a more connected digital journey digital innovation · 2019-07-24 · customer service, and a...

A MORE CONNECTED DIGITAL JOURNEY

GLOBAL TRAVEL RETAIL

TRAVEL RETAIL INDUSTRY DATA & INSIGHTS 2019/20 137

demands for an intuitive, seamless, omnichannel experience across every channel, a laser sharp focus on digital and data, is vital for satisfying the needs of today’s globally connected traveller/shopper.

As we explore later in the report, the Asia Pacific overseas consumer is influencing how the rest of the world will shop in the future. This is espe-cially true for the travel retail sector due to the exponentially growing numbers of Chinese passengers who are seeking travel and retail experi-ences overseas. So, while Europe and the US have sophisticated and highly competitive e-commerce landscapes and both regions enjoy relatively mature travel retail marketplaces, they are playing catch up to the leading region for innovative and best practice for the GTR consumer.

DIGITAL INNOVATION

This report is a collaboration between DFNI and Omnicom Retail Group (ORG) with our joint objective to consolidate industry opinion and showcase leader-ship thinking, innovation and opportunities within the Global Travel Retail (GTR) industry. Retail’s ‘Fourth Industrial Age’ aka Retail 4.0 – and its various digitalised drivers to purchase – is causing seismic shifts in GTR. Particularly with passengers who have a new set of expectations for how they go about their duty free shopping across multiple digital channels.

INTRODUCTION

As we enter 2020, Retail 4.0 points to the physical store continuing to be augmented by digital platforms, the rise of mobile online research to drive purchase offline (ROPO), data-led customer service, and a maturing of consumer behaviour across the physical meets digital hybrid we’ve come to understand as omnichannel retail.

From the passenger journey to airport

operations, through travel retail and duty-free sectors, it is evident that rapid digital change is severely impacting the consumer and passenger experience of the travel industry.

This report aims to highlight how the duty free and travel retail industry is struggling to keep pace with the rapidly evolving domestic retail landscape, and with customer

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GLOBAL TRAVEL RETAIL GLOBAL TRAVEL RETAIL

TRAVEL RETAIL INDUSTRY DATA & INSIGHTS 2019/20TRAVEL RETAIL INDUSTRY DATA & INSIGHTS 2019/20138 139

emerging market customer, more tourists from these markets will be drawn to international destinations.

GTR’S PREMIUMISATION OPPORTUNITY

In the future, the travel retail industry will rely on continued excise duty exemptions and a concentration on premium or luxury products accord-ing to research from Technavio, that predicted the sector was forecast to grow at a CAGR of 8.56% during the period 2017-2021.

Global duty free sales were up 9.3% in 2018 reaching a total of $75.7bn,

according to preliminary annual figures from Generation Research for the Tax Fee World Association (TFWA).

The primary drivers of global growth are the Asia Pacific region and the perfumes and cosmetics category. Sales in the leading region were up 14.2% on 2017 at $35.2bn and are on track to account for more than half of global sales within three years. Travel retail sales of perfumes and cosmetics were up 19.9% year-on-year at $18.2bn. All categories, except confectionery (-0.2%), recorded growth compared to 2017.

The high-end travel retail catego-ries including fashion and accessories, watches and jewellery, perfumes and cosmetics accounted for 64.3% of total revenue generated in the global duty-free market according to Technavio – suggesting premium categories continue to play a leading role in driving sales.

$35,000 per household is the estimat-ed tipping point at which households start considering travel a viable option, according to Euromonitor.

While the travel industry is watch-ing outbound tourism grow in emerging markets, this shift is being driven by smartphone penetration as these emerging market consumers increasingly choose to access the internet via smartphones. Worldwide smartphone penetration will continue to increase and by the end of 2018, over a third (66%) of the global population used a smartphone for internet access.

DEMOCRATISED TRAVEL

Fuelling the global trend for democra-tised travel is a wider choice and lower costs for travelling overseas. As airlines diversify to accommodate rising numbers of passengers, there are increasing numbers of budget airline options and governments are realising they need to lift visa restrictions to stimulate tourism spending.

Democratised travel is further boosted by online travel firms investing in ever more sophisticated search tools that are expanding access to planning and booking. Social media has become a powerful motivator for travel especially; and younger generations or digital-na-tives are exceptionally open to exploring other cultures. In turn, as travel brands better adapt to the

Worldwide travel growth is set to outperform GDP, according to the World Travel & Tourism Council’s (WTTC) 2018 Economic Impact report. The global travel & tourism sector grew at 3.9% versus 3.2% for global GDP, to contribute a record $8.8trnto the world economy in 2018, or 10.4% of all global economic activity. “For the eighth consecutive year, our sector outpaced growth in the wider global economy and we recorded the second-highest growth of any major sector in the world,” WTTC President & CEO Gloria Guevara says.

There is a widescale demographic shift happening in tourism and it is one of the biggest trends reshaping 21st century travel. “As income levels climb, masses of first-time international travellers are pouring out of China and the other BRICs, and gradually venturing out of other emerging markets, from Mexico and Malaysia to Turkey and the Philippines,” says industry commentator Skift in a joint report with Translations.com.

Emerging market tourists are the demographic making the biggest impact on global travel trends. “Outbound tourism from many emerging markets has grown very significantly over the past 10 years,” says Euromonitor analyst Amanda Bourlier. Middle class households have increased substantially over the past two decades in many of the fastest-growing outbound markets, Bourlier notes. Annual income of

GTR: THEGROWTH

CHANNEL

Global duty-free sales were up 9.3% in 2018 reaching $75.7bn. The Asia Pacific region is on track to account for more than half of global duty-free sales within three years, according to the TFWA 35.2bn

Primary drivers of global sales growth is the Asia Pacific region and the cosmetics and per-

fumes category – (TFWA 2018)

PART ONE PART ONE



OMNICHANNEL OPPORTUNITIES

The travel retail industry is facing a raft of omnichannel opportunities as it seeks to upgrade its digital infra-structure across multiple service points. Airports are increasing spend on digital innovations – according to Airports Council International, IT investment was up 8% between 2013-2016, while in 2018 overall airport IT spend was expected to reach $10bn, up from $8.6bn in 2017, according to air transport IT insights firm SITA.

Meanwhile brands and retailers operating within the sector are introducing omnichannel concepts and the trend is for more technology-led passenger touchpoints to facilitate a more seamless retail experience.

“Digital is the big focus for us now,” says Nice Airport’s Chief Commercial Officer Filip Soete. “We need to broaden our digital reputation, develop and optimise turnover, inform and satisfy our customers through loyalty programmes and connected

landscape is being re-shaped with mobile behaviours as paramount.

The way people shop in stores has fundamentally changed over the last few years. Web-influenced sales in

physical stores – when a consumer researches a product online and then buys it in a store – are expected to account for an additional $1 trillion, or around 38% of all retail sales by 2021, according to Forrester.

FAST FORWARD PHYGITAL SHOPPING

The travel retail industry should be fast-tracking its approach to phygital retail. According to a recent report, Barclays New Retail Reality research indicates that in order to stand out in the present retail market, and convince digitally savvy consumers to visit their physical locations, stores need to move towards phygital, shopping experiences.

More than half (65%) of respond-

VIP retail opportunities.” E-commerce is increasingly important for Nice Airport, says Soete, with online orders and conversion rates up 15% and 19% respectively for 2018 vs 2017.

After becoming a buzzword for the retail industry several years ago, omnichannel has become a catch all term for digital disruption and a facilitator for rapid change in consum-ers’ online and mobile shopping habits. From high street chains and major mall operators to e-commerce retailers, omnichannel represents an opportunity to experiment, invest and test out new channels for consumers to shop. But more importantly, it has paved the way for digital innovation and showcase physical and digital hybrid retail concepts, or ‘phygital’, that are channel agnostic; for frictionless behaviour that allows consumers to shop anywhere, anytime and anyway they want.

“The challenge for brands and retailers is not to think about each channel in isolation” says Sophie Daranyi, CEO at Omnicom Retail Group. “To effectively deliver seamless connected commerce, it’s important to plan across physical, digital and social points and consider the optimum moment for connection and conversion across paid, owned and earned channels. ”

Consumers have adopted a mobile-first shopping mindset and the retail

ents stated that touchscreen features would encourage them to visit a store, while 57% said they would be more likely to visit a shop with interactive technology that includes the capacity to suggest complemen-tary items.

A significant proportion of consum-ers also view mobile and contactless payments positively rather than as gimmicks, and the Barclays report suggests creating systems for interactive mobile use in-store. Devices that allow access to special offers via QR codes for example, will become increasingly important in the near future, as the use of mobile channels continues to grow.

“We are also seeing an increase in retailers optimising social content both in their ecommerce offer and also at store” comments Daranyi. “Look at brands on the high street such as Nordstrom that leads best practice in integrating its social content and partnership with Pinterest and creating physical ‘pins’ as point of sale in their stores to optimise content and awareness. There’s a huge opportunity to better leverage earned and paid content in owned channels, especially at point of purchase, where 60% of final purchase decisions are made”

Brands and retailers operating within travel retail are introducing omnichannel concepts with a bias towards more technology-led passenger touchpoints to facilitate a seamless retail experience

“To effectively deliver seamless connected commerce, it’s impor-tant to plan across physical, digital and social points and consider the optimum moment for conversion across media channels”

“Digital is the big focus for us now. We need to broaden our digital reputation, develop and optimise turnover, inform and satisfy our customers through loyalty programmes and connected VIP retail opportunities”

$10bnOverall airport IT spend in 2018 was

expected to reach $10bn, up from $8.6bn in 2017.(SITA, 2018)

15% vs 19%E-commerce conversion rates at Nice

Airport 2017 versus 2018 figures

Filip Soete, COO at Nice Airport

Sophie Daranyi, CEO at Omnicom Retail Group

PART ONE PART ONE



REINVENTING THE TRAVEL RETAIL CHANNEL

Rethinking how best to utilise the om-nichannel opportunity will be key for retailers in the airport space as they transition from a physical to a digital store. Travel retail brands should be crafting experiences that seamlessly cross channels – ones that begin as a digital research journey and end at a physical airport. It’s this mix of digital and physical retail touchpoints that will shape the future of airport shopping behaviours, especially for brands that are already talking to their customers across both online and offline platforms.

