Global Travel Retail Magazine TFWA WE October 2023 by Paramount Publishing Ltd.

GTRMAG.COM DDF celebrates milestone anniversary p. 14 Dufry’s travel retail revolution p. 24 Latin America spotlight p. 62 Rise in conversational AI p. 78 OCTOBER 2023 TFWA WORLD EXHIBITION & CONFERENCE VOL 35 · NO 6

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Newer, bigger and better than ever

If there is a theme to virtually every conversation in travel retail this year it’s about how good business is. Even Asian companies — which still have a way to go to hit 2019 numbers, given the closures and lockdowns that extended into this year — are seeing skyrocketing sales, with a very attractive 2024 on the horizon.

The traveling shopper is back. But brands and retailers alike are seeing that the 2023 travel retail shopper is not the same as the 2019 shopper. Today’s consumer is younger, more environmentally conscious, more fashion-oriented and, after a few years of living the majority of life online, more expecting of a strong digital environment. Travel retail consumers are savvier and more discerning than ever, and both retailers and brands need a comprehensive omnichannel approach to capture them.

In the Middle East, ARI’s Rob Marriott says, “[The region] moves at a tremendous pace, and we need to move with it, in order to accommodate the constantly changing passenger profile.” ARI does this through a constantly evolving digital approach and a new brand identity that’s all about joy.

For Jordanian Duty Free, investing in digital means not only enables the retailer to reach customers beyond physical store locations, but also create a seamless omni-channel shopping journey. Iraq Duty Free is focusing its efforts on upgrades and expansion, expecting that this will double company revenue. As Skytrax once again announced Hamad International as the “World’s Best Airport Shopping,” we would expect much of Qatar Duty Free, and indeed it’s challenging to keep up with all the new openings and unique offerings by the retailer.

With China’s border open, DFA’s Macau store gets busier by the day, with Hong Kong, Taiwan and Japan picking up as source markets. Heinemann’s US subsidiary is truly coming into its own, with the cruise channel becoming increasingly important for the retailer.

Meanwhile, Lotte is wooing Gen Z with a plethora of approaches that go far beyond a digital offer. The Korea-based retailer uses star power to drive the younger generation — who purchase 70% of the world’s luxury items — to visit the store, with top K-pop concerts, as one example. The retailer launched two new apps this year, and also publishes its own digital magazine.

As our industry has been chomping at the bit for China’s international travelers to return, India quietly took over as having the highest population in the world, one with increasing capability of spending, and one that’s currently building the biggest airport in Asia; it will also be the region’s newest hub.

Brands and distributors such as Essence are bringing new items into its expanded travel retail territory again, focused on items that appeal to the youngest adult generation and the one that will be in the driver’s seat for some time.

With all the activity and positive news from these and other companies in travel this year’s TFWA World Exhibition in Cannes promises to be one of the most successful and spectacular ever. We at Global Travel Retail Magazine look forward to seeing you there.

Kindest regards,

HIBAH NOOR Editor-in-Chief

Global Travel Retail Magazine (ISSN 0962-0699) is published seven times a year by Paramount Publishing Company Inc. The views expressed in this magazine do not necessarily reflect the views and opinions of the publisher or the editor. October 2023, Vol 35. No. 6. Printed in Canada. All rights reserved. Nothing may be reprinted in whole or in part without written permission from the publisher. Paramount Publishing Company Inc.

GLOBAL TRAVEL RETAIL MAGAZINE Tel: 1 905 821 3344 www.gtrmag.com

PUBLISHER Aijaz Khan aijaz@globalmarketingcom.ca

EDITORIAL DEPARTMENT EDITOR-IN-CHIEF Hibah Noor hibah@gtrmag.com

DEPUTY EDITOR Laura Shirk laura@gtrmag.com

SENIOR WRITER Alison Farrington alison@gtrmag.com

SENIOR EDITOR Wendy Morley wendy@gtrmag.com

SENIOR EDITOR Mary Jane Pittilla maryjanepittilla@hotmail.com

ART DIRECTOR Jessica Hearn jessica@globalmarketingcom.ca

CIRCULATION & SUBSCRIPTION MANAGER accounts@globalmarketingcom.ca

6 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Letter from the Editor

OCTOBER · VOL 35 · NO 6

hibah@gtrmag.com

WHAT’S INSIDE 20

The main event

Since its inception in 1983, Dubai Duty Free established itself as one of the world’s most important travel retailers. Executive Vice Chairman and CEO Colm McLoughlin tells Global Travel Retail Magazine how the company is celebrating its milestone 40th anniversary

by HIBAH NOOR

Dubai Duty Free will be celebrating its 40th anniversary this year, and with each passing year the retailer continues to grow. During the first seven months of 2023 compared to the same time period in 2022, Dubai Duty Free saw a 34% increase in sales, reaching US$1.23 billion.

As of writing, that figure had climbed to US$1.33 billion, which is 32.59% higher than the same period last year and 7.63% higher than pre-pandemic in 2019. Executive Vice Chairman and CEO Colm McLoughlin states that he is positive the retailer will meet its target of AED7.5 billion — over US$2 billion — by the end of the year.

Top categories

The top five categories at Dubai Duty Free tend to be dissimilar to those in most travel retailers, especially with the inclusion

of gold, which is a big seller for the retailer. McLoughlin says the top five categories so far in 2023 are perfumes, liquor, gold, cigarettes & tobacco, and electronics. In numbers, perfumes sales reached US$219 million, representing a 26% increase. Sales of liquor were up by 20% at US$189 million, while gold sales increased by 30% over the same period last year, with sales amounting to US$129 million. Cigarettes & tobacco increased by 35% with sales totalling US$125 million, while electronics came in fifth place with sales of US$106 million, representing a 39% increase.

Millennium Millionaire and Finest Surprise

The Dubai Duty Free Millennium Millionaire draw, which began in 1999, continues to grow in popularity, as does the Finest Surprise promotion. “More and more participants are purchasing tickets both in store and online,” says McLoughlin. “One factor in its steady growth can be attributed to the trust and confidence of our customers in the promotions. This behavior reflects the significant progress in ticket sales, with an increase of 12% compared to the 2022 sales figure.”

Another reason for the continued growth of these contests is Dubai Duty Free’s use of digital marketing

14 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

Dubai Duty Free believes that it will meet its target of AED7.5 billion — over US$2 billion — by the end of the year in time for it’s 40th anniversary Colm McLoughlin, Executive Vice Chairman and CEO, Dubai Duty Free Dubai Duty Free’s executive dream team

tools, email campaigns in particular, says McLoughlin. “As one of the most strategic digital tools, Dubai Duty Free uses email communications with over 377,000 records in its database. The email campaigns greatly help to increase online sales, which represent 64% of overall Millennium Millionaire and Finest Surprise ticket sales. The average daily online sale is US$82,000.”

According to McLoughlin, email marketing boosts sales by 200% to 300%. “As an example, the email to promote Millennium Millionaire Series 426 in June this year drove over US$300,000 in sales in less than a day, which is triple compared to average daily sales on regular days,” he says.

40th anniversary promotions

In December of this year, Dubai Duty Free will celebrate 40 years in business, and it is not marking the landmark anniversary quietly. McLoughlin says, “Plans are in place to make our 40th anniversary a memorable occasion.”

The celebrations will feature a series of promotional activities involving customers, suppliers, and staff, as Dubai Duty Free’s way of saying “Thank you for helping us reach this milestone year.”

On the day, a wide range of merchandise will be offered at a 25% discount; this promotion will continue for three days, from midnight on December 17 until midnight on December 20. McLoughlin states this is an annual celebratory event for passengers traveling through Dubai International and Al Maktoum International.

With the exception of gold, electronics and select fashion brands, this three-day 25% discount applies to all major categories, including the Dubai Duty Free Millennium Millionaire and Finest Surprise tickets. Shoppers do not have to visit the airport

to receive this discount, as it also applies to online shopping — using Dubai Duty Free's Click & Collect service and Dubai Duty Free's Home Delivery service — available to UAE residents.

Dubai Duty Free will run a special “Shop & Win” promotion, where customers who spend a minimum amount will have the opportunity to win gold with a 40th anniversary mark. “There will be 40 winners per week over four weeks,” says McLoughlin.

“We have worked closely with our suppliers to create a range of products and promotions that would link their brand exclusively with this milestone event,” he continues. “Currently we have over 25 products lined up from major categories such as liquor, perfumes and cosmetics, cigarettes and tobacco, gold, confectionery, and delicatessen.”

A special range of merchandise and corporate gifts will also mark the anniversary, and the Finest Surprise luxury car promotion will feature a special Bentley.

The lead-up and anniversary itself

Leading up to the anniversary day, which is December 20, the company will offer a whirlwind of activities to whip up excitement. These include fun activations on social media, with CGI video content as one example. Dubai Duty Free will invite print and online coverage in various trade publications and key UAE media, and it will hold a black-tie gala.

The company commissioned a high-profile celebratory publication from The Moodie Davitt Report, with distribution to multiple audiences in print and online. This publication will showcase highlights of the Dubai Duty Free story so far and look ahead at what’s to come.

“We have also negotiated a series of anniversary day supplements with different trade publications and key UAE media

16 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023

Retailer News

Leading up to the anniversary day, Dubai Duty Free will offer a host of activities to create excitement

to coincide with the anniversary date. This includes a series of full-page and double-page ads booked in the leading trade press to appear in the Cannes issue,” says McLoughlin.

An Irish radio station, Clare FM, will create a podcast documentary capturing Dubai Duty Free’s history and four decades of retailing success, with the support of the retailer.

“On the anniversary day itself, December 20, Dubai Duty Free will ensure a party-like atmosphere throughout the retail operation, including a celebratory cake cutting, a Millennium Millionaire and Finest Surprise draw, and a staff surprise draw,” says McLoughlin.

Finally, as the anniversary draws to a close, Dubai Duty Free will host a “glittering” gala as a “thank-you” to those who have contributed to the company’s success. McLoughlin says: “It will be an evening of celebration with entertainment and fine dining that is sure to take you down memory lane.”

54 years in industry, 40 with Dubai Duty Free

The term “industry veteran” doesn’t begin to cover Colm McLoughlin’s stellar career. With 54 years in duty free under his belt, he has been with Dubai Duty Free since its inception. “Forty years ago, in 1983, I never visualized for one second that I would be here 40 years later, and I feel very privileged to be so,” he says. “Although I never expected my tenure to be so long, I’ve been thrilled by the success. I feel very fortunate that I was given unbelievable trust to head up this organization and carry it through. And now, coming up to the 40th anniversary, I reflect very positively and honestly. I don’t regret one minute of my time here.”

McLoughlin does not want anyone to get the impression that he created this retail giant alone, however. “The growth and development of Dubai Duty Free are due to several factors, not least of which is the tremendous support I have receive from H.H. Sheikh Ahmed bin Saeed Al Maktoum, who is a superstar,” he says. “Also, I praise all our 5,200 staff, who were the best in the

industry, and lastly, I thank my wife Breeda and my family for their support down the years.”

He also attributes his success to his business values, represented by an adage learned from his father: “‘Keep your feet on the ground, act normal, treat people well, and you’ll be rewarded tenfold.’ And I think that is true. The right attitude will always carry you far in business,” he says.

After 54 years, has McLoughlin had enough? “As I usually tell people, I haven’t finished the job yet,” he says. “At 80 I still enjoy going to work and get huge satisfaction out of it. I have enjoyed very much what I have been doing, and I am enjoying very much the fact that Dubai Duty Free continues to grow. There are no strict rules about retiring. I talk to myself about it every year, and then I let it pass for another year.”

The next 40 years

After 40 years of continuously growing success, McLoughlin says of the coming era: “I think the future is going to be terrific. Dubai Duty Free is a brand that continues to excel and grow, one of the most trusted and recognized in the UAE. Even after 40 years, we are constantly looking at our retail offer at Dubai International and Al Maktoum International airports, enhancing it, and pursuing innovation and sustainability. We always seek a more forward way of thinking and seek to improve our service to our customers.”

As the population of Dubai is forecast to reach five million, McLoughlin says his forecast for Dubai Duty Free 10 years from now would be annual sales of about US$3 billion with 7,000 to 8,000 staff members, and possibly another hotel. “We already own one hotel, and we already own a tennis stadium. We are currently looking at probably enlarging that and upgrading our tennis tournament. Within our tennis stadium, we have several restaurants, including The Irish Village. We have two outlets now in Dubai, we might have more!”

18 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023

Retailer News

The Dubai Duty Free Millennium Millionaire draw began in 1999 and continues to grow in popularity

THE NEW FRAGRANCE

Never standing still

Together with Hamad International Airport, Qatar Duty Free has been a huge success story since opening in 2014. Senior Vice President Thabet Musleh ensures this is the case by staying ahead of trends and continuously offering unique experiences

by HIBAH NOOR

Opened

in Doha in

2014, Qatar’s Hamad International Airport has soared in importance since its inception. The airport served 20.78 million PAX in the first half of 2023, which is on track to being the airport’s busiest year yet. Also in 2023, at the Skytrax World Airport Awards, Hamad International won the titles of “Best Airport in the Middle East” for the ninth time in a row, and, as a testament to Qatar Duty Free (QDF), “World’s Best Airport Shopping.”

For QDF Senior Vice President Thabet Musleh, this is only the beginning. “Our sole objective is to remain the best airport in the world and therefore offer unique experiences to our passengers,” he says.

Always something new

Indeed, the operator has constant and consistent news about new openings and events — and often these are unique concepts unavailable elsewhere, such as the recently opened Louis Vuitton loungerestaurant concept.

“The Louis Vuitton Lounge is a tremendous success in a sense that it demonstrates how far QDF can raise the bar in offering exceptional experiences while partnering with extremely exigent and rigorous brands,” says Musleh. “All parties signed off on this project with the understanding that we are all committed to a long-term partnership. The feedback from our guests is the testimonial of this incredible success.”

Since that opening, QDF has had many more. For example, later this year

the operator has scheduled to open the world’s first Dior spa in an airport with the only Dior barbershop anywhere in the world — and only the fourth or fifth Dior spa in existence. QDF also recently opened a Dolce and Gabbana shop, and at writing a new CAPI store was soon to open. Musleh says two more major openings/events will be coming up before the end of the year — as yet unannounced — which will “elevate the passenger experience to new heights.”

“Being the best in the world does not happen when standing still,” he proclaims.

20 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

Thabet Musleh, Senior Vice President, Qatar Duty Free

“We constantly bring new concepts on board, invite international and local brands to partner with us and feed from passenger trends and expectations to constantly innovate.”

Ahead of trends

Musleh says an important aspect of staying ahead is by continuously looking at trends, looking at what’s happening and delivering for QDF customers all the time. “We see that our customers are becoming more and more demanding of us, making sure they get these exclusives, and that is what we continue to work on,” he says, adding that it’s a testament to the great work the team at QDF does, that the brands trust the operator to be their launchpad any new trends that they have coming in travel retail. “But I think it’s also what we do as a company,” he says. “We’re continuing to monitor trends — what’s happening not just in travel retail but also downtown. That’s what we do.”

Next year will be an even bigger year for QDF, according to Musleh, who says we will see “loads of new openings” in 2024. As we were going to press, QDF was in the process of launching the deployment of Q2 2024 developments.

“That’s what QDF is about,” stated

Musleh on these openings earlier this year. “It’s about evolving the customer experience; it’s about looking at what customers want and delivering for them. It’s not about standing still. It’s about looking at our space, looking at our brands. It’s about looking at how we do business, and evolving it.”

Qatar Airways Group

No doubt, the success of QDF comes in part because the retailer and the airport operate together as a team as part of Qatar Airways Group. “The retail space is generally dictated and delivered through QDF,” says Musleh. “We run the commercial space as such.” This allows the retailer to constantly create, as the airport itself is also in the constant process of growing and redefining itself.

In January of this year, Hamad International started Phase B of its terminal expansion. This will add an extra 21 new gates, five in Central Concourse, eight in Concourse D and eight in Concourse E by Q4 2024 or Q1 2025.“This means our expansion will be bigger than most airports in the world. It doesn’t stop. If it stops it gets boring,” says Musleh.

Doha is predominantly a transit airport, with upward of 80% of passengers in

transit. This, of course, affects the retailer because of shopping times. But Musleh says of local travelers an ever-growing number are coming early, and additionally more people are now choosing Doha as a transit hub because they’ve got more things to do. “They know they will have a great experience and they’re able to relax and unwind before they get on to the next flight,” he says, adding: “What’s super interesting is we’re seeing fewer people spending time in the lounge. Look at what we’re offering. It’s the whole experience. It’s beauty, it’s liquor, it’s F&B. Instead of staying in the lounge, First and Business Class passengers are instead coming down and enjoying the experiences we have via Fendi Cafe, Ralph Cafe, Oreo Cafe, Harrod’s Tea Room, Armani Restaurant — you know we have everything for everyone. And we’re seeing more and more people enjoying these.”

Avios rewards

Recently, Qatar Airways changed its rewards program from Qmiles to Avios, which Musleh says QDF fully supports. “We are constantly working with brands and partners to come up with unique opportunities for our Avios customers,” he says. “Any passengers can buy with Avios

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 21

The exclusive Louis Vuitton lounge is an example of the heights that can be reached by Qatar Duty Free in partnership with the very best of the world's brands, and is a testament to how those brands trust QDF to create a superior environment

and earn Avios in our stores and restaurants. Access to the Louis Vuitton lounge for Gold and Platinum Privilege Club members is one of the many exclusivities we offer Avios customers.”

TFWA WE in Cannes

Musleh confirms that, as industry events are extremely important to the retailer, QDF will again sponsor events at TFWA in Cannes this year. “We have been really consistent in our approach with the industry events and made sure we supported the industry as much as we possibly could, even in toughest of times,” says Musleh. “TFWA bears a particular significance for me and for QDF. Every year we sponsor the networking lounge and this year is no exception. As you know last year was unique and exceptional for QDF and we wanted to share our success with all our partners and industry colleagues, therefore we are also sponsoring the networking lounge at Frontier Awards,

as well as the BW Confidential party. Sponsoring networking events reflects our DNA; we are a central hub connecting passengers, brands and partners.”

Sustainability

While sustainability and CSR might be a current trend, it has been at the top of the agenda for Qatar Airways Group for some time, and as part of this group QDF is fully committed and engaged. “Sustainability is important, and we need to do more for the environment. For years we have placed a strong focus on supporting local communities, sourcing local products, as well as using recycled and recyclable items,” says Musleh. “Recently we removed 1.2 million single-use plastic bags from all our Day2Day stores and replaced them with cotton-based bags. As with everything QDF does, our first step’s always a big step. And this is a big change for customers now. So, we are testing the water, and if it’s successful it could be part

of a wider rollout. Also, every Day2Day store now has a water machine, so we're encouraging people to refill water rather than buy plastic bottles of water. Again, we’re constantly looking at what we do. We will continue deploying sustainable initiatives which we will share with you shortly.”

Being the best

In speaking with Musleh, his energy is palpable. He has a clear vision as part of a team, and his days are spent relentlessly pursuing that vision — and that vision is to offer the very best experience to travelers passing through Doha. “I don’t aspire to be the biggest. There are a lot of airports out there that are much bigger than ours, and fair play to them, it’s great,” he says. “We will never be the biggest and that’s not our aspiration. My job is to make QDF the best. I want to be the best in travel retail, I want everybody to use QDF as a benchmark for being the best.”

THE POWER WITHIN THE NEW FRAGRANCE

Retailer News

One of QDF's recent openings include a new Dolce & Gabbana boutique; the retailer will have more large openings this year

From the desire of LVMH, World leader in luxury, to raise eyewear as an essential element of its Maison’s collections and a pristine expression of their creativity, Thélios was founded in 2017. Pioneering a new luxury experience in eyewear, Thélios masters each step of its value chain, from conception to distribution of luxury sunglasses and optical frames for LVMH Maisons. Through its state-of-the-art Manifattura, located in Longarone, Italy, Thélios stands for Alta Occhialeria: an advanced savoir-faire, combining outstanding creativity and manufacturing excellence. Thélios operates a highly selective distribution network with a direct commercial presence in all major markets.

Travel retail revolution

by LAURA SHIRK

Following the unveiling of its new company strategy “Destination 2027” last year, Dufry Group (Dufry) has been on a mission to lead a travel experience revolution. With a focus on consumer and traveler insights and addressable market evolution, the purpose of this four-pillar strategy is a seemingly simple, but lofty one: to make travelers happier. Founded on environment, social and governance (ESG), geographical diversification and operational improvement culture, the retailer’s value proposition is set to advance in the next several years.

Described by Xavier Rossinyol, Chief Executive Officer at Dufry, as an inherent part of its vision to deliver a holistic travel experience, this direction is supported by the transformative business combination with Autogrill. According to the company, with this combination it is embarking on

a new era of retail and F&B convenience for travelers and well-positioned to maximize all of the opportunities provided as an integral part of its global growth strategy.

Dufry and Autogrill have joined forces to become a customer-centric, combined global travel experience player and be best placed to respond to the evolving consumer demands in both travel retail and travel food and beverage. Commercial space and product assortments will be adapted to travelers’ needs and digital engagement initiatives will further enhance the overall customer experience throughout the journey.

With the support of a consumerfocused approach and data insights, domestic and international traveler profiles across North America will be continuously monitored to identify new behaviors and requirements. According to the team at Dufry, this process of listening to customers, which is at the heart of “Destination 2027”, allows the company to fine tune its offering – not only matching, but exceeding the expectations of its customers and stakeholders.

Featuring new categories, exclusive products and hybrid shop concepts, the combined business will also deliver attrac-

24 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

Dufry’s “Destination 2027” strategy and combined business with Autogrill demonstrates a new era of retail and F&B convenience; plus, the team on consumer monitoring and optimizing retail space, passenger flow and revenue generation

Dufry’s Just Walk Out Hudson store at Dallas Love Field Airport Consumers can benefit from the convenience of online services such as Red by Dufry and Reserve & Collect

tive offers to concession partners in existing and new locations and enable airports to optimize retail space, passenger flow and ultimately, revenue generation.

Traveler mix and nextgen personalization

When it comes to consumer and traveler mix (2019 vs. 2025), Dufry reports an increase in Gen Y and Z of approximately 30% and a growth in sales directly influenced by online of approximately 20% (to over 30%). When asked how it is preparing to respond to the rise in discovery via Meta technologies and the desire for next-gen personalization, the company points out that Dufry is continually developing an omnichannel approach to boost consumer engagement via multiple touchpoints, as well as creating online and digital services. Along with interactive technologies available in-store, consumers can benefit from the convenience of online services such as RED by Dufry and Reserve & Collect.

Dufry combines online services with complementary physical experiences in-store via hybrid and experiential store environments, innovative campaigns and a wide range of leading brands across all core categories. The retailer has the advantage of being able to work in close collaboration with its long-standing brand partners to introduce personalized product and service options – from bespoke engraving of products to personalized analysis to help customers discover the perfect product for themselves or gift for others.

As shared by the retailer, social media and AI-technology analysis by Dufry shows three “new personas” (Working Wanderers, Experience Seekers and Young Explorers). While discussing how the company adapts its business model to address these different groups of travelers, it is noted that alongside the characteristics of the personas, it is important to remember that a key factor is tracking the passenger profile and the demographics at

specific airport locations. Research shows consumers are seeking digital engagement, tailored experiences, sustainable products and wellness and local offerings; in addition to the appearance of new trends, Dufry expects these findings to further evolve.

The nature of travel retail and ESG integration

Conducting business in an environmentally conscious manner is an essential component of “Destination 2027” and because of the special nature of the travel retail and F&B industry in which Dufry operates it works closely with third parties to reduce the environmental impact of its business.

Looking at key ESG initiatives that Dufry has executed in the first half of 2023, it is evident that the retailer is making strides across the developing sustainability movement. According to Dufry, in March, it received validation from the Science Basted Targets initiative for its greenhouse gas emissions reduction targets covering scopes 1, 2 and 3. As of June, as part of its commitment to fight climate change and an alternative to single-use bags, Dufry has teamed up with advocacy and ocean conservation group Oceana to offer reusable bags made of 100% recycled plastic bottles at select stores.

The phasing out of plastic packaging and waste management is also on Autogrill’s agenda. The company is taking the next step forward on the way to substituting single-use packaging items with non-plastic, recyclable and compostable materials. The goal is to reach 100% sustainable guest packaging by 2025.

The two are working on integrating the companies’ individual ESG strategies into a combined one moving forward. The basis for this is the development of a new joint Materiality Matrix, which is currently ongoing.

On applying Dufry’s zero-based budgeting approach to its 2023 budget, the company says leveraging this methodology ensures constant operational improvement. Dufry assesses every single activity – plus, how it contributes to the business and how it can be improved. At all levels of operation, Dufry teams are fully aligned in terms of managing costs, improving efficiency and focusing on what is necessary to run successfully.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 25

Based on a new joint Materiality Matrix, which is currently ongoing, Dufry and Autogrill are in the process of integrating the companies’ individual ESG strategies Focusing on consumer and traveler insights, Dufry’s four-pillar strategy “Destination 2027” positions the retailer as a global leader in the travel experience space

Shilla Duty Free confirms that significant investments are on the horizon, adding that strategizing about these investments and product offerings will be at the forefront in coming months

Competitive future

by HIBAH NOOR

The Shilla Duty Free is strengthening its position as a duty free operator both in its traditional region of East Asia and around the world. The tender to manage the large-scale Incheon T1 and T2 stores that was awarded to Shilla “signifies a remarkable milestone toward realizing our vision as a leading global top-tier operator,” says Younghoon Kim, Executive Vice President of Sales HQ, The Shilla Duty Free.

But expansion in Asia is only part of the retailer’s strategy. “Beyond the Asian region, we are exploring potential markets, including the Americas and Europe, as pivotal points for our international business expansion,” states Kim. “As part of this strategy, we invested in 3Sixty, with plans to steadily drive our business expansion in the American region, where mutual synergies can be harnessed.”

This expansion in other regions is not a new idea; as referenced above, in late 2019 Shilla acquired 44% of US-based 3Sixty Duty Free, a deal that closed in April 2020 just as the world was in the process of shutting down. With the world’s borders now fully open again, Shilla has the opportunity to continue what it started so long ago.

Customers returning

As international travel restrictions began to ease in the first half of 2022, Kim says Shilla observed a resurgence in travel demand, predominantly from local travelers. “At present, the domestic recovery stands at 85% of 2019 levels,” he says. “Concurrently, the influx of foreign visitors is swiftly rebounding. We anticipate the retail market demand fully recovering in the latter half of the year. Specifically, for China, we anticipate a rejuvenation in travel similar to pre-pandemic levels once various restrictions are fully lifted. In preparation, we are actively initiating strategies to capture this potential customer surge.”

Chinese and Japanese travelers were Shilla’s main customer base pre-2020. Kim says while these nationalities continue to comprise the majority of its customers, there is an upward trend in demand from Southeast Asia as well.

Rapid rise

As of the first half of 2023, both Changi Airport and Hong Kong Airport are experiencing nearly triple the growth rate compared to that of 2022, and Kim says revenue and profits have surpassed Shilla’s targets at both airports.

“The early removal of travel restrictions in both countries led to a PAX recovery rate surpassing 50%,” he says. “Our proactive approach to business enhancement including augmenting inventory and staff and activating promotions, coupled with the solid partnerships with the airports cultivated throughout the COVID era, have been instrumental in our success. We are driving full throttle towards operational normalization, forecasting PAX to recover to 80-90% of pre-COVID levels by the close of 2023.”

He confirms that significant investments are on the horizon, adding that strategizing about these investments and product offerings will be at the forefront in coming months. Additionally, the company will focus on creating a solid strategy for online and offline marketing with the goal of delivering an enhanced experience to Shilla’s returning customers.

28 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

Understanding its considerable strengths and creating partnerships for strategic reinforcement is helping The Shilla Duty Free to reach and surpass its sales and expansion goals, with much more to come

Younghoon Kim, Executive Vice President of Sales HQ, The Shilla Duty Free

“Through these measures, we aspire to solidify our win-win partnership with the airports and broaden the synergy with the Korean duty free market,” he says.

Daigou – a double-edged sword Hotel Shilla’s Q2 report showed an interesting trend, with revenue down but profits up. This, according to Shilla, is because of an overall crackdown on the daigou business and the subsequent disappear-

ance of its commission payments.

During the pandemic, the majority of Shilla’s downtown duty free business came from daigou shopping. This brought necessary sales but a lessened profit margin. Although downtown sales have now dropped dramatically, airport sales have more than made up for it. Since airport sales do not have the daigou commissions attached, this has increased profitability.

“Throughout 2023, our primary focus

TELLS TIME ALL OVER THE WORLD

has been securing revenue from existing channels capable of generating sales while diligently striving to enhance our profit margin,” says Kim. “As travel demand reignites in the year's second half, we are optimistic about a further uplift in profitability.”

Focus on beauty

Cosmetics represent the highest sales ratio across Shilla’s domestic and international stores, with an incredible 80% of total sales as of June 2023. This is thanks to competitive pricing and the fact that it is a consumable item, which encourages frequent purchases, especially in comparison to luxury fashion, watches, or jewelry.

“Beauty products from globally renowned cosmetic companies such as SK-II, La Mer, Estée Lauder, and Lancôme consistently yield impressive sales performance. In luxury fashion, significant brands like Hermès, MCM, Chanel, and Saint Laurent continue to secure high sales numbers. Apart from appreciating the cost benefits associated with duty free shopping, our customers

Stylish looks for less Taylor Classic 40428 Active Smart Watch 1909 Maverick Pilot 30077 We are delighted to attend this years Duty Free and Travel Retail Global Summit in Cannes. Come and visit our stand in the Green Village K50

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 29

The Shilla Duty Free’s captivating cosmetics and perfumes store at Changi helps keep beauty sales at 80% of the company’s total

also covet an assortment of experiential values, including introducing and trialing new products. We are unwavering in our commitment to cater to these desires,” says Kim.

