retail suppliers across all categories are beginning to target digitally-connected consumers in earnest, and this is certainly the case in the confectionery sector, where livestream events are becoming popular. Zehnder stresses the importance of digital for the travel retail channel and aims to team up with its retail partners where possible. Lindt & Sprungli enjoyed regular exposure across the retailers’ platforms across the region, with one highlight being the China Duty Free Group partnership with Lindt as it became the first brand in travel retail to partner for its VIP Live Sale event.

Similarly, Nestlé ITR’s KitKat x Sunrise for China Duty Free Group digital livestream event in January 2022 was a first for the group and followed the successful introduction of its premium products KitKat Chunky and KitKat Senses at the Chinese Expo in 2021. The livestream event, timed to coincide with Chinese New Year, was “a real success”, says Dryburgh, with over 23,000 viewers for the chocolates category section and a triple-digit uplift in sales. “We will try to do more of this kind of activity when opportunities arise in partnership with our travel retail customers, since it has already become a very common way to sell products in China. It really enhances the premiumization of chocolate snacks for the gifting market.”

While it has been “very challenging” to undertake activations elsewhere in Asia, in October 2021 Nestlé launched KitKat Senses with King Power Thailand, leveraging the travel retailer’s strong social media presence to communicate the launch to travelers.

Mars is working on creating an immersive digital experience for travelers during their entire journey, from beginning to end.

“Imagine a world in which a shopper is interrupted by a digital billboard when arriving at the airport, is engaged by a digital screen in the main store, and is then converted by a digital vending machine by the gate. We are doing a lot of work in this space, essentially to drive the conversion of more travelers to shoppers,” explains Hudson.

Nestlé ITR’s Dryburgh has already seen “great results” from an exciting KitKat branding initiative to engage with consumers before they entered the airport store. For its Christmas and New Year 2021 seasonal advertising campaign, a series of ads was launched at major hub airports, including Hainan, Dubai and Madrid. The infographic-style campaign was featured across giant digital advertising hoardings with the aim of increasing communications with target travelers. Slogans such as ‘Cele’break New Year’ were designed to target travelers pre-trip, in-trip and during travel.

“The results of the campaign show how travelers visiting Dubai, Madrid and Hainan airports were engaged with KitKat brand awareness in far greater numbers than expected,” he enthuses. “22 million impressions were delivered across the three target locations via eight different high-traffic platforms. We saw excellent click-through rates across all formats – meeting or exceeding our target benchmarks for the campaign. The focus on digital engagement was paramount, so we were pleased to see a 1,000% increase in website sessions for December vs the year average.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE

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Cloetta Update

Cloetta aims for maximum brand visibility at Prague Airport

A complete sugar solution European candy supplier Cloetta is going for steady global growth with its sugar confectionery brands

B

erend-Jan van Egmond, Head of Global Travel Retail at Cloetta International Markets, is brimming with optimism about the Nordic confectionery manufacturer’s growing business in travel retail.

Cloetta’s objective is to develop its global presence with The Jelly Bean Factory as its main brand. Besides that, the company offers what van Egmond describes as “a complete category solution” for the sugar confectionery segment with its brands Red Band (including Swedish Fish fish-shaped, chewy candy and Sour Suckers gummy candy), fruitflavored, car-shaped Ahlgrens Bilar Limousines and KEX Chocolate mini wafers.

In 2022, the company has seen a “great performance” for its brands so far, and distribution levels are growing steadily.

For example, Cloetta has installed eyecatching, fixed merchandising displays at Prague Airport in the Czech Republic for a selection of its brands. “We have the ambition to be really visible on the shopfloor, and I think we succeed with this,” he tells Global Travel Retail Magazine.

Turning to Asia, van Egmond expects Asia Pacific to recover more slowly compared to other regions when it comes to COVID-related issues. However, the

44 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

company still believes in the importance of the region, and thinks the business will gradually recover in the next few years.

Price-sensitive consumers

In the post-COVID travel retail world, Cloetta sees three main trends in consumer purchasing behavior. First, Cloetta is witnessing a greater focus on sustainability. “Most of our customers have this topic high on the agenda, which is obviously driven by travelers,” he observes.

“They are looking for products that have environmentally friendly elements in ingredients, production and packaging.

We believe it is a good movement, and we have also received good feedback from our consumers as the perception of our brands has improved as we focus more on sustainability.”

Second, van Egmond notes that price sensitivity is an issue, especially now in a world in which inflation rates are high, and everything is becoming more expensive. And third, the company sees a strong focus on differentiation of products in travel retail versus the domestic market.