Focusing on digital synergies has significantly changed the way passengers shop when they travel, says Teo Chew Hoon, Group Senior Vice President of Airside Concessions, Changi Airport Group, Singapore. “The retail experience at Changi Airport starts even before the traveller steps foot into the airport. We have made major enhancements to Changi’s duty-free shopping platform iShopChangi recently as we step up to the challenge of delivering even more to our passengers. To remain relevant and exciting in the constantly evolving e-commerce scene, iShop-

Changi expanded its product line-up, bringing over 800 brands to its portal, and a new website interface with added social and experiential shopping capabilities.”

In particular, Chew Hoon highlight-ed the recent Shiseido SENSE beauty pop-up as a great example of how the airport likes to blend its offline and online retail offer. “We love to delight

our passengers with new retail experiences that especially engage across multiple senses,” she said. “We are always looking for opportunities to have a more omnichannel ap-proach to our activations. At Changi, we try to connect the dots between our digital offer on iShopChangi and our merchandise in stores. If we can gather more information about our customers, that’s even better.”

From the passenger journey to airport operations, through travel retail and duty-free sectors, it is evident that rapid digital change is severely impacting the consumer and passenger experience of the travel industry

01

800The number of brands iShopChangi brought over to its portal with a new

website and added shopping capabilities

140mThe number of outbound trips made by Chinese travellers in 2018 representing a

13.5% increase year-on-year

Emerging market tourists are the demographic making the biggest im-pact on global travel trends

02

Worldwide smartphone penetration will continue to increase, impacting the way travel retailers target duty-free customers 03

Free Independent Travel consumers (FITs) from emerging markets are a more diverse consumer group, especially those using low-cost carriers (LCCs) for flight choices, allowing brands and retailers to better target passengers via location-specific flights and seasonal holidays

04

Premiumisation is a keenly debated strategy for growth among confec-tionery and liquor GTR brand stables, who will need to think about in-creasing their targeted promotions for passengers who are less inclined to dedicate dwell time to duty-free shopping, but might be attracted by exclusive, more premium products and location-specific offers

05

The travel retail industry is facing a raft of omnichannel opportunities – brands and retailers are introducing omnichannel concepts and the trend is for more technology-led passenger touchpoints to facilitate a more seamless retail experience

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TAKEOUTSTeo Chew Hoon, SVP Concessions, Changi Airport

“To remain relevant in the evolving e-commerce scene, iShop-Changi expanded its product line-up, bringing in over 800 brands and a new website with new experiential shopping capabilities”

PART TWO



number of affluent high-net-worth households in China. Consider this: by January 2017, the number of million-aires (with assets of ¥6m/$1m) in the Greater China Region had reached 4.6 million, increasing by 6.3% in a year.

Those households with assets of ¥10m reached 1.86 million, up by 8.6% on 2016, while the ultra -high-net-worth segment with ¥100m totalled 121,000, increasing at a growth rate of 10.5%.

Newly-prosperous China is moving the goal-posts for brands that want to do business with its increasingly

31%The percentage of Millennials that prefer recom-

mendations via email. Recommendations via social media is second at 23%

affluent and sophisticated citizens. Chinese consumers may have an increasing array of products and services on which to spend their money, but with wealth, peoples’ priorities, desires and values are also changing.

Global brands, once highly-prized for their glamorous international sheen, can no longer rely on being the de facto choice. The modern Chinese consumer is more likely to buy the brand that offers the best quality and value. In addition, as indicated in the 2018 BrandZ Top 100 Most Valuable Chinese Brands report, a purchase must be instrumental in helping them realise the Chinese Dream (the vision of a rejuvenated China becoming one of the best places to live in the world).

When it comes to luxury purchases, China is the largest market in the world. But while Chinese shoppers are increasingly prepared to pay premium prices for a wide range of products and services – as long as they enhance their lives – the mid-market also provides a vital opening for brands that do their homework.

As well as shopping at home, they often make purchases while they are abroad and in high-spending holiday mode – but only if the brand is already established in China and will make the purchaser look good on social media.

The social media hook is critical; WeChat – which is seamlessly integrated into everyday life for Chinese people – allows shoppers to show off a new purchase. Savvy brands can use this to their advantage, tapping into location-based services to identify when tourists are in the vicinity of tempting tax-free offerings and target them accordingly.

CHINESE POWERHOUSE DEMOGRAPHIC

Rising wealth, a young travelling population, digital development and a trade war with the US – Chinese consumer shopping behaviour is evolving at a rapid pace. It’s important to understand the macroeconomic and cultural trends the travel retail industry must consider in order to keep pace with this powerhouse demographic.

Last year, Chinese travellers made around 140 million outbound trips, an increase of 13.5% year-on-year, accord-ing to China Tourism Academy (CTA), a research institution affiliated with China’s National Tourism Administra-tion (CNTA). The agency estimates that travellers spent over $120bn in 2018, up from $100bn the year before. The China Outbound Tourism Research Institute (COTRI) predicts that overseas trips by Chinese tourists will increase to over 400 million by 2030.

This quest for experience and adventure from Chinese travellers is being propelled by the rapidly rising

THE POWER OFOVERSEAS

CONSUMERSThe social media hook is critical. WeChat – which is seamlessly integrated into everyday life for Chinese people - allows shoppers to show off a new purchase and facilitates location-based promotions

The potential global market for travel retail is set to grow positively and steadily in the coming years, due to increased numbers of overseas passengers from Asia Pacific, especially Chinese consumers choosing to travel and shop overseas. Let’s start with China, which is where the GTR industry is, without a doubt, going to see the most growth, both for inbound and outbound travellers.

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TRAVEL RETAIL INDUSTRY DATA & INSIGHTS 2019/20146

TARGETING PASSENGER DEMOGRAPHICS FOR CONVERSION

As numbers of global travellers grow, so too do their diverse origins. A sophisticated regional approach to customer demographics is increas-ingly important for targeted market-ing that cuts through the noise, says market research agency m1nd-set.

Purchase driver trends for duty-free shoppers vary between the genera-tions, but a universal point for travel retailers is to create more touchpoints, especially for travellers in North and South America. Here, the different generations respond to pre-planning and pre-trip engagement as well as on the spot attractions.

To draw more duty-free store footfall and boost conversation rate, compelling in-store elements/touch points and experiential retail are required to convert more Millennials into buyers. For middle-aged and senior customers, an increase in pre-trip engagement about what travel retail has to offer will give them

477mThe estimated number of departing

and arriving passengers (2019) travelling from Northeast Asia

a reason to visit the duty free-store in the first place.

Travel retailers must adapt pre-trip and in-store touch points according to the planning level by each generation: the large majority plan their purchase (seniors especially) but only a small minority is exposed to touch points about duty free before the trip, something that is higher for Millennials.

All three generations still often seek information from personal interac-tions with friends and relatives and

THE MILLENNIALISATION OF TRAVEL

Millennials in Asia Pacific are set to become the most influential group in travel retail. By 2020, 60% of the world’s Millennial population will live in Asia, with the highest spending power of any generation yet – an estimated US$6trn. Therefore this cohort is shaping the key trends in GTR and a compelling reason to focus on their influence in this report.

According to Expedia research, Chinese Millennials are the most avid travellers choosing to travel at least 35 days each year. This is compared to Millennials in Japan who only take 12 days for travel, on average in compari-son with Australians who are more likely to travel abroad, as Chinese and Japanese Millennials tend to travel within their own country.

Digital influence is of course, a powerful decision driver for Millenni-als. According to Amadeus, the airline technology firm, social media and brand recommendations are key to inspiring new travel experiences among young travellers - 27% of Asia Pacific Millennials open to recom-mendations from travel brands. Meanwhile, value is a key factor, with 37% of Millennials paying attention to recommendations that help them save money. Across Asia Pacific, 31% of Millennials prefer recommendations via email, with social media sugges-tions coming in second at 23%.

Travel retailers must adapt pre-trip and in-store touch points according to the planning level by each generation; the large majority plan their purchases, but only a small minority are exposed to duty free

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TIERED CITY CHINESE TARGETS

Taking a deep dive into Chinese international travellers, not surpris-ingly, those from tier one cities such as Beijing, Shanghai, Guangzhou, and Shenzhen represent half of the overall Chinese international air passengers, says m1nd-set However, as YoY growth of 14% (2018 vs 2019) sug-gests, tier two (Tianjin, Chongqing, Chengdu, Wuhan, Xiamen) citizens are increasingly flying more.

Taking a look at the shopping behaviour, Asian duty-free and travel retail shoppers tend to buy more beauty products, followed by confec-tionery. More specifically, among all Asian nationalities, Chinese are the ones most likely to buy travel retail beauty products and also spend the most on average ($345.2). They are followed by South Koreans. Indians (45%), and to a lesser extent also Japanese (36%), are instead more likely to buy confectionery compared to the other Asian nationalities.

Overall, Asian duty-free shoppers buy for themselves with 45% making self purchases: South Koreans (52%) and travellers from Singapore (52%) are significantly more likely to do so, followed by Chinese (48%).

However, gifting still plays a signifi-cant role for about four out of 10 duty free purchases overall – this holds especially true for Japanese shoppers

notice advertising both inflight and at the airport.

Conversion of passengers in the physical retail space is the holy grail for the duty free marketplace but that conversation needs to start increas-ingly earlier in the path to purchase.

Among the regular duty free shoppers from across the Generation Z, Millennials, Generation X and Boomers demographics, Millennials show the highest conversion levels, with 72% of them making purchases

after visiting a duty free store. Driving attention and therefore

footfall is one of the key drivers of demand and desire among duty-free airport consumers.

To drive footfall in the first place it is crucial to address key drivers to visit the duty free shop. Brands and retailers alike can do this by clearly highlighting offerings of specific products, such as gifting items and attractive promotions outside the shops, but also improve the retail environment and store front appeal by ensuring the presence of attractive, relevant displays that will in turn drive

effective engagement.

Supplementing store activations with concourse activities to drive interest and engagement can contribute to drive footfall and strengthen conversion by making duty free shopping more exciting and relevant. This is especially true for duty free impulse visitors and non-duty free visitors who do not have a specific reason to visit and do not find it appealing enough to just browse the shop.