Perfume and Cosmetics together have inspired a number of activations this year, including “Fly With Me,” a multi-brand fragrance discovery pop-up store featuring brands like Burberry, Chloé, Marc Jacobs and Miu Miu; and the “Kilian Bar” concept by luxury perfume brand Kilian Paris, which ran in early summer at Singapore Changi Airport, marking its first airport location worldwide — but most notably, Coty Inc recently struck a strategic digital partnership with Shilla to enhance their digital transformation as they innovate to meet travel retail consumers’ rapidly evolving needs.

This partnership aims to redefine the online and offline shopping experience by creating new ways of engaging with travelers, providing consumers with unique digital experiences such as its virtual class on the metaverse in beauty, which generated 3.5 times more engagement than the initial target and led to an 80% increase in the number of customer transactions compared to previous events. Many more metaverse workshops are in preparation.

While P&C remain core drivers, Kim notes that Shilla has seen “robust” growth in the fashion, alcohol and tobacco categories. “This growth trend aligns with the popularity of K-fashion across Asia and an increasing preference for diverse alcoholic beverages, such as whiskey, among millennials and Gen Z consumers,” he says.

Digital pioneer

Shilla Duty Free has consistently innovated within the e-commerce space. Kim says the company pioneered the creation of “Tipping,” which is the first socialbased review platform in the global dutyfree industry. It also created “ShillaTV,” the proprietary live commerce platform.

“This has allowed us to foster a dynamic dialogue with younger consumers,” he says. “We recently hosted a series of ‘Virtual Masterclasses’ using Zoom, delivering an immersive brand experience by integrating metaverse elements.

Participants of the Virtual Masterclass were offered limited-edition NFTs as mementos, in addition to special privileges at our airport outlets. This blending of youth-friendly content and digital technology has placed us at the forefront of a transformative shift within the duty free industry.”

Shilla is currently developing a new virtual studio-produced masterclass, which is on schedule to be completed in 2023. “This will feature cutting-edge AI and big data technologies, enabling us to understand customer contexts and create an integrated omnichannel experience where online and offline dimensions coalesce seamlessly,” says Kim “Moreover, building on our metaverse acumen, we aim to establish metaverse duty free shops in all three major Asian airports where The Shilla Duty Free operates, a strategy already demonstrating tangible success.”

Continued challenges

While distribution and consumer habits changed around the world during the

pandemic, nowhere is this truer than in China. Kim says the most striking transformation for the Chinese consumer has been a pivot toward platform-centric consumer behavior. “This evolution has resonated within the Korean duty free market, prompting us to strategize on adaptive measures. In these rapidly fluctuating circumstances, we are committed to exploring innovative solutions to meet these challenges head-on,” he says, further explaining that the company is “comprehensively reassessing” its existing business structure and shifting towards a more digital-centric model.

“This entails providing actionable insights through a digital big-data platform and developing premium content to generate additional revenue,” he continues. “We are amplifying our virtual marketing programs by leveraging augmented reality (AR)/virtual reality (VR) technologies and fortifying our collaborations with brands via CRM integration. We are also enhancing our platform's core competencies by bolstering the functionalities of our commerce platform.”

Customer experience

The “enhancement of customer experience” has become Shilla’s primary focus. To achieve this objective, Kim states that the company is making “continuous efforts to identify and offer brands and products our customers seek, paired with Shilla's distinct high-quality spaces and distinguished services, creating a delightful experience for our customers.”

Shilla recognizes that revitalizing its overseas stores in Hong Kong and Singapore, which were impacted by the pandemic, is another crucial task to remain competitive. Kim says, “We plan to strengthen the competitiveness of our customer-focused strategy to improve the performance of our existing channels while preparing for the changing landscape and recovery of travel demand.”

#GucciGuilty

Retailer News

Beauty products from globally renowned skincare and cosmetics companies consistently yield impressive sales performance

Priceless investments

Since making the decision to open a location in Macau just as business was expanding in the US, DFA’s Jerome Falic has figured out the formula for success at the location; the time since then has been spent expanding on it

by HIBAH NOOR

After opening in Macau in 2007, it took some time for Duty Free Americas’ (DFA) Falic brothers to get the correct categories, but figure it out they did. When the store first opened, the product mix was typical of duty free stores, with spirits, tobacco, confectionery, accessories and electronics taking a lot of space. In short order they learned that there was only one magic category that would succeed at this location, and that was P&C — beauty and fragrance. All other categories have now been eliminated.

Throughout the 16 years since cutting the ribbon, the Falic brothers have continually shown their faith in the location by investing further, taking up space whenever it has become available. This was even the case when there was no end in sight for the pandemic lockdown; the company once again took on more space in 2022, believing that business would bounce back strongly once restrictions had lifted. Once again, its investments were wisely placed.

Increased traffic

Since China’s borders reopened completely earlier this year, Macau has seen increasing footfall, with each day at DFA getting busier. And, though Chinese mainlanders make up the vast majority of DFA customers in Macau — CEO Jerome Falic says that business is still more than 90% from mainland China — the crowds are much larger, and more and more visitors are expected throughout the year from Hong Kong, Taiwan, Japan and other markets.

The DFA store in Macau also sees traffic because of its location on the way to the casino. Similar to walkthrough stores in airports, regardless of how they’re dropped off, visitors to the casino see the DFA store on both their right and left as they walk through.

New additions

DFA’s continued investment in Macau has been both wise and profitable,

especially since Macau opened up before mainland China, offering travel options in the region.

Recent investments include the renovation and expansion of the DFA shop last December. “We introduced a number of new luxury brands such as Maison Francis Kurdjian, Aqua di Parma, Byredo, Diptyque, Maison Margiela and several others,” says Falic. “The demand for the niche fragrance category has increased quite a bit and is lifting the fragrance business up overall.” Some brands such as Maison Margiela are especially popular with a younger demographic, which is appealing in part because the spend is higher with this cohort.

DFA’s close relationship with L’Oréal Travel Retail, which helped to make a success of the store in early days, also helped to bring about the addition of SkinCeuticals. Other additions include Helena Rubinstein in early 2022, Gucci Beauty from Coty, and several others including L’Occitane, which was introduced this summer. “We are planning to introduce more brands over the next few months,” says Falic.

And now, DFA is branching out in an unexpected direction. The company

32 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

Jerome Falic, CEO, Duty Free Americas Valentino is a brand popular across the age groups, but is especially appealing to a younger demographic The Falic brothers learned early on that at the store in Macau, beauty is the only category needed

will soon open a standalone TWG Tea store next door to its Macau shop. The Singaporean luxury teahouse chain and artisanal tea brand will be located directly between DFA’s store and the US burger chain Five Guys.

Price consciousness

Falic says a new trend he’s seeing is that current consumers are far more price conscious than before. This is because China is such a huge market that has become highly accustomed to purchasing online, especially during the pandemic — and lockdowns and closed borders affect that country for far longer than others. “All of the brands are selling online in China at very big savings, which means consumers are checking prices before shopping, which was not the case in the past,” says Falic. “So, we need to be able to give the consumer a reason to shop in Macau. We have all of the brands they are looking for, but we have to be extremely competitive and therefore offer certain types of promotions to draw in the consumers and make sure they actually shop,” Falic concludes.

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Gucci Beauty by Coty was added to the store since its expansion in December 2022

Full steam AHEAD

As the cruise channel grows, its segment within Gebr. Heinemann’s business has become increasingly important. GTR Magazine spoke with Kerstin Schepers, Managing Director of Gebr. Heinemann

Cruise Liner GmbH & Co. KG about the company’s growing focus on cruise retail and wholesale

by ALISON FARRINGTON

In its FY22 trading update in April of this year, Gebr. Heinemann cited the cruise and ferry channel as contributing 5% towards its overall US$4.1 billion group turnover. The company also noted that there would be a three-year consolidation for its US subsidiary, which will focus solely on the cruise retail and distribution business.

“After the pandemic the cruise industry experienced a very strong comeback,” says Kerstin Schepers, Managing Director of Gebr. Heinemann Cruise Liner GmbH & Co. KG. According to Schepers, the company is watching with interest the 62 ships coming into market by 2028. “The future of the cruise industry is looking very bright,” she adds.

Gebr. Heinemann currently runs retail operations on board 19 cruise ships including leading players such as Royal Caribbean, Hapag-Lloyd and TUI Cruises. In addition, it operates as a wholesaler, supplying over 240 cruise ships and ferries.

With both retail and wholesale operations in the cruise channel, Gebr.

Heinemann is experiencing strong growth in both areas, making this an extremely important pillar of its overall business. Renewed efforts in this channel are also in line with the overall strategy to diversify the business.

Industry partnerships

Regionally, Gebr. Heinemann has cruise operations in the US, Europe and the Middle East, but a core region is the Americas, which it operates from a subsidiary in Miami. “Our experienced colleagues in Florida focus mainly on the cruise business and work strongly together with the local industry partners,” says Schepers. “Europe is also of relevance with some key clients and for our wholesaling business. In addition, we see great potential in the Middle East and other emerging markets.”

The Heinemann Americas office is located in Miami, the most important hub of the cruise industry in the Caribbean, which is itself the busiest cruise region. For this subsidiary, a focus is building strong relationships with local partners,

including Royal Caribbean, with which Heinemann successfully operates several shops on board a number of cruise ships. “I am optimistic that Heinemann can extend this collaboration in the future,” she says.

This optimism looks well placed, as Royal Caribbean awarded Heinemann the retail partnership for Icon of the Seas, which will be the biggest cruise vessel in the world and the first one of its kind, a completely new ship class. Her maiden voyage will take place in January 2024.

In Europe, Heinemann operates the retail business on board Mein Schiff 1-6, operated by TUI Cruises, as well as five cruise ships operated by Hapag-Lloyd and four by Phoenix Reisen. Moving to the Middle East, the company’s latest partnership is with Cruise Saudi. “We are very happy for this relationship,” shares Schepers. “We will be the exclusive retail partner on board its first cruise line AROYA Cruises, which will be put to sea in 2024. This is a first step into a very promising market for us.”

34 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

Gebr. Heinemann Cruise operates retail for several Mein Schiff ships, where jewelry plays a key role Kerstin Schepers, Managing Director of Gebr. Heinemann Cruise Liner GmbH & Co. KG

Regional collaboration

Leveraging its Miami base as a regional hub for connections is important for Heinemann to grow its cruise business. “Miami is a hub for several key players in the cruise industry,” she says. “Therefore, it is a logical step that our Heinemann Americas team is focusing on our strong competences in retail and wholesaling services in the cruise sector. This also underlines the dedication of Gebr. Heinemann and Heinemann Americas to grow within this channel, in both retail and distribution.”

Strong collaboration with cruise partners is a critical strategy for Heinemann’s growth plans. “We always aim for strong outcomes for all partners involved, which then also fuels long-term partnerships,” says Schepers. “Our team in Miami plays an integral part in driving this development. Being one of only two regional headquarters for Gebr. Heinemann shows the strong support for the team. We all work closely together across regions and this collaboration is key as our global customers trust us and rely on our high quality of services across the world –for example when it comes to logistics.”

Cruise retail

In March 2022, the Royal Caribbean cruise ship Wonder of the Seas set sail on

its maiden voyage with seven shops operated by Heinemann. These shops offer the core duty free categories including liquor, tobacco, confectionery, perfumes and cosmetics, complemented by a number of luxury goods such as fine watches and jewelry. After the ship’s first full Caribbean season after the pandemic, sales confirm that Heinemann is “on the right track,” with performance constantly improving, notes Schepers.

The operator’s next collaboration with the cruise line will be on Icon of the Seas. The categories offered on this new class of ship will match what Heinemann currently offers on board Wonder of the Seas, but Schepers says the brand line up and the retail execution will be tailored to the uniqueness of this vessel. “We will be operating 14 retail venues on board this ship; passengers will be offered a customized one-of-a-kind retail experience designed especially for Icon of the Seas. This way we will be able to contribute to the most iconic vacation experience offered on board.”

In its retail operations aboard Cruise Saudi’s AROYA Cruises, Heinemann aims to provide experiences and services specifically designed to embrace Arabian preferences. “As retailer on board this ship, we want to inspire travelers. To accomplish this, we will work directly

with the world’s best-known luxury brands and will offer a wide range of products which extends from perfume and cosmetics to confectionery, fashion, accessories, watches, and jewelry,” she explains.

In addition to operations on Icon of the Seas and with Cruise Saudi, Schepers says she is looking forward to further yet-to-be-announced developments coming in the next year, in Europe and Asia Pacific.

Valuable time

‘Turning travel time into valuable time” is a key element of the Gebr. Heinemann mission statement to travelers. Schepers points out that passengers spend far more time on board a cruise ship than they do at an airport, which means that the dwell time in shops is much higher. An additional difference with airport retail is that cruise ship shops compete with markets at the various ports along the journey. She adds that the guest structure varies depending on the ship’s itinerary.

“Assortment and pricing therefore have to be flexible to match the respective clients on board. This is a challenge we love to face, and we are always motivated to go the extra mile,” she says. “Personalization is a big part of that – we want to offer a spectacular assortment and provide unforgettable experiences. These two promises are especially key when it comes to retail on cruise ships, as it varies a great deal compared to the airport retail business.”

Heinemann accomplishes this with a variety of customer-centric actions to deliver on its promises, including personalized product offers, trunk shows and workshops. Digital elements and technology also play an increasing role in providing inspired personalized experiences to the guests on board. “We all agree that digitization will have a huge impact on our success in the future, and facilitating this is something we are working on closely with our partners, to provide even better shopping experiences to all guests,” Schepers concludes.

Retailer News

Eyewear is an expanding fashion category for Heinemann’s cruise retail operations

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Blazing trails

Lagardère Travel Retail has taken on a leadership role during this time of change, from creating new business models and F&B concepts to achieving its lofty CSR goals, and its empowered local teams are helping to deliver

In the years leading up to the COVID-19 outbreak, sustainability was becoming a serious topic of conversation throughout the world. However, during the pandemic this consciousness exploded, with sustainable practices becoming ever more important to consumers and the population at large. Lagardère Travel Retail made a huge

commitment to drive change, leading to its PEPS (Planet, Ethics, People and Social) roadmap.

“Lagardère Travel Retail has a strong and clear ambition: to play a leadership role in the transition to a more sustainable travel retail industry,” says Dag Rasmussen, Chairman & CEO of Lagardère Travel Retail. “CSR is a strategic priority, and we have built a solid roadmap, PEPS, to drive and monitor change. Limiting our environmental impact through a robust climate strategy across the entire value chain is our responsibility towards future generations.”

Rasmussen states awareness on the company’s part that it cannot act alone on this journey, highlighting the partnerships necessary for success. “We need all our stakeholders to join forces to make a

meaningful difference. Landlords, consumers and brands are essential partners to drive these positive changes. The products we sell account for more than 80% of our global carbon footprint. This is why collaborating with our brand partners is critical to achieving our carbon reduction objectives, through innovation, shared agendas, data sharing and a a testand-learn mindset. We see a lot of new solutions emerging in the market and we are very happy to be testing and promoting these in order to pioneer more sustainable practices.”

Conscious retail

Lagardère Travel Retail had already been operating an extensive portfolio of F&B concepts at Dubai International, when it recently opened its first retail partnership

the new eau de parfum lumineuse Retailer News

Dag Rasmussen, Chairman & CEO, Lagardère Travel Retail, says the company’s success lies in part with its ability to remain agile

at the airport, Pangaia. One of the world's most innovative fashion brands, Pangaia harnesses science to create responsible clothing and accessories.

“Dubai Airport has been identified as a prime location for the store, as it is the world’s busiest international airport for the ninth year running, and is a trendsetter among global aviation hubs. It is the perfect setting for a new, edgy brand to break into travel retail and gain visibility amongst the world’s best consumers,” says Rasmussen. “This opening is a testament to Lagardère Travel Retail’s commitment to bring sustainable brands and a more responsible offering to consumers in airports and to pioneer more sustainable travel experiences and concepts. Both the range of products and the store design are serving this ambition.”

This is the first Pangaia store opened by Lagardère. Rasmussen states there are no current plans to open other Pangaia stores, but the operator will build on its strong partnership with the brand to explore new opportunities when relevant.

Carbon neutrality

Hot on the heels of the Pangaia opening, Lagardère appointed Arnaud Rolland as VP CSR. Clearly, the company is putting its PEPS plan in action, and Rasmussen

affirms they are operating according to schedule.

“As planned, we are on track to achieve our contribution to global carbon neutrality by the end of 2023 thanks to the efforts already put in place everywhere in our network, a series of global energy reduction measures were implemented in all countries and operations, from stores to restaurants, offices and warehouses,” he says. “These include actions such as adapting the temperature, sharing IT best practices, using only coolers/fridges with doors, running extensive energy audits and adapting all store equipment in the most efficient way. We are making significant progress in reducing energy consumption in the countries where we operate. In 2022, we already achieved a reduction in energy consumption compared to the previous year.”

As a second parallel step, Lagardère Travel Retail is also switching to green and renewable electricity wherever it is possible, he says. “Where we depend on indirect contracts, we are looking into Renewable Energy Certifications. With all our efforts and structural changes, we can significantly reduce our direct emissions, achieve our ambitious objectives and greatly contribute to the overall efforts of the industry.”

Diverse business models

During the pandemic travel retail operators discussed at length creating contracts with more balanced risk between airport and retailer. Lagardère was the first operator to sign such a contract, an innovative long-term profit-sharing agreement with Lima Airport Partners (LAP), a business model where partners equally share risks and benefits.

“The profit-sharing model is more a partnership than just a contract, and it has opened up a significant revenue potential for both Lagardère Travel Retail and LAP, as well as greater investment opportunities – ultimately benefitting travelers and enhancing the airport experience,” says Rasmussen. “Building on this very successful experience, we are promoting similar partnerships when and where they prove to be the most adapted.”

While this agreement garnered a great deal of attention, recently Lagardère signed an agreement with AENA with even higher MAGs than before, so clearly the former business model is not dead.

“The crisis has helped the industry to open up to more innovative and balanced ways of collaboration. We are confident that this change is sustainable and that we can capitalize on our global coverage and strong relationships with partners

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Retailer News

The partnership between Lagardère Travel Retail and Time Out Market brings the best of local culinary creations to travelers, scaled to the travel hub

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to replicate this model elsewhere. But this is a long-term process, and it will take some time before the industry adopts new models,” says Rasmussen. “The recent tender process launched by AENA demonstrated that MAGs are still firmly anchored in the industry’s culture, with which we can live and prosper. What is most important is to keep an open conversation with landlords, evaluate which model is most appropriate based on a set of different factors, and to know where to draw the line.”

Time Out Market

Lagardère Travel Retail has recently been appointed by Time Out Market to support its expansion into travel locations. Rasmussen explains, “The bespoke travel hub model will feature key elements of Time Out Market, with its curation of the best of the city through a targeted selection of local chefs and restaurateurs, as well as bars. Everything will be appropriately scaled to the footfall and speed of a busy travel hub. In addition, travelers in transit will also be inspired by the Time Out Media brand, with screens displaying its inspirational content on the best things to do in cities around the world.

“With this partnership, Lagardère Travel Retail and Time Out Market are combining their expertise, footprints and foodie passion to offer travelers an unforgettable experience: ‘a true culinary journey within their trip.’”

Lagardère Travel Retail is also “progressing very well” in the integration of Marché international into its network, according to Rasmussen. “We are working

very effectively with Marché teams to further develop the globally recognized Marché concept,” he adds.

Asia Pacific

The Chinese traveler has been of the utmost importance globally, with the sale of luxury goods in particular. While travel, especially international travel, dropped drastically in 2020, it edged up in a slow climb until borders began reopening. Uncertainty remains regarding the return of Chinese travelers, however, and these individuals are very high spenders.

“We don’t have a crystal ball and cannot say when or if these passengers will come back to pre-crisis levels,” says Rasmussen. “As we navigate this uncertainty, the key success factor is to remain agile and to adapt our category strategy to a different PAX mix. Our teams are making the most of our customer data to constantly improve our offering and be relevant to the passengers visiting our stores. This has proved to be a very effective strategy and we are on track to deliver our best year ever.”

Overall, Rasmussen says, the Asia Pacific region is recovering slowly, and not in a uniform pace. “Singapore and the Pacific have been recovering since the second half of 2022 and North Asia only since the beginning of 2023, driven by robust domestic traffic. We believe that this region will see fast and strong sales improvement through accelerated recovery, further business development initiatives and a very innovative omnichannel sales strategy.”

Desires and expectations

More than ever, Asia Pacific travelers are expecting both an unrivalled in-store experience and the ability to make their purchases on different channels. “Our expertise of social media livestream sales and our sophisticated approach to customer engagement will help us make the most of these dynamics. Other trends that we have identified are the increase of luxury consumption and the increasing importance of downtown duty free in Hainan, both areas where Lagardère Travel Retail has a clear competitive advantage,” he explains.

While Rasmussen admits it may be some time before Asian travelers resume international travels to the previous degree, he says, “We have had to adapt to this, by shifting some elements in our offer, for example, by further developing the local authenticity many passengers are looking for. We are also seeing more young travelers, and want to develop an offer that specifically meets their expectations. We believe our ongoing focus on experiential and conscious retail experiences is a strong factor of success with this cohort.”

Speaking about how local authenticity is a leading revenue driver, he concludes, “We are well-positioned to deliver this through our locally empowered teams, who know the specifics of each local market and can identify the local brands that will deliver a sense of place. Finally, we are working hard to deliver more sustainable travel experiences, which is something all travelers – whatever their age or origin –are expecting.”

42 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

Lagardère Travel Retail partnered with Pangaia to open its first retail location at Dubai International Airport

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Bringing joy

ARI Middle East’s Rob Marriott talks to GTR Magazine about the company’s bespoke approach to a dynamic region and its new brand identity campaign: Joy On Your Way

by ALISON FARRINGTON

ARI Middle East (ARIME) has just celebrated its 30th anniversary and for ARIME’s Chief Executive Rob Marriott, that three decades have passed since its first location opened in Bahrain showcases just how much the company has grown in line with this fast-paced region.

After taking up the group role 18 months ago further to his role as CEO at Muscat Duty Free, Marriott says he has learned quickly that the Middle East is a very dynamic region. “It moves at tremendous pace, and we need to move with it, in order to accommodate the constantly changing passenger profile.”

ARIME has ventures in Bahrain, Cyprus, Lebanon, Oman, Qatar and Saudi Arabia. It’s an impressive regional stronghold and each location represents its own opportunities for growth and investment potential.

ARI Middle East’s Chief Executive Rob Marriott has seen a lot of growth in ARIME and the region itself in the past three decades

“Each location is different. It’s a bespoke ‘by business’ operation, and we need to make sure the offer is right in each one,” says Marriott. “ARIME operates a collaborative partnership model, and each of our stores and partnerships is tailor-made; one size certainly doesn’t fit all.”

In ARI’s most recent trading update for FY2022, the Middle East region delivered strong results following a solid overall performance for 2021. The Bahrain business traded ahead of forecast while the Riyadh T5 operation performed well, with the domestic terminal faring better than the international terminal during the pandemic, due to the international travel restrictions.

Marriott says he is cautiously optimistic about the end of year performance, “2022 was a good year to rebound and 2023 is shaping up to be double digits ahead. I would hope to be back to 100% of pre-pandemic sales for 2023, but we have some way to go.”

44 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

ARIME’s focus on luxury categories such as jewelry in Bahrain Duty Free is part of its bespoke approach

Bahrain focus

Bahrain Duty Free recently opened a new store location focused on the region’s best-selling travel retail brands and exclusives. “In July, we opened a new liquor & tobacco store, to make it easier for passengers going into the lounges not to miss the retail experience. It’s an amazing facility there and now the retail offer is more easily accessible,” he says.

“Retail space here is at a premium and it’s great to see that brands are investing in activations again,” says Marriott. We keep adapting and brands are showing more confidence; we are ensuring that there’s a return for them too. Yes, there have been challenges post-Covid, but brands are on the front foot again, they want to support their business in this region which is so dynamic.”

New space in Abu Dhabi

Marriott is excited about the opening of Abu Dhabi’s new terminal, and with good reason. The 742,000 square-meter Terminal A is expected to open in November of this year, enabling the airport to service 45 million PAX annually. This new terminal, which will feature an array of world-class amenities, will have 163 retail and F&B locations.

“The Middle East is always exciting; there’s lots coming to market,” Marriott says.

Sense of place has become increasingly important in the travel retail atmosphere, and ARIME has ensured passengers will notice it. “Passengers feel as if they’re in Abu Dhabi, from the sense of place, the beach, the ocean etc. It’s the newest, most luxury example of what we can do here. The space allows us to give a full offer across those categories – all the main brands want to be there. It’s a major opening and will be a world leader for its proposition.”

New branding

ARI recently launched its new brand identity campaign, which celebrates, expresses and attempts to elicit joy. “We’ve just rolled out our new ARI brand supported by an emotive expression of ‘Joy On Your Way,’” says Marriott. “Our new brand framework and strategy will deliver clarity, cohesion and consistency across the ARI estate. It marries our strategic ambitions, vision, mission and customer value proposition (CVP). ‘Joy’ is an uplifting message; it’s the glue that combines all the elements of our business under one framework.”

Marriott has found meaning in this brand message on a professional and personal level. “For me it’s the cultural piece that shows a global attention to detail. How do you make sure the passenger flying to the Indian sub-continent at 2am from Oman Airport has the best experience, compared to another passenger traveling at 10am when everyone is around? It’s a cultural approach to experience, delivered through joy.”

Value for customers

Marriot says ARIME is focused on making authentic and emotional connections to its customers through a bespoke approach, and not just a homogenous one. “To this end, in 2020 we constructed our new customer value proposition, which includes principles such as value, convenience, gifting solutions, brand range and, importantly, bespoke concepts and sense of place.”

With over 70 initiatives around the world, the company has worked hard to deliver over the last 18 months and the teams are now in the process of evolving ARI’s value proposition. “We identified areas where we can do more, do better, enhance our engagement across every touchpoint, from before people travel to online to in-store to point of payment and after-sales service too. It’s about engaging better or in new ways.”

Retailer News

The wide aisles and luxury offer make for a premium experience at Bahrain Duty Free

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New brands are coming to market and Marriott affirms the priority of taking the opportunity to showcase them as soon as possible. “We are very excited to be getting new beauty bands such as Charlotte Tilbury,” he says. “Anything that our customers want is what we aim to get for them. Some are very clear they want to come in for a special product or others want guidance. It’s about giving them an informed decision. This is where personalization techniques such as gifting, engraving stations or brand activations, such as Toblerone’s named sleeve,

allow us to give a bit of extra joy to their experience. Our mantra is giving something you can’t get elsewhere, delivering the wow factor, offering a personalized service. It all adds to the overall experience.”

Marriott adds that liquor remains an integral part of the business. “It’s very fast moving. We are sensitive to the trends of the region and that means working closely with our brand partners,” he says.

Digital progression

Personalization also means a digital approach that is constantly evolving in line with the passenger. “ARI has a very strong ecommerce offer focused on beauty, liquor, fashion and accessories – online shopping that adds value for the customer,” says Marriott. “The ‘Joy On Your Way’ theme is all about that personal and value approach.”

In keeping with the bespoke concept the company manifests, Marriott says the Middle East behaves differently to Europe and digital plays such an important part in capturing the regional culture.

ARIME is investing in more digital solutions from social media to new platforms. The company has recently set up a new digital centre of excellence in Ireland. “This is the base to understand what the full opportunity is for us across all our different locations at ARI,” explains Marriot. “We are also looking at our Shop and Collect, Shop and Go services, leading in what we offer for our passengers looking for that convenience. We know that arrivals is more successful than departures and it’s helping us to learn from these insights and plan for future locations. Also coming soon is Delivery to Seat — these processes are easier to navigate where we’ve got partnerships with airlines.”

NEW GM, TR SALES AND SERVICES

As Abu Dhabi’s new terminal inches closer to opening, ARI has chosen a new GM to head a new joint venture between ARI Middle East (ARIME), and local partners, Travel Retail Sales and Services (TRSS).

Adrian Bradshaw, General Manager, TRSS

Adrian Bradshaw has been announced as General Manager, TRSS, which will operate the perfume, cosmetics, jewelry and sunglasses categories at Terminal A. Bradshaw will assume his new role later this year.

Bradshaw comes to Abu Dhabi directly from his role as General Manager, Beirut Duty Free; before that position he held senior roles at ARI and elsewhere, including Alshaya Group, Marks & Spencer, and as Senior Vice President at Qatar Distribution Company.

In a recent release, Rob Marriott, CEO of ARIME, welcomed Bradshaw to the role, expressing delight in the appointment and confidence that he would continue to drive growth in this position as he has in Beirut.

At the announcement, Bradshaw stated his feeling of privilege at being offered the position. “As General Manager of ARI’s newest operation in Abu Dhabi at such a pivotal time for the business, I look forward to immersing myself in this exciting new venture and unlocking the huge potential that awaits. I would like to take this opportunity to thank my exceptional team in Lebanon. Their dedication and brilliance have been instrumental in our shared successes over the last number of years,” he stated.

Marriot says ARI is always looking ahead, identifying what the new generation of customer wants, “So for Gen Z and millennials, we need to adapt in each segment, giving them the offer they want. Whether it’s digital promotions when they get near the airport or more cohesive thinking with our partners, ultimately, it’s about getting our customers to understand how much more they can do with us. We want to bring joy across the whole traveler journey by joining the dots.”

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with major spirits brands are a key offer for ARIME’s stores at Cyprus Airport

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SECOND ACT

After completing most of the Samarra Terminal upgrade, Iraq Duty Free switches gears to create an exciting shopping experience in Babylon Terminal B at Baghdad Airport, expecting a two-fold increase in sales

Iraq Duty Free (IDF) is upgrading its departures and arrivals stores in Babylon Terminal B at Baghdad Airport to create more space and a broader offer, according to the company. These renovations “will enhance the pre-flight experience for international travelers at Baghdad International Airport and create a great shopping experience that seamlessly blends modernity with the rich identity of our brands,” says a spokesperson at IDF.