This could be differentiation in packaging, and also in flavors.

In the last few years Cloetta has found that digital communications in travel

An eye-catching fixed display for The Jelly Bean Factory at Prague Airport in the Czech Republic

retail have been growing in importance.

Together with its retail partners it is looking at the communication strategies available that could be beneficial for their mutual businesses. However, since its business is still in a development phase, the first objective is to be physically available in stores around the world.

The second step is to work on the brand communication strategy, utilizing the knowledge and network of its partners to further develop this.

The company is working with some of its global partners on digital initiatives to help target the digitally connected shopper. “It is very important to target the digitally connected shopper, because they are the current and future shopper,” says van Egmond. “Today, the majority of shoppers are spending their time on their phone while traveling. We are so dependent on digital connections during our whole trip (i.e. pre-travel, during travel and after travel). So, in order to stay connected with our shoppers, we need to focus on digital connections.”

Brown-Froman

BROWN-FORMAN

draws on ‘popularity and strength’ of travel retail portfolio During the pandemic, BrownForman’s planning and operational strategies have revolved around its firm belief that the duty free and travel retail industry will eventually make a full recovery.

In a wide-ranging interview, Aude Bourdier, Vice President, Managing Director, Global Travel Retail, Brown-Forman, tells Hibah Noor how the company has navigated the turbulent Covid-19 period

by HIBAH NOOR

Brown-Forman expects to strongly focus on its American whiskeys led by Jack Daniel’s

46 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

Aude Bourdier, Vice President, Managing Director, Global Travel Retail, Brown-Forman

“While we are experiencing an increase in business travel, we still have a bit of ground to make up before we reach pre-pandemic levels. Everyone is keeping an eye on Covid developments, as well as the critical situation [involving Russia and Ukraine] in Eastern Europe.”

Brown-Forman’s planning and operational strategies during the pandemic revolved around its strong belief that the travel retail industry would eventually make a full recovery.

“With that as our guideline, the Brown-Forman travel retail team put in place key strategies and initiatives designed to be implemented as the business environment improved,” Bourdier explains. “A good example would be the partnership formed with our friends at Gebr. Heinemann to launch a pair of unique whiskeys carrying the Jack Daniel’s label – Sweet & Oaky and Bold & Spicy (August 2021).

“This travel retail exclusive addition to our portfolio has been a remarkable success and you can expect similar announcements and partnerships in the near future.”

Bourgeoning premium spirits sector

K

entucky-based wine and spirits producer Brown-Forman Global Travel Retail may not be expecting a quick revival of its Asian duty free business but is at least observing signs of promise.

Speaking candidly to this publication, Aude Bourdier, Vice President, Managing Director, Global Travel Retail, BrownForman said Hainan Island remained an economic bright spot in Asia. She also praised the South Korean government for abolishing the KRW6076/US$5,000 purchasing limit for outbound Korean nationals at Korean duty free stores, effective 18 March.

Bourdier comments: “South Korea made a positive overture to travel retail by increasing available spend in that country. Hong Kong also announced in March that it would ease some border restrictions for international travelers, beginning this spring.”

In anticipation of better times ahead for the Asian duty free market, Brown-Forman retail partner DFS Group held its 10th annual Master of Wines and Spirits exhibition in Macau (February to April 2022) for the first time. Bourdier, however, remains cautious: “Overall, it appears the rest of the region will be slow in returning to its former business vibrancy,” she remarks.

Robust H2 2021 performance

Reflecting on the past year or so, Bourdier suggests the company’s overall duty free and travel retail business has recovered “fairly well,” with particularly robust performance at the start of H2 2021.

“As disclosed by our financial releases, net sales in the travel retail channel during the first half of the 2022 fiscal year increased +38% (+64% underlying). This was primarily due to a favorable prior-year comparison, which was significantly impacted by travel bans and restrictions related to the Covid-19 pandemic.”

The sales recovery is mainly attributed to Europe, the Middle East, and the Americas, according to Bourdier. “Thus far, the sales momentum established in the latter part of last year has continued into 2022 and appears to be accelerating.

“Air travel across these regions has grown considerably and is overwhelmingly led by leisure travel versus business travel.

As the rapid growth in popularity of the premium spirits sector continues, much like it was before the pandemic, Brown-Forman expects to strongly focus on its American whiskeys led by Jack Daniel’s, Woodford Reserve and Old Forester.