From passenger journey to air-port operations, through travel retail and duty-free sectors, it is evident that rapid digital change is impacting consumer and passenger experience of the travel industry. With customer demands for an intuitive, seam-less experience, a laser focus on digital and data, is vital for satisfying their needs today

$345.2The average spend of Chinese travellers. The next

highest spenders are South Koreans

Purchasing duty-free exclusives is a key characteristic of Asian travellers. The majority (61%) prefer to interact with sales staff in-store. The influence of sales staff on the final decision to purchase is very high at 63%

m1nd-set research for DFNI

PART TWO



In line with the planning level, the moment of decision to purchase tends to be before leaving for the airport for 34% of travellers, especially for South Koreans and those from Singapore. However, in-store decision-making is still a key step in the path to purchase, especially after looking around the duty-free area.

Around half of Asian buyers purchase at least one item on promotion, the research finds. This share is signifi-cantly higher for Chinese (77%), who indeed, as seen before, are particu-larly triggered by value/promotion.

Purchasing duty-free exclusives is also a key characteristic of Asian travellers compared to other regions. Chinese, who are the most active and excited about travel retail shopping, show an above average share (81%) in this area. In line with the fact that Japanese purchasers are less likely to be triggered by exclusivity/unique-ness, this nationality tends to purchase exclusives much less compared to the other Asian nation-alities (25%).

Regarding barriers to purchase, the assortment range (or lack of) is a considerable factor for Asian travel-lers, especially for those coming from Vietnam (85%), Pakistan (75%) and Philippines (76%).

(51%) and those coming from Philippines (48%).

In terms of drivers to purchase, it doesn’t come as a surprise that the large majority of purchases in duty free made by Asian travellers were triggered by value/ promotion (price advantage, value for money and promotions) which accounts for 78% of all purchases.

However, it is worth noting that gifting at 55%, experience in the store (55%) and exclusivity (54%) are also extremely important drivers to purchase.

Chinese are particularly triggered by value/promotions (86%), as well as experience in the store and exclusiv-ity. Similarly, this applies for Philip-pine travellers (76%) for which gifting (73%) also plays a key role.

The large majority (86%) of Asian travellers pre-plan their purchase – however the majority do so only generally (65%), hence without knowing which product/brand to buy specifically. Among those who plan the most (overall), both Chinese (74%) and South Korean (62%) travellers are the most organised. Japanese travellers are instead more likely compared to the other nation-alities to plan purchases specifically (33%), followed by shoppers from Singapore (28%).

Luxury shoppers from China are younger than those from the rest of the world, with an average age of 28. The biggest demographic shift is coming from increasingly affluent Chinese consumers orginating from tier-three or below cities

Boston Consulting Group for Tencent

PART TWO



From passenger journey to air-port operations, through travel retail and duty-free sectors, it is evident that rapid digital change is impacting consumer and passenger experience of the travel industry. With customer demands for an intuitive, seam-less experience, a laser focus on digital and data, is vital for satisfying their needs today

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digitally-driven, says Angela Wang, Partner and Managing Director from The Boston Consulting Group.

Luxury shoppers from China are younger than those from the rest of the world with the average age being 28, mostly they are female, suggests Wang, citing the company’s joint research with Chinese e-commerce operator Tencent.

According to Wang, the biggest shift is coming from increasingly affluent Chinese consumers originat-ing from tier-three cities and below. While Chinese consumers from the top 15 cities account for 40% of luxury spending, the growth will come from those Chinese consumers in emerging origin cities – meaning that these tier three cities and below are set to grow as key origin markets, and (in 2018) already accounted for 6% of Chinese luxury shoppers.

The digital shopping behavior of these Chinese consumers, who are

72%The percentage of Millennials who make a

purchase after visiting a duty-free store – (mind-set 2018)

now more widespread in their origin markets, is shifting more quickly than before: over 50% of luxury consumer attention is online, mostly on mobile and comprised of social content driven traffic, other media traffic or organic search traffic. The key is that Chinese key opinion leaders are an important touchpoint to reach luxury consumers.

However, while digital is important as a driver of information, when it comes to shopping, most luxury shoppers return to physical stores. Therefore, the ‘Research Online Purchase Offline’ (RO-PO) purchase pathway is the most dominant for Chinese luxury consumers, occurring for 26% of overseas sales (vs 32% domestic).

Digital is crucial to reach and convert consumers living in lower tier cities and so Wang advises brands to consider a location-based cluster approach to help amplify their marketing reach.

For key touch points, searching for information on the duty-free offer is intense among Asian travelers overall, but even more so for Vietnamese (80%), Thai travellers (79%) and Chinese (72%).

Online is the key source for informa-tion, followed by touch points such as digital screens and billboards noticed at the airport.

Six out of 10 Asian shoppers do compare prices before making the final decision to purchase, mainly vs those in downtown shops (24%) or duty-free shops in other airports (20%). Those most likely to do so are Vietnamese, Chinese and Thai – in line with the intense touch points research mentioned earlier.

Finally, the majority of Asian shop-pers (61%) do interact with the sales staff instore – holding especially true for Chinese and Vietnamese custom-ers. Overall, the influence of sales staff on the final decision to purchase is very high at 63%.

LUXURY’S YOUTH DRIVE

Some of these wider trends are also reflected specifically in luxury duty free shopping, younger and more diverse Chinese consumers are driving the biggest shifts in spending behaviour, which is becoming more

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58%The percentage of sales represented by ROPO (Research Online Purchase Offline) for luxury

brands – Cecile Naour, Cartier

Millennials in Asia Pacific are set to become the most influential group in travel retail, especially due to digital audience – a power-ful decision driver for this younger cohort01

Many young travellers plan their shopping carefully when abroad, using in-depth advance research and recommendations from friends and influencers to create a specific shopping list02

Chinese social media eco-system WeChat offers myriad targeting op-portunities for travel retail brands that tap into specialist comparison shopping platforms such as Extra Aile’s Globuy or Jessica’s Secret03

The large majority of Asia Pacific travellers pre-plan their duty-free purchases. Chinese consumers are particularly triggered by value/promotions, while experience, exclusivity and gifting also play a significant role in drivers for purchase decisions

04

For the luxury market, Chinese consumers from the country’s top 15 cities currently account for 40% of spending, however future growth will come from those consumers originating from third or fourth-tier cities, accounting for 6% of luxury Chinese spending in 2018

05

To draw more duty-free store footfall and boost conversation rates, travel retailers need to introduce more compelling in-store elements, digital touch points and experiential retail to convert more Millennials into buyers

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PART THREE PART THREE



to reach overseas Chinese shoppers.

While WeChat and Weibo domi-nate the Chinese social media scene, their respective content platforms are only part of the story.

According to ParkLu, a Chinese marketplace for KOLs, more digitally savvy shoppers are also using networks on their favourite platforms to research products and brands before they buy. This is due to the online censorship in China that prevents domestic consumers easily accessing popular overseas social media platforms including Facebook, Instagram or Twitter. So, brands

127mThe number of consumers Lancôme’s Declaring Happy launch in Haitang Bay in 2018 reached

via multiple channels

looking to have a presence on China’s social networks have to adopt different strategies and that means creating content with their platform community in mind

CHAT ECOSYSTEMS

Thanks to blockbuster apps like WeChat, Asia Pacific consumers are pioneers in messaging, using chat apps rather than SMS to communi-cate with each other. These apps allow consumers to communicate rapidly and privately over data networks, whether one-to-one or in groups. WeChat reports a billion users, but despite its size, it’s not necessarily the most popular chat app across the region. WhatsApp is the dominant app in Malaysia and India, KakaoTalk is top in South Korea, Facebook Messenger leads in the Philippines and Oceania and LINE is the most popular platform in Japan and Thailand.

As chat apps become more essen-tial to consumers’ person-to-person communication, developers are adding functionality that includes entertainment, shopping, travel booking and even payment. The growing appeal of all-in-one apps is creating competition in the chat market, with Indian mobile wallet giant Paytm introducing messaging as part of its service,

In China, WeChat’s dominance is being challenged by new start-ups like Zidan Duanxin, also known as Bullet, which aims to be more private than WeChat, making it a “a much safer place to send sensitive informa-tion”, according to founder Luo Yonghao. The app was an instant hit when it launched in September 2018, becoming China’s most downloaded app and gaining 7.2 million users in just two weeks.

Messaging apps play an important role in the overseas shopping experience, not just because they allow travellers to stay in touch with friends and family at home, but

DRIVING A

NEW ERA OFTRAVEL RETAIL

“Price comparison is key for Chinese shoppers. 18% of Jessica’s Secret app users are influenced by brand promotions and travel retail purchases is one of the fastest growing channels”

Chinese consumers’ online behaviour is influencing the way the travel retail marketplace evolves. With a high percentage of Chinese luxury shoppers on social media, the role of influencers or Key Opinion Leaders, (KOLs) is an important one.

Digital offers GTR brands the ability to communicate through social media and reach more consumers via KOLs. The industry has become dominated by big social media campaigns; Lancome‘s Declaring Happy launch in Haitang Bay in 2018, reached 127 million consumers via multiple digital channels; while in May 2019, L’Oreal took three of its biggest KOLs and brand ambassadors to the Cannes Film Festival, to reach a wider global audience.

From Weibo and Douyin to the dominant force of WeChat, it’s key for brands operating in travel retail to master social media in China, in order

As Millennials continue to drive new behaviours in travel, so too does their digital-native mindset. We’ve gone beyond the research online purchase offline (RO-PO) duality, now we need to talk about retail’s new era of integration with social media ecosystems, which again is led by travellers in Asia Pacific but is already being adopted in wider international markets.

DIGITAL DRIVES A NEW ERA OF TRAVEL RETAIL

Mirko Wang, CEO at Jessica’s Secret

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app and this really plays to their preference for planning trips (and associated purchases) well ahead, usually between 1-3 months before departure.

However, Arthur Cong, who heads up travel retail platform Globuy that Chinese travellers are becomingly increasingly influenced by the quality of products and social shopping, with KOLs a stronger promoter for brands than official advertisements.

Globuy merges content from its own shopping guides, user product reviews and Chinese KOLs along with coupon offers for over 20 duty free

18%The percentage of Chinese shoppers influenced by brand promotions within three months of

using the WeChat app

stores (in China) and a price compari-son service. Cong says he started the business when he recognised the opportunity of offering coupon offers on boarding passes and the ability to target passengers based on their flight choice.

Cong says Globuy X WeChat mini programme has a very active user base. “They are high value users, now over 1 million, over 87.7% female, mostly 25-35 years, with great purchasing power.”

because their trips are increasingly informed by chat.