The renovated areas will include all categories, but will highlight the retailer’s largest offer, perfumes and confectionery, located in the most visible section of the store. “Interspersed throughout the floor will be gondolas for accessories, cosmetics, watches and other categories,” says the spokesperson. “In addition, we will upgrade separate sections for liquors, tobacco, souvenirs and travel accessories in the rear section of the store.”

For the renovations, IDF has focused efforts on its most popular product categories of fragrances and spirits. “Most travelers' spending habits are on perfumes

by ALISON FARRINGTON

and liquors, which represent the largest percentage of our sales at Iraq Duty Free, followed by confectionery and other categories,” adds the spokesperson.

Full steam ahead

The renovation of the IDF stores at the Babylon Terminal is ahead of schedule.

This is thanks to the timely completion of the Samarra Terminal 3 upgrade, which opened in January 2023 and has contributed “promising results” so far this year.

The Samarra Terminal upgrade, which has been a key focus for Iraq Duty Free, is almost completed. “We have been focused on upgrading our retail spaces with new design and fixtures,” says the source. “In terms of investment, we have renovated all our existing shops to international standards with the exception of one still to come, in the departures area for the international concourse known as Babylon. It is due to open in the last quarter of 2023.”

Sales will not be affected during the renovations, says the company, explaining IDF has prepared a temporary store that

will serve its customers during renovation work. “Our expectations are that sales will be doubled with the new-look stores, due to the expansion of most category sections and inclusion of new brands as well.”

PAX increasing

Average passenger numbers are very good and increasing all the time, confirmed IDF. “The number of international passengers traveling through Baghdad Airport per year is around 2 million to 2.5 million. Iraqi airport travelers are dominated by Iraqi nationals, representing around 70% of travelers. Expats and other nationalities represent around 30% of travelers from various countries,” he says. A diverse range of airlines operate at Baghdad, and many international airlines fly out of the Babylon Terminal. These include Emirates, Qatar Airways, Royal Jordanian, Turkish Airlines, Fly Dubai, Gulf Air, Middle East Airlines, Fly Baghdad, Ur Airlines, Pegasus, Sham Wings, Egypt Air, Air Arabia, Tailwind Airlines and more.

50 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

A look at Babylon Terminal at Baghdad International Airport

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Inspired expansion

by ALISON FARRINGTON

JDFS plans to expand with new multichannel travel retail offers

Jordanian Duty Free Shops (JDFS) has secured another 10-year exclusive agreement with the government of Jordan. This agreement represents a strong vote of confidence in JDFS’ capabilities and underscores its strategic importance within Jordan's travel retail landscape, says CEO Haitham Al-Majali, allowing the operator to make informed and strategic investments that pave the way for future success.

“Over the next decade and beyond, we plan to invest in several key areas across infrastructure and store expansion, product portfolio enhancement and digital transformation,” he says.

Al-Majali confirms that the company’s investment focus will be on modernizing

and expanding store infrastructure to accommodate the increasing number of travelers, including upgrading facilities, implementing advanced technologies for smoother transactions, and creating inviting retail spaces.

“We will continuously work on curating an attractive mix of products, including exclusive offerings and local merchandise, to cater to the diverse tastes of travelers,” he says. “This will involve forging new partnerships and collaborations with brands that align with our values and customer preferences.”

The company will also invest further in its digital platforms, including improving its online pre-order services, enhancing its virtual shopping experience and offer-

ing more contactless payment options. “This will enable us to reach customers beyond physical store locations and create a seamless omni-channel shopping journey,” states Al-Majali.

Consumer expectations

The planned enhancement of its digital environment is in part because of changed consumer behaviors and expectations. Al-Majali says while digital adoption had already been growing, the pandemic accelerated this trend, with customers more inclined to pre-order online, for example. They are also now more keen to take part in virtual shopping experiences and use digital platforms to explore products and promotions before shopping in person.

“As the digital landscape continues to evolve, there's significant growth potential in further integrating our digital

52 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

A new 10-year agreement allows Jordanian Duty Free Shops to strategically invest in new avenues, both digital and brickand-mortar, CEO Haitham Al-Majali explains to GTR Magazine Jordanian Duty Free Shops CEO Haitham Al-Majali

platforms with our physical stores,” says Al-Majali. “This could involve enhancing online pre-order options, providing realtime promotions, and creating a seamless transition between digital and in-store experiences.”

He also sees growing interest in consumers supporting local businesses and choosing sustainable products, with a particular emphasis on finding authentic products that hold a meaningful connection to the local culture and environment. This trend is especially well suited to JDFS, says Al-Majali, “Our stores continue to emphasize the connection to Jordanian culture and heritage. We offer curated experiences that highlight local craftsmanship and traditions, resonating with customers' desire for authentic and memorable encounters.”

The company is also focusing on products with sustainable and eco-friendly attributes, as this is increasingly important to its customer base.

Categories and mixes

Other consumer trends are consistently being met with a constantly curated and changeable category mix in store, keeping in line with the preferences of the retailer’s diverse customer base.

As one example, Al-Majali says premium alcoholic beverages including high-end spirits and wines is one area

JDFS is expanding its luxury offer across categories in line with passenger demand for premium brands

experiencing notable growth, as travelers are seeking unique and highquality selections.

“The spirits category holds significant importance for JDFS as it contributes significantly to our overall sales and customer satisfaction,” he says. “This category appeals to a wide range of customers, including both international travelers seeking unique beverages and local customers looking for premium selections. The spirits category is a strong revenue generator for us due to its popularity among travelers.”

Tobacco has also historically been an important category for JDFS, with consistent demand and popularity among

travelers. In this area, however, Al-Majali sees shifting consumer behaviors along with changing regulations. “Our strategy involves adapting to market dynamics, providing a diverse range of tobacco products to cater to different preferences, and staying informed about regulatory changes to ensure compliance and provide the best possible shopping experience for our customers,” he says.

Again, customers are seeking a strong sense of authentic local culture in their purchases, and this is reflected in the category mix. “The demand for local and culturally significant products has been growing. Travelers are increasingly interested in purchasing items that have

54 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023

Retailer News

Consumer trends are consistently being met with a curated and changeable category mix in store

a connection to the region's heritage and craftsmanship,” says Al-Majali.

Expansion opportunities

Currently, JDFS operates 20 border stores and a downtown store in the capital Amman; Al-Majali confirms the plan to strategically expand this portfolio, taking into consideration market potential, traveler demographics, and regional trends. “We’ve identified a number of potential growth opportunities for multi-channel activities, including expanded border operations, airport store expansion, tourist hotspots and cruise terminal openings,” he says.

The company has seen great success at its border stores, and will be exploring opportunities to expand to additional border crossings. “These locations facilitate a high volume of cross-border travel and offer a unique retail environment where travelers are often looking for last-minute shopping options,” says Al-Majali.

Indeed, border and seaport shops are the mainstay of the company, but airports are also a part of the expansion agenda. “We see potential to expand our airport presence as well,” says Al-Majali. “As air travel resumes and grows, airport dutyfree shops continue to be a lucrative avenue for growth, catering to international travelers seeking premium products.”

Less traditional avenues

Al-Majali and his team are looking at some unique location prospects, including the possibility of establishing stores in popular tourist destinations within Jordan. “These areas attract both domestic and international tourists, providing us with a chance to capture a broader customer base,” he says. “Locations near historical sites, cultural landmarks, and resorts could prove to be fruitful.”

While seaports are already an important avenue for the company, Al-Majali says his team is looking to expand into partnerships with cruise companies, “With the potential for increased cruise ship traffic in the region, seaport shops offer an exciting avenue for growth. Collaborating with cruise lines to provide an exceptional shopping experience to passengers disembarking at Jordanian ports could be a strategic move.”

Emerging markets

As global travel returns, Al-Majali says the team is noting that key regions and countries that are showing increasingly dynamic passenger traffic. “We are observing trends in emerging markets in Africa, and other parts of the Middle East are showing potential for growth,” he says, adding that company marketing strategies are designed to target these regions

and countries with tailored offerings and promotional efforts that resonate with their preferences.

Jordan’s historically strongest source market is from neighbour countries such as Saudi Arabia, UAE, Qatar and Kuwait. “Their proximity to Jordan and the cultural ties often lead to significant passenger traffic,” explains Al-Majali. This being said, European countries also contribute a substantial number of tourists to the country, in particular those interested in exploring historical sites and experiencing Jordan's unique culture. But travelers from other regions are showing increasing interest as well, with Al-Majali saying travelers from Asian markets like China, South Korea and India often appreciate local products and cultural experiences, while travelers from North America are also contributing to growth in passenger traffic.

Caution prevails

The company has seen a steady upward trajectory in sales in the first half of 2023 vs. 2022. However, Al-Majali points out that uncertainites remain. “We continue to closely monitor developments and adjust our strategies accordingly,” he says.

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Retailer News

JDFS operates 20 border stores and a downtown store in the capital Amman

Winning over Gen Z

by WENDY MORLEY

Only now are we in travel retail coming to fully understand our post-pandemic world. We are still working on trying to figure out the basics: How do we restock and in what quantities? How do we restaff? What is available now that we have disturbances in the supply chain? Can we go back to having in-store activations?

Now that the initial reopening has passed, we are discovering the nuances of

these times. Who are our consumers now? What exactly do they want and how do we reach them?

Two things have changed our landscape drastically since our last full year of operation, 2019. First, the travel retail consumer is not the same person. Leisure traveling — which people all over the world have been chomping at the bit to do — makes up the majority of those at the airport, while businesses have significantly curtailed their use of travel. This

trend, plus the simple passing of time, have made Gen Z and younger millennials the channel’s clientele.

Second, while reaching the customer with an omnichannel approach had already been increasing in importance, the necessity of living in a digital world has greatly accelerated the necessity of reaching a customer using this approach, for brands and retailers alike.

Brands and retailers the world over are working hard to solve this equation, but Lotte Duty Free appears to be first in class.

Embracing the opportunity

Korea-based Lotte Duty Free has embraced the rise of the Gen Z shopper, seeing — and seizing — endless opportunities to reach this cohort. Pre-pandemic, Lotte had already been more focused on using various channels to reach Gen Z, and so is in a primed position at the gate.

Fashion is a great place to start. Duty free can have a reputation of being out of date. As Gen Z is fashion conscious and companies can use younger looks and styles – not only in clothing, but also in the promotion of clothing – to increase sales in the category and give a sense of being current.

“Young Chinese, Southeast Asian, and Korean customers are showing interest in the Korean brand THE MUSEUM VISITOR, which recently launched by

Lotte Duty Free broke new ground with its “Young Travel Club,” offering VIP benefits to members. The first 200 memberships sold out immediately

58 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Retailer News

Casual luxury is on trend for the Gen Z shopper with a solid income, and Sporty & Rich caters to this clientele

Always innovative, Lotte Duty Free has taken omnichannel to a whole new level in its multitentacled digital and IRL approach to attracting and inspiring loyalty from a whole new generation

Lotte Duty Free,” says Kim Won-shik, Head of Lotte Duty Free’s EC Division, “Easy casual brands such as Sporty & Rich also opened at the Lotte Duty Free World Tower store on August 1, and a select shop The Court&Cart with sportswear and goods such as golf and tennis, was also set up at the Lotte Duty Free Busan store. Lotte Duty Free Shop is also testing cosmetics brands and vegan cosmetics that are popular on social media through its online duty free shop channel. We will continue to strive to meet the diverse needs of Generation Z.”

Early loyalty

Though Gen Z is the cohort to win over, their conversion rate and average spend remain low. “We are working hard to lock-in this generation and turn them into loyal customers,” says Won-shik. “Although their purchasing power is still low, they will gradually emerge as Lotte Duty Free’s main customers, so we are conducting pre-emptive marketing.”

To this end, Lotte Duty Free is strengthening customer benefits aimed specifically toward this age group, such as introducing paid memberships to foster potential VIP customers. The retailer has created a lounge exclusively for younger travelers called “Young Travel Club Membership.” Those with a membership receive special benefits that only “top-tier customers” receive, such as a Lotte Duty Free Main Store Star Lounge pass. This program turned out to be excep-

tionally successful. All 200 memberships on primary offer sold out immediately after the launch, and the concept itself received a lot of attention — so much attention that the ratio of Lotte customers in this age group shifted notably. “The ratio of customers in their 20s and 30s among the top customers of Lotte Duty Free increased from 20.5% in 2022 to 27.3% in 2023, indicating that the importance of customers in their 20s and 30s is increasing. Lotte Duty Free plans to launch a new membership after analyzing the customer data that participated in the first term and reconsider the benefits and number of people,” he says.

Star power

Even before the pandemic, Lotte Duty Free had used celebrities to draw attention in truly original and non-traditional ways, such as through concerts. Now, this marketing concept has expanded to a whole new level.

“We took the lead in K-wave marketing, which has now emerged as a global trend, and captivated customers in China, Japan, and Southeast Asia,” says Won-shik. “Top-tier K-pop artists such as Junho, Aespa, Stray Kids, Twice, and Super Junior are currently models for Lotte Duty Free.” As this idea has expanded, so has the classification of “star” for the company, which recently collaborated with Nobody Sausage, an animated virtual influencer with 30 million global followers, to hold the

“EVERYBODY SOGONG 1st AVE” exhibition at Lotte Duty Free’s flagship store in Myeong-dong until October 31.

This exhibition is a true marriage between online and offline, digital and real life — Nobody Sausage appears for the first time outside of the digital environment, and is also available in augmented reality form. “This Lotte Duty Free shop is designed to be an entertainment space where virtual influencers and duty free shopping coexist,” adds Won-shik.

“Lotte Duty Free has launched the web drama ‘A LDF ORIGINAL SERIES’ and held fan meetings with foreign customers. In addition, ‘Lotte Duty Free Family Concert’, which the company is proud of, is held 32 times and is loved by customers from all over the world,” he explains. “In addition, we are attracting customers by evaluating various contents such as videos, photos, and hand printing of models at Star Avenue, the main store of Lotte Duty Free Shop in Myeong-dong, which has become a representative tourist attraction in Seoul.”

Digital realm

Always on the forefront of the digital landscape, this year Lotte Duty Free launched new digital community services “Trip Talk” and “Challenge,” allowing customers to share travel-related experiences, as well as duty free shopping at Lotte Internet Duty Free.

“Trip Talk” is a travel-based community focused on exchanging global travel information, where customers can discuss and ask questions about such things as travel destinations and their own personal experiences, bringing information and excitement about travel through an interactive and social environment.

“Challenge,” also a social community service, is shopping specific. Customers are able to upload text, photos and videos along with reviews of items purchased, and can also tag and post products sold at Lotte Duty Free.

If star-powered events, concerts, dramatic series, augmented reality, videos and community spaces are not enough to drive interest and loyalty, the retailer also publishes LDF Magazine through social channels such as Instagram and KakaoTalk, to provide duty free shopping information and social trends, and also hold other customer engagement events.

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Korean brand THE MUSEUM VISITOR is proving to be especially popular with the Asian Gen Z consumer

The big

by LAURA SHIRK

As international travel continues to bounce back and drive economic recovery across the Americas, tourism leaders have committed to establishing a more ethical, inclusive sector. As reported by the World Tourism Organization (UNWTO) in June, tourism in the Americas has experienced rapid recovery fuelled by the United States outbound market. According to data, international arrivals to destinations across the Americas reached 86% of pre-pandemic levels at the end of Q1 2023; international seat capacity on planes in the region is also close to pre-COVID figures at 97%. Several destinations in the region have already achieved pre-pandemic levels in terms of international arrivals including Sint Maarten (+51%), El Salvador (+26%), Colombia (+18%) the Virgin Islands and the United States (+17%) and Guatemala (+14%).

On the flip side, foreign direct investment in tourism is showing no signs of recovery. At this year’s Regional Commission for the Americas in Quito, Ecuador,

Connectivity and airfare

Looking at the current big picture, ForwardKeys’ Trends Report reveals that Latin America and the Caribbean are only 5% behind 2019 figures in regards to international arrivals in the first six months of 2023. The company cites the strong performance of Mexico, Central America and the Caribbean as key to their success; in contrast, South America is down 24% compared to the same period in 2019. Described as one of America’s rising tourism superpowers, the report also shows Brazil has had a difficult time attracting travelers back since the reopening of international travel. According to data, limited air capacity from the most reactive global source markets is impending travel recovery in the country. The lack of connectivity to Brazil is not only limiting its chances of attracting more international visitors, but also increasing the cost of airfare.

“Despite the limited capacity and higher fares, travel intent, measured in flight searches to Brazil, shows the demand for the destination is still high. European markets are at the top of the most active markets searching for Brazil in the first two months of the year,” reads the report.

Considering the turnout at this year’s Rio Carnival, the resilience of the affluent segment and overall findings, ForwardKeys says there are reasons to be cautiously optimistic about South America.

ASUTIL’s outlook

Looking for an association’s take on the picture in Latin America, Global Travel Retail Magazine spoke with José Luis Donagaray, Secretary General, Asociación Sudamericana de Tiendas Libres (ASUTIL). Quick to acknowledge the success of the domestic market, he reiterated that the two main issues in the region on an international scale are lack of connectivity and the high price of airline tickets. It is expected that the region will make a full recovery by the end of next year.

With the exception of Argentina, Luis

José Luis Donagaray, Secretary General, ASUTIL

60 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Latin America Report

Brazil’s lack of connectivity is not only limiting its chances of attracting more international visitors, but also increasing the cost of airfare UNWTO hosted a seminar to shine a light on the challenges and opportunities around sustainable investment.

Drawing

on research from ForwardKeys, ASUTIL, m1nd-set and other sources, Global Travel Retail Magazine reports on the state of international travel and the duty free channel in Latin America

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Donagaray also pointed out the decline in value of the US dollar across the region. This could potentially lead to a lower cost of living in countries that are experiencing currency appreciation and “balance the mix of incoming and outgoing tourists.”

Considering the tax rates across the region, he said alongside travelers, Latin Americans often shop duty free as a way to save money. Operators are working on maximizing opportunities in the digital space and offering additional programs and services.

On the agenda for ASUTIL, it is preparing to attend the third session of the Meeting of the Parties to the Protocol to Eliminate Illicit Trade in Tobacco Products. In association with the World Health Organization, the meeting will be held in Panama City, Panama, November 27 – 30. In recent news, DFS Group has joined as a signatory to the Duty Free World Council and Tax Free World Association anti-illicit trade declaration. This makes it the seventh leading travel retailer to do so, following Aer Rianta International, Dubai Duty Free, Dufry Group, Gebr. Heinemann, Qatar Duty Free and Lagardère Travel Retail.

It has also been announced that ASUTIL Conference 2024 will take place in Bogotá, Columbia, in mid-June. The venue is still to be confirmed. In other news, after 22 years with the association, José Luis Donagaray will be retiring as ASUTIL Secretary General this month. He leaves the position having achieved a

long list of achievements not only within the association, but also the wider travel retail industry. Luis Donagaray will be succeeded by Carlos Loaiza-Keel, Secretary General, Chamber of Uruguayan Free Shop Operators.

Travel retail trends and path to purchase

When it comes to travel retail in the region, research from m1nd-set indicates that Latin American shoppers in the channel are considerably more likely to purchase new-to-them products and brands compared to the global average. According to the agency, which surveyed more than 2,000 duty free shoppers from across the region earlier this year, 67% said they plan to travel again within the next six months; just under half said they visit shops on every trip and 17% always make a purchase.

Looking at purchasing drivers, pretravel touchpoints and marketing messages, data shows 44% of Latin American shoppers notice touchpoints before shopping duty free, which is higher than the global average. Also, sales staff are influential in their purchasing decisions; just over half said they interact with staff and of those 61% called it positive. Brands and retailers need to consider the change in age of the traveling population and this implication on product and marketing mix in order to ensure successful marketing and promotion in the region.

Peter Mohn, Owner & CEO, m1nd-

set, says the fact that travelers from Latin America are more likely to notice marketing messages in the channel is good and bad. Travelers are interested in duty free, eager to learn about new products, travel exclusives, limited editions and offers and willing to spend if their needs are met.

“The bad news is that it makes it more challenging for stakeholders to know exactly where to invest regarding their marketing activities. This requires a good understanding of the path to purchase and the ability to define which touchpoints have the strongest impact on the decision-making process,” he explains.

The research agency has developed a tool called M1OM (m1nd-set’s investment optimization model), which has helped brands and retailers to define the following key aspects:

• The optimal combination of touchpoints to maximize reach while minimizing investment

• The importance of the ROPO effect (research online, purchase offline)

• The sources of information that are most researched or noticed pre- and during travel

• The touchpoints that are most effective in terms of purchase decision, brand equity and awareness and the likelihood to re-purchase

• The moments that matter most to shoppers and how to build brand value around them

62 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023

A look at international air traffic in Latin America in PAX per million

Your best duty free experience

Reaching the summit

by WENDY MORLEY

For years it has felt like India’s been inching toward the top of the mountain — on the cusp of having the largest population in the world, on the cusp of having a huge aviation market, on the cusp of having a large traveling middle class, in addition to wealthy travelers with a penchant for duty free, and it appears that day has finally dawned.

Booming economy

According to The Times of India reporting on “The Rise of India’s Middle Class,” as of November 2022 nearly one in three Indians are now considered middle class –well more than double the 14% representation in 2004; this figure is projected to reach 63% by 2047. Meanwhile, the number of “super-rich” Indians has risen from fewer than 100,000 in 1994 to 1.8 million in 2021. Since the turn of the millennium,

India’s gross domestic product (GDP) per capita has more than quintupled, from US$442 to US$2389.

To give an idea of the impact these changes may have and what they may portend, they virtually mirror the changes that took place in China between the 1990s and the 2000s. And in spring of this year, India’s population passed that of China.

Travel & tourism by the numbers

This population milestone occurred just as India’s tourism is in strong recovery. The country’s travel and tourism sector in 2023 is forecast to reach 96.5% that of 2019, contributing INR16.5 trillion (US$200 billion) and creating more than 1.6 million jobs this year alone, reaching almost pre-pandemic job numbers of 39 million in the sector. Domestic travel has

practically fully recovered, at 99% of 2019’s numbers.

As a large, populous country, the domestic market has always been especially strong. This year, domestic travel and tourism spend is expected to reach more than INR12.6 trillion (US$152 billion), with international spend reaching INR2 trillion (US$24.13 billion).

Meanwhile, international arrivals to India have grown drastically since 2001, from 2.54 million in 2001 to 17.91 million in 2019, with a percentage rank in the world growing from 0.37% to 1.23%, and a global ranking of 51st to 23rd.

All indications show that this is only the beginning. By 2033, the travel and tourism sector is expected to contribute 7% to the country’s GDP, reaching INR36.8. trillion, or US$444 billion. The sector will employ over 58.2 million people, or one in 10 workers.

New airports and expansion plans

In keeping with this growth in travel and tourism, India is gaining many new airports — approximately 18 will open in 2023/2024 alone, in addition to the 162

64 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 India Update

With the world’s largest population, an exploding middle class and travel expected to increase in the hundreds of millions of PAX in coming years, India is ripe with opportunity

Noida International will be India's first net-zero carbon emissions airport

NIA will serve as a destination with attractive retail, food and beverage, and entertainment options for travelers; the airport has already awarded the contract to Roseate Hotels and Resorts to build a 220-room property

already in existence in the country. Most of these new airports will be domestic, while a few will be international. But the one getting the most attention by far is Noida International Airport (NIA), and with good reason. Once completed, NIA will not only be India’s largest airport, but also Asia’s. In fact, with six runways, NIA currently stands to be the fourth largest airport in the world. However, approval has already been granted for the airport to increase this to eight runways as land becomes available, which could raise its ranking to largest, depending how the rest of the world progresses in that time.

The 5,000-acre airport, for which ground was broken in November 2021, is located 72 kilometers from Indira Gandhi International Airport (DEL). While this may seem a poor location choice, DEL currently serves the entire Delhi capital region — with a population approaching 50 million — and is quickly reaching peak capacity even with expansion plans. Currently, Indira Gandhi Airport serves approximately 90 million PAX.

NIA is being developed by Yamuna International Airport Private Limited (YIAPL), a 100% subsidiary of Zurich Airport International AG, in close partnership with Government of Uttar Pradesh and Government of India. TATA Projects is managing the construction. The airport, which will open in four phases, is expected to begin operations by the end of 2024. Phase one will serve 12 million passengers per year, with one runway and a terminal.

World class airport, efficient infrastructure

Noida Airport is aiming to be all things to all stakeholders, and given its location, planning and backing, it should have no trouble achieving these goals.

The airport has already awarded the contract to Roseate Hotels and Resorts to build a 220-room property, and CEO Christoph Schnellmann states that the airport will be “a destination with attractive retail, food and beverage, and entertainment options for travelers, including those visiting Agra and other tourist destinations nearby.”

Schnellmann adds that NIA will have world-class facilities for airlines, hotels, cargo, and commercial partners with short turnaround times and low operating costs for airlines.

As NIA is located adjacent to the Yamuna Expressway, an eight-lane, 100-meter-wide highway that connects to the Delhi-Mumbai Expressway. The airport will have a “multi-model” cargo hub. For passengers, it has been proposed that the airport be connected to Noida Metro and Delhi Metro, driverless pod taxis, personal rapid transit to and from an amusement park and a high-speed railway (HSR) station in the proposed Delhi-Varanasi HSR corridor, included in India's High-Speed Rail project.

Expected growth

According to IATA, India is expected to see a compound annual growth rate of 5.8% in the next two decades. The association predicts an additional 430 million air passenger journeys to, from and within the country by 2040 compared to 2019. Given this trend, with its ultimate capacity of approximately 120 million PAX annually, NIA will cater not only to the capital region, but also to numerous districts in Uttar Pradesh and act as a second airport for the growing density of Delhi, Noida, Greater Noida, and surrounding settlements.

Noida Airport will open in four phases and is expected to begin operations by the end of 2024

66 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023

Once completed, Noida Airport will not only be India’s largest airport, but also Asia’s; it currently stands to be the fourth largest airport in the world

India Update

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Strength in numbers

by HIBAH NOOR

This year Sherif Toulan began his second term as President of MEADFA. He could not have found a more challenging time to begin this position than when he did in 2021. Immediately, he made a point of strengthening MEADFA’s relationship with other associations around the world, as in general, what one faces they all face, and there is strength in numbers. There has never been a time when this was more the case.

Toulan confirms this relationshipbuilding will continue into his second term, and the association also has a number of other priorities to focus on in the coming years. Currently, MEADFA is working to foster itself internally by increasing the activity of its members in addition to looking outward. “Our objective is to expand MEADFA’s outreach by collaborating with other relevant associations and focusing on strengthening the impact of the MEADFA committees,” he says. “We would also like to increase

Sherif Toulan, President, MEADFA

member participation and engagement in the different committees. While achieving this, we will enhance the services we offer and actively seek feedback and comments from our members to identify areas for improvement, prioritize our members’ needs, and deliver tangible benefits.”

Toulan says strengthening the effectiveness of the association itself is an overarching focus. “We will work on enhancing the capabilities of the MEADFA advocacy committee to become the most effective advocate in the region and enhance our partnerships with other associations that share our interests and have a broad reach,” he says. “Effective communication is essential, and we will leverage our involvement in other associations to support our members’ needs.”

A committee that will be getting particular attention is that of sustainability, according to Toulan, with the promotion of the sustainability committee in the Middle East and Africa region one of the association’s primary goals.

Supporting a growing market

Soon after he began his first term as President of MEADFA, Toulan announced that MEADFA as an organization has made it a mandate to be more inclusive of Africa as a whole, as traditionally the organization has been more focused on the Middle East.

This year for the first time, MEADFA will be taking place in Sub-Saharan Africa, specifically in Accra, Ghana, November 19-21, 2023. When Toulan was asked why Ghana was chosen and not one of the countries already strong in travel retail, his response was, “Why not Ghana? Our choice is based on a variety of factors, including the country's growing economy, political stability, strategic location in West Africa, and the support that we are getting from our partners. Ghana has been positioning itself as a hub for business in the region, and hosting the conference there will give MEADFA delegates the opportunity to explore the potential of the African market.”

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Since beginning his first term as President of MEADFA, Sherif Toulan has made it a priority to increase the effectiveness of the association through connection and relationship-building

As a whole, travel retail in Africa has been stagnant, though there has been continued talk that the continent is ripe for substantial growth. Toulan says, “There are certainly signs of growth, although it remains a challenging market. The pandemic has impacted travel and tourism worldwide, but as the world is open up again, there is optimism that the African travel retail market will bounce back.”

As referenced earlier, this market varies considerably from one city and airport to another. Toulan says, “At the moment, the strongest cities and airports in Africa are Cairo, Johannesburg, Kenya and Casablanca. However, there are also emerging markets, such as Lagos and Addis Ababa, that are expected to experience growth in the coming years. New airports are also being built, such as the new international airports in Kigali and Dakar, and others. This will bring new opportunities and will boost travel retail in the region.”

Important passengers

For some airports in the Gulf, the Chinese traveler is very important. That traveler has been completely absent for years, now just beginning to venture beyond China’s borders but at the moment is far from previous numbers. Toulan says despite this it is anticipated that the sales levels of 2019 will be reached and possibly exceeded by next year. “The reopening of outbound travel from China has a positive impact on travel retail sales in the Gulf region due to the large number of Chinese tourists who visit the region annually. Prior to the pandemic, Chinese tourists were the highest spenders globally, and their return to travel will help the industry recover. This is likely to result in a surge in demand for luxury goods, particularly among Chinese tourists who have a high disposable income and a strong affinity for luxury brands,” he says. The Russia-Ukraine war has also affected travel to and from that region. According to Toulan, MEADFA is seeing other nationalities filling the gap left by the war between Russia and Ukraine, and the industry is likely to continue to attract visitors from other countries.