“After all, these are the brands that set the highest standard for the category by being authentic premium spirits of the highest quality with a great taste and mixability,” Bourdier comments.

“Single malts have also developed a strong following in the travel retail industry, so you will also notice considerable emphasis on Benriach, The GlenDronach and GlenGlassaugh.

“Finally, we will make every effort to capitalize on the growing interest in tequilas by bringing focus to the taste, history, and authenticity of Herradura and el Jimador, particularly in the Americas.”

The popularity and strength of the Brown-Forman portfolio stood the company in good stead even during the darkest days of the pandemic. “Our attention and efforts remained focused on promoting and highlighting the authenticity and premium standards of our brands that has made them among the top-sellers in the travel retail channel.”

A trend among passengers to increase their basket size during visits to travel retail outlets, was one of the main positives to emerge from the pandemic. Bourdier believes the increased basket sizes were most likely driven by an uncertainty among shoppers as to when they could shop again.

She says: “As travel apprehensions give way to a gradual return to normalcy the continued higher basket spend could very well reflect an effort to make up for lost time as well as a sense of wellearned indulgence given the experiences of the lockdown.”

Meanwhile, Brown-Forman is maintaining a strong emphasis on sustainability, which has been ingrained in the company’s culture for a long time. “For many years, we have crafted our core brands (Jack Daniel’s, Finlandia Vodka, Tequila Herradura etc), keeping in mind a range of sustainable practices from zero waste production in Tennessee, to water stewardship to protect the health of key watersheds in our communities.

“Part of our sustainability prioritization strategy includes a more active consumer-facing marketing element. This is because there are multiple ways to conceive and implement better and more eco-friendly initiatives in travel retail.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE

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KT International Update

Optimistic: Stuart Buchanan, Chief Commercial Officer, KT International

KTI aims to be crowned

King in Asia European tobacco products specialist KT International is re-focusing on the Asia market this year with new portfolio expansions and innovations

by MARY JANE PITTILLA

48 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

F

ollowing good results in 2021, independent tobacco products company KT International (KTI) has started 2022 with its bestever first quarter, driven by an “exceptionally strong” performance in domestic markets supported by signs of recovery in its travel retail and duty free business.

The company, which emerged from the break-up of the Bulgarian State Tobacco Corporation in 2008, is now re-focusing on expansion in the Asian travel retail and duty free market, after the COVID-19 pandemic paused its plans.

“Asian travel retail is a very small part of our business,” KT International Chief Commercial Officer Stuart Buchanan told

Global Travel Retail Magazine. “We had extensive plans in place for 2020 and 2021 with a number of Asia specific innovations developed which we had to put on hold due to the COVID crisis. We have re-planned this for 2022, so this year our plan is to re-focus our efforts to build our Asian footprint.”

Last year, KTI introduced two new additions to its King and Corset cigarette ranges, specifically to target the Asian market. The smaller-format King Compact pack design aims to offer quality and value. The King Compact contains American style cigarettes and comes in a slimmer format in line with the latest consumer demands. For extra flavor, KTI

The new King Compact pack design comes in a slimmer format in line with consumer demand

has created The King Pop Compact. The King Pop features the same well-balanced blend complemented with the newest generation capsule flavored filter. Two taste options are available – menthol and blueberry, which can be activated on demand.

For Fall 2021, the Corset brand presented the latest capsule collection for its premium American blend cigarettes.

Inspired by the vibrancy of the design of the Shellpack range, the brand has altered the look and feel of Corset Deux and Corset Double to match the premium quality and high-fashion sense demanded

by KTI’s consumers. Corset Deux comes with a single menthol capsule, while

Corset Double tastes of menthol glaze and blueberry blush.

KTI developed these ranges specifically for Asia, and while they were introduced to many markets, the delayed return of global travel meant that its implementation and brand activations were limited.

Eco-friendly initiatives

Another hitch has been the long shipping times from Europe to Asia caused by the continuing pandemic. “Whilst we have high expectations for 2022 with these ranges, we are finding shipping and transport lines from mainland Europe to Asia severely delayed,” noted Buchanan.

“Average shipping times have gone from

six weeks to 14 weeks for some Asian markets and this, coupled with the situation in Eastern Europe, has meant that we could delay these plans further.”

But he remains optimistic: “Asia is strategically important for us and we are confident that our brand philosophy of global brands, international quality and accessible pricing, coupled with the innovations we have developed specifically for Asia, will be a success, so we really hope that the macro socio/economic environment stabilizes in Q2 to allow us finally to start fulfilling our Asian ambitions.”