Chinese travellers use WeChat for travel inspiration, research and booking before departure, as well as at their destination for local recom-mendations and payment. Travel retailers are recognising the potential of chat apps to provide direct, fast interactions with their customers.

One travel retail operator, Korean-based The Shilla Duty Free has picked up on this trend in order to improve the shopping experience for its Chinese customers. By strengthening its relationship with WeChat Pay, Shilla’s new service allows shoppers to make direct purchases within the WeChat app, which they already use to chat with the retailer via chatbot services and receive notification of in-store events and promotions. With the new service, Shilla can provide a one-stop shopping experience for its Chinese customers, from a member-ship sign up to product purchase.

PRICE COMPARISON EDGE

“Price comparison is key for Chinese shoppers,” says Jessica’s Secret Founder, Chairman and CEO, Mirko Wang. “18% of users are influenced by brand promotions within three months of using the app and travel retail purchases is one of the fastest growing channels,” he said, adding that users can pre-order products from global duty free shops via the

“Chinese travellers are increasingly influenced by social shopping with Key Opinion Leaders seen as stronger promotors for brands than official advertisments”

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free retailers to attract this huge potential Chinese market. Many new approaches are developed now to attract Chinese consumers, such as special limited-edition products only available in certain duty-free shops, creative on/off-line campaigns and deep social media engagement,” he says.

DIGITAL PAYMENTS DRIVE

Several European airports are embracing the potential of WeChat to drive young Chinese Consumers to duty-free offerings on-site.

In May 2019, Amsterdam Airport Schiphol became the first in Europe to be a WeChat Pay Smart Airport. The adoption of the Chinese digital platform means the major European flights hub can offer WeChat users with both practical airport access information and shopping services covering a wide range of products in beauty, fashion, watches, jewellery and liquor. Customers can also order and pay for goods ahead of collection at the airport using WeChat Pay.

Besides the Mini Program, WeChat Pay experience zones have been set out across the Dutch airport. These will provide assistance for Chinese travellers and feature merchants ready to accept WeChat Pay. Chinese tourists can also receive coupons for a preferred currency exchange rate and discounts across Schiphol.

Over 500,000 departing Chinese passengers passed through Amster-dam Airport Schiphol in 2018 and Director of Consumer Products & Services Tanja Dik says investing in this kind of digital technology is important for the airport’s future ability to focus on convenience and customer experience.

In Spain, travel retail group Dufry has partnered with the bank BBVA, to introduce the first WeChat Pay facilities in the country at Madrid Airport. The Chinese payment platform was first introduced in the

“The community shares its wishlists and latest flash sales promotions. These consumers are changing their consumption habits with a fast pace. They care most about pre-trip preparation and like to know about product purchase decisions in advance to make more rationalised decisions,” says Cong.

“The reality is that travellers want to be able to compare product prices based on their destination, as well as the availability at the airport location. With our WeChat mini programme

we can leverage our own product reviews with localised shopping information and the user has all their shopping plus travel information at their fingertips within the WeChat ecosystem.”

Further to the call to arms for a more price-comparison focus for the GTR channel, Cong believes brands need to be more innovative across their on/off-line campaigns. “Chinese travel shoppers are no longer only price and brands sensitive, which makes it more complicated and difficult for all duty

Arthur Cong, Globuy x WeChat

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with just 11% of non-Chinese. Travel retailers have been responding to this trend with increasing global reach.

Lagardére Travel Retail has launched Chinese mobile digital payment services WeChat Pay and Alipay at several airports across Europe includ-ing Charles de Gaulle in Paris.

Global Blue has also launched early refund services on WeChat in locations such as Madrid Airport. This allows Chinese travellers to receive their tax refund directly onto their WeChat digital wallet when shopping abroad.

65%The percentage of Chinese tourists that use digi-

tal payment platforms on their travels compared with just 11% of non Chinese – Nielsen data

LOCATION MARKETING

Digital has been one of travel retail’s biggest buzzwords for quite some time, but advertising giant JCDecaux believes the industry is now coming into a data revolution.

The company’s Marketing &

non-Schengen shops in Terminal 1, but the global duty free store operator has said it plans to roll out the payment facilities to further stores in Madrid and Barcelona Airports

Dufry added that the software can easily be applied to the other 24 Spanish airports where it operates World Duty Free stores in a move designed to capitalise on the estimat-ed 650,000 overseas tourists that visit Spain every year, with the retailer saying that more initiatives designed to make Chinese visitors feel at home in Spanish airport retail environments are on the way.

At Heathrow, Dufry’s World Duty Free recently partnered with pay-ment process solutions provider SafeCharge to offer WeChat Pay and Alipay in-store.

“With Chinese tourism rising by 20% every year, the ability to offer popular Chinese mobile payment methods is a necessity for merchants,” says Yuval Ziv, CCO of SafeCharge. “Chinese travellers also carry huge spending power and are among the most tech savvy consumers globally. By offering mobile payment methods they are familiar with, merchants increase the likelihood of closing a purchase and maximising their sales conversion.” Recent figures from retail group Nielsen revealed that 65% of Chinese tourists use digital payment platforms on their travels compared

“Chinese tourists carry huge spending power. By offering mobile payment methods they are familiar with, merchants increase the likelihood of closing a purchase and maximising sales conversion”

PART T H R E E



signing a deal with NPD Travel Retail to be the only media company to have access to the company’s global traveller statistics service.

“Now we have developed a dynamic, real-time and data-driven manage-ment platform, which means that we are enriching the system with the data from the passenger,” Lepage says.

The contract, which will run over several years, gives JCDecaux direct access to the global passenger and traffic information of 550 airports, including a traveller segmentation and detailed shopper profiles. It will also have access to a ‘Time of Day/Day of Week’ module, which provides a detailed forward-looking view of precise passenger numbers by terminal, by nationality, by day of week and time of day.

“If you would like to target Millenni-als travelling from Shanghai to Paris, we could select and ensure the campaign is on the right media at the right time to target the right Chinese people,” Lepage adds.

This is something JCDecaux has put into practice at Singapore Changi Airport with Martell. The cognac brand aimed to specifically target Chinese travellers passing through the airport so JCDecaux was able to put tailored advertisements on boards near gates for flights to China. Lepage adds the system is sophisti-cated enough to automatically redirect the adverts to different boards if the departure gate for the flights changes.

Despite being in the midst of a digital revolution, JCDecaux takes account of more than just data when creating tailored advertising for brands in airports, as demonstrated by the new terminal at Guangzhou Baiyun International Airport.

Terminal two at the Chinese airport opened in April 2018 with JCDecaux having won the contract to install and operate the advertising concession.

Business Development Director Jérôme Lepage says: “The new revolution [in travel retail] is a data revolution. We have achieved a digital revolution in terms of hardware and we are already in the data revolution.”

Since early 2018, a first-of-its-kind agreement has been in place between JCDecaux, Dubai Duty Free and Dubai

Airports to provide relevant data-driven advertising content for consumers. Lepage explains: “The idea was to develop a platform, which could deliver accurate messages at the right time.”

In mid-2018, JCDecaux stepped up its data-driven approach to advertis-ing the right brands in travel retail by

From passenger journey to air-port operations, through travel retail and duty-free sectors, it is evident that rapid digital change is impacting consumer and passenger experience of the travel industry. With customer demands for an intuitive, seam-less experience, a laser focus on digital and data, is vital for satisfying their needs today.

Yuval Zic, CCO at SafeCharge

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GLOBAL SHAREPOINTS FOR DIGITAL MARKETING

Pernod Ricard has highlighted how Asia Pacific can lead the way for digital innovation within the GTR channel and called on industry stakeholders for closer data sharing on digital marketing initiatives to drive up category penetration rates.

The French multinational has been trialing a range of strategies to target travellers at important digital touch points along their journeys, but the liquor company believes closer cooperation with partners will unlock further sales.

It believes there is a strong will among travel retailers to reach out to consumers beyond the confines of their retail stores, in order to connect to audiences in a more synchronised way.

The company has recently com-pleted a large global shopper study to understand how far in advance

different travelling nationalities start to plan their travel retail shopping. For Chinese travellers, for example, Pernod Ricard says that there’s a very high level of planning that relates to travel in general, not just shopping. “For you to be part of their travel plans, you’ve got to get on their planning lists ahead of time to make sure you’re on their agenda,” says the company.

Pernod Ricard GTR has started to run dedicated travel retail marketing programmes for some of its latest launches such as the new Chivas Regal XV whisky, a campaign which encompassed multiple nationalities in 10 key markets this year.

Martell Cognac, with its strong Chinese following, has been a pioneering brand for the company’s travel retail marketing activity, which reaches a peak for Chinese New Year (CNY) and was cited as carrying among the group’s greatest elements of consumer experience and digital interaction tested to date. “We always make sure we’ve got a strong, integrated approach driving travel retail campaigns such as CNY”, says Pernod Ricard.

Fusing online and offline channels has been a key focus for the liquor group and, in this area, the company has been working with JCDecaux at Singapore Changi and HKIA to activate WeChat ‘Shake Panels’ across Asia. Shaking your phone in front of the ad panel with WeChat activated will download a piece of communica-tion or a voucher directly onto the phone, enabling customers to redeem something instore, which, the company says is starting to show effective results.

“A consumer requires multiple contacts. You can’t just have one piece of advertising somewhere and hope that they’ll see it and then purchase something from your brand, but it’s connecting with them at least four, five, six different times before they get into the store,” says the company.

The high ceilings in the new terminal played a significant part in JCDecaux’s advertising vision and have allowed the company to install what LePage calls ‘immersive tunnels’ in the new terminal; these have recently been occupied by Remy Martin and Tiffany & Co. He adds that these installations ‘fulfil Chinese expectations for the brand’.

Yet these immersive installations are not necessarily the norm for JCDecaux when given the blank canvas of a new airport terminal in the future. “It depends on the architecture of the airport and if we have got the right environment,” Lepage adds.

“In Guangzhou, we had the perfect location in terms of advertising value because it was a converging point to build up this immersive concept. It is for the right location in terms of advertising value and architecture, which will beautify the environment and deliver on the sense of place.”

As technology becomes more advanced and more advertising solutions are presented for travel retail stakeholders, collaboration between stakeholders is likely to become something more pronounced both from a data and a design point of view due to increasingly diverse and sophisticated advertising solutions.

As Lepage adds: “We all have our objectives, but the more collaboration the greater benefits to all parties, including passengers.”