The MEADFA Conference

Speaking about the MEADFA Conference, Toulan says the focus will be on global trends and chalenges of the Toulan says the focus is expected to be on the global trends and challenges of the travel retail industry, as well as exploring opportunities for growth and innovation in the region with a focus on Africa. The location of the conference in Ghana is a positive step toward promoting the travel retail industry in Africa, says Toulan. “Over the years we have received a load of feedback to hold the conference in Africa, now that we are ready and this has become a reality, I truly believe it is a great opportunity for all to explore and learn about the real African market.”

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Ready for change

by ALISON FARRINGTON

Global Travel Retail Magazine (GTRM): How do you feel about the success of this year’s registration and number of exhibitors compared to last year and vs. pre-pandemic?

Erik Juul-Mortensen, TFWA President (EJM): Preparation for TFWA World Exhibition & Conference is shaping up very well and the response from both exhibitors and visitors has been very strong. The number of brands and retailers that have confirmed their presence is well above that of last year’s event and close to pre-pandemic figures. In addition, a record-breaking amount of floor space has been reserved by exhibitors, with over 25,000 square meters planned.

In addition to the encouraging numbers, the positivity surrounding the event is highly gratifying, with this mood sure to be reflected in an upbeat atmosphere throughout the week.

GTRM: What is the category breakdown at the show?

EJM: The range of brands confirmed to be exhibiting this year is as diverse as ever. Currently, the largest category represented is perfumes and cosmetics with around 33% of exhibitors. We are also seeing a strong number of brands from the wine

and spirits, beer and non-alcoholic beverages categories; a large number of confectionery, fine food and food supplement brands will also be in attendance.

GTRM: How many delegates do you expect to attend the show? Do you think Cannes is still the best place to host the event?

EJM: Visitor numbers are looking very encouraging and the number of pre-registered buyers and landlords is ahead of the level at this equivalent stage in 2019 – at the time of the Q&A.

Given this, we expect the final total of visitors to be close to, or even exceed, prepandemic levels.

While we are always mindful about what is best for our members in terms of the date and location of all our events, Cannes remains the ideal location to host TFWA World Exhibition & Conference, in regards to convenience, cost, and of course against the beautiful backdrop of the Côte d’Azur.

GTRM: According to the association, what current trends exist on the consumer level of the industry?

EJM: We are on an upward trajectory according to many indicators. Air traffic

numbers are approaching 2019 levels, and with this in mind there is plenty of reason to be optimistic as we head into the latter part of 2023 and into 2024.

We have just seen an extremely busy northern hemisphere summer season, in which airports have been very lively. This has brought challenges as well as opportunities, but it bodes well for duty free and travel retail.

It is key that the industry prioritizes appealing to, and engaging with, a new generation of traveler. These passengers have tastes, preferences and expectations that are unique, and significantly different from the generations who came before. As a result, we are seeing new trends appear throughout the industry, including an increasing demand for enhanced store experiences, digital elements and sustainable options. There is plenty of opportunity available for both established

70 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Association News

The popular evening social scene by the beach returns this year with extended hours Erik JuulMortensen, President, TFWA

and up-and-coming brands to capture the hearts and minds of this fresh cohort.

The cost of travel continues to be a considerable issue. If the current economic climate remains the same and the cost of travel continues to increase, it is likely this will have a negative impact in 2024.

Staff shortages have been a significant challenge for our industry, and recruitment and retention will be of the utmost importance over the coming year so that we can have the right number of staff on the ground to serve travelers eager to spend.

GTRM: Please provide a news update on the association.

EJM: In May, we returned to Singapore for the first full-scale TFWA Asia Pacific Exhibition & Conference since 2019, which was a resounding success.

It was fantastic to meet with our industry partners and peers in South America at the ASUTIL Conference in Buenos Aires in June. The experience we had working with the ASUTIL team was a very positive one, and feedback from delegates at the conference suggests that they were very happy to see the event return to the calendar.

November will see the MEADFA Conference take place in West Africa for the first time, with Accra, Ghana, being the location for the event. There is a vast amount of untapped potential in the region and this year’s MEADFA Conference will provide delegates with insight into the opportunities available in this part of the world.

TFWA has partnered with Duty Free World Council to launch the “Duty Free: Trusted, Transparent, Secure” campaign to emphasize our industry’s credentials in the fight against illicit trade. Illicit trade represents a significant threat to our industry and with much misinformation and confusion around the subject, we believe it is crucial to act now. The signing of a zero-tolerance declaration on the practice by eight major retailers is an important step in the right direction and we hope that more retailers and brands will publicly state their support. We look forward to updating delegates in Cannes on the campaign at the Duty Free: Trusted, Transparent, Secure workshop on Wednesday, October 4 at 8am at the Hotel Majestic (to register visit conference@tfwa.com).

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The TFWA WE iLab technology innovation area will showcase several digital innovations this year

Association News

Brands taking yachts for meeting spaces in Cannes have seen a considerable increase this year

THE ROAD AHEAD

Canada’s border stores went through quite a time, to say the least, with over two and a half years in total of strict border regulations — from complete closure with enforced isolation for citizens to expensive and invasive testing requirements once the border reopened. Throughout most of that time, these border stores saw sales drop from -95% to -100% compared to 2019.

Constant pressure

by HIBAH NOOR

Throughout, the country’s Frontier Duty Free Association (FDFA) worked extremely hard on its members’ behalf, and the association’s efforts enabled these border stores to survive a crisis of unimaginable proportions.

“Our work with the Coalition of Hardest Hit Businesses helped our stores become included in Wage and Rent subsidy relief measures, and being named as one of only 20 industries in Bill C-2 — the extension of these relief measures,” says Barbara Barrett, Executive Director, FDFA. “As things were opening domestically and Canadians were enjoying domestic travel and tourism, our stores were left behind. It was imperative for FDFA to get the border open, despite there being no signs of it being considered.”

Therefore, the association put continuous pressure on political leaders to re-open the border and restore nor-

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FDFA’s member stores needed a lot of help to get through 20 months of closure, and the association was there every step of the way.

Now, together they are moving toward a positive future, including its first convention in four years

Some members from Frontier Duty Free Association that helped to apply pressure on political leaders to re-open the border and restore normalcy

malcy. And it wasn’t just the Canadian duty free stores suffering the brunt of the restrictions; border communities across the US and Canada and businesses within those communities were being disproportionately affected by the closure that, according to Barrett, no longer made scientific sense.

“We at the FDFA organized political leaders — mayors, congressmen and Members of Parliament – on both sides of the border to do public and media panels and apply the pressure to their own parties, which was covered widely by US and Canadian media. Federally, and at the grassroots level across Canada, FDFA did not let up,” Barrett says. “Our work resulted in the government dropping testing, opening the border and remarkably, dropping the need for the use of the ill-designed ArriveCan app, allowing our land border duty free stores to finally step on the road to recovery. So yes, our members did make it through and proved that duty free business is strong and resilient.”

FDFA has more work to do as residual effects from the long closure continue, according to Barrett, but the association continues to make its voice heard and its members remain optimistic. “Duty free may be a small industry, but we have proven our mightiness.”

FDFA has always maintained close relationships with groups like the Tourism Industry Association of Canada.

“Through the pandemic, it was an essential connection. Post-pandemic, there is still much advocacy work to be done in the tourism space and where our goals overlap, we will work together to reach them. An example of that would be the call for the return of the Visitor Rebate Program. Our strong relationships and coordinated advocacy plans are what will bring this to fruition,” she says.

The future is here Thankfully, Canada’s border stores are now on the road to recovery, but store traffic has yet to reach pre-pandemic levels. “FDFA is working with government and tourism groups on ways to increase the rubber tire travel and to encourage our American neighbors to return to Canada, and moreover, ensure that such a closure never happens to our border again,” says Barrett.

Now, after a four-year hiatus, FDFA’s convention is back. “We are very eager to bring our partners together in our original convention format, providing a platform to share ideas and visions that will ultimately grow their businesses while building relationships and brands,” says Barrett. “We believe that by working with our partners, together we can build a thriving industry, which inspired our theme this year: Canadian Duty Free – Building Tomorrow. The convention will take place November 27-30, 2023, in Toronto, Ontario.”

According to Barrett, FDFA staff were thrilled by the immediate response after registration opened in mid-June. “Our supplier members were extremely motivated and enthusiastic to secure their participation,” she says. “We have also received a very positive reaction from the border store operators. These early indications are leading us to anticipate extraordinary attendance this year, which is very welcome after the last few trying years. We look forward to giving everyone a warm Canadian welcome in Toronto!”

FDFA agenda

While the long-term effects of the pandemic continue, with the fully reopened border FDFA’s focus going forward is removing any barriers to success the industry faces. "This includes advocating for the removal of unnecessary, illogical domestic red tape on such things as domestic labeling regulations, and seeking a clear understanding among all federal departments that we are export only and thus removing any inclusion in domestic regulations,” Barrett explains. “Longterm we will also be advocating for the re-instatement of the Visitor Rebate Program, and we will continue our work with border community mayors to protect our border and ensure it is never closed again.”

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FDFA has more work to do as residual effects from the border closing are ongoing; however, the assocation remains optimistic about the future

Association News

FDFA Executive Director Barbara Barrett

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CHATTERBOX IN THE MAKING

On track to continue the push toward digitalization, airports worldwide are ramping up their investment in technology to digitalize operations and streamline the travel journey. As shared by Airports Council International (ACI) in April, 93% of airports expect their IT spend to stay the same or increase in 2023 compared to 2022. As a point of reference, ACI revealed last year’s airport IT spending rose to an estimated US$6.8 billion. Biometrics, self-service technologies and business intelligence solutions top the list of current and future initiatives.

With the rise in conversational AI, a type of artificial intelligence (AI) that enables computers to stimulate human language, and ChatGPT fueling the aviation and travel industry, travel retail is taking notice. Updated last quarter, software development company Master of Code published a list of “The Most Successful Airport Chatbots” in 2022. According to the company, which specializes in building enterprise-grade chat and voice solutions, Melbourne International Airport deserves the top spot.

The second-largest airport in Australia, in addition to its self-service check-in kiosks and digital signage, Melbourne Airport has introduced an AI-powered chatbot for call center automation. Providing digital assistance via the airport’s website and Facebook Messenger, the tool offers real-time flight updates, FAQ page

automation and information regarding the search for food, beverage and shop options. Plus, with the support of API chatbot integration, updates can be sent to the passenger’s messenger service.

Brussels Airport also made the cut thanks to its Virtual Airport Assistant BRUce, which is available via the airport’s website, Facebook Messenger and WhatsApp. Along with providing flight information and responding to common airport FAQs, passengers can use BRUce to book parking and order a lounge pass.

Switching gears from airports to airlines, Etihad Airways recently signed an agreement with technology firm Astra Tech that will enable customers to book flights using AI via the chat app BOTIM

and offer new payment options to simplify the booking process. In a 2023 press release, Etihad Airways CEO Antonoaldo Neves says the airline is committed to staying at the forefront of the constantly evolving digital landscape by adopting innovative solutions such as GPT-enabled flight bookings to deliver the best possible experience for its guests.

EQ-Commerce and the future of personalization

Diving into tech-based topics including metaphygital retail, the influencer market and live-stream commerce, The Future Laboratory has released its new Retail Futures report called EQ-Commerce. As described by the leading futures consul-

As sourced by Google Cloud, 52% of shoppers abandon their online trolley and go to another site if there is just one item they can’t find

78 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Technology

The Future Laboratory has released its new Retail Futures report called EQ-Commerce, which dives into tech-based topics including metaphygital retail, the influencer market and live-stream commerce Image Credit: EQ-Commerce, AI artwork by Samuel Davies for The Future Laboratory

With the rise in conversational AI, Global Travel Retail Magazine provides industry tech updates and a detailed look at the e-commerce relationship and the future of personalization

by LAURA SHIRK

LEGO, the LEGO logo and the Miniﬁgure are trademarks of the LEGO Group. ©2023 The LEGO Group. 95933_EN MAKING A POSITIVE IMPACT Learn more about our plant-based elements made from Brazilian sugarcane on www.LEGO.com/ sustainability/environment www.LEGO.com/ sustainability Our sustainability strategy covers the impact areas: children, environment and people. TFWA World Exhibition & Conference, Cannes 2023 Visit our stand on

tancy, EQ-Commerce is a framework for building highly personalized relationships with customers and is based on four pillars: intuition, intimacy, individualization and interconnection. The Future Laboratory blends trend forecasting, consumer insight and brand innovation to “inspire and future-proof organizations.”

According to the report, the overall global chatbot market is set to expand at a CAGR (compound annual growth rate) of 25.7% to 2030. “AI chatbots are becoming more intelligent, more conversational and able to handle contextual conversations, which in turn will transform how people shop – from customer service to product discovery and purchasing,” it reads.

Speaking about how consumers could use chatbots to improve customization, Matt Ramerman, President at Sinch for Marketing says, “No longer do brands need to make educational guesses about what a customer might want.” The report explains that in the coming years retailers will move beyond modern personalization, which is based on consumers’ past shopping behavior and current engagement, to using sentiment analysis to offer products that are best suited to one’s personality.

Experimenting with the connection between artificial intelligence and the beauty category, Perfect Corp.’s AI Personality Finder measures users’ levels of extroversion, agreeableness, openness, conscientiousness and neuroticism by categorizing their facial features. The AI & AR-powered beauty and fashion tech-solutions provider has partnered

with Dufry to enhance the shopping experience in duty free and travel retail. In the works, consumers will be able to virtually try-on makeup products from up to 15 brands via the retailer’s Reserve & Collect services and at airport locations worldwide.

While it’s easy to get caught up in the advancements – or even the basics – of AI and the need to digitize, brands and retailers should keep in mind the importance of combining technological innovations with human touch to support communication and engagement. Demonstrating how vital it is to create a more intuitive search experience via visual AI algorithms, the report says (as sourced by Google Cloud) 52% of shoppers abandon their online trolley and go to another site if there is just one item they can’t find. Looking ahead, more companies will start to implement customer segmentation to showcase different products in search.

Virtual flagship stores

Beyond augmented retail and metaverse exploration, retailers are working to make the e-commerce relationship less transactional and more personal through the rise of virtual flagship stores. It is believed that virtual flagships could develop into more permanent immersive spaces that allow “for a feedback loop between physical stores and e-commerce.” Long-term thinking: retailers could create a seamless, personalized shopping journey that begins virtually and ends in-store or vice-versa.

One of many names cited in The

Future Laboratory’s report is Emperia, a company that has developed a platform which powers the creation of immersive virtual experiences for brands across multiple retail sectors. According to the company’s site, its platform marries the reach and accessibility of e-commerce with the impact of the physical customer service shopping experience. Emperia offers brands the tools to build virtual flagship stores that display real-world inventory; these “virtual showrooms” can be accessed via mobile phone.

Olga Dogadkina, Co-Founder of the company, says, “The earlier marketing hype, which was based on a campaigndependent, short-lived virtual space, has now become a permanent, long-term e-commerce solution, which is treated as a flagship virtual store.” As referenced in the report, in collaboration with Emperia, Lacoste created a virtual shop, featuring five seasonal products, with a token-gated room for VIP customers in the brand’s Web3 community.

“Building an ecosystem of EQCommerce means not only investing in technology, but also having an understanding of what that technology can deliver and how that can align with customers’ expectations,” reads the release. Key to the current retail landscape and the relationship between retailers and consumers is a change in perspective: to stay relevant retailers need to look at new technologies such as virtual stores not as one-off marketing promotions, but as opportunities to build long-lasting, loyal relationships.

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Beyond augmented retail and metaverse exploration, retailers are working to make the e-commerce relationship more personal through the rise of virtual flagship stores

Travel, tourism and multi-destination trips

by LAURA SHIRK

Even though global international travel was still down 31% vs. 2019, the Caribbean returned to prepandemic levels of international visitor arrivals in Q1 2023. The region’s efforts during the pandemic to remain open to visitors while simultaneously remain safe have been described as world-class.

The latest air ticketing data analysis by ForwardKeys predicts significant growth in the Caribbean for Q4 of this year. Popular destinations like the Dominican Republic, the US Virgin Islands and Curacao are expected to experience continued growth in international arrivals, with growth rates of 54%, 39% and 31%, respectively. Also, Jamaica and the Bahamas have potential to boost their performance by improving long-haul connectivity with source markets in Europe.

Data shows in comparison to the same period in 2019, the overall Caribbean inbound travel is expected to increase by 15%.

According to ForwardKeys, while couples still make up the largest group size in the Caribbean at 43%, group travel (over 10 people) is making a comeback with a rebound of 39% vs. 2019. This type of travel is rebounding strongest in the Dominican Republic (+100%), Sint Maarten (+41%) and Aruba (+39%) and being driven by travelers from the United States, Canada and the United Kingdom.

Also worth noting, the United States

and Canada make up the most bookings to the region, with Canada being the top growing origin market for premium cabin travelers. As shared in a recent press release, Juan A. Gomez, Head of Market Intelligence at ForwardKeys, comments, “Looking at the destinations visited by affluent travelers originating in Canada, we can see that they are mostly traveling to the Dominican Republic, Cuba and Jamaica. And not only are more high-end travelers arriving from Canada, but they are also embarking on more stays of 14 nights or more (+75%), when traveling to the Caribbean, which opens the door to multi-destination trips.”

Seat capacity and air connectivity

On the flight front, the continued uptick in seat capacity has been encouraging. There has not only been an increase in the number of seats on established routes, but also in the number of new routes launched by multiple airlines.

Notably, Danish aircraft operator FlexFlight has increased seat capacity by 720% on established routes from Colombia, Mexico, El Salvador and Guatemala. Copa Airlines, Colombia flagship airline Avianca and low-cost airline Wingo have also increased capacity. Airlines that have launched new routes to the Caribbean include Euroairlines (from Colombia, Mexico, El Salvador, Guatemala, Costa Rica and more), Arajet (from Colombia,

Mexico, El Salvador, Guatemala, Costa Rica and more) and Sky Airline (from Peru).

ForwardKeys calls Latin America the next origin source market to watch. Although it represents only 13% of all bookings, it is growing quickly with bookings +65% ahead of 2019 levels. A rise in the number of connections out of Latin America serves as a major opportunity. “Latin American countries have been boosting capacity to the Caribbean. Colombia (+157%), Brazil (+187%) and Mexico (+55%) are all showing strong growth and audiences that are interested in a Caribbean holiday,” adds Gomez. The company points out that this summer, the preference to visit “urban” destinations and “shopping” destinations outpaced “sun and beach” destinations vs. 2022. However, it is noted that many travelers are seeking sunshine in the Caribbean this fall – especially with better flight connections available.

ForwardKeys’ Dominican Republic case study

ForwardKeys says the Dominican Republic stands out among its competitors due to its excellent connectivity with both intra and extra-regional airline carriers, which contributes to its strong performance.

Dona Regis-Prosper, Secretary General & Chief Executive Officer, Caribbean Tourism Organization; she will make history as the first woman to assume the leadership position

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According to ForwardKeys, this summer, the preference to visit “urban” and “shopping” destinations in the Caribbean outpaced “sun and beach” destinations vs. 2022; however, many travelers are eyeing the Caribbean this fall – especially with better flight connections available

As reported in a case study of the Dominican Republic in ForwardKeys’

2023 South America & the Caribbean Trends Report, during the pandemic the country’s Ministry of Tourism faced the issue of identifying untapped direct air routes allowing tourists immediate arrival in Dominican Republic without any stopovers. Focusing on destination marketing during the pandemic, the study shows that “the ministry had to concentrate its budget and efforts on markets with a focus on audiences who were still flying despite COVID restrictions.”

According to the case study, with the support of ForwardKeys’ historical data revealing the importance of the United States as a source market for the Dominican Republic, the Ministry of Tourism’s Intelligence Unit made the country its main focus. Plus, the study notes that forward-looking ticketing data also showed that other typically important source markets were still not yielding high ticket prices due to COVID lockdowns. “To guide its business intelligence strategy, the Ministry of Tourism used the information reported in the segmentation of the number of inbound gateways by trip origin city in flights to the Dominican Republic,” it reads.

As quoted in the study, Enrique Penson, Intelligence Unit of Dominican Republic – Ministry of Tourism, says, “We identified which trip origin cities in the US had an average of more than 20 – 30% of passengers traveling to the Dominican Republic via a stopover and were among the top 20 tourism-emitting cites for the Dominican Republic.”

To reinforce its newly shaping marketing strategy, the ministry closely tracked competitors. The result: sister city

arrangements with the newly discovered top tourism-connecting cities, which are set to improve tourism and trade relations. Across the industry, partners are promoting the application of data-supported decisions to find ways of generating tourism.

“Now, the whole sector will pursue this new focus on the key US cities for transfer flights and improve connectivity via new routes identified through ForwardKeys data,” adds Penson.

As the world moves on from COVID and people regain confidence in traveling safely, ForwardKeys tells Global Travel Retail Magazine it is possible that some elements of the revenge travel trend – like a preference for unique experiences and luxury travel – might continue beyond the immediate post-pandemic period. “Nevertheless, economic factors such as the rising cost of living and falling disposable income will undoubtedly influence the trajectory and sustainability of the revenge travel phenomenon,” it says.

Caribbean Tourism Organization appointment

Providing a different perspective, Caribbean Tourism Organization’s (CTO) monthly statistics for August revealed that all five destinations reporting international tourist visits for the January to July period experienced varying growth – between 13.4% in Aruba and 59.3% in Trinidad & Tobago – compared to their performances for the same period in 2022.

In other news, CTO appointed Dona Regis-Prosper as Secretary General & Chief Executive Officer in July. Born in St. Lucia, Regis-Prosper will make history as the first woman to assume the leadership position. As Secretary General, she will lead the collaboration with over two dozen member countries and territories and work closely with partners and stakeholders to advance the organization’s mission.

At a press conference, held on September 8 in the Cayman Islands, RegisProsper presented her initial plans for CTO and said, “I am deeply honored to step into the role of Secretary General of the Caribbean Tourism Organization. The Caribbean is a dynamic region with immense tourism potential. With the support of my Chairmanship and the CTO team, I am confident that we will implement the best strategy for leveraging our Caribbean brand for the benefit and greater good of the people of the Caribbean region.”

Caribbean Tourism Organization will host the 10th Tourism Human Resources Conference on October 30 – November 1 in Nevis under the theme: Navigating the Next Phase of Caribbean Tourism.

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The United States and Canada make up the most bookings to the region, with Canada being the top-growing origin market for premium cabin travelers

Caribbean Overview

Airlines that have launched new routes to the Caribbean include Euroairlines (from Colombia, Mexico, El Salvador, Guatemala, Costa Rica and more), Arajet and Sky Airline; ForwardKeys calls Latin America the next origin source market to watch

Net zero action plan

by LAURA SHIRK

In 2021, the aviation industry took the unprecedented step to become net zero by 2050.

This commitment brings air travel in line with the objectives of the Paris Agreement and is further supported by the International Civil Aviation Organization’s (ICAO) adoption of a LongTerm Aspirational Goal to decarbonize air travel. The ICAO agreement aligns governments with the goal set; they now share the same target to achieve net zero emissions by 2050. “There is no time to waste and all stakeholders need to work together to ensure that ‘Net Zero by 2050’ becomes a reality,” comments Marie Owens Thomsen, SVP Sustainability & Chief Economist, International Air Transport Association (IATA). She says that addressing climate change and creating a resilient and sustainable industry is a top priority moving forward.

IATA has released a series of roadmaps to net zero that provide a step-by-step action plan in order for the industry to be successful. The roadmaps address aircraft technology, energy and new fuels infrastructure, operations, finance and policy.

“The roadmaps are the first detailed assessment of the key steps necessary to accelerate the transition to net zero by 2050. Together, they show a clear direction and will evolve as we dig deeper to set interim milestones on the way to net zero. The roadmaps are aimed at airlines,

but also for governments, suppliers, and financiers.

“The main message of these roadmaps, from IATA and the industry, is that it is possible to achieve net zero by 2050. Success will depend on early, harmonized policy support, which should be technology agnostic, and include targeted financing. The greatest challenge isn’t related to any specific solution, but to the pace at which [sustainable aviation] needs to happen, and the collaboration needed,” explains Owens Thomsen.

Potential limitations and operational improvements

Also shedding light on the global issue is Bain & Company. The management consultancy firm released its study “A Realistic Path to Net-Zero Emissions for Commercial Aviation” in June and it tells a slightly different story. According to Bain & Company, “airlines can only eliminate up to 70% of aviation emissions by 2050 by improving engine and aircraft efficiency, broadly adopting sustainable aviation fuel (SAF) and optimizing aircraft operation.” The firm reports limitations to current technology mean this might not be enough for the industry to achieve its Net Zero by 2050 goal. This is especially the case if air traffic continues to grow at a faster rate than GDP.

In a 2023 press release, Co-Leader of Bain & Company’s Aerospace, Defense &

Government Services practice Jim Harris says, “As air traffic continues to grow, airlines are under increasing pressure to reduce emissions in service of their 2050 net zero goals. Unfortunately, many of the technologies the industry needs to decarbonize are unlikely to be operating at scale by 2050. Leading airlines will develop a strategy to secure an affordable supply of sustainable aviation fuel, mitigate the rise in operating costs, and manage the impacts of declining demand as a result of higher prices.”

Research by Bain & Company says the best bets for 2050 include that airlines can reduce CO2 emissions by 43% through fuel efficiencies with current aircraft renewal cycles and operational improvements; and a new generation of evolutionary engines and aircraft-frame improvements would deliver 80% of these gains. It adds that the rest could be made up by

86 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Sustainability

With input from IATA and research by Bain & Company, Global Travel Retail Magazine looks at what it will take to turn “Net Zero by 2050” into a reality and the possibility of falling short

“Net Zero by 2050” has been further supported by ICAO’s long-term goal to decarbonize air travel; this agreement has aligned governments with a shared target to achieve net-zero emissions by 2050 Marie Owens Thomsen, SVP Sustainability and Chief Economist, IATA

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continued efforts to optimize flight and ground operations.

The release continues, “Analysis shows SAF prices in 2050 will remain two to four times higher than the average historical price of Jet A fuel, the most commonly used aviation fuel over the past decade. To meet its 2050 goal, the industry will need to invest up to US$2.1 trillion. This, combined with the high maintenance costs of new aircraft, means airlines’ overall costs are likely to increase by up to 18% by 2050.” As highlighted by the firm, governments could significantly reduce SAF supply by providing incentives to biofuel refineries rather than renewable diesel.

Takeaway all of the figures and findings and one thing is certain, it is agreed that there is no single solution for decarbonizing aviation by 2050. Whether falling short or forging ahead, it will rely on a collective effort and the need to consider all aspects of the industry.

Sustainable tourism and practices

When it comes to airlines returning to profitability for the first time since the pandemic, a net profit margin of 1.2% is forecast for this year. According to Owens Thomsen, the airline financial performance in 2023 is exceeding expectations and higher profitability is due to several positive developments including the lifting of COVID-19 restrictions in China earlier than expected. Plus, cargo revenues remain above pre-pandemic levels even

though cargo volumes do not and – while still high – jet fuel prices moderated in the first half of the year.

Owens Thomsen states making air travel sustainable will come at a cost.

“Our objective is to make the process as economically efficient as possible. Airlines are businesses, and costs added to the business need to be recouped in the price charged to customers. This is particularly true considering that airlines historically operate on wafer thin margins,” she says.

When asked about the growing interest in sustainable tourism among leisure travelers worldwide and its key pillars, Owens Thomsen notes that aviation is an integral part of the tourism value chain. The industry is working hard to reduce its environmental footprint across all of its operations. As an example, she says in Europe, especially in countries with well-developed rail networks like France, Italy, Spain, Germany and Swit-

zerland, IATA is seeing airlines offering more and more tickets with options favoring intramodality.

Within the same realm, Owens Thomsen points out that managing on board catering is also a priority for airlines, from food waste to single-use-plastics (SUPs). With this also on the agenda, the association is working on several initiatives with airlines and other organizations across the value chain. This includes a partnership with the United Nations Environment Program to tackle SUPs and other sustainability challenges.

The association will launch the IATA World Sustainability Symposium in Madrid, Spain, on October 3-4, 2023. As shared by IATA, the symposium will facilitate discussion in seven key areas including the crucial role of government and policy support, the effective implementation of sustainability measures and financing the energy transition.

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IATA has released a series of roadmaps to net zero that provide a step-by-step action plan in order for the aviation industry to be successful

Sustainability

Research by Bain & Company shows sustainable aviation fuel prices in 2050 will remain two to four times higher than the average historical price of Jet A fuel

In just 1 week. improve wrinkles ﬁrmness & elasticity

Fully charged and ready to go

by LAURA SHIRK

Earlier this year, FOREO entered into the skincare category with the release of its Supercharged range. According to the Swedish beauty tech and wellbeing house, the collection was designed to complement its existing devices, promising more visible results and beneficial targeted treatments. After years of research and development at FOREO Institute, the range is formulated with the most effective and technologydriven elements. Supercharged is crueltyfree and consists of up to 99% of natural ingredients. The new line features a moisturizer, a sleeping mask, an eye and lip contour booster and an updated version of FOREO’s serum. A happy coincidence, the launch coincides with the beauty tech innovator’s tenth anniversary.

Speaking about the integration of beauty and skincare, Gary Leong, Global Travel Retail Director at FOREO, says, “The assimilation of the health and beauty industries has been a gradual trend, but one that is gaining steady momentum as we move further into the age of technology. The two need to overlap in order to provide not only an elevated customer experience, but also better results – ones

that can be achieved in the comfort of one’s home.”

Leong points out that with the application of artificial intelligence and augmented reality accelerating the merger of the two, the potential for the health and beauty world is vast and still largely untapped. “Retailers can look forward to reflecting the diversity of their customers, while delivering more content in the future,” he adds.

The landscape for the advancement of beauty tech opens the door to the opportunity to create extreme personalization – products that are tailored to customers individually, instead of target groups. FOREO’s Supercharged collection works in tandem with its devices to offer an elevated level of skincare that no other brands can compete with. The range also circles back to the brand’s message of beauty for all and “simple, but effective” approach.