With the global move to sustainability, KTI is working on eco-friendly ranges for both its King and Corset brands which will be ready in Q3. And more is in the pipeline. “The real excitement for us is what we are doing across our production and office facilities which will be another world first for KT International and demonstrate our real commitment to sustainability. Watch this space as we will announce this late Q2/Q3 and it will be really something beyond the ordinary,” enthused Buchanan.

Right now in travel retail, KTI is working on recovering its volumes and positioning from pre-Covid when the firm started 2020 with its best-ever results in the channel. “We have managed to keep our good partnership relations with our travel retail customers and clients during the pandemic despite the drop in sales and operations, and we are now focusing on reopening those businesses,” explained Buchanan. “During the last two years we were also working on expanding our customer database and we have managed to approach not a small number of new clients and partners that we are now to further develop the business with.”

Looking ahead, KTI is also eyeing the Americas travel retail market for growth.

It has seen the signs of recovery there and has resumed its business with existing and new customers.

Meanwhile, the focus remains on Europe where KTI has a significant footprint domestically as well as on Eastern Europe and the Middle East where the company has managed to get back on track. www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE

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Rituals The lifestyle brand will be launching its Body assortment at its Hainan locations and via T-Mall in the second half of this year

Rituals is preparing to launch multiple home product innovations in Q4 2022 and a new addition to its Private Collection line in Q1 2023

Rituals Cosmetics ACHIEVES GROWTH ACCELERATION IN APAC

H

by LAURA SHIRK

aving recently opened three stores across Hainan in order to expand its presence in the Asia-Pacific (APAC) region and promote its Home fragrance collection, Global Travel Retail Magazine reached out to Rituals Cosmetics to learn more about its continued potential for growth. With the company exceeding initial expectations, overall sales are said to be promising, as the team prepares to launch multiple home product innovations in Q4 2022 and a new addition to its Private Collection line in Q1 2023.

Following positive changes to the product-testing approval process, the lifestyle brand will also be launching its Body assortment at its Hainan locations and via T-Mall in the second half of this year. Described as typically its strongest performing range, Melvin Broekaart, Director of Global Travel Retail at Rituals Cosmetics, believes the move will generate “a significant uptick in sales” and support growth acceleration in the region.

Showing no signs of slowing down, Rituals has also opened its online boutiques and WeChat shops in partnership with DFS (Shenzhen Duty Free), Lagardère Travel Retail (HTDF) and Dufry (GDF Plaza), which will go on to further establish its offering across both 50 GLOBAL TRAVEL RETAIL MAGAZINE MAY 2022

Melvin Broekaart at Rituals Cosmetics breaks down its growth strategy into three key elements: the addition of its Body assortment, the application of its omnichannel approach and market-specific innovations

Home and Body and explore customer preference(s) for specific products.

“The omnichannel approach plays a big role in our strategy for the APAC market: partly shifting sales to the online channel allows us to generate sales when customers are on their trip, as well as when they return home. Additionally, the convenience of online shopping with a home delivery option is a great advantage for customers,” says Broekaart.

Staying connected

When asked how Rituals plans to create brand desirability and replicate its European success in Greater China over the next several years, Broekaart breaks down its growth strategy into three key elements: the addition of its Body assortment, the application of its omnichannel approach and market-specific innovations. Although it’s critical to stay connected with consumers online post-instore purchase worldwide in order to build brand loyalty, this is especially true in China where the consumer engagement level with brands online is extremely high. Building upon its product barcode scanning system (accessible via WeChat), Rituals is working on an exciting project in which it aims to offer a holistic con-

sumer journey – uniting the online and offline experience.

“Finally, market-specific innovations will play a role, as we continue to offer localized product exclusives and campaigns targeted at Chinese shoppers and travelers. These local exclusives will serve as an essential part of our innovation strategy going forward, particularly for major events in the calendar such as Lunar New Year. We are closely monitoring customer preferences in the region and will select dedicated hero products on which our marketing communications will be hyper-focused,” adds Broekaart.

Investing in the region

Looking ahead, Rituals expects to experience strong APAC growth, as well as more granular growth in the Chinese duty free market. Speaking about its significant business investment in the region, Broekaart notes that the company is well-positioned to grasp opportunities as the travel industry in Asia-Pacific continues to recover. Along with the May opening of its domestic warehouse in Mainland China and plans to open an office in Shanghai at the end of this year, the company is preparing for expansion in Southeast Asia domestically, as well as in travel retail.