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Travel retail has become an industry dominated by big social me-dia campaigns, designed to leverage wide global reach01

WeChat is a blockbuster social media platform with multiple re-search and retail integration opportunities02

Price comparison apps are providing a point of difference for trav-el retail brands keen to drive brand awareness03

Digital payments are increasingly found at European airports, the trend is for integrated WeChat or Alipay payment systems04

Digital offers the potential to target and reach customers all the time via flexible or adapted campaign messaging, for example, engage with consumer via social media on loyalty or promotional deals05

PAR

T T

HR

EE

TAKEOUTS

The new revolution in travel retail advertising is a data revolution, ac-cording to JCDecaux, that has launched exclusive digital campaigns based on incoming flights and passenger demographics by the hour06

Digital integration in the duty free retail environment offers greater convenience and higher levels of service, plus research shows, it can increase the average transaction of every purchase, when used in tan-dem with highly trained brand ambassadors

07

PA RT F O U R



picture in travel retail to share a new perspective with our partners.”

The company is looking to redefine travel retail, perhaps a bold statement from a small company, he said. “We are not so arrogant to think we could alone do this and disrupt the entire industry but we would like to give you a contribution on how we believe the long-term healthy growth of this industry could be. And a new perspec-tive of what our industry could play in such growth.”

He said the retail sector has gone through a revolution with e-com-merce, and development of smart-phone technology and explosion of their users. In the US, 25% of retail sales in the e-commerce channel are made on mobile; in contrast, that’s 85% in China. In the US, of the 18-39 demographic, 75% prefer to shop online. “Does this mean offline retailers are going to die? Absolutely not. Consumer needs and expecta-tions are changing. Retail is changing

to consumer-focused and e-com-merce is no longer enough,” he said.

Graziani said travel retail is lagging behind in omnichannel and digital, with many that made investments in this space turning those into PR initiatives. “They are also investing more in in-store customer engage-ment, assortment and promotional activities, retailtainment and aug-mented reality – but is this enough?

“Despite the fact that industry growth is at 9%, I don’t believe in-store engagement is enough for long-term growth.”

Graziani pointed to the fact that 51% of travellers are making purchase decisions before arriving at the airport. “So, we must engage digitally much earlier. But how do we do that? It’s too expensive to acquire them on our own digital platforms. When the industry began to talk about the

trinity, they were forgetting the important stakeholder – the airline. The airline is the only stakeholder in the industry who knows who the consumer is,” he said.

“Airlines have been undervalued for the potential contribution they can have on the industry. If we want to develop long-term stability, all stakeholders need to partner in an

Traditional travel retail operators will need to rethink their role as part of the trinity relationship that is a partnership between airports, brands and themselves as retail concession-aires. All will need to re-address data sharing to make the relationship work. Many key players have thrown open the door for conversations about data in order to collaborate for growth.

One retailer reinventing its role in the industry is 3Sixty Duty Free (previously DFASS). Executive Vice Chairman, Roberto Graziani says re-thinking the company’s position in the market is about a new perspective with digital disruption at the fore-front.

At the recent TFWA conference in Singapore, he explained how the company aims to redefine travel retail through its embrace of a new omnichannel approach, typified by its KrisShop joint venture with Singapore Airlines and SATS.

He said the company’s goal is to develop a healthy industry and leverage the power of digital disrup-tion. “Our aim is to constantly evolve, improve and be at the cutting edge of the industry. We climb higher to see wider – we continually look for the big

RETHINKINGTHE ROLEOF RETAIL

“Airlines have been undervalued for their potential contribution. For long-term stability, all stakeholders need to partner and put the con-sumer at the centre”

85%the number of retail e-commerce sales in

China now made on mobile devices

Roberto Graziani, Executive Vice Chairman, 3Sixty Duty Free

The travel retail industry is undergoing a data revolution and omnichannel is the most important future-facing strategy for retailers.

PART FOUR PART FOUR



effective way with the consumer at the centre.” Another digital disruptor is Kian Gould, CEO and co-founder of AOE an e-commerce marketplace solutions provider for airports.

“Airports increasingly have to represent themselves as multi-chan-nel and multi-service. They should be places with real customer experience, with great service, with modern technology, digital systems, they need to be ready to serve the new generations of digitally-savvy consumers,” he says. As a strategy, it’s now just as important to build a digital sales channel for an airport as it was to build a retail channel 50 years ago, says Gould.

Airports need to think of omnichan-nel approaches, says Gould. “One, where you might have an entry way for the domestic passengers, who are primarily focusing on convenience, speed of service. Then, you have a different entry way for those high-value, VIP passengers who might want to pre-order stuff, book a personal shopper and combine that with a hotel booking or opera ticket. As an airport, once you have that direct communica-tion with the passenger, you are capable of creating a seamless user experience and you can sell them virtually anything because you have that single customer view.”

Travel retail brands know they need to be more digital-ready, they need to embrace e-commerce and look at it from the airport or airline point of view. According to Gould, the travel retail marketplace become more challenging recently with the big duty-free operators in greater competition with each other, simply because they have started developing their own channels to try to sell digitally to the passengers.

“The success rate of this route is questionable because passengers do not really associate with a duty-free brand unless they are a very frequent travellers and they have interacted with that brand before. Even the airports have a challenge, not every airport is a brand itself either. The biggest brand for a passenger is still the airline.”


Brands operating in the GTR market-place need to change their perception of how a connected journey looks and feels, not to mention re-think their performance metrics.

Dr Patrick Bohl, Head of Retail & Advertising Budapest Airport, suggests airport retail is declining because of online competition. “Many airports have found themselves on this dangerous path and started struggling.”

The danger, he says, reflecting on the airport’s long-standing partner-ship with Heinemann, is that the perceived price advantage at the airport is not always available and consumers are distracted by a lot more products available online.

Airlines are best-placed to drive commercial offers to passengers at just the right time in their journeys, says Bohl. “This is because they are engaged end-to-end through flight bookings, pre-flight reminders,

boarding passes, apps, texts for gate notifications.” The reality is that airport retail must become 100% digitally engaged with customers at the airport, he explains.

AOE’s Gould thinks the online journey for luxury retailers at airports has only just begun.

AOE’s e-commerce technology platform for airports, which is opera-tional at Frankfurt, London Heathrow and Auckland and rolling out at multiple other locations, has been helping multi-retailer venues to take their products and services, integrate them into one digital market and then provide customers with a seamless omnichannel shopping experience. But, unlike the duty free and retail sales that comprise up to 70% of travel retail’s core categories, at most airports the trends in digital travel retail point sharply towards luxury.

For example, around 90% of the revenue generated by AOE’s Heath-row ‘boutique’ comes from luxury purchases, particularly fashion, jewellery, watches and consumer technology. Some of the most popular pre-orders are for high-end electron-ics such as the iPad Pro or expensive cameras, says Gould. The impact of online luxury purchases on revenue is also reflected in the increase of the average basket value to more than £430 (in 2018), some five times higher than the offline average.

“Airports will have to represent themselves as multi-channel and multi-service. They need to be ready to serve the new generations of digitally-savvy passengers”

Kian Gould, CEO, AOE

£430Average basket value for luxury purchases made

online via AOE’s luxury boutique at Heathrow

Heathrow Airport, UK AOE’s Boutique platform, which allows travellers to view and purchase items and then collect them at the airport, generates most of its revenue from luxury goods such as electronics, fash-ion and jewellery

PART FOUR PART FOUR



When purchasing luxury goods, customers need the peace of mind they are genuine – an assurance they receive when buying through authorised online shops at major international airports, says Gould.

“Sophisticated e-commerce markets also ensure constant availability of goods. If customers cannot find a desired item they will turn elsewhere, which means lost revenue at best and lost customers at worst. Convenience is crucial to the success of online marketplaces, for both the online user experience and the offline fulfilment, payment, reliability and performance.

With 81% of purchases at the airport now planned in advance, according market research from m1nd-set, it is absolutely crucial to make advance purchasing possible, says Gould.

“The travel retail operators can only cover a small spectrum of brands’ product ranges, that’s why airports need to run these online marketplac-es with all their partner retailers listed for passengers,” says Gould.

And why would passengers be expected to know which operator has the concession at which airport?

“People will naturally search online for airport names not retail operators. Even the larger operators like Dufry, Lagardère and Heinemann don’t usually have their brand associated with their stores. Instead the retail offer takes the airport location’s name plus a duty-free moniker.

example, allocate 20% to allow for experimentation across new brands or categories and “adjust the variables accordingly”, resulting in scenarios such as lower rent or better prices for the end customer.

Within the current GTR business model, Rasmussen saiys there are both advantages and disadvantages: “Sales are growing and there is continued growth in value terms, but we have to try and increase spending per passenger as much as possible.”

For Rasmussen,developing the company’s presence in China is the most important growth strategy for Lagardère. “The evolution of Chinese shoppers is that they are digitally savvy, 50% are under 35 and they use technology to shop.”. He cites their key shopping drivers as: convenience, localness, gifting and experience.

“The digital revolution in travel retail means we need to connect with passengers before they travel – 50% of them plan their purchases in advance – a key new behaviour is click & collect and this is being driven by price advantage. We need to facilitate and augment experience through digital, whether that’s providing brand ambassadors in stores with tablets in order to encourage immedi-ate currency conversions or to help provide customers with product reviews in-store. It’s all an opportu-nity to engage via CRM.”


The travel retail industry is facing a raft of omnichannel opportunities as it seeks to upgrade its digital infra-structure across multiple service points. Airports are increasing spend on digital innovations – according to Airports Council International, IT investment was up 8% between 2013-2016, while in 2018 overall airport IT spend was expected to reach $10bn, up from $8.6bn in 2017, according to air transport IT insights firm SITA.

But, importantly, that’s not perceived as a viable online shopping brand by the majority of passengers, which is proven by the limited success of most reserve & collect sites operated by travel retailers.” In comparison, Gould cites Heathrow Airport’s e-commerce performance that saw a 500% higher basket value (than in physical retail) in its first month of being live in November 2017.

$10bnestimated overall IT spend by airports

in 2018 (SITA)

Meanwhile brands and retailers operating within the sector are introducing omnichannel concepts and the trend is for more technology-led passenger touchpoints to facilitate a more seamless retail experience.