“We monitored market trends and expanding our range was an important channel in remaining profitable and relevant, and prove that our expertise in skincare goes far beyond our bestseller, the LUNA. We also chose to expand in

order to build experiences into our brand. This type of expansion helps us to delve further into a variety of markets with the introduction of new skincare products, while maintaining our existing customer base,” explains Leong.

Educational content and activations

An established lifestyle brand often develops a community focused on its core values. When asked how FOREO continues to grow this community in travel online and offline, Leong says the brand works to create the best and most effective beauty devices using cutting-edge technology and to deliver the most professional treatments to its customers.

“Professional products need to be used with care and technique in order to ensure that users receive the maximum benefits. To achieve this, education is crucial – FOREO conducts a lot of educational content via livestreaming sessions. We have hosted numerous sessions this year in partnership with CDF-Sunrise Duty Free to educate viewers on the LUNA 4,” he says.

90 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Beauty

FOREO’s Supercharged collection works in tandem with its devices to offer an elevated level of skincare Gary Leong, Global Travel Retail Director at FOREO

When it comes to offline channels, FOREO’s beauty advisors and in-person beauty sessions simultaneously support the company’s educational prong and promote FOREO as a high-tech beauty brand. FOREO’s closed-door beauty masterclass is offered in collaboration with Hyundai Duty Free and Lotte Duty Free. According to Leong, these activations also assist the company in engaging the consumer on a deeper level, encouraging shoppers to become familiar with the ins and outs of its tools and professional FOREO users.

Speaking about the clinically proven results of Supercharged, he says the team looks forward to serving an even wider audience and ushering in a new generation of users.

On display at TFWA

Alongside the new Supercharged collection, FOREO’s sister brand, FAQ, will showcase its FAQ 100 range and debut its FAQ 200 range on the global travel retail stage in Cannes. According to the company, these lines are touted as the most powerful anti-aging devices on the market. The FAQ 200 range is a tech-driven

LED mask that provides seven colors of LED treatments and Near Infrared Light treatment to target a variety of skincare concerns including wrinkles, redness, discoloration and hyperpigmentation. Designed with flexi-fit silicone, the lightweight, portable and wireless mask adapts to the curves and contours of individual faces and lends not only to the at-home spa experience, but also a beauty on the go routine. Alternatively, the FAQ 100 range uses radio frequency to encourage electro muscle stimulation and the production of collagen, elastin and new skin cells to achieve a “lifted look.”

Surf’s up in Hainan

This summer, the company shared a piece of exciting news out of Hainan. The sister brands partnered with Loop Surf Salon, located in the beach town of Rye Bay, Wanning, to conduct surfing classes and educate surfers on the ways they can benefit from FOREO and FAQ devices preand post-surfing. A popular destination among Gen Z sports enthusiasts, Wanning is known as one of the top ten surfing destinations in the continent. Over 5,000 square meters, Loop Surf Salon is Asia’s

biggest surf club and the national training base for the sport.

The FOREO & FAQ and Loop Surf Salon beauty class attracted eight Gen Z key opinion leaders, surfing students and Wanning tourists. After hitting the waves, surfers had the opportunity to test the travel friendly FOREO LUNA 4 go facial cleansing and massaging device, the FOREO UFO 2 facial mask device for deep hydration and the FAQ 201 antiaging silicone LED mask for post-sun skin repair.

Leong says after enjoying “stellar success” with the Loop Surf Salon partnership, FOREO plans to replicate the blueprint for other programs. For China’s National Holiday, it is teaming up with Atlantis Sanya, a luxury resort hotel on Hainan Island, to promote the FAQ 200 range via an advertising campaign targeting hotel guests.

“The FAQ 200 collection will also launch as part of China Duty Free Group’s new key project, Sanya International Duty Free City’s third building. The Atlantis Hotel is a stone’s throw away from FAQ’s new placement in this up-and-coming duty free landmark,” he concludes.

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According to Leong at FOREO, the assimilation of the health and beauty industries is gaining momentum as we move further into the age of technology

Gaining momentum

global distribution thanks to

Corp,

by HIBAH NOOR

Since 2014, Essence Corp (Essence) has been the travel retail distributor for Bath and Body Works (BBW) in the Americas. In June 2021, this agreement expanded substantially as Essence was announced as the exclusive travel retail distributor worldwide for BBW. The distributor is responsible for business development, creating new clients, developing existing clients and expanding brand presence with travel retail operators and new markets.

This year was Essence’s first time at TFWA AP in Singapore. Liliana Fuentes, Executive Director VS & BBW Division, says it was a great experience, offering the opportunity to understand the priorities, requirements, market needs and ways of working in Asia.

“Young adult shoppers will make the difference for brand results,” she says. “The digital generations are active and they know US brands and trends.

This brand is part of their world and social media lifestyle. BBW is always innovating and creating content for all our consumers.”

New items

Newness is a huge and important aspect of brand results, and it is newness that excites shoppers. Through Essence Corp, BBW is delivering exciting new point of sale formats, including the 2023 gondola design with a “fun and must-have assortment,” maintaining the expected sales in multi-brand stores.

The gondola assortment includes 60 SKUs, with a focus on bestsellers. “At the beauty counters, we add the aromatherapy category and the three-wick candles. In the stores, BBW will activate five or six new collections. Repeat costumers are always receptive to the new scents, forms and fun we bring to the stores through these assortments,” says Fuentes.

Great potential

The brand has great travel retail potential because of such offerings as everyday promotions, unique brand products in segments such as sanitizers and soaps, as well as the candles, with exceptional quality and price, according to Fuentes.

“These all give the brand a solid opportunity to compete and capitalize in sales and awareness,” she says.

Regionally, Americas is number one for travel retail, but Fuentes says Philippines, Iceland and India are very strong markets where we keep improving in execution and expanding POS/distribution.

Rapid rise

In the coming year, more market developments and new POS formats will be part of BBW’s expansion. Experience and knowledge of the travel retail market, the channel’s need of flexible formats and assortment will allow the brand to rapidly approach the opportunities and trends, Fuentes attests. “We look forward to launching in Europe and Africa towards the end of the year,” she says. “The brand is growing rapidly and in a sustainable path. Essence creates long-term relationships based on growth and profitable mutual business.”

In the travel retail channel, BBW’s spring season shows a high double-digit sales result, according to Fuentes. “The optimization of inventory, the reduction of lead times and the constant training and follow up from Essence’s team have had a positive impact on the store’s sales teams,” she attests.

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Earlier in 2023 the company’s execs spent some time traveling throughout Asia including Hong Kong, Macau, Korea and Malaysia, searching for opportunities and identifying development needs in these markets, and also visiting and meeting with existing partners and stores in Manila and Singapore

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Upping the ante

The premiumization of skincare products is a key focus for beauty brands operating in the travel retail channel, especially in Asia. The skincare segment of the travel retail beauty market is expected to reach a CAGR of 6.3% between 2022 to 2029, according to a report by Data Bridge Market Research.

Unsurprisingly, China is a major target for growth, as beauty brands look to capitalize on the return of Chinese overseas travel. This is also the case thanks to Chinse consumers’ tastes for highly personalized product recommendations, as found via digital shopping platforms or apps such as WeChat and Tmall.

China’s beauty and personal care market revenue will grow 5% year on year to US$98 billion in 2023 over 2022 and continue climbing at 6.55% per year over the next four years. The premium market is estimated to surpass the mass market by 2026, according to Euromonitor International.

Hainan: premium focus

by ALISON FARRINGTON

Beauty groups see plenty of growth coming from new product developments dedicated to travel retail in China,

especially as the Hainan duty free trade zone continues to develop at pace. At the Hainan Consumer Expo in April, Coty and Shiseido showcased their premium skincare brand portfolios and the associated retail experiences.

Coty has launched two new premium skincare lines into the Chinese travel retail market recently, Ligne Princière and Orveda, with a focus on personalized retail technology for each brand, showcased at the recent Hainan Expo.

At the Expo, Coty said it would open stand-alone flagship locations for its major brands on the island, “Looking to the future, Coty will continue to use Hainan as a springboard into China’s travel retail market, to expand into other Asia Pacific markets and to drive continued improvement in our ability to meet the needs of the consumer market in China,” said a company statement. The brand is looking to bring about expansion by introducing more global and popular regional brands to Hainan, with consumer-centric omnichannel campaigns and “retail-tainment” experiences.

Coty was optimistic about the reaction in China to its new Lancaster Ligne Princière skincare line, when in March it

94 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Beauty

Major beauty groups are pouring investment into premium skincare lines –especially in Asia – as this product category leads a charge for growth and consumers seek out more personalized product recommendations

Nuxe chooses targeted pop-up locations for skincare expansion in China

launched the heritage brand “with exclusive ties to the Monaco Princely family.”

The ultra-premium brand was “extremely well received” in China and is “backed by patented and top-testing formulations,”

Coty CEO Sue Nabi said at the time.

As part of the global launch, Coty also unveiled Lancaster’s first flagship store in Hangzhou, China, in partnership with one of China’s leading department store retailers, INTIME, in the same month.

Coty says it will continue to open new doors in China’s “most luxurious locations” while also launching the Lancaster range online on platforms such as Tmall and Douyin.

Strategic lines

As we reported earlier this year, also taking part in the China Consumer Expo in Hainan, Shiseido presented its “ALIVE with Beauty” universe — a celebration of energy and movement depicted via the brand’s key activation statement: Living Red. Shiseido also presented its range of premium Japanese skincare brands with a dedicated wall display, highlighting skin beauty innovations from Ipsa, The Ginza, Baum, Elixir and Anessa.

At Dr.Ci:Labo, the Johnson & Johnson-

owned dermatological skincare line, the premiumization opportunity is being seized via the brand’s latest launch, Retin169, which is Dr.Ci:Labo’s first preaging skincare line. Pre-aging is one of the fastest growing categories amongst millennials and Gen Z consumers in China with a huge 64% YOY growth online, says Michelle Tong, Regional Business Development Associate Director for the brand.

Travel retail exclusive gift sets and Japan-exclusive products are key drivers of premiumization at Dr.Ci:Labo; they serve as a differentiator in product offering that is unique to the channel and increases average order value per transaction.

Personalization opportunities

For SK-II, travel retail offers an opportunity to cater to increasingly discerning luxury consumers, and securing these travelers is of utmost importance, especially in Asia, where they are looking for skincare solutions that are accredited bestsellers for good reason.

Global CEO of SK-II, Sue Kyung Lee, says personalization is essential in the premium beauty space today. “Our personalization strategy has always been to

listen and engage with superior product innovations and experiences across all omnichannel touchpoints,” she says, adding that this is with SK-II’s PITERATM “at the heart of it all.”

According to SK-II’s research, beauty consumers are more likely to invest in premium products when they are armed with personalized information at the beginning of their trip, by which time they have researched extensively their intended travel retail purchases.

Lee highlights that while beauty consumers’ travel shopping habits have not changed dramatically post-pandemic, certain existing characteristics have heightened. “She [the SK-II customer] is now smarter and savvier in planning,” she says. Lee estimates the brand’s customers spend an average of 10 hours across four or five social media platforms and approximately 20 minutes at physical stores before finalizing their travel shopping list.

“She has more freedom to choose especially when she starts to travel, but there is a consequence we call the ‘Weight of Choice.’ It’s really important for us to give her the right information before her trip because when she travels, she’s very, very keen to invest. And what she’s looking for is higher quality, so she’s willing to invest in the premium products if it really meets the value creation.”

Personalization is a key strategy for Nuxe’s growth in travel retail, according to Caroline Goix, Global Sales Manager, Nuxe Travel Retail. “Personalization is the most effective way to optimize the performance of an activation,” she says.

“For example, to help consumers discover and appreciate the speed of our new two-step anti-aging routine, using the duo of our Merveillance Lift and Super Serum products, we created a ‘60 seconds to transform your skin’ in-store activation in La Samaritaine during February, Alongside this, we developed an antiaging diagnosis giving consumers their two-step routine delivered online by scanning a QR code.”

Dr.Ci:Labo is known for its ethos of Omotenashi, the Japanese philosophy of hospitality, so it looks to well-trained sales staff to offer personalization services. “We recognize that the human touch is important in nurturing relations, and we are aware that people shop differently now, where consumer journeys could start at various touchpoints online and offline. Dr.Ci:Labo ensures our consumer experi-

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Shiseido presented its premium Japanese skincare brands with a dedicated wall display at this year’s Hainan Expo SK-II Secret Key House immersive pop-up at Tokyo’s Ba-Tsu Art Gallery

ences a personalized journey through the newly launched AI Skin Diagnosis Technology, for accurate regime recommendations. This can be done at our offline counters or in the comfort of their own home,” says the brand’s Michelle Tong.

Pop-ups: an interactive opportunity

We’ve seen brands invest heavily in pop-ups and activations in Hainan and more downtown locations in Asia. While engaging the traveler, these brand statements are increasingly focused on more personalized services.

In July, SK-II launched a discoverybased immersive pop-up, the SK-II Secret Key House, in Tokyo’s Ba-Tsu Art Gallery to highlight its “World Pitera Month” and and to give visitors a chance to discover its key ingredient for clear skin, Pitera. for clear skin. Entering the week-long pop-up, visitors could immerse themselves in multi-sensory installations designed to educate on the world of Pitera and its skincare benefits.

“Pitera has remained unchanged for over 40 years. Yet its miracles on skin continue to unfold and its secrets are endless. For the first time in SK-II’s history, we are handing our consumers the keys to unlock the biggest, most closely guarded secrets behind SK-II and our iconic Pitera,” said SK-II’s Lee. The company also

plans to host a version of the Secret Key House experience during the TFWA WE in Cannes in October.

For Nuxe, pop-ups offer an opportunity for “next-level” service. “Post-pandemic, brands, retailers and airports are all on the same mission: to rebuild their businesses as fast as they can,” says Nuxe’s Goix. “They are working hard to find space for pop-up installations which offer a highly effective way of generating incremental sales though additional points of sale. Pop-ups allow individual brands to take the customer experience of more conventional HPPs to another level through enhanced interaction with customers.”

Nuxe is currently increasing its investment in this area, as demonstrated by its recent Flower Market installation, which could be found in Sanya Downtown in Hainan, in Beijing Airport T3 and in Shanghai Pudong T1. “This project is a good example of our development in China supported by great visual impact instore,” Goix adds.

In the post-pandemic Asian market, Tong at Dr.Ci:Labo says she has witnessed a shift in consumers' purchasing intent and behavior. “They are now more focused on the personalized experiences they receive and are seeking unique brand offerings,” she says. “There has been an increase in interactivity and personalization in offerings by brands as they work to capture customer loyalty and spend.”

She attests that pop-ups and activations are important as platforms for immersive engagement and to help foster emotional connection to a brand. As companies strive to meet the evolving demands of post-pandemic travelers, these exclusive encounters in key destinations are key to their loyalty. “These encounters provide a highly visible platform to reach out to consumers offering differentiated brand experience to introduce newness and create excitement,” says Tong.

For Dr.Ci:Labo, online platforms within the travel retail marketplace represent another crucial component of its overall strategy. The new O2O concept blends online and offline commerce to engage more shoppers. Tong says, “We continue to strengthen our capabilities in offering customers an experiential shopping journey through our newly developed O2O concept at the Haikou International Duty Free Shopping Complex.”

The company will be expanding its O2O offering to the rest of its counters through the use of iPads. This will allow consumers to have a seamless shopping experience based on AR technology and brand discovery via gamification.

TR exclusives: driving innovation

Dr.Ci:Labo’s major launch for the year will be Retin169 in October. “It addresses the needs of both new and existing retinol users with its innovative range of products that offer gentle formulations and deliver effective results without causing skin irritation,” says Tong.

Additonally, the Professional Clinic is slated for a 2024 launch with a focus on pre- and post-treatment care. Tong hopes it will tap into a distinct and niche demand in the market. “This range is specifically tailored for consumers who have undergone aesthetic treatments or are considering them,” she says. The line will be soft launched with the opening of the CDFG Sanya Haitang Bay Beauty Experience Centre. These products, exclusive to clinics, are now being launched by Dr.Ci:Labo for the first time in travel retail.

“Our best-selling collection in travel retail continues to be the 377 Brightening Line,” explains Tong. “Dr. Shirono, Founder of Dr.Ci:Labo, was the pioneer in introducing the revolutionary 377 ingredient in Japan and incorporating it into clinical practices. This ingredient stands as a testament to our commitment to innovation and addressing skincare concerns at their source.”

Nuxe’s Goix says the company has had three stand-out product launches in travel retail in 2023: the two-step anti-aging routine using the duo Merveillance Lift and Super Serum products, plus a Merveillance Lift channel exclusive that includes full-size packs of Nuxe Day and Night Cream and Nuxe Eye Contour. Nuxe also expanded its Sun Care Collection range with two new products to provide factor 30 and 50 sun protection.

“Anti-aging products lead the skincare category and user expectations are very high, with 71% of women expecting their anti-aging routine to deliver instant benefits. It’s a growth category with huge potential when brands deliver against their product promises,” says Goix.

96 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023

Beauty

Lancaster’s new luxury brand, Ligne Princière, has seen early success in China

AGGRESSIVE EXPANSION

Blue Chip Group continues to broaden its offerings and territory, with expansion into new regions as its top priority at TFWA WE in Cannes

by HIBAH NOOR

Blue Chip Group, based in Hong Kong and established in 2011, has been growing rapidly over the past nine years. The company has successfully launched its brands in more than 51 duty free stores. Aggressive expansion is the key phrase used to describe Blue Chip’s approach — expansion in territory, in number of stores and also in the brand profiles. While Korean and Asian brands are still an important cohort within its portfolio, Blue Chip has started working with wellknown global brands based in other regions.

Initially, travel retail was not the main focus for the company, but since its launch with DFS in 2014, Blue Chip has continuously expanded in the channel. While its main region remains Asia Pacific, the company now operates in Korea, China, Hong Kong, Macau, Australia, Cambodia, Indonesia, Malaysia, Philippines, Singapore, Vietnam and the US, and has four local offices in addition to its Hong Kong headquarters.

Expanding sights

The company’s travel retail commitment was unsurprisingly forced to take a backseat because of the pandemic. Blue Chip Group Managing Director Flora Lee says the company switched focus to local business during that time, but travel retail has now returned with a vengeance. “Our travel retail business has been completely back on track since the second half of last year.

We’re aiming not only to further expand our business, but also to enrich the category,” she says.

While Korean brands continue to be a major part of the company’s portfolio, according to Lee, it will soon be launching a number of non-Korean skincare brands. “We are launching AXXZIA, which we had at our stand at TFWA Asia Pacific in Singapore. We have other luxury brands getting on board too,” she says.

Blue Chip’s top priority at this year’s TFWA World Exhibition is to focus on global expansion. The company is looking to expand into other continents and regions such as Dubai, European markets, as well as North America.

HACCI on cruises

Blue Chip has now brought popular Japanese luxury beauty brand HACCI onto Starboard cruise ship “Blue Dream Star,” which operates mainly in Hong Kong, China and Japan. The cruise ship was launched — with HACCI on board — in June of this year. Lee expresses delight and excitement for this new direction. “We are operating the permanent counter on the ship,” she explains. “HACCI is a well-known luxury brand in Japan locally; however, its presence is very limited in global travel retail. We at Blue Chip have been really hands on working toward the global expansion. We made great progress with DFS and Shilla, and now Starboard is the first cruise ship counter as part of our travel retail expansion. Having the first cruise ship is a great direction for HACCI to show its potential in the global market.”

EviDenS topseller

French-Japanese luxury skincare brand EviDenS de Beauté is Blue Chip’s top-selling brand, for which the company serves Hong Kong and Macau. “When we first launched EviDenS in Hong Kong back in 2018, the brand's awareness was not there, so we invested in order to operate physical stores with travel retail operators such as Shilla and DFS with its airport store, as well as downtown duty free stores of course, and at other prominent stores in order to build up the luxury brand image,” says Lee. “We also invested in advertising such as with airport OOH.”

Blue Chip opened its fourth EviDenS store in Hong Kong with DFS in Hysan Place. Other Hong Kong locations include Sun Plaza and Chinachem, and the company has been operating Hong Kong airport store with Shilla since 2019. Additionally, Blue Chip has exclusive stores with DFS in Macau including Four Seasons, Londoner, Galaxy, City of Dreams and others.

“After years of hard work in the brand building, finally we made it,” she adds.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 97 Beauty

HACCI is a well-known luxury brand in Japan, which is now available on Starboard as part of its travel retail expansion Flora Lee, Managing Director, Blue Chip Group

A vision of

beauty

by LAURA SHIRK

Since its inception, Moroccanoil has aimed to cater to all types of hair and ethnicity. Having established a strong brand identity globally, the oil-infused beauty brand wants to convey the theme of diversity in its 2023/2024 campaign. Fresh off the launch of its Airy Moisture haircare line, which is exclusive to Asia, the brand will release its Frizz Control collection and Moroccanoil Treatment Purple next year.

According to market research, Moroccanoil discovered that the most common hair concern among global consumers is frizziness. A map breakdown shared by the company, shows that depending on the region, frizzy hair is caused by different types of hair and weather conditions, extreme humidity, UV rays and other factors. Moroccanoil targets an audience that is made up of all hair types: fine, coarse, curly and Asian. The line, which consists of Frizz Control Shampoo and Conditioner, Frizz Shield Spray, a smoothing lotion and an intense smoothing serum, will launch in March in travel retail.

Gearing up for back-to-back releases, the brand’s MOT Purple color care treatment will launch in June 2024. Its Original Oil Treatment is now enriched with violent pigments to enhance cool tones and neutralize brassiness.

Diverse portfolio and digital presence

When asked about the expansion of the brand’s assortment beyond haircare, Sebastien Levi, Vice President, Global Travel Retail at Moroccanoil, says the team is excited at the success of Moroccanoil as a lifestyle beauty brand.

The company has widened its assortments to offer travelers the full Moroccanoil experience, as well as convenience. Hero products include shampoos, conditioners, oil treatments and hair masks. The company also offers a multisensory journey online and offline via its diverse portfolio and expertise in digital, e-commerce and social media.

“We’re excited to see travel retail embracing digital more, with stronger

customer relationship management on the operators’ platforms and the development of click and collect. We intend to build a strong partnership with the operators there. We can leverage our marketing assets and educational videos with our partners to engage with the traveling consumer beyond the mere act of buying,” he says.

Right now, the brand is looking for ways such as hair styling and massage sessions to bring the expertise of Moroccanoil into the channel in coordination with its partners. From a commercial point of view, it plans to further expand in the Americas, especially in Latin America and on the US West Coast, in Asia Pacific (Taiwan, Australia, New Zealand) and at a later stage in the Middle East.

Eurovision 2023

Following its initial presence in 2022, Moroccanoil teamed up with World Duty Free this year to create a massive one at airports across Britain to celebrate the Eurovision Song Contest (ESC).

As a partner of the popular contest for a second time, the brand had the chance to extend its presence into travel retail. This exposure was in line with the introduction of Moroccanoil at airport stores across the country.

The team recreated the Hand Heart symbol in Liverpool, which represented the theme of this year’s competition “Togetherness, Celebration and Community.” The company also exhibited activations at Liverpool, Manchester, Heathrow, Gatwick and Stansted airports, all of which featured its “Be an Original” special edition ESC set.

“When arriving to Liverpool, travelers were fully immersed in ESC and Moroccanoil from the start of their journey. As each participating country and venue is different, every ESC is unique; allowing attendees to experience some of our hero products was as a key focus this year,” adds Maureen Hockley, Director of Sales, Europe, Retail and Travel Retail at Moroccanoil.

98 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Beauty

With back-to-back launches coming up in 2024, Moroccanoil brings attention to its diverse portfolio and strength as a lifestyle beauty brand

Moroccanoil’s Frizz Shield Spray 160-ml Moroccanoil’s Head-to-Toe Essential travel retail set

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Ajmal’s return to form

For Dubai-based Abdulla Ajmal, CEO of Ajmal Perfumes, a post-pandemic recovery is leading to global growth for the prestige fragrance house

by ALISON FARRINGTON

lot of inquiries and we are also proactively expanding our presence in various travel retail outlets worldwide, particularly duty free shops,” he adds. Ajmal’s continuous pursuit of growth and strategic exposure in global markets are key components of the company’s current success.

While the pandemic posed significant challenges, they are now behind Ajmal.

across Europe and Africa in: Moldova, Albania, Romania, Bulgaria, Zambia, Uganda, Somalia and Kenya. In travel retail, new locations where Ajmal has been listed with duty free partners are: London Heathrow, Dusseldorf, Sheremetyevo, Tashkent, Iraq and Beirut.

New exclusives and key markets

Ajmal Perfumes’ sales performance has significantly improved since 2019, according to Abdulla Ajmal, who is the third generation of his family to helm the fragrance brand known for creating a wide range of fragrances that reflect the cultural heritage of the Middle East.

Domestic pushes growth

The upward trend for sales in both domestic and travel retail continued throughout 2022, and the first half of 2023 has proven promising for the brand’s return to pre-pandemic performance, says Ajmal, surpassing his previous expectations.

“The reason for this is primarily because we are seeing an increase in global travel. The more travel happens, the more benefit we get with the travel retail portfolio of Ajmal, as it exposes us to a broader customer base. We are getting a

“Our primary focus at that time was on business consolidation, while simultaneously nurturing a positive mindset among our team members. We knew that once travel started again, the market would stimulate positive changes, a prediction that we are now seeing come to fruition. While it was a period of adversity, our proactive strategies and positive outlook played a key role in navigating through those challenges,” he says.

Eyeing international markets

“We are seeing commendable growth across various regions, encompassing Europe, the Middle East – our home turf, Asia, and North America. These four regions are demonstrating significant progress, contributing to our global expansion and fortifying our presence in the international market.

“We are witnessing an upward trend in 2023 that significantly outpaces the growth we experienced in 2022. One of the primary reasons for this progression is our strategic expansion into several new territories,” he explains.

In the domestic retail side of Ajmal’s expansion, the brand has new operations

Ajmal is focused on introducing new exclusive products in key markets. “We're delighted to announce an exclusive launch from our signature collection – Amber Leather from the renowned A-series by Ajmal – a captivating fragrance that embodies sophistication and sensuality with a bold and memorable signature scent,” he shares.

Top of Form

The products we create for travel retail are planned well in advance because our product conception and development take at least nine months to a year. These exclusive launches are carefully curated based on the regions we aim to expand into or the portfolios we seek to broaden.

Ajmal says he plans to ramp-up the brand’s digital strategy in order to reach new customers in global markets. The company is committed to collaborating with the best influencers across various regions. “We recognize and appreciate the significant role influencers play, particularly within our lifestyle category. The influence they wield greatly complements our social media presence and digital strategy,” he concludes.

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Amber Leather from Ajmal’s renowned A-series Abdulla Ajmal, CEO, Ajmal Perfumes

2024 SUMMIT OF THE AMERICAS April 14 – 17 Palm Beach County Convention Center West Palm Beach, Florida Join us in West Palm Beach, Florida, for the 2024 Summit of the Americas, the signature event for the duty free and travel retail industry in the Americas and Caribbean! Don’t miss this opportunity to connect with colleagues for valuable networking, learning, and business-to-business meetings during this three-day event. Visit www.2024summitoftheamericas.org to learn more about registration, room reservations, and ways to increase brand exposure through exhibit space and sponsorship.

Eastern ascendancy

by HIBAH NOOR

The beauty category as a whole is soaring around the globe, including both cosmetics — which have rebounded since mask mandates have been removed — and skincare, which is reaching dizzying new heights. L’Oréal is outperforming category growth in all regions and subcategories in 2022/2023. Though Europe and the Americas have been especially strong, with Germany, Austria, Switzerland, France, Mexico, Brazil and the US all standouts, Asia has also performed well.

Category and subcategory growth

This being said, travel retail remains an important channel in the region for L’Oréal, both for sales and to showcase brands. “With the reopening of borders and the resumption of travel, there is a boost in consumer confidence in travel. We are optimistic and confident about the future and continue to be committed to driving growth and delivering exceptional experiences for our customers,” explains Tao Zhang, Managing Director, L’Oréal TR Asia Pacific.

Current trends and sustainability initiatives

The growth of its dermatological skincare is in line with pandemic and post-pandemic trends, according to Zhang. “In response to the pandemic, we have seen some shifts in retailer assortment in the beauty category towards products that address specific consumer needs such as health, hygiene, and self-care,” she says. “Skincare has always been an extremely important category and it became even more dominant during the pandemic, with consumer behaviors shifting strongly towards self-care. We have brands such as Lancôme, Takami and La Roche-Posay, which address sensitive skin and other concerns.”

When it comes to haircare, Zhang points out that the practice of self-care includes products that address dandruff and hair loss. “Kérastase has three different scalp serums for these concerns, as well as a new franchise Symbiose for dandruff and sensitive scalp concerns,” she adds.

Other trends arising post-pandemic include an increase in makeup use, since the lifting of mask mandates. With the return of social engagements and events, consumers are back to wearing makeup and there is a demand for color excitement and makeup services.

Throughout the channel, there has also been a shift toward digital-first strategies; this is the case for L’Oréal. “Retailers have been investing in e-commerce and digital marketing to reach consumers who are shopping online more frequently. We have strong partnerships with companies such as Alipay and Trip Advisor to provide end-to-end connected brand experiences,” shares Zhang.

Zhang says consumers are increasingly choosing brands with a purpose. “All of our brands have great initiatives to support communities,” she explains. “We are focused on decreasing our environmental footprint throughout our value chain, and we are also offering more refillable options for our fragrances and skincare products — just one of the many examples of our sustainability initiatives.”