“Digital is the big focus for us now,” says Nice Airport’s Chief Commercial Officer Filip Soete. “We need to broaden our digital reputation, develop and optimise turnover, inform and satisfy our customers through loyalty programmes and connected VIP retail opportunities.” E-commerce is increasingly important for Nice Airport, says Soete, with online orders and conversion rates up 15% and 19% respectively for 2018 vs 2017.

After becoming a buzzword for the retail industry several years ago, omnichannel has become a catch all term for digital disruption and a facilitator for rapid change in consum-ers’ online and mobile shopping habits. From high street chains and major mall operators to e-commerce retailers, omnichannel represents an opportunity to experiment, invest and test out new channels for consumers to shop. But more importantly, it has paved the way for digital innovation and showcase physical and digital hybrid retail concepts, or ‘phygital’, that are channel agnostic; for frictionless behaviour that allows consumers to shop anywhere, anytime and anyway they want.

DISRUPTION FOR THE GTR INDUSTRY

The way travel retail operators will have to measure store performance is shifting in line with digital behaviours of growing numbers of passengers.

Success is no longer measured by turnover by square foot. Brands and retailers alike will need to change to valuing their store through data capture. There will be fewer transac-tions in-store, customers will come and expect brand experience. This shift begs the question: will the airport-retailer-brand concessionaire relationship still exist in a few years’

“Globally travel retail is still about the partnership between airport, retailer and brand, but each party needs to focus on the role of data to make the trinity work”

Dag Rasmussen, CEO, Lagardère Travel Retail

The reason why it’s so much higher is twofold, explains Gould. “Firstly, because the focus, design and product range of the boutique concentrates distinctly on brands and luxury and secondly, because all our data from airports shows that people want to use online shopping at airports especially for items that they are concerned to be in stock, available and authentic in other places, so the drive towards luxury ranges is evident.”

The business model of GTR needs to change, according to Lagardère Travel Retail Chairman and CEO Dag Rasmussen, who suggests that contracts between airports and travel

DATA SHARING FOR PROFIT

retail operators need to be more flexible in the future.

“Globally travel retail is still about the partnership between airport, retailer and brand, but people need to work together more, especially around the role of data,” says Rasmus-sen. “The retail evolution will be when we can share data (mostly our own) in

order to give the best customer experience,” he says.

“There should be a new bidding structure where airports set maxi-mum rent, retailers bid on the commercial elements and airports monitor quality of retail execution.” He adds that the trinity could collaborate on profit sharing, for

“The end goal is to be able to person-alise communication and our offer to travellers. But this requires a lot of information about the traveller that we just don’t have today”

Ambroise Fondeur, Chief Business Officer, Lagardère Travel Retail

PART FOUR PART FOUR



time? The advent of digital shopping behaviour is disruptive for the trinity, but everyone within it needs to adapt.

TRINITY CONVERGENCE

Rethinking how best to utilise the om-nichannel opportunity will be key for retailers in the airport space as they transition from a physical to a digital store. Instead of considering om-nichannel as simply about fulfilment of online orders, a more forward approach will be to craft experiences that seamlessly cross channels – ones that begin as a digital research journey and end at a physical airport. It’s this mix of digital and physical retail touchpoints that will shape the future of airport shopping behaviours, especially for brands that are already talking to their customers across both online and offline platforms.

Focusing on digital synergies has significantly changed the way passengers shop when they travel,

says Teo Chew Hoon, Group Senior Vice President of Airside Concessions, Changi Airport Group, Singapore.

“The retail experience at Changi Airport starts even before the traveller steps foot into the airport. We have made major enhancements to Changi’s duty-free shopping platform iShopChangi recently as we step up to the challenge of delivering even more to our passengers. To remain relevant and exciting in the constantly evolving e-commerce scene, iShop-Changi expanded it product line-up, bringing over 800 brands to its portal, and a new website interface with added social and experiential

for our marketplace airport partners. We have a WeChat mini programme for Auckland Airport, while Singapore Airlines is integrated with Ctrip for its Kris Shop e-commerce platform. It’s about connecting with the existing duty free eco-system to help digital convergence.”

IN-FLIGHT DISRUPTION

For Singapore Airlines’ Kris Shop, AOE’s approach has been to focus on branded content,” says Gould. “Every brand featured has its own microsite. There are opportunities for video content around product launches and then within the microsite, brand partners can work with the platform for a more digitised shopping experience. The customer benefits from a more connected approach when they place an order and they still get a branded experience that can be luxury pitched – for example a white gloved delivery service in an airport lounge to try on or return items.”

and price-comparisons in one place. Plus, they don’t want to see standard offers – they want luxury items, exclusives or limited-edition pieces. Too often, travel retailers just give consumers the bare minimum. “

“To invest in a wider digital offer, it takes buy-in from brands to build e-commerce systems, and travel retailers are not really doing anything different – due to the volume of airport footfall anyway, the travel retailers don’t need to concern themselves with providing a point of difference online,

shopping capabilities.”

In particular, Chew Hoon highlight-ed the recent Shiseido SENSE beauty pop-up as a great example of how the airport likes to blend its offline and online retail offer. “We love to delight our passengers with new retail experiences that especially engage across multiple senses,” she said. “We are always looking for opportunities to have a more omnichannel ap-proach to our activations. At Changi, we try to connect the dots between our digital offer on iShopChangi and our merchandise in stores. If we can gather more information about our customers that’s even better.”

TRINITY SILOS

AOE’s Gould talks of airlines or airports owning their own e-com-merce operations in silo. “It’s not enough for airports to just do reserve and collect. Passengers want to do all their purchasing, payments, research

they rely on duty free sales to make up the volume of sales.

“Consumers are not going to research who is the retailer at the airport, they’re wanting to do their research much earlier. For example, Jessica’s Secret has quickly learnt this and targets customers via its price comparison partnerships. Through its partnership with Thai duty free operator, King Power, Jessica’s Secret now directs 60% of the retailers’ trade via its app.

“We’re doing similar integrations

6%of all passenger spend with airlines occurs through loyalty programmes

From passenger journey to air-port operations, through travel retail and duty-free sectors, it is evident that rapid digital change is impacting consumer and passenger experience of the travel industry

PART FOUR PART FOUR



Previously, the travel retail industry has been too focused on volume, says Gould. With an e-commerce layer the retail offer needs to shift to be about margins for fewer, exclusive products.

“When you bring digital into it, brands can offer an exclusive luxury experience. Product selection and content options that are very different to the usual physical duty free store look and feel.”

Subscription or loyalty pro-grammes offer a tremendous opportunity for airlines. “As part of our offer for Singapore Airlines we are doing a subscription programme that includes a wide choice of duty free products. It can be anything from a favourite wine, a recommend-ed gift or even replenishment beauty products. We are seeing lots of requests for specific products on specific flights for regular travellers.”

These kinds of sales offers can push the dial on ancillary revenues advises Gould. “Consider the opportunity of converting frequent flyers’ points into e-commerce opportunities. Airlines can shift their customers’ loyalty points spending ‘debt’ onto e-commerce sales and leverage the points value to their advantage. For an airline, 6% of the passenger spend happens with loyalty points. The easiest thing would be to tie it to an airport.

“Some of the biggest airline loyalty programmes, such as United Airlines, Star Alliance have a lot of potential to be flexible with their offers – for example real time earn and burn sliding scale platforms where passengers can just add dollars to make a purchase.”

DIGITAL LENS FOCUS

A key challenge for all stakeholders in the global travel retail business is to develop concepts that appeal to tech-savvy, digital-native travellers. In this key area, convenience and F&B specialist, Paradies Lagardère plans to learn from its recent technological advancements, applying a digital lens focus to future projects, according to Gregg Paradies, CEO and President of the company.

Paradies Lagardère has revealed plans for a transformed retail offer at the new $3.6bn Salt Lake City Airport, being built in the mountainous US state of Utah and due for completion in 2024. One of Paradies’ highlights is a new TripAdvisor local retail concept that features a touchscreen that allows travellers to research Salt Lake City and the surrounding area.

Paradies Lagardère made headlines last year when it opened a virtual reality (VR) Experience Centre in New York JFK T4. With 70,000 passengers passing through the terminal every day spending an average of three-to-four hours to catch their flight, the self-serve towers allow users to escape to virtual worlds to explore an undersea world or deep space, or even build, sculpt and paint their 3D creations.

Paradies says the initiative was an industry first. “PeriscapeVR is the first-ever permanent, interactive virtual reality centre of its kind in an airport. The ground-breaking VR experience combines expertise in luxury, retail, original content, and technology, and offers travellers an interactive escape.”

“Paradies Lagardère has a plan for incorporating innovation and technol-ogy into its concepts. We’re going to pick the right technology, that is building an IT infrastructure for the long term that can be built upon vs going for flash in the pan coolness; We’re going to make sure we have the airport staff necessary to succeed in an increasingly sophisticated technol-

ogy environment; and we’re going to work to stay current in the face of ever changing technological innovations.”

Mobile payment is one of the more prosaic technological services Paradies Lagardère is now providing at many of the its new stores. “We continue to offer travellers enhanced efficiency and speed in their transac-tions through options such as Apple Pay and apps such as Grab, which allow travellers to pre-order meals on the go,” explains Paradies.

Introduced initially in 2016 at Pittsburgh and Denver international airports and then expanded to others, the Grab smartphone app allows users to place meal orders and pre-pay from their smartphone, while collecting their items from special pick-up areas.

The app features restaurant menus, as well as concourse maps and special offers.

FOLLOW THE TRAVEL TRAIL

To conclude this section, it’s back to Pernod Ricard, which has developed a dedicated marketing strategy that leverages the triple opportunities of pre-planning, during- and post-travel shopper behaviour.

Craig Johnson, Marketing Chief for Pernod Ricard says the wider travel retail industry would do well to consider the proverb: the journey is the reward.

“This demonstrates the transforma-tive power of travel. The mindset of travellers provides unique opportuni-ties for brands to reach consumers when they are open to new experi-ences, new products and are on a journey to discover.

Johnson says the company approach-es the channel by owning the journey and calling it ‘the travel trail’. “We aim to enhance the shopping experience in travel retail through creating connected and seamless consumer interactions. It is a core component of our strategy that we leverage our position to not only engage with travellers at the right place and right time, but to simultaneously enhance partnerships with retailers.”

“We are dedicated to building connected brand experiences across the Travel Trail that combine interac-tive, educatory and engaging activi-ties and promotions for travellers.