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Lancôme Skin Screen, for projective aging was revealed for the first time in travel retail during TFWA Singapore

With growth far outpacing category averages in all regions, L’Oréal Managing Director TR Asia Pacific Tao Zhang is taking crucial and strategic steps to ensure its eminence continues to grow at a dominating clip in the Asia Pacific

Tao Zhang, Managing Director, L’Oréal TR Asia Pacific

Launches and activations

In partnership with King Power in Thailand, L’Oréal recently launched travel retail exclusive jumbo-sized Revitalift Filler Eye Cream, drawing travelers’ attention with a pop-up “science library” animation. This was the global launch of the product. “L’Oréal Paris Travel Retail Asia Pacific is the first to launch the blockbuster product L’Oréal Paris Revitalift Filler Eye Cream for Face in jumbo-sized format 65ml,” says Zhang. “We also offer our Filler Eye Cream for Face product in a duo set with an improved sustainability footprint where we have reduced plastic usage by as much as 46%. With the launch of the 65ml jumbo format, our product has also been upgraded with 2X Proxylane-Pro, an anti-aging superstar ingredient to visibly reduce signs of aging, developed and created by L’Oréal Research and Innovation.”

While this may be its biggest recent skincare launch in the channel, L’Oréal is not a company to rest on its previous successes. “We are constantly exploring new and innovative ways to enhance the customer experience in the travel retail channel,” comments Zhang, going on to list some beauty tech developments:

Skincare

• Lancôme Skin Screen, for projective aging was revealed for the first time in travel retail during TFWA Singapore

• Lancôme Absolue is launching new innovations in beauty tech, being introduced into the most important stores in travel retail, elevating the premium service and even stronger level of efficacy for consumers

• Helena Rubenstein high-tech cabin treatment with clinical-grade devices: Dermo-Regeneration and Thermo Repair, recommended by dermatologists to improve skin texture and boost product penetration

• L’Oréal Paris Skin Genius skin analysis tool powered by advanced Artificial Intelligence (AI), developed by L’Oréal Research based on 30 years of clinical data and validated by dermatologists, analyzing the consumer skin’s specific needs on eight key skin attributes for a more personalized skincare routine

• SkinCeuticals Advanced SkinScope will be launched in May in Hainan. This is an AI-driven diagnostic tool for complete skin diagnosis and routine recommendation, equipped with HD cameras for 270-degree full-face scanning and five different light rays to reveal any underlying skin damage. The tool uses algorithm and AI scoring to generate a diagnostic report

Fragrance

• Yves Saint Laurent Beauté Scent-Sation, the first in-store fragrance finder based on neuroscience, will be launched in travel retail this year

• Maison Margiela and Atelier Cologne will offer a personality Q&A-based Fragrance Finder to enhance personalization

Hair

• Kérastase K-Scan 2.0 will launch next year. It is powered by AI and has three different lights to help stylists analyze scalp and hair results

“These are just a few examples,” continues Zhang. “We are constantly pushing the boundaries of what is possible with technology to enhance the customer experience and bring new excitement and innovation to the world of beauty.”

Showcase in China

While we in travel retail tend to speak about the Chinese person who travels internationally, the focus on duty free by the government in China has helped the Chinese to experience both duty free as a whole and L’Oréal’s portfolio, though they may not normally travel internationally. For L’Oréal, this has proven to be a real boom in brand recognition in the country.

“The Chinese tourist market continues to be one of the strong drivers of growth for us this year,” says Zhang. “For example, our boutiques launched in mega malls in Hainan present a wealth of opportunities for L’Oréal to showcase our brands and products to a vast consumer base. We have our latest beauty tech innovations there such as Skin Screen, ModiFace and Scent-Sation, and have also rolled out the first-ever skincare cabins in travel retail for Lancôme, HR, and SkinCeuticals.”

Zhang adds that it’s imperative to strike the right balance between staying true to a given brand identity while also tailoring campaigns to the correct audience. To do this, she says, “We partnered with major retail channels to amplify our brands, including leveraging the popularity of popular social media platforms and personalities to target our messaging to the right audience. Overall, we are committed to understanding local markets in addition to consumer behavior and preferences to drive growth and deliver exceptional experiences for our customers.”

Regional focus

In Asia Pacific, Zhang notes that L’Oréal will be focusing on customer experience and building the brand in the region. “We recognize that Asia Pacific is a key market for travel retail and beauty, and will continue to focus on building brand loyalty, as well as engaging with new consumers who are visiting the region for the first time,” she says. “Our plan, now that international travel has restarted, is to continue to focus on providing exceptional consumer experiences through innovative and tailored offerings, such as personalized beauty consultations, exclusive product launches and digital experiences.”

“As always, our goal is to bring the best of L’Oréal to all travelers and provide them with new and exciting experiences whenever they interact with our brands,” she concludes.

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Yves Saint Laurent Beauté Scent-Sation, the first in-store fragrance finder based on neuroscience, will be launched in travel retail this year

The DKNY line has been a valuable addition to the company’s portfolio, helping to secure listings with key partners in Europe and the Americas

Sweet smell of success

by HIBAH NOOR

While travel retail sales overall have seen substantial growth in 2022 and 2023, fragrance is outperforming the other categories. This trend toward fragrance purchasing has helped to bring about a record-breaking second quarter for Inter Parfums, Inc. in 2023, with sales of US$309 million, up +26% from the same period in 2022.

For Jean Madar, Chairman of the Board, Chief Executive Officer & CoFounder, Inter Parfums, Inc., both its strong 2019 and the modest subsequent years have become a distant memory with the outstanding results the company is seeing. “Fragrance is currently the fastest growing consumer segment, still outpacing skincare and makeup,” he says. “Inter Parfums is a pure fragrance player with a unique competitive advantage to leverage these market trends. Our company sales grew from US$539 million in 2020 to US$879.5 million in 2021, and we hit a milestone in 2022, reaching US$1.08 billion in sales.”

With 2023’s record-breaking second quarter now in the books, Madar is confident in achieving another excellent year.

“As supply chain disruptions and inflationary impacts on components are mostly behind us, our brands continue to perform exceedingly well in conjunction with the continued favorable growth catalysts in the fragrance market,” he says.

TR picking up

According to Madar, this phenomenal growth has been spread across the company’s distribution footprint, which currently stands at 120 countries. While this is mostly in the domestic market, the travel retail business is also picking up.

“Our Inter Parfums brands have a strong base globally,” he says. “We are always exploring new opportunities to grow business with our existing retail partners, with existing brands and with new ones.”

Despite the supply chain disruptions that disproportionately affected fragrances, Madar notes that the company has exciting innovations ready to be revealed at TFWA WE in Cannes for all of its brands, including GUESS, Donna Karan and DKNY, Oscar de la Renta, MCM and Abercrombie & Fitch.

According to Madar, the DKNY line has been a helpful addition to the company’s portfolio, helping to secure listings with key partners in Europe and the Americas, including Dufry, Heinemann, Lagardère and others. “The addition of Roberto Cavalli is also creating some opportunities,” he adds. “We see some traction for travel retail, especially in the Middle East.”

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Inter Parfums, Inc. Chief Executive Officer & Chairman of the Board Jean Madar

Increased visibility

As has been the case throughout the company’s existence, Inter Parfums, Inc. is always looking to increase its brand presence. “We continue to work to expand our reach with some of our most key partners globally, to cast a broader net in terms of visibility and animation support,” says Madar.

Regionally, he says domestic strategic partners such as Macy’s in the US and Douglas in Europe help foster growth, and the company ties travel retail activations to those in such stores. “In the APAC region, Australia is becoming a bigger and bigger opportunity, with excellent results coming through,” he explains. “We have strong holiday programs coming down the way alongside the first launch for DKNY in years, and we look forward to seeing the reaction. GUESS also has a new launch against our successful Bella Vita franchise that we anticipate enthusiasm for. Both launches pave the way for even bigger things in 2024 for each brand.”

Digital investment

As the digital sphere becomes increasingly important, Inter Parfums, Inc. is

upping its digital investments in domestic markets to heighten visibility, says Madar. “The target audience in the local market is the same as travel retail. The more shoppers see us, the more likely they will be to buy the products when traveling.”

Media screens are becoming more common in airports, and Inter Parfums, Inc. is happy for this partnership oppor-

tunity, according to Madar. The company also collaborates with its retail partners to communicate its brands through retailers’ social media accounts. “We have recently started to invest in key airports to increase our brand awareness thanks to media screens,” he shares. “Improving our visibility on retailers’ websites is also something we tackle on a daily basis.”

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At TFWA WE this year, Inter Parfums, Inc. will reveal innovations for all of its brands. Here, Ferragamo Signorina, a featured collection GUESS’ new launches will pave the way for even bigger things in 2024

A blockbuster year

by HIBAH NOOR

When Tania and Robert Bassan founded Tairo International 26 years ago, they envisioned the future of the business exactly as it has turned out. “We strategically decided to focus on the Caribbean and Mexican region as a territory, as it’s a very stable market with consistent growth in the travel sector,” says Robert Bassan, COO at Tairo International. “With the exception of the COVID years, the business has shown great strength and stability.”

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Tairo partner Sol de Janeiro’s Brazilian Bum Bum Cream is especially popular among Millennials and Gen Z TAIRO brought success to YSL Libre’s franchise during a special Mother’s Day promotion this year; the “Libre Love” campaign in Grand Cayman created a memorable experience for shoppers Robert Bassan, COO at Tairo International

During the pandemic, some countries in the region were closed altogether whereas others were wide open, in some cases receiving travelers who would normally have gone elsewhere. While that may have helped balance business out, the region relies heavily on the cruise industry, which disappeared entirely. Bassan says while they took a massive hit as a result of the cruise ship business disappearing, other factors helped to buoy the loss. “Namely, the local markets in our region really picked up, as the local consumers did all of their purchasing of beauty products at our client’s stores instead of abroad when they would have typically traveled,” he says.

“Our Mexican border business was also quite strong, as it thrived during this period. Today, we have seen quite a spike caused by pent-up demand from travel consumers who have not visited the region in the previous few years,” he says, adding that while it took some time to ramp back up, cruise ship travel has definitely returned.

New launches, new demographic

In March 2022, Tairo International introduced two new fragrances, Molton

Brown and Frida Kahlo in Mexico and the Caribbean. These launches solidify Tairo International's position as a critical player in these thriving markets, according to Bassan, who says the company is seeing a very strong surge in fragrance sales among younger consumers. He believes this surge is driven by social media.

Bassan has been happy with the performance of Frida Kahlo. “Frida is an icon for women around the world, and that has resonated with consumers. As a result, young consumers have really taken to the brand. Our Mexico business is strong, and we will be rolling out into airport stores next year.”

Marc Jacobs Perfect has been especially popular with the younger consumer demographic this season, says Bassan. “Embraced for its fresh and alluring scent, Marc Jacobs Perfect fragrances have become an essential choice for the modern generation, igniting a passion for fine fragrances.” Also, following the overwhelming success of Gucci Flora Gardenia, Tairo International expanded the Gucci Flora line with the launch of Gucci Flora Jasmine in November 2022.

"Over the past year, Tairo International has achieved extraordinary milestones,"

says Bassan, "Our dedication to delivering exceptional fragrances and engaging experiences has been met with immense enthusiasm from our consumers and partners. We are grateful for their unwavering support, which continues to inspire us to reach greater heights."

One important partnership Bassan mentions is that with esteemed body care brand Sol de Janeiro. “Since 2019, our partnership has flourished,” says Bassan. “At the heart of our collaboration lies the resounding success of their iconic Brazilian Bum Bum Cream, which has swiftly become a favorite among Millennial and Gen Z consumers. This phenomenal popularity can be attributed to the cream's remarkable firming qualities and the brand's profoundly resonant philosophy of celebrating natural beauty, captivating the hearts of the younger generation.”

Big year ahead

For the upcoming high season, the company will be introducing a number of new items to the region, including another addition to the Gucci Flora collection, Gucci Flora Magnolia; Burberry Goddess, launched to complement its counterpart, Burberry Hero; and on September 1, YSL will unveil a blockbuster male fragrance currently shrouded in secrecy.

“As we look ahead, Tairo International remains committed to crafting timeless launches that resonate with hearts in the region, and creating unforgettable experiences that touch the lives of our valued customers,” explains Bassan. “We are all in on our upcoming launches. It’s been some time since our supplier/partners have brought blockbusters to market, and this season will provide us all with the opportunity to do so. We will also be holding a BA seminar for beauty advisors and buyers from throughout the region in Orlando this fall where we will be featuring all of the items we’ll be focusing on for the upcoming year.”

Speaking about TFWA World Exhibition in Cannes, Bassan says the trade show affords Tairo International the chance to meet its partners that are based in Europe and find opportunities for new brands that are searching for a premier distributor in its region.

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Bassan says Marc Jacobs Perfect fragrances have become an essential choice for the modern generation; pictured here at the John Bull store in the Caribbean

bright

by ALISON FARRINGTON

DFS House of Jewels

A category first for DFS Group, the newly launched House of Jewels concept at T Galleria by DFS, Macau, Shoppes at Four Seasons spans 232 square meters of multi-brand luxury retail space, which features nine jewelry brands, seven of which are exclusive to DFS in Macau: Damiani, Dinh Van, Fred, Garrard, Ginette NY, Persée Paris, RedLine, Stephen Webster and Vanrycke.

DFS Group Senior Vice President Watches and Jewelry, Charles-Henry Chenard, said the retail concept aims to answer the needs of increasingly discerning jewelry shoppers at the luxury location. “We have evolved alongside our seasoned shoppers – as well as their

next generation of tastemakers – and have answered their needs by developing concepts such as House of Jewels, which features a curated selection of fine jewelry, from precious color stones and diamond engagement rings to collectible pieces,” he says.

TOUS seizes opportunity

For global jewelry brand TOUS, now present in more than 40 countries, the travel sector is an environment full of opportunity. The company’s executive team is constantly analyzing and considering new opportunities, according to Giordano Reffatto, Commercial Director at TOUS. “Recently we’ve reinforced our presence at some key airports, and we are

beyond excited to share our brand evolution in these great spaces,” she says.

Airports have always been an important part of the company’s strategy for visibility, and its presence in this channel is growing. “Recently, we reopened in Madrid and Barcelona airports,” Reffatto says. “And for sure, we’ll continue exploring opportunities, while we try to align our activations with the countries where we have presence.”

Two channels Reffatto notes as “exciting” are inflight and cruise. The company is already available inflight, which he calls an “amazing and unique channel, because it allows us to interact with customers in a different way.” He sees the inflight future as especially bright, with the recovery of tourist travel. “For us, it is a good tool for being visible in the market and it is very easy and convenient for clients,” he says.

While not currently present in the cruise channel, as TOUS has a strong presence in the Caribbean and Mediterranean, the company is considering cruise as part of its ongoing strategy.

Though Reffatto says TOUS always works with a global approach, it’s important to keep a local perspective.

“We envision growing our regional travel retail partnerships following this same approach, understanding what each market needs and wants.”

Launched in 1920, TOUS has been around for more than a century. One might think this could lead to an older clientele, but Reffatto explains that the

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Retailers and jewelry brands are investing in travel-specific R&D, concepts and floor space, adding fresh energy to the global travel retail marketplace

Shining

House of Jewels at T Galleria by DFS, Macau, Shoppes at Four Seasons features nine luxury jewelry brands under one roof With a higher price point than Kurate International’s other brands, the company’s new “Author” line is well placed for travel retail

brand holds strong appeal for younger consumers. “We like to say we are 100 years young. We are always evolving with society and with our customers. You can see this with the vision we presented last year, our brand evolution, our new logo and new ways to communicate,” he says.

Swarovski wonder

Gebr. Heinemann and Swarovski partnered to open a pop-up shop at Hamburg Airport from July through September of this year. It is the crystal jewelry brand’s first Wonder Color travel retail store in the Europe-MENA region.

The 15-square-meter shop, designed entirely in shades of green to invite visitors to browse in a relaxed atmosphere, offered travelers the chance to discover specially curated products.

Swarovski has been steadily updating its travel retail locations over the last 18 months or so, first with its Instant Wonder tourist stores worldwide and more recently under the “New Retail Landscape” strategy that first launched with CDFG in Haikou, China in December 2022.

The new-look duty free location in Haikou targets Chinese tourists with its focus on crystal homewares, figurines, watches and jewelry pieces. Swarovski says its ambition is to create an immersive

entry into its world of crystal wonders, leaving a lasting and inspired impression for all.

“Our New Retail Landscape is an incredible ode to creativity, and the result of Swarovski’s strong new vision, a realm where science and magic meet. Playful, aware, and always boldly chic, our aim is to reflect desires and dreams in the physical space of our stores, and to underline our new age of crystal living,” says Swarovski Creative Director Giovanna Engelbert.

Pilgrim drives curiosity

According to Louise Rohde, Head of Travel Retail for Danish jewelry brand Pilgrim, airport activations are the largest sales driver for Pilgrim. The brand successfully launched in Helsinki with Dufry and in Hamburg and Graz Airport with Gebr. Heinemann in 2023.

“This autumn, we will open a customized Pilgrim area at Dallas Fort Worth Airport in collaboration with 3Sixty, and we are expanding our partnership with ARI via new launches at Abu Dhabi Airport, followed by Portugal,” says Rohde. “Europe is Pilgrim’s biggest market, but we are expanding worldwide. Simultaneously, we are focusing on organic growth with our existing partners.”

Every spring, Pilgrim introduces a new travel retail exclusive collection, which Rohde says is always a bestseller. “This collection is made from a minimum of 75% recycled materials, and we are always open to explore the opportunities of creating exclusive collections in collaboration with partners,” she shares. “We are always open for new travel retail partnerships, especially from those with a curious mind.”

The inflight market is not a large one for the company, mainly because of fees and special requirements. But Rohde says Pilgrim customers have great interest in shopping via this channel, and so it continues to play a role.

Meanwhile, in cruise, retail is becoming an increasingly important channel for the company. “We see this channel as a great opportunity for expansion,” says Rohde. “In the beginning of this year, we entered a partnership with AIDA and Stena Line, and it has already generated excellent results in terms of sellouts.”

Domestic business always informs travel retail, and for Pilgrim this is one area where digital partnerships and social commerce are especially important — it is in the digital realm where new domestic consumers are recruited, and this translates into more travel customers, especially those who have become

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At 100 years young, TOUS appeals to all ages with its constant evolution; company classics and new collections are well received

engaged in the brand’s online community. “We are always up to date with the latest trends and engage closely with our community across our different channels. Authenticity, transparency, emotional engagement, and digital connectivity are all key words within the Pilgrim community,” Rohde says.

Kurate: new listings, new brand Wholesale company Kurate International is expanding out its global airport and ferry partnerships with Belle & Beau, the watch and jewelry specialist’s affordable, self-select fashion brand that is focused on trend-led designs at value prices.

Kurate has partnered with Portugal Duty Free to launch its Belle & Beau brand at Lisbon Airport, while other new partnerships include ARI at Abu Dhabi International Airport later this year and a further listing at Paphos International Airport in Cyprus. For its ferry business, Belle & Beau is now listed with Condor Ferries (UK-Guernsey), as well as with DFDS (UK-France). London Supply’s border stores in South America round out the brand’s latest listings.

Another Kurate International jewelry brand, Author, is seeing expansion with

new airport, inflight and cruise retail listings, according to International Travel Retail Key Account Manager, Sharon Edwards.

Kurate has been expanding its product line-up to meet a wider price point spectrum. The Author collection includes ranges created specifically for inflight and cruise/ferries; it is also listed with ARI in Abu Dhabi, which will be the first airport store for the brand.

“Author has been very well received by the industry, and we have secured a number of inflight listings,” Edwards says. “The higher price points make it particularly suited for airport and downtown shops along with ferries and cruise ships, markets we are keen to develop in 2023 and beyond.”

Author is suited for travel retail not only because of its price points, but also because it has a strong sustainability story to tell, with jewelry made from recycled silver and presented in recycled packaging.

Kurate International is putting much thought into targeting this brand toward travel retail. A new self-select display unit, to drive impulse sales in any travel retail environment, was introduced at this year’s TFWA Asia Pacific Exhibition, and the company is working on more modular displays for Author to be more versatile in other areas such as the cruise channel. Further display options, including a protype for a cruise countertop unit, will be revealed at TFWA World Exhibition & Conference in Cannes.

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Swarovski opened its first Wonder Color pop-up store with Gebr. Heinemann in Hamburg over the summer

Pilgrim’s sustainable jewelry is especially appealing to Gen Z and the growing number of people worldwide for whom sustainability is increasingly important

fdfa.ca @FDFAInsider @CanadaDutyFree BUILDING TOMORROW CANADIAN DUTY FREE –King Edward Hotel, Toronto ON FDFA Convention 2023

27–30

November

Tailor

made

Business returns

As with all industries selling items that people use when venturing out beyond the front door, jewelry took a hit during the pandemic. But Tateossian says as of mid-2023 business has returned to pre-2020 levels for both retail and wholesale. Unsurprisingly, business in the US had a quicker rebound than Europe, China or Japan, according to Tateossian. He adds that for the year ahead, North America and China will be the growth markets. “Sales continue to be positive and on an upward trend. In our industry sector, the last quarter is the most important. We are all gearing up for a strong holiday season,” he says.

The important things

Tailored for TR

If anything can be said of Tateossian, the company is tailor made for travel retail, and one might say its jewelry is tailor made for the traveling business executive. The style and quality are sure to draw a discerning eye. The items all have a sense of uniqueness, and the company’s habit of personalization only serves to emphasize this, further underlining its appropriateness in the channel.

From its inception, luxury jewelry company Tateossian filled a niche that clearly needed filling — jewelry for men that was both luxurious and edgy, made for the man who wanted style of the highest quality with zero stodginess. Originally it was cufflinks that brought fame to Founder and Managing Director Robert Tateossian. He later branched out, bringing his unique style to a larger range of jewelry items for men and also for women — although his cufflinks remain iconic.

Present in luxury retail outlets in over 70 markets around the world, Tateossian is known for its stunning design featuring unusual materials. The brand speaks for itself, and the visual impact of any dedicated space already draws in the customer, without the need for theatrics.

For Tateossian, therefore, there’s no magic new strategy for sales. He says the strategy is and will always be: “Focusing on what is important. Good strong visuals of the product, great packaging and ultimately a product that stands out from all the other pieces of jewelry.”

TFWA World Exhibition and Conference is an important event for Tateossian, and the company always develops a few key exclusive pieces for Cannes. “Bracelet stacks are always successful, and we plan to introduce a few that include the Evil Eye symbol. Similarly, embarking on the trend of necklace sales we have a layered necklace with an Evil Eye,” says Tateossian, who hopes to target the key operators and airlines in the industry for appointments during the week.

At Cannes, the company will launch a new women’s item, UNISEX Birthstone Collection, with three different stone selections available in a necklace, earrings, and two different ring options. All are using Rhodium Plated Sterling Silver with a polished finish, and each design features the stone arranged with three different cuts: round, square and baguette.

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Robert Tateossian’s name will be forever associated with jewelry that is unique, luxurious, and perfectly suited for the travel retail channel

Tateossian’s Founder and Managing Director Robert Tateossian Tateossian's new UNISEX Birthstone Collection of necklace, earrings and rings will hold the company’s spotlight at TFWA WE in Cannes by HIBAH NOOR

TOUS MANIFESTO

TOUS.COM

ZÓLDI secures EmiratesRED as key retailer partner in GTR expansion

ZÓLDI Jewels is to expand its global travel retail operations further to securing EmiratesRED as a key retail partner in October 2022, and has set its sights on inflight and airport retail.

“I have a deep passion for travel and a strong connection to the world of aviation. I created ZÓLDI Jewels after firsthand experience of interacting with passengers from diverse backgrounds and cultures. I am excited to be expanding into travel retail as ZÓLDI Jewels embarks on this next stage of growth,” says Founder and CEO Maria Soldatova.

Soldatova worked as a flight attendant with Emirates for 11 years and says she understands the unique needs and desires of travelers. This experience inspired her to create ZÓLDI Jewels in 2019.

For Soldatova, ZÓLDI Jewels is not just about selling jewelry, it's about creating an emotional connection. Each piece is thoughtfully designed to evoke a sense of wanderlust, adventure, and nostalgia.

“The focus on travel retail allows me to showcase the unique qualities of our jewelry and introduce travelers to a brand that resonates with their own experiences. My time with Emirates helped me create pieces that evoke a personal connection; it’s why I am delighted to be included in the EmiratesRED store and Crew Shop at Emirates Dubai HQ. It has given me an opportunity to work closely with the company's inflight retail buyers to cultivate a promising future relationship,” she says.

By working with travel retail and expanding further into inflight retail, Soldatova is looking to share the ZÓLDI Jewels story and connect with a broad audience who appreciate the beauty of travel.

Some of ZÓLDI’s best-sellers are being earmarked for travel retail. The brand’s Ready for Departure bracelet and Up in the Sky necklaces, as well as its Take Me Away ring and My Private Jets’ earrings are available to travel retail partners.

L’azurde

looks

to GTR

to grow business via exclusive partnerships

Middle East gold jewelry specialist, L'azurde, has earmarked 2024 as a big year for the company’s growth into global travel retail. A prominent brand in key markets such as Saudi Arabia and Egypt, L’azurde is well-known for its expertise in designing, manufacturing, and distributing gold jewelry collections across the Middle East.

Returning to TFWA WE in Cannes to showcase its “travel retail ready” gold and diamond jewelry collections, L’azurde’s Head of GTR, Martine Larroque says the company aims to build on its impressive reputation for excellence and jewellery design innovation by working with more travel retail partners to tailor-make exclusive collections. In May 2023, L’azurde participated in the TFWA Asia Pacific Singapore showcase where it secured a number of new business opportunities in Asia.

“I have seen an excellent response to the brand’s expansion plans in travel retail so far,” says Larroque. “The company has many years of vertically integrated product design, retail expertise and supply chain management. Travel retail is very much next on the agenda for growth. L’azurde’s latest collections have something for everyone – from airport retail to inflight and cruise retail.”

ZÓLDI’s best-sellers are being earmarked for travel retail

L’azurde offers a wide range of elegant, contemporary and exclusive jewelry collections. Known for its expertise in multiple gold carat offerings, the high-design crafted brand signature appeals to customers across the Middle East. Plus, L’azurde is finding new audiences in Asia and Europe, where the varied designs meet different tastes and jewelry for all occasions.

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JEWELRY NEWS

L’azurde returns to TFWA WE in Cannes to showcase its “travel retail ready” gold and diamond jewelry collections

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evolving. To remain at the forefront, we understand the importance of promptly adjusting to these changes. Our foundation rests upon the following principles: globalization, portfolio diversification, technological integration and exceeding expectations.

by LAURA SHIRK

Duty Free Dynamics (DFD), owned by E. Liberman Group, named Martin Mairal as Chief Executive Officer in June. The appointment followed Mairal’s twelve-year stint as Director at DFD sister company Haute de Gamme Corp, which is a global brand distributor across domestic markets.

With offices located in Panama, Barcelona, Miami and Hong Kong, Duty Free Dynamics distributes products across several key travel retail categories; brands represented include adidas, Clarks, Anne Klein, Gucci, Haribo and LEGO.

In this Q&A with Global Travel Retail Magazine, Mairal discusses the importance of brand adaptability in the duty free channel, DFD’s exclusive “Order Entry System” and how the company works to increase added value to its portfolio.

Global Travel Retail Magazine (GTRM): How would you explain the concept of disruption in duty free and travel retail? How does Duty Free Dynamics practice this in a positive sense?

Martin Mairal, CEO, Duty Free Dynamics (Mairal): At Duty Free Dynamics, we embrace the idea of disruption with a forward-looking approach. We acknowledge that the travel retail industry, along with consumer behavior, is constantly and rapidly

GTRM: At a time when those in the duty free industry are required to consistently adapt to change, how are you adapting on a personal level to your new position as Duty Free Dynamics CEO?

Mairal: In the dynamic realm of travel retail adaptability is vital. Although my background doesn't originate in travel retail, I've led another company within the group for years. During this time, we achieved robust international expansion, establishing a direct presence on four continents with dedicated teams. This global experience is proving invaluable as DFD expands into EMEA (Europe, Middle East and Africa) and soon Asia Pacific (APAC).

Duty Free Dynamics is built on strong global teams and effective communication within both the organization and with stakeholders and clients. Firstly, recruiting top talent and harnessing their expertise enables us to navigate diverse scenarios, recognize opportunities and challenges and innovate in response to the industry landscape. Secondly, transparent communication with brands empowers us to quickly adapt our product offerings and establish actionable plans. Lastly, by regularly engaging with our network of retail partners, we translate insights into practical strategies, optimizing the performance of their retail spaces.

As a leader, my focus revolves around cultivating an agile and autonomous participatory culture within the company. From my experience, I've observed the most impactful innovations often emerge from those closest to the consumer. This implies

116 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Q&A

In this Q&A, new Duty Free Dynamics CEO Martin Mairal discusses the importance of brand adaptability in the channel and how DFD brings added value to its portfolio

Duty Free Dynamics announced the addition of sportswear brand adidas to its portfolio in August; the collaboration will elevate the retail experience for travelers in the Caribbean region Martin

a willingness to embrace calculated risks and learn from both successes and setbacks. By fostering a work culture that embraces change, we're equipped to swiftly and effectively seize opportunities and adjust operations accordingly.

GTRM: How is Duty Free Dynamics working to further increase added value to its brand portfolio and provide a consistent brand image across its operational regions?

Mairal: Currently, we’re in the final stages of solidifying agreements with new brands both on a global scale and within specific niche markets. Our goal is to refine our portfolio, presenting our partners with the most appealing and profitable options available.

Our approach entails a close partnership with our brands, emphasizing a strong sense of unity. From the outset, we communicate our commitment to creating relationships that will extend well into the future. This assurance provides our partners with the confidence that their brand image will be upheld across the entire travel retail landscape. This principle holds even greater significance in today's environment, characterized by consumer expectations spanning physical and digital realms, as well as domestic and travel retail channels.

Our success is evident through our meticulous selection of suitable retail partners and the precise execution of point-of-sale strategies. We enforce visual and design standards that ensure a consistent presentation throughout our stores and platforms. This contributes to maintaining a uniform and recognizable brand identity across all our operations.

GTRM: What has been the response to DFD’s “Order Entry System” exclusive platform?

Mairal: The response to Duty Free Dynamics' exclusive "Order Entry System" (OES) platform has been overwhelmingly positive. The OES platform represents a significant leap forward in how we conduct business and interact with our partners.