“The consumer journey to discovery within travel retail is key. The travel trail is what we call our integrated approach at Pernod Ricard, in which we target travellers at multiple touch points from the time they begin planning a trip to reaching their destination.”

“By grabbing their attention at multiple touchpoints within the travel trail marketplace, brands are better able to engage with the busy traveller, says Johnson. Simply put it is ‘pre-trip, during-trip and post-trip’ that Pernod Ricard can use to generate the most consumer interaction.

Shopper motivations drive the company’s understanding of the changing world of travel retail, he says. “We need to understand when purchase decisions are made, how the retail environment effects purchase, and for some audiences, the role of gifting.”

Pernod Ricard has identified eight different shopper missions including gifting, souvenirs and replenishment/stock-up. “Shoppers’ behaviours and perceptions are deeply linked to

70,000Daily passenger footfall at

New York JFK Airport T4

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Travel retail operators will need to rethink their role as part of the trinity relationship - they will need to re-address data sharing to make the new digital dynamic work

Digital disruption, for many travel retailers, will become about having a new perspective for how the industry as a whole can adapt for common growth

Airlines are (largely as yet) the uninvited member of the travel retail trin-ity. They will need to start thinking about represent themselves as multi-channel and multi-service with passenger data at the forefront for new shopper marketing opportunities

Subscription or loyalty programmes offer a tremendous retail opportu-nity for airlines that need to re-think passenger points offers. Targeted sales offers per passenger have the potential to push the dial on ancillary revenues

Pre-trip communication via technology plays a key role in building brand engagement with passengers; finding micromoments within ‘the travel trail’ or along the customer journey is key for prolonging campaigns

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specific nationalities. Some cultural specificities are related to the way our shoppers buy and consume our products. An example of this is the meaning behind gifting, and the completely different connotations that it can have depending on the nationality. This creates storytelling opportunities.

CAMPAIGN MICROMOMENTS

Micromoments are key for building Pernod Ricard’s understanding of pre-trip planning. “Pre-trip communi-cation via technology plays a key role in building engagement with the traveller in the channel. We know that 80% of travellers are mobile-enabled, which allows us to connect with these travellers beyond the store by integrating our messages at different stages of their travel journey.

“We are aware of the importance of pre-trip digital communication and the role of the travel trail as a driver of travel retail consideration and footfall. We will be increasing our investment in pre-trip communica-tion in our campaigns for 2019. This is

because we increasingly understand how product considerations and purchase decisions are often made before passengers arrive at the airport. In some cases, consumers carried out research about the category, the product or the brand up to five weeks before travelling, says the brand.

PRICE COMPARISON S-COMMERCE

One of the most important social-commerce brand partnerships recently has been Pernod Ricard’s collaboration with Chinese price comparison app, Jessica’s Secret.The brand platform partnership means Pernod Ricard can amplify its global travel retail product listings across the duty free price comparison app direct to Chinese travellers.

As part of the partnership, Pernod Ricard has unveiled a revamped wine and spirits section on the app, with up-to-date product and price infor-mation.

It will also include a dedicated section driving awareness of travel

retail promotional offers; and a calendar of media partnerships to deliver Pernod Ricard brand news and promotions to a captive audience via home page takeovers, voucher ad and IP-targeted push notifications, as well as extension offers via Alipay Interna-tional allowing an even greater audience of consumers to benefit from the partnership.

Leveraging its expertise in travel trail, Pernod Ricard will also launch a pre-ordering service on Jessica’s Secret for Chinese travellers. The partnership will provide travellers with a one-stop travel retail e-com-merce shop, from price comparison, ordering and paying online to airport pick-up.

“The partnership will enable us not only to leverage the reach of the app, but also to connect with Chinese travellers, in a meaningful way by tapping into an existing consumer behaviour and offering them content and offers to match,” Pernod Ricard Global Travel Retail Digital Manager APAC Janice Chan said.

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and customer ease, but which also recognises the potential of the airport itself as a destination in its own right. As the logistical aspects of travel become ever more efficient, airports can all too easily fall into adopting a cookie-cutter approach. But what the best operators are doing is seizing the opportunity to integrate powerful one-of-a-kind customer experiences into the journey — whether that’s imaginative dining concepts, intel-ligent service offers, or innovative retail destinations. And what’s clear, as passenger numbers continue to rise across the globe, is that the race to lead in travel experience has never been so intense.”

For synergies across the domestic and travel retail channels, O’Sullivan says it’s key to look at how the consumer begins their understanding of the brand online, which is then translated through to a travel retail environment. “We’ve been working with philanthropic online retailer Olivela to create their first physical stores. Digital touchpoints have been incorporated into the experience in a clear yet relaxed way, from interactive displays which expand on the stories behind each product, to focal walls which communicate the difference each purchase makes to the commu-nities and causes Olivela supports. For HMKM, this comes back to the key roles of storytelling and customer connection play within the retail experience – elements which all too often get lost in the sheer size and scale of the airport experience.”

TOUCHPOINT CHANGEMAKERS

Canvasing opinion among the retail design community, it’s clear there’s a sense that there’s not much newness happening (within airport retail design) to bring about the much-needed transformation of physical to digital with consumer shopping behaviour. The common theme is that store environments for the GTR channel need to change to cater for the digital passenger.

Brands and retailers need to work together to find ways to create passenger journeys that are dedicated to creating more data-centric touchpoints. It’s time for a sea change among retail designers and recogni-tion that the consumer is now dictating those interaction points.

The acquisition of passenger data is a common goal. With this in mind, agencies agree there is a need for a more integrated approach to mixing e-commerce into travel retail spaces – for example London Heathrow or Frankfurt Airports’ online offer have started to do this.

Future store design solutions will incorporate a unified customer journey in mind. There’s more interac-tion needed from everyone in the travel retail process – before, during, after purchase – from online partners such as Ctrip or Booking.com that target Chinese passengers from the beginning of their journey plans.

There’s a reason Singapore‘s Changi is consistently voted the best international airport in the world — thanks to its combina-tion of world-class retail and innovative leisure experiences, set in a spectacular landscape (and positioned landside, so it becomes a landmark destination for locals as well as travellers).

DESIGNING SPACES FOR A DIGITAL AGE OF TRAVEL

The view of retail design specialist agency, HMKM is that storytelling in the retail environment is paramount and that it is amplified through digital touchpoints in-store. The agency’s associate director, John-Michael O’Sullivan says interaction with the passenger will be key to change up the airport retail experience.

“There are a host of factors that

combine to create a great airport experience, from streamlined, well-thought-out passenger processes to culturally relevant dining offers and memorably-designed environments,” he says.

CULTURE HUBS

The USP of airports is local culture, or hubs that thrive on entertainment, says O’Sullivan. “Austin Bergstrom is one of the best US airports, thanks to a programme of regular live music events, and a food line-up that celebrates the city’s vibrant food truck culture. Or take San Francisco Interna-tional, where three of the city’s best-loved chefs have combined to create a food hall with a distinctive local flavour. Or the iconic TWA terminal at JFK, now reborn as a stunning airport hotel complete with pop-ups from innovative retail brands Shinola and Warby Parker as part of the offer, plus a cocktail bar set inside a vintage Lockheed Constellation plane.”

What these airports share is an

imaginative, innovative approach to the passenger journey, he says. “It’s a journey that maximises convenience

RETAIL DESIGN& DUTY FREEEXPERIENCE

“The USP of airports is local culture; they are transport hubs that thrive on entertainment. The focus should be an imaginative, innovative approach to the passenger journey”

John-Michael O’Sullivan, Associate Director, HMKM

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brands to deliver bespoke content due to the requirement that messaging needs to be dedicated to that location.

In contrast, a vertical ribbon – something that works for the environ-ment – can split up airport areas, duty free or F&B for example to help passengers navigate their way around the space. Dufry’s Cancun store is a good example; it has high ceilings and volume of space opens up the possibilities for branded or placemak-ing markers. Instead of a psychologi-cal horizontal barrier, the fundamen-tal shift to vertical allows designers to play with the space. In Cancun, the airport was able to harness the signage opportunities as beacons meaning it could play to the destina-tion’s tequila heritage.

MIXED REALITY TESTBEDS

Using mixed realities technology is another area for digital innovation, as agencies say it improves their concept design sign off process via 3D or virtual reality software. Agencies and retailers alike are increasingly experimenting with augmented reality (AR) in the retail space. Magic mirrors in the travel retail beauty category have been working well with brands such as Shiseido, L’Oréaland Sephora all taking the stance that by putting technology in the hands of the customer, they can have a more personalised shopping experience.

Getting people to engage by trying something on virtually is great for brands to have a deeper conversation, especially for products such as lipsticks or eyeshad-ows and especially sunglasses.

Change has been happening over the last few years, with digital improvements in key locations, say experts that specialise in airport design. There has been a sea-change from the likes of Nuance (now owned by Dufry) and Aer Rianta over their approach to digitised briefs. For example, Dufry has changed its viewpoint around digital screens or ‘contentainment’ and have more recently, updated screens for brand campaigns that used to sit at the end of gondolas in-store to an entire digitally-driven atmosphere.

CONTENTAINMENT 2.0

In the last five years retailers such as Dufry/World Duty Free have invested in rolling out contentainment executions – across multiple screens - at airports such as Zurich and Heathrow. This kind of itinerant digital strategy could give them the flexibility to change the whole feel and ambience of a space, in order to change the mood as and when necessary - even by the hour if necessary. However, consumers are now bombarded by branded content from multiple digital channels and passengers expect this level of content in an airport environment.

A newer approach within major airport retail hub is location-specific digital ribbons that sit above the eyeline. They present both an opportunity and a challenge, say designers.

A linear digital line that sits just above the main walkway delivers new content to passengers, but can be distracting. It can be a challenge for

“Using mixed realities such as AR in an airport retail environment pro-vides a new era of contentainment”

Alison Farrington, Associate Editor, DFNI

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THE DUTY FREEEXPERIENCE

Retail environments are key to driving engagement in-store. The opportunity of brand immersion increasingly overrides that of price differentials and travellers report they are more inclined to seek out travel retail exclusives, rare products or limited-edition travel retail channel products.

Brands are using a phygital-led approach to delivering inspirational store concepts, with a range of physical attributes that lead to a reason to visit, discoverable via a digital journey.