This development has garnered considerable praise for its user-friendly interface and streamlined procedures. It offers a seamless way for our retail partners to manage orders and access up-to-date product information instantly. Consequently, collaboration has been enhanced, order processing expedited and transparency across the entire supply chain improved.

The enthusiastic reception reaffirms that technological solutions like the OES platform play a vital role in propelling our industry forward and providing unparalleled support to our partners.

GTRM: Please provide an update on the company’s 2023/2024 expansion plans.

Mairal: Our commitment extends to offering value-added services in new regions and markets across the globe. In the upcoming years, our focus will be on consolidating our presence in North America, while also prioritizing expansion efforts into EMEA and APAC.

Starting with the EMEA region, we are executing our plans to expand our commercial platforms in Barcelona, as previously announced. This expansion is geared toward providing more personalized and proximate service to our brand and customer partners in this region.

Shifting our focus to the APAC region, we recognize its untapped potential and are fully dedicated to catering to our current retail partners already established in the area, as well as forging new partnerships that can cater to the evolving preferences of travelers in APAC. Our expansion into these regions not only bolsters our global footprint, but also solidifies our role as strategic partners for both affiliated brands and retail partners.

GTRM: What attracts you to this unique retail segment as a professional?

Mairal: In an environment where space costs per square meter are exceptionally high, staying ahead of trends, efficiently managing inventory and processing information become even more aggressive and demanding compared to other industries. Challenges such as maintaining a balanced range of sizes, near just-in-time supply due to limited storage or being the first to introduce new collections are just a few examples.

I'm interested in the impending changes – or those already underway – in this industry. Challenges including sustainability, omnichannel integration and digitalization are topics currently under discussion and active development, poised to yield significant outcomes. One noteworthy example is the rising adoption of dynamic pricing, which adapts based on factors like hours and passenger flow, particularly gaining ground in specific locations.

The interplay of these dynamics and the emergence of transformative concepts paint a promising future landscape, offering both challenges and opportunities that will sculpt the evolution of travel retail. The ability to effectively navigate these intricacies and embrace these changes will undoubtedly be the defining factor for success among those operating within the industry.

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 117

Mairal, CEO, Duty Free Dynamics The adidas UltraBOOST DNA LOOP is created from a single material from the sole to the laces

Passion point portfolio

With

by LAURA SHIRK

Although the LEGO Group has been present in multi-category travel retail stores for decades, it’s seen a consistent growth in business over the last several years. Moving beyond its unique business model, which aims to reach “grab & go shoppers” – LEGO Travel Retail delivers a truly immersive brand experience to passengers at airports worldwide. Since 2018, the company has opened over 60 boutique LEGO Travel Stores with retail partners at airports across the globe.

When asked if this rate of opening is sustainable, Sebastian Alt, Senior Business Development Manager Travel Retail Development at the LEGO Group, responds with “absolutely.” He explains it is sustainable for a couple of reasons: one, the brand has extended its portfolio to create desirable products not only for kids, but also for adults; two, the LEGO Group teams up with long-term retail partners and airport landlords to expand its network of shops. The brand recog-

nizes the LEGO journey does not end as a youth and celebrates its adult fans by creating meaningful products for this segment.

“To ensure we speak to a broad audience, the LEGO Group structures its portfolio not into target groups by age or gender, but by passion point. We want to offer products available for all kinds of interests – including for moviegoers, space enthusiasts and car collectors. Almost all product lines consist of complex models for smaller hands and more sophisticated ones for grown-ups,” he explains.

Alt speaks about how the company has navigated its transition from existing solely as a toy brand to a family brand with multi-generational appeal. The foundation of this transition is that the LEGO Group sees the adult market as an incremental opportunity without compromising on its purpose to create relevant toys that inspire children around the world.

Creating a destination in duty free

As dedicated shopper marketing experts, when it comes to consumer engagement in travel retail, the LEGO Group’s approach is adapted to reflect the change in audience. Compared to its downtown shops, which are mostly visited by families on a planned shopping trip with often unlimited dwell time, LEGO Travel Stores are visited by adult shoppers traveling on their own. With this in mind, instead

of creating play and building opportunities in the channel, the Group offers the option to snap a souvenir picture with one of its giant LEGO models to share via social media. When asked how the brand helps shoppers to navigate duty free stores and seek beyond core categories, Alt points out that within the toy category, the LEGO brand logo is among the most recognized globally.

“We support our retail partners to guide shoppers so that the toy, and therefore, LEGO placement stands out from a distance and creates a destination within duty free stores. Equally important, are frequently updated listing recommendations that we share with retailers. These make it easy for passengers to select the product that matches their needs and ensure travelers have access to a selection of the latest products launched,” says Alt.

Most recently, the company launched LEGO® DREAMZzz. Bringing the dream world to real life, this release is the biggest for the LEGO Group within the last decade. Supported by a successful TV series and a significant marketing push, LEGO® DREAMZzz is set to drive sales across all channels.

In other news, the LEGO Group has opened eight stores at airports this year, and is scheduled to open another nine by the end of 2023 including at Changi Airport. As of early August, retail spaces can be found at Los Angeles Airport and Barcelona Airport.

118 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Toys

nine more airport openings scheduled this year, LEGO Travel Retail discusses sustainable growth and multi-generational appeal

The release of LEGO® DREAMZzz is the biggest for the company within the last decade Sebastian Alt, Senior Business Development Manager Travel Retail Development at The Lego Group

JOIN OUR COLOURFUL WORLD! Meet us at the TFWA Cannes, Harbour Village, M/Y ANTISAN, 1-5 October 2023 SUSTAINABLE PACKAGING UPDATE NEW PRODUCT LAUNCH!

Snacking done right

Known for its premium snacks, German confectionery brand Seeberger relies on snackification and its signature packaging to appeal to health-conscious consumers

by LAURA SHIRK

brand says its best practices serve as inspiration to empower the category in duty free. In the current culture, digital and physical engagement must go hand in hand to guide, inform and add value to any given proposal.

“We acknowledge the differences between each channel in travel retail. Besides the classic trade and consumer marketing activations, we always strive to customize options for our partners,” it says.

Power of snackifaction

Channel diversification

As a company, Seeberger has a wider portfolio than snacking fruits and nuts. While some of its items will never enter the channel, the brand still believes diversification is important to travel retail – more specifically, diversification with a focus. “Travel retail is experiencing a behavioral shift among traveling consumers. For example, the shift from gifting to self-consumption is on the rise. This often means consumers are looking for healthy and natural snacking alternatives to be consumed immediately,” shares the brand.

As the number one German brand for snacks made of premium nuts and dried fruits, it is not surprising that Seeberger is available across many channels like airports, ferries and military retail.

The company tells Global Travel Retail Magazine that 2022 was a pivotal year for its visibility in travel retail. “Exhibiting at TFWA in Cannes last year, was a key milestone in our journey to reinforce our presence in the travel retail environment, as well as present ourselves to new potential business partners. This year, we’re looking forward to presenting our focused travel retail assortment.”

Since the performance of confectionery and fine foods in travel retail is tied to category engagement, which tends to be lacking in the channel, it is noted that Seeberger is working to strengthen its position in this regard. As a leading brand in Germany, with a strong position in many European markets, it understands how to elevate the category. An attentiongrabbing presence at the point-of-sales is one of the pillars of its success.

This attention-grabbing presence begins with the brand’s signature striking orange packaging — Seeberger is easy to spot on the shelf from a distance. The

As a category driven by moment-led consumption, sharing and gifting, confectionery and fine foods is recognized as an impulse-driven category. Since Seeberger caters to health-conscious consumers, one might think the brand’s sales are less impulse driven; however, this is not the case.

“Our travel retail product range provides the right snack for every life situation, with a special focus on the following needs of our consumers: satisfying hunger, energizing, nerve food and enjoyment. We are positioning these products as a snack. They are not mixed in as an ingredient, but rather snacked on exactly as they are: made by nature and made available to everyone by us,” says the brand.

In one word, the brand is about “snackifaction” – quick and natural snacks for in between meals. Seeberger’s range is always a good choice within this trend. It is shared that healthy eating is not just a trend; it has been here forever and it will remain.

“Snacks are becoming more frequent and mobile,” adds the brand. “Consumers expect them to be healthy because ‘snackification’ trends and healthy eating go hand in hand. Seeberger´s natural snacks are trending now more than ever.”

Plus, some travelers are also adjusting to a different time zone, so while some are looking for a breakfast alternative, others might be looking for a healthy snack in between meals, and others might be focused mainly on a cold beverage and want a savory snacking option alongside.

“With Seeberger we can cater to all those demand moments of conscious snacking, with slightly roasted and salted references; ‘free-from’ snacking options, based on high-quality natural nut and fruit mixes; and pure indulgence, with either pure fruits or pure nuts,” it says.

While the company offers a focused travel retail assortment, Seeberger also offers a choice of more than 60 options, from a wide range of pure, all-natural nuts to nut mixes and snack mixes and a vast variety of dried fruits.

Sustainability efforts

Outside of snackification and diversification, sustainability is a major topic of the brand, and social, ecological and economic responsibility are considered explicit aspects of the Seeberger name. The brand communicates its efforts via transparent sustainability reports, which are published on the company’s website, and they communicate brand success stories via its social media channels.

120 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Confectionery

{L-R] Erlande Hagenbusch, Key Account Manager International, Andreas Meindl, Head of Business Unit Retail International, Valeria Reiser, Project & Sales Manager Coordinator Retail International Seeberger Choco-Cranberry-Mix sweet and salty (150 grams) Seeberger Dried Mango Strips (100 grams)

PLEASE FIND US AT OUR STAND J21 AT THE RED VILLAGE

Ritter Sport invites consumers to let their taste buds sparkle

Ritter Sport is extending its Choco Cubes assortment with a new travel retail exclusive Fruity Yogurt Mix Pouch. The brand has noted Choco Cubes’ strong performance in the channel and, until now, the lack of a light fruity mix.

The brand says now yogurt and berries can claim center stage, with these new varieties: Yogurt, Black Currant Yogurt and Strawberry Yogurt to help “close this gap” in the range.

“Ritter Sport is looking to strengthen the Choco Cubes product line-up as we know that small bites are performing very well in travel retail,” comments Nicole Miltenberger, Ritter Sport’s Marketing Manager Global Travel Retail. “With every bite, traveling consumers can savor the perfect balance of creamy yogurt and juicy berries, creating a truly unforgettable chocolate experience.”

Perfect for sharing with family and friends, the Ritter Sport Choco Cube bag contains a mix of 20 Choco Cubes. The chocolates do not contain artificial coloring or flavoring and are presented in a paper-based bag. The Fruity Yogurt Mix Pouch will roll out into travel retail late January 2024.

Perfetti Van Melle returns to TFWA Cannes with a focus on gifting

Focusing on kids gifting and engagement, Perfetti Van Melle is set to launch new Chupa Chups products at this year’s show.

The new Chupa Chups offer includes a “mini suitcase” for carrying games and lollipops. The handy lunchbox-sized (126 x 91 x 67-mm) case features eight lollipops in strawberry flavor, as well as Tic Tac Toe and Find the Match memory card games.

In addition, Chupa Chups has partnered with Hello Kitty and The Smurfs to release two new coloring kits – each containing four markers, four lollipops and a themed coloring book. Also great for gifting, like the mini suitcase, these kits help to keep kids entertained while traveling.

“We have a range of new activations lined up for 2024. These are designed to showcase our brands Mentos and Chupa Chups in the travel environment and make an impact on the shop floor to drive sales. New concepts have been developed that are aimed at gifting, snacking and refreshment like our Mentos Mints flip top tins or Chupa Chups suitcase. In the area of visibility, we will also help our partners leverage the brand power of Chupa Chups and Mentos with eye catching and interactive displays and other engagement tools,” says Michiel Goedvolk, Global Travel Retail Director at Perfetti Van Melle. Goedvolk is new to the position and will be at the show in Cannes for the first time.

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CONFECTIONERY NEWS

Ritter Sport’s Fruity Yogurt Mix Pouch (160-g) contains a mix of 20 Choco Cubes The new Chupa Chups offer includes a handy lunchbox-sized case that contains lollipops and memory card games

Snack worldwide. Snack Seeberger.

Natural, tasty snacks for your journey.

travelretail@seeberger.de TFWA CANNES

Mars ITR announces next chapter of moment-led strategy

Mars Wrigley International Travel Retail (Mars ITR) will share the next chapter of its moment-led strategy in Cannes, with a clear focus on bringing moments to execution on the shop floor and engaging travelers with the right offer at various touchpoints. The brand will also share more about the introduction of its 100% Responsibly Sourced Cocoa logo within the channel.

“Last year, we made the shift to a moment-led strategy putting customer and shopper needs at the heart of our thinking,” says Marcus Hudson, Sales Director at Mars ITR. “The relevance of making this move is underlined when we look at how shopper behavior has changed over the last [several] years. We know confectionery has the highest conversion rate of any category in the channel. However, only one out of five travelers are visiting the confectionery category in duty free. We need to confront and inspire travelers in the right way, create more excitement to bring travelers into the category and inspire better moments to convert shoppers into buyers.”

The company will exhibit an expanded portfolio at Bay Village 41 to better fulfill traveler needs at all key moments including those identified as: Enjoy travel time together, Give a gift, Refresh & energize on the go and Unwind & indulge.

Mondelez WTR launches Toblerone’s “Bag That Gives Back” campaign in Sydney

Mondelez World Travel Retail (Mondelez WTR) is championing sustainability within travel retail with its global Toblerone’s “Bag That Gives Back” campaign. From Europe to the Middle East and now Sydney, Australia in partnership with Heinemann, the campaign spotlights Mondelez WTR and partners’ dedication to support local communities and worthy causes within their value chains.

Throughout August and September, Sydney Airport passengers passing through the departure terminal can check out the “Bag That Gives Back” activation and make a contribution. By riding a life-sized wooden tricycle, passengers can make a donation toward Mondelez WTR’s Ghana Mobility Initiative, a project centered on providing tricycles to local cocoa communities. The initiative is in partnership wtih its cocoa sustainability program, Cocoa Life, and Child Rights International. Every kilometer cycled generates AUD$1 (US$0.64).

The campaign aims to enhance mobility for children and small businesses in Ghana, and the interactive activation allows travelers to understand the project’s impact in a memorable and meaningful way. In addition to the tricycle, travelers can enjoy special price promotions when they purchase two 360-g Toblerone bars or two 272-g Toblerone Tiny Bags.

This latest iteration of the “Bag That Gives Back” marks the confectionery brand’s first-ever corporate social responsibility (CSR) campaign in Asia Pacific and its first collaboration with Heinemann on a charitable gifting activation.

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CONFECTIONERY NEWS

The brand’s strategy focuses on bringing moments to execution on the shop floor and engaging travelers with the right offer at various touchpoints Featuring a life-sized wooden tricycle, the interactive and charitable gifting activation promotes Mondelez WTR’s Ghana Mobility Initiative

New take on tradition

TAKING A CLOSE LOOK AT THE RISE OF NEW WORLD WHISKY, GLOBAL TRAVEL RETAIL MAGAZINE TELLS THE STORY BEHIND A SERIES OF TASTEMAKERS IN THE GROWING SEGMENT AND OFFERS A GLIMPSE AT TRUE INNOVATION

by LAURA SHIRK

With over 300 days of sun per year, Israel’s hot climate and high humidity contributes to an expedited aging process, leading to a “deep and complex whisky” even after a short-term maturation. On the flip side, the same climate and conditions result in the angel’s share reaching as high as 10%. As described as Baran, the country’s geographical diversity is M&H Distillery’s playground.

Across the whisky industry, innovation is taking hold and new world whisky makers are offering more choice than ever before. From the establishing of disruptive distilleries to the shaping of a new generation of master blenders and consumers, the long-recognized boundaries, traditions, and styles in line with the segment are quickly shifting. Along with new names and regions, the industry is navigating evolving consumer demands, digital platforms and so much more.

In this report, Global Travel Retail Magazine hears from a series of tastemakers from around the world that are helping to re-define the world of whisky. While respecting the history and culture of the drink, these new producers are paving the way for a long list of upand-comers.

Diverse climate zones and big wins

Founded in 2013, M&H Distillery (Milk & Honey) is a new world, urban distillery and Israel’s first whisky distillery. It is located in Tel Aviv, a high-tech hub known for its original thinking and innovative companies, as well as its liberal way of life. And it is considered to be a part of the city’s fabric. A mix of old and new, past and present, M&H Distillery brings to life the culture of Israel – one sip at a time.

“Tel Aviv inspires us to be innovative and think outside the box. We like to experiment with cask types, barley, yeast, but most of all with different climate zones. Israel is a very small country, only 22,000 kilometers, but we have five different climate zones,” explains Dana Baran, Vice President of Marketing at M&H Distillery. She calls it a low-tech startup.

M&H Distillery won the title of “World’s Best Single Malt Whisky” at the World Whiskies Awards 2023 for its Elements Sherry Cask; the first and only kosher single malt whisky in the world aged in sherry casks. It was also awarded “Brand Innovator of the Year” at the 2022 Icons of Whisky Awards, mainly because of its Apex Dead Sea edition. This small batch single malt whisky is the first and only whisky ever aged in the lowest place on earth.

Back to the basics – in all the best ways – Baran spotlights the M&H Classic, “It is our base, a smooth, easy to drink whisky. It defines the distillery's character and is made from the finest ex-bourbon casks and special red wine STR (ShavedToasted-Re-charred) casks, giving it a light and balanced character,” says Baran.

Art of distillation

With 30 years of experience as Cellar Master, Jérôme Tessendier, CEO at

126 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Spirits & Tobacco

From brewing to bottling Distillerie Tessendier & Fils is responsible for the entire whisky production chain Arlett Whisky’s bottle design has been crafted to evoke different levels of Interpretation; the glass relief symbolizes Distillerie Tessendier & Fils’ brewing vats

Distillerie Tessendier & Fils and Creator of Arlett Whisky, believes that an exceptional spirit is born from the alliance of perfect raw materials, deep understanding and complete mastery of various transformation processes. This is why Distillerie Tessendier & Fils has initiated a project that encompasses the entire whisky production chain; it is responsible for the brewing, distilling, aging, blending and bottling of its whisky.

The Tessendier family has been excelling at the art of distillation for generations and it is said Arlett Whisky is its desire to embark on a new era of work. “The French origin of our whiskies enhances the already abundant market by bringing original identity and quality; this is the essence of our approach with Arlett Whisky,” says Jérôme. Arlett Whisky is enriched by expertise drawn from the family’s history and tradition in the cognac field.

Summarizing the flavor profiles of its whisky portfolio as rich, concentrated and harmonious, Jérôme says its method of double distillation allows the distillery to achieve concentrated spirits with excellent aging potential in barrels. “During the maturation stage, we meticulosity select our barrels, with the Japanese MIZUNARA oak cask standing out among them,” he explains.

A distinguishing feature of the new

world whisky category is often a focus on brand image and values as opposed to the liquid itself. When asked about purchasing drivers and cues that are at the center of Arlett Whisky’s brand strategy, Jérôme reveals the bottle design has been crafted to evoke different levels of interpretation. “The glass relief symbolizes our brewing vats, while reminiscent of the upholstery of an old English leather armchair,” he says.

As shared by Jérôme, Arlett Whisky aims to be among the top three French whisky brands by 2025. He says this is achievable through a strategy focused on the domestic French market and the support of duty free distribution to make a strong entry into non-European export markets.

History of mythology

With the rise of Asian and world whiskies, the spirits industry has evolved to widen its audience, manage demand and flip tradition on its head. Damith Weerakoon, Co-founder and Director of Marketing & Operations at Milestone Beverages, says in all circumstances it is brands which emerge victorious rather than just liquids.

With this in mind, Milestone Beverages develops wine and spirits that celebrate diverse tastes and creates quality brands that are inspired by the Asia Pacific marketplace – and designed

M&H Classic (700-ml) is a smooth, easy to drink whisky, made from ex-bourbon casks and special red wine STR (Shaved-Toasted-Re-charred) casks

to hold global influence. According to Weerakoon, its Onikishi Japanese Whisky targets a broader demographic and in addition to highlighting classic elements that speak to traditional whisky enthusiasts, offers a modern twist to invite new consumers to engage emotionally with the product.

“We strike first visually, appealing to all by virtue of being arguably the most iconic Japanese whisky on the market; capturing elements that can be easily recognized as Japanese, elements from pop culture using the non-traditional Anime style. Those drawn in might be captured by pure aesthetic, but others are usually swung by the affordability and giftability of the package,” he shares.

Described as having a fierce duality, while Japan is known for its cuttingedge technology, it has a long history of mythology. Weerakoon is fascinated by what he calls Japan’s deeper, darker side, which is often reflected in its media arts. Onikishi aims to present this side through all facets of the brand.

Translated to mean “Demon Knight,” Weerakoon believes that Onikishi’s mystical charm captures the essence of Japan and drives curiosity. “This duality is what has bred creative storytelling, mythologies and traditions for centuries and allows us to tap into these to build characters and stories around Onikishi,” says Weerakoon.

While the category of Japanese whisky is “shrouded in secrecy” with few rules to govern production, it is growing in popularity. The brand is working on a third SKU as a travel retail exclusive; Weerakoon adds this will help solidify its personality and story base, which evolves around the mythological creation of Japan.

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It is said that Onikishi Japanese Whisky’s mystical charm captures the essence of Japan and drives curiosity; the country has a long history of mythology

Riding the wave

SERVICING THE CRUISE SECTOR AND EXPLORING EMERGING CATEGORIES IN DUTY FREE, MONARQ CONTINUES TO STRENGTHEN ITS BRAND PORTFOLIO AND RESPOND TO KEY TRENDS IN THE CHANNEL

by LAURA SHIRK

MONARQ’s growing list of partners has experienced an especially big boom this year, announcing distribution agreements with brands from numerous categories within the beverage business. Described as a curator of lifestyle brands and products, it is a regional distribution and marketing group of premium beverages in the domestic and duty free markets of Latin America, the Caribbean and the US duty free channel. The group works with key duty free retailers such as Starboard Cruise Services, Dufry Cruise Services and Heinemann.

Servicing the cruise sector is a strategic spearhead of MONARQ says Danielle Glazier, Regional Manager, US Duty Free and Key Accounts. The company is present on all major cruise lines and views the sector as dynamic and multi-faceted because of the diverse demographics on board, different ports of call and the wide variety of cruise lines. According to Glazier, catering to the individual needs of each cruise line has been essential to MONARQ’s growth in the channel. The company recently partnered with Carnival Cruise Line to offer Sorentobased liqueur Villa Massa Limoncello fleetwide. Implementing a 360-approach, MONARQ services both on-premise and duty free retail which are equally impor-

tant to the guest experience on board.

Existing trends continue to strengthen across the sector including a desire for premium and super premium American and Japanese Whisk(e)y, an interest to support local, seeking luxury brands that include rare qualities and limited production, as well as continuing to drive and elevate the guest experience. The company has responded to all of these trends; it recently launched Uncle Nearest Tennessee Whiskey on-premise across all ships on Royal Caribbean Cruises, Disney Cruise Line and Virgin Voyages and in duty free retail on Starboard Cruise Services. Produced in Miami, MONARQ also introduced craft liqueur J.F. Haden’s fleetwide on Carnival Cruise Line; plus, Bollinger’s exclusive Recently Disgorged Champagne is performing well across high-end cruise lines like Regent Seven Seas Cruises and Disney Cruise Line. Glazier shares that MONARQ will be teaming up with Regent Seven Seas to present an exclusive premium Hayman’s gin tasting experience on board its newest ship “Grandeur,” which will be unveiled in November.

Emerging categories and CBD-based products

When asked about the addition of Shanghai-based, family-owned Porcelain Distill-

ery to its world gin portfolio, Robert de Monchy, Managing Director, MONARQ, expanded on the group’s work in the subcategory, “We also see a trend toward local gins like Condesa Gin from Mexico City – a brand that’s performing well for us – and more exotic premium and super premium gins, especially from Asia. Our brand portfolio includes Hakuto Premium Gin from Japan and Saigon Baigur from Vietnam.”

Additionally, MONARQ has formed a long-term partnership with the Isle of Raasay Distillery, the first legal distillery on Hebridean Island in Scotland, “due to the increase in interest and curiosity in our markets for new frontiers when it comes to premium whiskies.”

Beyond “better for you” alternatives, MONARQ notes an increase in demand for health or supplemental beverages that promote both mental and physical wellness. This has led to its exploration of emerging categories in duty free like mood enhancing, ready-to-drink mocktails and CBD-infused beverages. This is demonstrated through its deal with Drink Recess Inc., which will bring Recess’ portfolio of non-alcoholic relaxation beverages Recess Mood, Recess Zero Proof Craft Mocktails and ultimately, Recess with CBD (pending regularity clarity) to consumers.

“As long as there is a strong demand for any type of premium product or brand in the domestic market, the duty free market will have a vested interest in offering that particular product or brand. This would potentially be the same in the case of CBD-based products,” adds Garrett Koolman, International Marketing Manager, MONARQ.

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The Recess sampler is sparkling water infused with a calming blend of hemp & adaptogens and available in six flavors: coconut lime, blackberry chai, peach ginger, blood orange, pomegranate hibiscus and black cherry Porcelain Distillery is a family-owned and operated distillery located in the Liaoning province of China

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Breaking barriers

With the increasing popularity of aged spirits in recent years, Raffaele Berardi, CEO and Founder at Fraternity Spirits, is introducing a new concept that gives consumers the taste of an aged liquid, but with the flexibility to choose and create their own preferred flavor profile — while also giving them the exciting experience of making it happen.

Don Leonardo, founder of both Tequila Corralejo and Ron Prohibido, has created a way to “age” spirits at home, without having to invest in the finances, time and space of purchasing a barrel and filling it with newly distilled spirits.

Easy, fun system

Rompe las Barreras del Tiempo, Ron Prohibido Aged Rum Kit, includes a 750ml bottle of Ron Prohibido, an American oak stick with extra toasting, a stylish glass decanter with a wooden stopper, and a decanter cork. To “age” the spirit, the

consumer simply fills the decanter with rum, inserts the barrel stick and waits as the flavor slowly infuses into the drink. The wood brings a sense of aging to the liquid, providing the experience of drinking aged rum in a matter of days or weeks. The consumer can watch as the liquid becomes darker, with a taste profile that changes the longer you leave it in.

“We want to enhance the consumer experience by giving them the opportunity to experiment and choose their own preferred taste,” says Berardi. “They can then start trying to drink, to taste and experience new flavors coming out of that wood barrel. After three or four days, the liquid will seem to have aged. You can experience an evolving taste with new flavor notes. You decide when the product you’re buying has the peak flavor for your palate.”

Perfect for sharing and gifting Berardi says Rompe las Barreras del Tiempo is a wonderful conversation piece

As with barrels used for aging rum, whiskey and tequila, the wooden stick that comes with Rompe las Barreras del Tiempo is made from American oak, with extra toasting to increase the flavor profile

that is perfect for sharing. “You can make a custom drink that you can share with your friends, and suggest they taste with you after a certain number of days has passed, and then again in another few days. It’s a great gift,” says Berardi.

As a premium, exclusive item, the price point will be higher than for the rum itself — or tequila, as Fraternity is also offering this concept with its Tequila Corralejo, though Berardi says the system could actually be used with any type of spirit. “It's a gift, something to give you the opportunity to make a new experience and to share with your friends,” says Berardi. “It's an experiment, and you can repeat the experiment multiple times. You can purchase a bottle of rum, and then use the stick and decanter again and again.”

This new creation has been designed for travel retail, and will launch in second semester 2023.

130 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Spirits & Tobacco

by HIBAH NOOR Raffaele Berardi, Founder and CEO, Fraternity Spirits, shows Global Travel Retail Magazine the company’s innovative new product that allows for the aging of a spirit without the time commitment Fraternity’s Rompe las Barreras del Tiempo allows the consumer to experiment with the preferred flavor profile by leaving the stick in the liquid for longer, “aging” the spirit in a matter of days

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The heart of premiumization

Diageo Travel Retail on its “better, not more” approach to localized digital marketing and Heathrow Airport takeover

by ALISON FARRINGTON

In its latest trading statement for 2023, Diageo cited premiumization as a strong growth driver. The company is most interested in “high-quality brands at the premium end of the market that have a good runway for growth,” according to the company’s late CEO.

For Dafydd Pugh Williams, Marketing and Innovation Director, Diageo Global Travel, the company’s latest activations have premiumization as a central strategy in the channel.

“Core to Diageo Global Travel and all of Diageo is the principle of ‘better, not more’. Our portfolio lends itself to aspi-

rational and inspirational purchases. We want to encourage consumers to drink well. Premiumization has this at its heart. We have a portfolio of brands to support this, with premium and ultra-premium brands across categories.

“We also have the campaigns, experiences, and activations to enhance these brands – as we have seen with the current 1942 Don Julio takeover at T5 Heathrow, or our Blue Label gifting pop-up at Changi Airport,” explains Pugh Williams.

Diageo’s premium core ranges will always remain central to its global travel activations, he says, “With fresh cam-

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The Johnnie Walker Blue Label “Cities of the Future” campaign launched at Changi Airport with a Singapore Limited Edition Dafydd Pugh Williams, Marketing and Innovation Director, Diageo Global Travel

DIAGEO COURTS LUXE TEQUILA CROWD WITH TEQUILA DON JULIO 1942 AT LHR

“It’s an incredibly exciting time for the tequila category,” Andrew Cowan, Managing Director, Diageo Global Travel, told Global Travel Retail Magazine in August at the Tequila Don Julio 1942 LHR launch event.

“This icon of luxury tequila is a brand synonymous with special celebrations. Our luxurious temporary experience in T5, we hope will give travelers just a taste and glimpse of what this brand has to offer. Created by Don Julio González in 2002 in the heart of Jalisco Mexico to mark 60 years of generational tequila-making, its heritage and craft speak for itself,” said Cowan.