Here we present some recent Duty Free Experience (DFX) best-in-class examples of how brands have delivered on inspira-tion, engagement, digital touch-points and data mining across the pre or planning stage through to in-store campaign activation and post trip opportunity. What is it that makes these examples stand out? These are the brands resonating across multiple touchpoints and offer a heightened opportunity to leverage conversion.

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1. SHISEIDO SENSE Changi Airport, Singapore (May-June 2019)

Shiseido took travellers on a beautiful sensory journey with its Forest Valley and SENSE digital pop up at new Jewel shopping mall, Changi Airport, Singapore.

Shiseido’s SENSE Beauty pop-up was a brand showcase in collaboration with Singapore duty free operator, The Shilla and featured a number of sensory and digital attractions in a temporary space at the airport.

Pushing the boundaries of physical-meets-digital travel retail concepts, this interactive experience utilised a series of digital touchpoints for travellers to learn more about Shiseido’s hero skincare products. The pop-up introduced state of the art technology such as augmented reality point of sale (POS) as well as a virtual experience unique to each guest.

Personalised brand engagement is a key topic within the space. From the initial QR code download to the digitised metal stamp that unlocks augmented reality POS product information, each visitor is in control of their own Shiseido experience. The added touch of creating an individual SENSE flying avatar social media campaign feels like an innovative and digital-mindset driven initiative.

Described by the Japanese beauty giant as an innovative retail execution that targets deeper traveller engagement, the company said it plans to revolutionise the customer experience through non-tradi-tional retail experiments. This activation, along with its two-year sponsorship project, the Shiseido Forest Valley at Jewel Changi, is an indication of further developments within the travel retail space as it looks to elevate its consumer engagement and digital storytelling.

The dual placemaking and digital strategy for this pop-up meant it achieved an overarching sensory campaign. It elevated the brand beyond mere product and touched consumers with emotion and holistic wellbeing for a longer lasting brand impression.

“We aim to push boundaries by revolutionising the customer experience through non-tradi-tional retail experiments, and this pop-up embodies that commitment”

Philippe Lesné, President and CEO, Shiseido Travel Retail

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2. ABSOLUT GLOBAL SELFIEMultiple airports (May – September 2018)

Absolut launched a Global Selfie advertising campaign over the summer of 2018 at selected airports, to celebrate the launch of its limited edition Absolut World vodka.

The campaign invited travellers flying from Frankfurt and Singapore to upload a picture of themselves via the Absolut Global Selfie microsite with their name, age, city and their favourite places for eating, drinking and socialising with friends in their home city. The insider travel tips and selfies were then displayed on screens in terminals with flights departing to the cities mentioned.

The contributors’ selfies were then displayed against different-themed backdrops such as ‘Ready for Your Trip’, ‘Join our Global Selfie’ or ‘Unlock Local Hotspots’ and transformed into a photo collage.

The campaign ran on JCDecaux’s digital duty-free network across all four terminals at Singapore’s Changi Airport, marking the advertising company’s first live social feed digital campaign.

This was both an ‘in the moment’ and a ‘post trip’ marketing opportu-nity, according to Pernod Ricard’s VP of GTR Marketing Craig Johnson, who said the Absolut’s Global Selfie campaign was a digital engagement platform designed to encourage millennials from all over the world to come together by celebrating different countries and cultures.

Pernod Ricard made the most of the post-trip opportunity with a follow up campaign. After participating in the engagement activity: users received an email with their selfie which contained further information about the next Absolut Limited Edition campaign: Drop of Love.

This ongoing limited edition campaign is a good example of how Pernod Ricard is tailoring shopping experiences around specific missions its consumers might have, based on the typologies and nationalities throughout their journey.

“Shopping is part of the journey and consumers are demanding experiences,” said Johnson. “We’re reaching our shoppers across touchpoints in their travel trail meaning we leave our shoppers as loyal consumers when they return home.”

“We’re reaching our shoppers across touchpoints in their travel trail, meaning we leave them as loyal consumers when they return home”

Craig Johnson, VP of GTR Marketing, Pernod Travel Retail

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3. DIOR PINK CITY, DFS T GALLERIA Macau (April – June 2019)

Dior’s Pink City pop-up was a worldwide beauty retail concept launched in partnership with DFS at the LVMH-owned duty free retailer’s downtown hotel resort location of T Galleria in the Galaxy Macau, and was designed to embody its pink name and the brand’s flirtatious spirit.

The multi-sensory retail activation featured “an immersive journey around Dior’s beauty icons and heritage,” and majored on the brand’s hero products of perfume and lipstick, featuring the strapline: The City as Dreamt by Christian Dior, in Pink.

Organised like city blocks around an intersection, each of the four connected pop-up shops offered exclusive brand experiences to visitors and the concept showcased DFS’ expertise in destination marketing.

The Pink City tour began with Dior’s pink flower shop area, where visitors discovered Dior’s range of floral fragrances in an educational and immersive manner.

Next on the Pink City experience tour was the Pink Library area where personalised colour choice was the theme. Dior described this room as featuring all the different hues of pink that are magnified and enhanced, evoking the brand heritage around pink that always stood as one of Mr Dior’s favourite colours. Here visitors could lounge on a lipstick sofa, while choosing their perfect shade of pink. This room was dedicated to the Dior Addict Stellar Shine lipstick, available in a colour palette of 24 shades.

Next up was the Pink Music Hall, which contained a photobooth and karaoke machine. Lastly, visitors were guided towards the Pink Cafe, where bite-sized pink treats and rose tea beverages were on the menu.

Aside from the numerous retailtainment attractions within the Dior Pink City pop-up, there were a number of services available to custom-ers: they could compose and personalise gift boxes with a range of packaging and ribbons; they could book make-up tutorials and hear from professional make-up artists or flower artists who were in residence; and they could also engrave their new Dior Addict Stellar Shine Galaxy Shade lipstick case.

The truly immersive manner of this pop-up stood out. It offered unprecedented and multiple on-brand pink experiences for customers to dive into. By bringing exclusive activities from a pink flower shop or pink cafe to life, coupled with the personalisation opportunities, this partnership marked a commitment from both brands to create destination-driven entertainment designed as a social retail space.

Leonardo Ferracina, Travel Retail Director Hong Kong & Macau, Dior

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“The consumer is projected into a truly engaging Dior discovery, across the senses”

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4. MARTELL CORDON BLEU FOR CHINESE NEW YEAR Multiple airports (January-February 2019)

Pernod Ricard marked the launch of its Martell Cordon Bleu Limited Edition bottle in time for Chinese New Year with an interactive virtual reality (VR) travel retail experience, stationed at a number of global travel retail airport locations.

The interactive digital installation invited travellers to ‘Be the Artist’ and took inspiration from Martell’s collaboration with French artist, Mathilde de l’Ecotais, who designed the special cyanotype bottle and gift box for the brand’s Cordon Bleu Limited Edition release.

Martell’s activation played to travellers’ curiosity by offering an engaging digital experience and encouraged those taking part to explore their creative side. Transported to the artist’s French studio, the VR experience saw participants using gesture recognition technology via a digital paint-brush and palette to create personalised patterns and messages around the life-size limited edition bottle. While the participant was immersed in VR, their experience was also broadcast to passers-by via large screens linked to the branded retail columns.

Upon completion, each work of art was automatically emailed to their creators, or alternatively, the personalised digital greeting card was available to be published on social media channels or shared with friends and family to celebrate Chinese New Year.

Martell’s installation encouraged data capture and a heightened sense of brand awareness after taking part in the digital experience, often leading to higher conversion rates among passengers.

Aside from the brand engagement value associated with this activation, Martell’s creative execution conveyed a personalisation opportunity in both physical and digital form. By working with a characterful artist such as l’Ecotais, the product’s seasonal appeal was communicated before, during and after the traveller’s exposure to the activation. For all participants, the enduring brand communication was focused on the exclusive packaging design that explores Martell’s cognac characteristics and emphasizes the generous flavours of the legendary cognac.

“Technology allows us to create activations that are unique, dynamic and highly engaging. This helps our brands to build strong connections with target audiences and to drive storytelling via digital media and digital touchpoints pre-trip and during the airport journey,” said Pernod Ricard’s Craig Johnson.

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“Technology allows us to create activations that are dynamic and highly engaging”

Craig Johnson, VP of GTR Marketing, Pernod Travel Retail

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5. TOBLERONE Dubai Duty Free (June 2019)

Mondelez World Travel Retail channelled in-store digital engage-ment with a dedicated augmented reality (AR) installation at its Toblerone store space at Dubai Duty Free (DDF) in Dubai International Airport.

The AR and holographic features in-store were designed to entice passengers into the Toblerone area at DDF, and keep them there playing with the brand. The company said it wanted to focus on both digital immersive experiences and sense of place engagement.

The Toblerone takeover installation featured two AR games, the first of which invited travellers to use the iconic Toblerone 360g bar to build Dubai’s skyline. With motion-sensing technology, a simulated Toblerone bar appeared between the player’s hands on the wall bay screen, which the player then used to catch virtual triangles that shaped the city’s famous skyscraper-riddled silhouette in a timed race. In the second game, players used a Toblerone Tiny bag to catch as many virtual Tiny miniatures as they could, in the allotted time. Video footage of the game and the player’s score were then shared to the leaderboard in-store and on social media for 360-degree engagement.

The adjacent wall bay also featured a holographic display that highlighted the various Toblerone Tiny flavours – Milk Chocolate, Dark Chocolate, White Chocolate and Crunchy Almonds – and depicted their journey from Switzer-land, the home of Toblerone, all the way to Dubai.

Mondelez says digital is ingrained in its vision to drive category growth “by delighting all travellers” – including Next-Gen passengers who are highly connected and always on the lookout for unique experiences.

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Sensory, memorable retail engagement is a key differentiator be-tween convenient online shopping and the opportunity present-ed by premium, location-based travel retail exclusives 01

For travel retail brands looking to stand out, it will be about creat-ing memorable and immersive experiences for travellers. Just look at the two-year Shiseido SENSE art installation and retail ex-perience at Jewel, Changi in Singapore that engages across digital

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Digital-first is paramount when it comes to designing retail spac-es with multiple touchpoints. From AR to brand storytelling, ex-tended dwell time through campaign engagement is a key factor03

Successful GTR store design is increasingly likely to be deter-mined by data capture and social amplification through interac-tive brand campaigns beyond a sales per sq ft metric04

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T his report was sponsored by Omnicom Retail Group – a centre of commerce marketing excellence

www.omnicomretailgroup.com

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