Discussing the growing consumer trend for tequila, Cowan explained, “We’ve really seen our tequila business ramping up over the last couple of years, as the drink has gained popularity in key US cities and is now growing around the world. Tequila is now as important to Diageo as our vodka portfolio, in terms of growth potential. We want to internationalize tequila, and global travel has a key role; it’s the vehicle to grow into new markets.”

There will be further global iterations of the Tequila Don Julio 1942 activation. “We feel the UK market is very important and is a testament to our expansion plans into Europe. But we also see pop-ups in APAC, India, Dubai and Hainan. As well as doubling down on the Americas,” he added.

Described as the pinnacle of Diageo’s premiumization strategy for the tequila category, it is evident that consumers want exclusives – and that’s why the company believes Don Julio 1942 is capturing the best opportunity for appealing discerning tequila drinkers.

“We will market the full Don Julio range of tequilas with the focus on Don Julio 1942 – the other products are also available in duty free. We want the customer’s aspiration to be about 1942, the luxury product where taste and profile make a real statement – and that’s reflected in the highend destination pop-up experience. £180 is nicely premium but it’s not out of reach for recruiting tequila drinkers,” said Cowan.

paigns and variants coming to brands like Smirnoff and Baileys, the travel retail marketplace can expect to see more exciting activations for these core brands that consumers know and love, alongside the luxury portfolio.”

Local, digital

From the immersive whisky boutique in Hainan to the “What’s Your Whisky” app, Diageo recognizes the need for spirits brands to offer a more tailored approach to localized digital marketing, which feeds into the overarching theme for premiumization within the group’s portfolio of brands.

“Digital is such an exciting space for travel retail, from the signage and displays

in airports and stores to the apps and online platforms where we can show up to shop before, during, and after travel. We are embracing an omnichannel approach for our brands to meet the needs and excite those from all regions and at all stages of digital engagement,” shares Pugh Williams.

Digital offers an array of enhancements for Diageo’s Global Travel activations program. “In APAC, for example, consumers have higher expectations around digital experiences, and this is where, for moments like Lunar New Year, we activated across travel apps and in-store for an end-to-end consumer interaction from the beginning to the end of their travels,” he continues.

No- and low-alcohol category

Meanwhile, via more recent global travel brand activations, Pugh Williams cites a focus on consumer engagement initiatives that are driving new brand messaging for the no-and low-alcohol category.

“Tanqueray Sevilla 0.0% was launched across Europe this summer. It is bringing choice and inspiration to the nonalcoholic space. We want consumers to ‘Holiday Magnificently,’ and this was a new campaign this year with aspirational ad placements across key sites in London and Madrid,” he says.

Diageo believes in positive drinking and alcohol being consumed in moderation, which according to Pugh Williams, “can be achieved with concerted aspirational campaigns and choice.”

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DJ Kayper takes to the decks at Heathrow Airport to launch the new luxury Tequila Don Julio 1942 pop-up From left: Eve Fifer, Commercial Director for the UK at World Duty Free; Kevin Nichols, Global Head Tequila Don Julio 1942 – Luxury Portfolio and Experiential at Diageo; Nico Wyckaert, Head of Marketing White Spirits, Diageo Global Travel; DJ Kayper; Andrew Cowan, Managing Director of Global Travel Retail; Nancy Stewart, Heathrow Head of Category Duty Free, Luxury and High Street and Fraser Brown, Retail Director at Heathrow Airport

Drum roll for rum

After years of effort establishing itself as a liquid with complex flavor that offers much more than a vacation party drink, rum is ready for its moment in the travel retail spotlight. Global Travel Retail Magazine talks to brand owners about the category’s momentum

by ALISON FARRINGTON

While rum has traditionally lagged behind other more popular spirits in travel retail, it is beginning to live up to its market potential. According to IWSR, global premiumand-above rum volumes rose by a CAGR of 8% between 2014 and 2019, outpaced slightly by value, which rose by 9% over the same period. It is forecast to be the fastest-growing spirits category in coming years, expanding by a CAGR of more than 13% between 2022 and 2027. The rum category is booming.

As consumers look for more premium purchases on their travels, the trend of drinking less, but drinking better is having a positive effect on rum sales. Recent mergers and acquisitions are driving interest in niche or independent spirits brands, which in turn is driving market demand for premiumization in the spirits sector — with a big focus on rum (as well as tequila). In October 2022, BrownForman announced it would purchase Diplomático Rum for US$725 million; then in January 2023, Diageo agreed to acquire Philippine rum brand Don Papa for an initial US$281.5 million.

Super premium growth

Rum is seeing increasing demand in the travel retail market as travelers seek more

than just deals, Brown-Forman Marketing Director GTR Stéphane Morizet affirms. Instead, traveling consumers crave meaningful experiences and education. “Brands and retailers alike are adjusting to the trend of consumers becoming connoisseurs, delving deep into the brands they invest in. This desire for expertise applies particularly to rum, which is an unfamiliar territory for many,” he explains.

Morizet points out this trend bolsters market share, stating, “Our recent acquisition, Ron Diplomático, with its robust brand heritage, has significantly enriched our super premium portfolio.”

Cocktail culture continues to drive growth in the travel retail market, making consumers more experimental and curious about new premium spirits. Morizet says, “There is also a paradigm shift: rum's image has evolved from a spirit predominantly used for mixing to a beverage that is also enjoyed neat, putting it on a par with spirits such as cognac and scotch. The changing perception of rum has spurred the rise of premium expressions.”

Morizet acknowledges Brown-Forman’s commitment to leveraging innovation and new product development, with the clear goal of propelling growth in the premium segment. “By offering discerning travelers exceptional beverages, we provide a gateway to memorable

experiences during their journeys. This approach ensures that our offerings resonate not only in terms of quality, but also through meaningful and engaging interactions,” he continues.

Meaningful engagement

After a robust 2022, exciting travel retail initiatives are driving sales across the Brown-Forman portfolio this year. According to Morizet, passenger numbers are approaching pre-pandemic levels and the customer response to products and activations has been remarkable. “With its exceptional quality and compelling brand values, Ron Diplomático will be a standout performer, and we are eager to see its successes,” he shares.

Compared to 2019, the market share of Ron Diplomático has now doubled, and the brand grew in value by over 200% in the premium plus price segment, reports IWSR.

Within duty free shopping, Morizet sees a growing inclination to step beyond conventional purchasing patterns. “The realm of rum is captivating, offering an element of fascination that resonates with travelers,” he says. “For our new entry Ron Diplomático, we are committed to delivering meaningful engagements, imparting knowledge, and introducing enthusiasts to the world of sipping rums.”

134 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Rum Report

Since 2019, sales of Brown-Forman-acquired Diplomático Rum have increased +200%

Captivating the attention of travelers is of utmost importance. This is accomplished by creating differentiation, embracing innovation and introducing disruptive elements both in product offerings and brand activations. Doing this effectively and driving the category's prominence requires ongoing collaboration with retailers and airports.

“The growth potential for premium rum within this channel is extremely promising, and it is excellent for showcasing prestige and premium offerings,” states Morizet. According to him, the traveler demographic’s curiosity aligns with the possibilities of exploration of this category and Ron Diplomático stands to capitalize on this potential.

Rum connoisseurs

Flor de Caña GTR Manager Rodrigo Bazan believes consumers are “looking to drink less, but of higher quality, and they are looking for something new and unique.” These trends resonate for the fair-trade rum brand from Nicaragua that specializes in premium aged rums in the travel retail market. “We have an amazing portfolio of premium rums that caters to brown spirits enthusiasts seeking an elevated sipping experience,” says Bazan. Some of these products include Flor de Caña 19-Year Rum, Flor de Caña Volcanic Bourbon Cask and Flor de Caña V Generaciones 30-Year Rum.

For Flor de Caña, sampling has been a key factor in conquering new customers, according to Bazan, because once consumers taste the liquid, conversion soon follows. “Our authentic 130-year family story has also been a clear differentiating element of the brand marketing, as it reflects our century-old rum-making tradition, as well as our commitment to sustainable practices,” he explains. “Today, we’re proud to be the world’s first carbon neutral and fair-trade certified spirit. Our liquid combined with our unique brand story has been a winning formula.”

Bazan also considers travel retail to be the best medium for selling premium rum around the world. “With premiumization on the rise, the stories told at our travel retail partner stores can have major impacts for the brand. We see a lot of potential in working with partners to continue growing our brand globally in the coming years,” he says.

Appleton Estate experience

Also capitalizing on the rum renaissance, Campari Group GTR opened a new permanent boutique experience for its Appleton Estate Jamaica rum earlier this year. It is located within the Dufry-owned store at Sangster International Airport in Montego Bay.

The Appleton Estate showcase is the largest travel retail activation in the brand’s history. Visitors to the space are

guided through a multi-sensorial, interactive brand experience that educates and engages customers about the legend and craft of the island’s famous rum.

Here, the focus is also on premium releases; the Ruby Anniversary Edition was a key promotion for the opening, with digital touchpoints that helped customers discover the limited-edition’s blend notes of five rare rums, each aged for a minimum of 35 years, selected from the Appleton Estate’s 200,000+ barrels stock.

“If there’s one clear trend in our industry, it is that in developed markets consumers tend to drink less, but drink better,” said Bob Kunze-Concewitz, CEO at Campari Group, as published by the Financial Times.

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Campari Group and Dufry have collaborated for an interactive Appleton Rum space in Jamaica’s Sangster Airport Flor de Caña presents exclusive aged rums in travel retail

Rum Report

Rodrigo Bazan says Flor de Caña is proud to be the world’s first carbon neutral and fair-trade certified spirit

Premium

growth

by ALISON FARRINGTON

According to recent data from IWSR Drinks Market Analysis, wine was a leading growth category in the US last year for premium alcohol. While total volumes of wine declined slightly in 2022 (-2%), the premium-and-above segment grew +6% compared to the previous year, and that’s good news for wines in the travel retail channel, where premium and above are the rulers. Fueled by prosecco, sparkling wine achieved its 21st consecutive year of both volume and value gains. Wine has sometimes struggled to be accepted in the travel retail channel, but

this is changing, in part because of the consumer trend toward premium and above wines, which means the shelf space makes more sense to the retailer, and also because of the recognition that a superior bottle of wine makes an excellent gift, to others or to oneself.

Treasury and Penfolds: luxury perception

Treasury Wine Estates-owned brand Penfolds has long championed travel retail, with several permanent collections in the channel including the Penfolds Bin series, the contemporary Superblend and the

Grange, which all have global distribution. Penfolds also offers travel exclusives such as the Cellar Reserve range, and limited editions such as the Bin 389 Travel Retail Gift Pack.

Penfolds has a clear premiumization strategy, which General Manager Michael Jackson says is helping to drive the way the wine category is perceived globally.

“We are working towards becoming the luxury icon wine of choice among travelers by constantly reinforcing the brand’s exceptional wine offerings, digital-first mindset, and in-store experiences that truly venture beyond,” he says.

The launch of the Penfolds Digital Sommelier has been a boost to the company’s profile in the channel. User-friendly and engaging, the app was conceived to guide travelers in their wine shopping journey, to inspire discovery and encourage them to trade up. “The Penfolds Digital Sommelier leads travelers through a personalized questionnaire that helps them discover a Penfolds match tailored to their palate, occasion, and budget,” says Jackson. “We saw fantastic results after its debut in June 2023 at T Galleria by DFS, Macau, with double-digit growth in user engagement, foot traffic, basket size, and sales reported. We are excited to bring this experience to even more travelers in other locations.”

138 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 Wine Report

Wine is a growing category in travel retail, and these companies are working hard on premiumization strategies, TR exclusives and promotions to ensure it gets the attention it deserves

Penfolds research shows strong traveler demand for the wine category globally. The EU and Americas have already shown a rebound, and in Asia wine is resurging at key locations such as Singapore and Macau Penfolds Digital Sommelier helps shoppers find their perfect wine choices at T Galleria by DFS, Macau

Tasting and testing

Jackson says the company’s research underscores the trend for more luxury wine purchases in travel retail. “A significant proportion of upcoming wine shoppers actively engage in pre-trip wine research, with 68% seeking information on duty free websites and 51% through social media. It is also interesting to see that these percentages are even higher for Chinese shoppers, frequent flyers, and those traveling in premium cabins.”

The wine category has great potential as a dynamic testing ground for innovation, according to Jackson, who states that Penfolds wants to challenge the status quo regarding how luxury wine brands behave. The company’s recently launched Penfolds Collection 2023 addresses that challenge. It features wines from four different countries, spanning variety, vineyard, country and time. “Building on our experimentation with countryof-origin wines, the Penfolds house style is expressed through the best viticultural regions across Australia, USA, France and now China. This is a huge milestone for us and rips up the rules of the traditional wine world,”

This year’s collection features the inaugural release from Penfold’s own vineyards in China, the Chinese Penfolds Winemaking Trial 521 Cabernet Sauvignon Marselan 2021. This wine combines Cabernet Sauvignon Shangri-la and Marselan from Ningxia, China. The other wines in the collection are Penfolds Bin 707 Cabernet Sauvignon 2021; Bin 21 Barossa Valley Grenache 2022; Penfolds II Cabernet Sauvignon Merlot MV; Quantum; and Penfolds Oakville Napa Valley Cabernet Sauvignon 2020.

Bottega: giving back to the land

The metallic bottles of Bottega Prosecco may have become iconic and a standout on store shelves, but company President Sandro Bottega is quick to share the credit, saying the success of the subcategory is thanks to the commitment of many wineries.

Premiumization is an important mission for this Italian sparkling wine specialist. “The selection of specific vineyards means our grapes have cultivation costs higher than Champagne,” Bottega says. “We aim to communicate the value of our

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For Sandro Bottega the commitment to sustainability is important not only for ecology’s sake, though he says one must give back to the earth, but also for the sake of the wine itself

wine production, careful selection of the grapes and the fact that our Prosecco has a shelf life of over five years.”

For Bottega, premiumization automatically includes sustainability, along with authenticity and transparency of the heritage. The company has made many commitments to sustainability, trying to maintain a medium-long term vision that can lead to real and concrete results.

“This sensitivity [to sustainability] is actually a duty for a winery that draws wealth from the land, and which therefore is required to give something back to the land, so that the natural cycle continues to take place. Having organic farming criteria in our vineyards is key,” says Bottega. “Innovation has always pushed the world of wine to renew itself, also in the name of biodiversity.” He adds that he is seeing many Italian wineries and associations investing in research on native grape varieties, which represents an important ecological heritage.

For future trends, Bottega believes low- and no-alcohol wines will become more relevant in the market, though currently they’re still considered niche. “We produce Bottega 0 Rosè and Bottega 0 White, both without alcohol; they offer the same consumption rituality of the sparkling wines,” he says.

Bottega’s portfolio also includes also Elixir 0 Bottega, a non-alcoholic “amaro.” The product recalls the great tradition of herbal bitter liqueurs, maintaining the aromatic complexity and fascination, despite having zero alcohol content. In the low-alcohol category Bottega has launched the pre-mixed cocktail Lemon Spritz, available in cans and bottle.

González Byass is on trend

González Byass is also a family of wine producers committed to caring for their environment, according to Violaine Creuzé, the winery’s Global Duty Free and Travel Retail Director. “Our sustainable culture promotes working towards being better in the future,” she says. “‘Huerta collaborativa’ is one of our proudest initiatives and promotes growth in Casablanca by providing local farmers land to grow their crops.”

Creuzé is pleased to see the wine category growing and becoming more relevant in travel retail, despite still being small compared to spirits. She sees the growth of wine as the result of some current trends, including customers who are becoming ever more knowledgeable about fine wines, and the interest in wines

that are grown organically and sustainably. “People are drinking less but they are upgrading their consumption,” she says.

“We can see more interest for top organic wines with limited production, or wines with a special characteristic like a blend with a prephyloxera grape, for example our Finca Moncloa wine. Consumer knowledge on fine wines is increasing.”

The company strategically places higher-value wines in the GTR channel.

“We do this by introducing exclusive ranges such as the Edición Limitada in Beronia, the Singular Estate Wines or our entire range of sherry,” Creuzé says. “Due to our Jerez origin, we are working to generate a link with this heritage through our history with the sherry cask, for example, which brings something unique to our wines.”

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Wine Report

Despite still being small compared to spirits, the growth of the wine category is partly because consumers are becoming more knowledgeable about fine wines The company strategically places higher-value wines in the GTR channel. “We do this by introducing exclusive ranges such as the Edición Limitada in Beronia, the Singular Estate Wines or our entire range of sherry

www.flywithwine.com ® World Class Travel Products that Enhance the Duty Free & Travel Retail Shopper Experience

Wine alliance

Together with five other family wineries sharing the same values — Albert Bichot, Cono Sur, Famille Perrin, González Byass, Masi and Symington — González Byass has been developing a great partnership with the creation of the Travel Retail Fine Wine Alliance (TRFWA).

“TRFWA was created to encourage the contribution that renowned wine families can, in conjunction, bring to the travel retail environment,” says Creuzé. “The six members believe that sharing experiences between them is not only of great value to their businesses but most importantly to the improvement of experience that new wine lovers look for in a fast-moving travel retail world.”

No and low

The pandemic accelerated a number of consumer trends, including a stronger focus on health. This has inspired an increase in the burgeoning low- and no-alcohol category, and also a renewed focus on spending time with friends and family. “People are changing their habits and looking to socialize and start drinking earlier in the day,” says Creuzé. “No and low-alcohol products are well suited to this lower-energy and earlier consumption moments.”

González Byass is already working on products in this segment, such as its Vilarnau 0.0%, which also serves another of current trend on the rise, that of sparkling wines. “We are also expanding on the aperitif moment with the launch of Croft Twist, a 5.5% fino spritz. With these, we are entering a new era in which consumers are increasingly demanding this type of low-alcoholic beverages,” she says.

Accolade offers premium on promotion

To celebrate 170 years of the Hardys brand, Accolade has recently launched a special release travel retail-exclusive wine. “Hardys The Eight 2016 showcases a unique Australian wine, a harmonious and powerful Cabernet Sauvignon and Shiraz blend made from select barrels, combining exceptional parcels from esteemed vineyards in Frankland River, McLaren Vale, and Coonawarr,” says Jeff Bond, Accolade Wines Senior Regional Manager – EMEA Global Travel Retail.

In airports Accolade premium ranges from Hardys and Flagstone continue to deliver, and Bond says these brands have seen consistent growth, especially in the last year since travelers returned.

While the company distributes clearly premium offerings, promotions on price

are a key sales tool for Accolade Wines, says Bond. “We are seeing increased demand for case deals on ferries, which is a big driver,” he says. “Our Hardys and Jam Shed brands are particularly popular and now that the duty increases in the UK are in effect, the percentage saving is even greater than before. We saw significant growth this summer.”

Bond feels that using a lower price point to give access to good quality wine, especially at a lower price relative to spirits, means consumers will allow themselves to try new brands without fearing disappointment. He offers the example of Wise Wolf. “This is a unique proposition that offers a great wine in a fully recycled bottle that consumers are loving. The growth potential for wine is huge when consumers are watching their spending but want to treat themselves in duty free,” he says.

Accolade Wines prides itself on innovating in the sustainability space. “Wise Wolf is our lead brand, but we also have magnums, which are 1.5-liter pouched wines and our flat bottle rPET, which has gained momentum with airlines and cruise operators this year,” adds Bond.

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Accolade’s Wise Wolf is a leader in sustainability, with its fully recyclable bottle

Wine Report

DISCOVER THE CLEAR SMOOTHNESS OF JALISCO'S HIGHLANDS Inquiries: Patrick Nilson Haleybrooke International p.nilson@haleybrooke.com

1904

Since

INDEPENDENT BUT GLOBALLY COMPETITIVE

While the company’s focus continues to be on innovations within its two global brands The King and Corset, it is also developing alternative NGP products and eco-friendly products, to be launched in 2023 and 2024

KT International COO

While KT International (KTI) now has a sizeable global footprint, the company must still compete with the tobacco giants for shelf space in a high-cost environment. Despite this, KTI is seeing some real successes in the TR channel, including new listings in several Dufry-operated airports. “We are currently in seven Dufry airports, with the latest being Antalya and Istanbul Sbiha Gokcen. We will soon be entering the major Spanish airports,” says Stuart Buchanan, COO, KTI. “It is very encouraging to see Dufry, a global player in travel retail, adopting a positive stance on allowing smaller independent players the chance to showcase their brands in prime locations globally. We see this as a very positive move not only for leading the travel retail industry but also in giving consumers more value through choice.

“As an independent manufacturer we have been encouraged further by the recent developments with certain opera-

tors in Western Europe as our brands get listed in more international airports. We see this as a sign of not only our growing corporate reputation but also driven by our purpose-built portfolio offering quality international brands at accessible price points.”

Innovation and differentiation

Diversifying the range of tobacco brands offered by retailers benefits both consumers and the industry as a whole, according to Buchanan. “Diversity provides consumers with more choices, supports smaller businesses, encourages innovation, and helps retailers adapt to changing consumer preferences,” he says. “Embracing other brands alongside big tobacco brands allows retailers to create a more vibrant and dynamic market environment.” This market provides consumers with more choices and allows them to explore different options, he says.

144 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023

Spirits & Tobacco

Stuart Buchanan discusses the company’s expanded availability in major TR retailers and how its model of dealing directly with customers helps KTI deliver what consumers are looking for in travel retail

by WENDY MORLEY

Stuart Buchanan, COO, KTI

“Some consumers may be looking for niche or specialty tobacco products that offer unique flavors, blends, or packaging experiences.”

This principle applies across all categories, not only tobacco, says Buchanan. “By giving these smaller brands an opportunity, retailers can tap into the potential for new and exciting offerings, which can help differentiate their stores and attract a diverse customer base. Working with smaller or niche brands can lead to innovative marketing campaigns, joint promotions, and mutually beneficial relationships. These collaborations can generate excitement and interest among consumers, as well as create a sense of novelty and exclusivity that can drive sales.”

Competitive advantage to challenges

Tobacco products are subject to various regulations, and these regulations vary significantly from one country or region

to the next. This creates challenges for tobacco companies operating in the global travel retail sector, as they need to navigate and comply with a complex web of regulations across different jurisdictions.

“Dealing directly with our partners across multiple cultures as well as our own internal diversity we believe is a major contributing factor to our success in this area,” says Buchanan. “It has fostered a climate of collaboration within our own teams and with our partners, which ensures that we constantly listen to customer needs and respond with appropriate actions or products. We furthermore produce all our global demand in one factory, which ensures that not only do we have global consistency in our product, but we are very quick to transfer product improvements or innovations across multiple markets. This combination of diversity, flexibility and quick response we see as our main competitive advantage.”

Innovation and diversification

The tobacco category in TR has reached a level of saturation in many markets, particularly in developed countries where smoking rates have been declining, according to Buchanan. “As awareness of health risks and regulatory measures increase, there is a growing decline in demand for tobacco products. This declining demand poses challenges for the future growth of the tobacco category. To adapt to changing market dynamics, tobacco companies are likely to continue investing in innovation and diversification particularly in the NGP sector.”

“The KTI strategy on NGP products has until now been a wait-and-see approach,” says Buchanan. “This is due to a lack of clarity on the regulatory and excise mid term horizon.” The company believes that the perceived health benefits and risks, particularly in disposable vaping products, are now becoming more recognized, and a regulatory/ excise framework is now starting to emerge. “We see a proper regulatory environment as essential for these categories and for this reason we will be entering the NGP product space in late 2023/2024,” says Buchanan.

Two-brand focus, but more to come

Buchanan says as a producer KTI consciously focuses on two global brands, The King and Corset. “Globally The King is our biggest volume brand. With Corset, our world’s first shell pack, a constant pipeline of taste/flavour and filtration innovations has seen the brand establish itself as a true global contender for consumers wanting variety, premium quality and differentiation from the mass offer.”

Besides entering the NGP product space Buchanan says the company continues to invest in the expansion of its traditional portfolio, with new formats and flavors. “We believe our portfolio is uniquely suited to the global travel retail channel, where innovation is a key driver. We have also a number of new eco-products being developed as a small part of our overall sustainability plan, on which we will have some more exciting news later this year.”

www.gtrmag.com GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 145

KTI is uniquely situated in travel retail, with strong partner relationships plus the ability to react quickly to changing consumer behaviours, innovation and tailored customer promotions

Jack Daniel’s unveils American Single Malt Whiskey pop-up at Changi Airport

Jack Daniel’s American Single Malt is launching a pop-up at Singapore Changi Airport. The experience will showcase the craft behind the whiskey innovation, blazing a new trail that will raise the perception of the spirit. Described as one of the “lighthouses” of the brand’s global launch, the pop-up is a Changi exclusive to Asia. Running until October 12 at Changi Airport T1, it is expected to attract three million passengers during its activation period.

Dreamy Zhou, Senior Manager GTR APAC at BrownForman, says, “We are thrilled to showcase our new take on timeless single malt traditions through this premium immersive pop-up. With its captivating digital displays and elegant ambiance, travelers will have the chance to savor the rich and complex flavors of our American Single Malt, while learning about the fascinating story behind it. We thank our partners for the great cooperation. Through this, we are able to enrich the journey for interested consumers at Changi Airport in such a special way.”

Jeff Jeong, Managing Director at Lotte Duty Free Singapore, adds, “Jack Daniel’s American Single Malt stands as a testament to ground-breaking innovation, embodying more than just a spirit; it presents itself as an immersive experience that beckons you into the artistry within each sip. Our heartfelt gratitude extends to our esteemed partner, BrownForman, for joining us on this remarkable odyssey of craftsmanship and luxury.”

To mark the launch of Jack Daniel's American Single Malt, Brown-Forman is hosting over 40 activations at airports around the world, reaching an estimated 13 million shoppers and offering 60,000 tastings. These activations demonstrate the brand's dedication to delivering exceptional experiences to its global audience.

Bacardi aims for the skies with launch of superpremium Patrón El Cielo

Bacardi Global Travel Retail’s ambition to super-charge the tequila category in travel retail is accelerating with the release of Patrón El Cielo.

With the prestige segment of tequilas forecast to double in size by 2025, according to IWSR, Patrón El Cielo builds on the pioneering spirit of Patrón Tequila. With current launches across IMEA, Europe, APAC and the Americas, it will engage consumers in new tequila markets in travel retail.

Translating to “the sky” in Spanish, Patrón El Cielo epitomizes how Patrón Tequila is redefining category expectations by being the first to launch an unaged, four-times distilled silver tequila. The multi-layered distillation process used is said to achieve a perfectly balanced complexity.

“With the rebound in leisure travel, there is a wonderful sense of excitement among spirits shoppers looking for new discoveries on their travels and innovation in their favorite super-premium and prestige categories, driven by the surge in elevated cocktail-making.

“The tequila category is on fire right now, with +9% CAGR predicted over the next three years. Our ambitions for Patrón are huge and we will continue super-charging the category with innovations that make consumers fall in love with our tequila portfolio. The unique stand out in the prestige price tier created by Patrón El Cielo is a great example of how we intend to deliver continued growth for our retail partners,” says Ignacio Vazquez, Global Head of Marketing at Bacardi Global Travel Retail.

Tequila is the fastest growing spirits category globally, expected to reach US$26 billion in sales by 2027.

146 GLOBAL TRAVEL RETAIL MAGAZINE OCTOBER 2023 SPIRITS NEWS

The pop-up is running until October 12 at the airport’s T1; it is expected to attract three million passengers Patrón El Cielo builds on the pioneering spirit of Patrón Tequila; it is re-defining category expectations by being the first to launch an unaged, fourtimes distilled silver tequila

RENOVATION TIMELINES

Nineveh Terminal Baghdad Arrivals

Mar. 2018

Nineveh Terminal Baghdad Departures

Dec. 2018

Babylon Terminal Baghdad Arrivals

Nov. 2019

Basra Arrivals

Feb. 2021

Downtown Duty Free Store Baghdad (Rasafa)

May 2022

Samara Terminal Baghdad Arrivals

Dec. 2022

Samara Terminal Baghdad Departures

Dec. 2022

Iraq Duty Free stores have been upgraded to a very high ﬁnish and international standards providing more space to o er a broader spectrum of products to enhance the pre ﬂight shoppinge experience for our travelers at all the major international Iraqi airports.

Travelers’ Gateway To A Great Shopping Experience

YSLBEAUTY.COM AUSTIN BUTLER THE NEW MASCULINE REFILLABLE FRAGRANCE

Global Travel Retail Magazine TFWA WE October 2023

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Newer, bigger and better than ever

WHAT’S INSIDE 20

Top Stories

14 The main event

24 Travel retail revolution

62 The big picture

78 Chatterbox in the making

Features

RETAILER NEWS

20 Never standing still

28 Competitive future

32 Priceless investments

34 Full steam ahead

INDIA UPDATE

ASSOCIATION NEWS

CARIBBEAN OVERVIEW

SUSTAINABILITY

BEAUTY

MAXIMAL COLOR, MINIMAL FEEL

Jewelry Report

TOYS

CONFECTIONERY

RUM REPORT

WINE REPORT

SPIRITS

The main event

Top categories

Millennium Millionaire and Finest Surprise

40th anniversary promotions

The lead-up and anniversary itself

54 years in industry, 40 with Dubai Duty Free

The next 40 years

Never standing still

in Doha in

Always something new

Ahead of trends

Qatar Airways Group

Avios rewards

Sustainability

Being the best

Travel retail revolution

Traveler mix and nextgen personalization

The nature of travel retail and ESG integration

Competitive future

Customers returning

Rapid rise

TELLS TIME ALL OVER THE WORLD

Focus on beauty

Digital pioneer

Continued challenges

Customer experience

Priceless investments

Increased traffic

New additions

Full steam AHEAD

Industry partnerships

Regional collaboration

Cruise retail

Valuable time

Blazing trails

Conscious retail

Carbon neutrality

Diverse business models

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Time Out Market

Asia Pacific

Desires and expectations

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Bringing joy

New space in Abu Dhabi

New branding

Value for customers

Digital progression

NEW GM, TR SALES AND SERVICES

THE #1 SELLING CANADIAN VODKA

SECOND ACT

Full steam ahead