Latest posts by Martin Moodie (see all)
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Traversing the globe as I do (if this is Thursday it must be Miami; if it’s Sunday it must be Tokyo – both in fact true this week), I often feel as if my life is constantly turning 360 degrees. Last night it did, though in this case it was spelled 3Sixty and the turn in question related to a journalistic exclusive, not my travels.
And so the purpose of our recent ‘teaser’ advertising campaign has been revealed. Miami-based DFASS is no longer. 3Sixty (I love the numeric/alpha combination) – together with the tagline ‘Duty Free & More’ – is born.
We’ve been working exclusively on the story for a few months but even I didn’t know the exact nature of the big secret until yesterday, just a few hours before last night’s impressive reveal. The new identity had been kept under stricter security than goods in the DFASS bond and many guests arriving at last night’s function were openly speculating that the subject must be a corporate acquisition – or even a sale to another party.
DFASS Founder Benny Klepach started in the business the same year as I did – 1987. I’ve known him all those years and watched his journey with much interest. He started off with a single duty free account servicing a Peruvian airline and despite the familiar bumps along the road (and in his case, in the air) that every entrepreneur experiences, he’s never looked back.
Now the world’s biggest inflight retailer, DFASS… sorry, 3Sixty… is also a fast-growing airport force. In 2017 the company ranked 18th in the annual Moodie Davitt ranking of the world’s top 25 travel retailers, with group sales of around US$686 million. 3Sixty is in the big league.
But, again like all entrepreneurs, Benny Klepach constantly thinks about the survival of what he has created. I am sure those who own businesses (and I speak from experience) have more sleepless nights than paid executives. Benny was no exception, knowing that the very model that had brought DFASS such success could also spell its demise.
Airline retail, a channel built on the increasingly archaic practice of often disinterested crew wheeling meal-trolley-like carts up and down the aisles purveying a limited range of goods, had been losing share to the burgeoning airport shopping world for years. But competition from e-commerce loomed as a far greater menace.
Benny knew that DFASS, as it was, had to embrace the digital age. Not just to survive but in fact to seize what he saw as an incredible opportunity. Airlines, so often cast as the poor relations of travel retail, actually held all the aces, he reckoned. They, after all, carried the passengers, and had a treasure trove of consumer data that airport retailers could only dream about. The key lay in marrying that data, those passengers and the product offer.
The answer was not the inflight trolley but an omni-channel solution, combining the physical and digital worlds and bringing a vastly enhanced range of great products and brands into play. Fulfilment onboard, fulfilment (in some cases) to the consumer’s home. Stop relying on impulse purchases and tap into planned ones instead via knowledge of who would be travelling, when they would be travelling, and knowing what they might want.
Enter Kian Gould, owner of German company AOE and wunderkind of travel retail e-commerce and disruption. Kian has played a key role in the crafting of the DFASS, Singapore Airlines and SATS joint venture, now close to finalisation, that will provide a hugely ambitious omni-channel travel retail offer not just from the airline but eventually from other partners. A whole new marketplace, to use the popular modern parlance.
But it wasn’t just about e-commerce and digital. DFASS had to reinvent itself from the ground up (literally as well as metaphorically). Its culture had to change from the entrepreneur’s passion- and relationship-driven approach, which had served it so well, to an enterprise that also adopted big-company disciplines and was properly structured for growth. Enter (in mid-2017) Roberto Graziani, the former leader of The Nuance Group and The Shilla Duty Free’s international business as Executive Vice Chairman, charged with transitioning the company and the team into a bold new force.
Last night’s reveal of the new identity was a culmination of both processes. The name and tagline – perfectly pitched, beautifully executed – resonate strongly for the very different travel retail world that is taking shape as we near the third decade of the 21st century.
Yesterday afternoon before the evening’s celebrations Benny Klepach told me at group HQ (pictured below) that he was as committed as ever to his entrepreneurial enterprise. “Thank God I have my health. And I’m very committed to working. I’m not afraid of working,” he said. “And I’m not afraid of re-setting the benchmarks of the industry. I’ve done it in inflight and I’m going to do it now in digital.”
Last night he spoke with passion and no little emotion about his latest mission. “Duty free is in the next generation change and we are now at a crossing point and I have two options. One, to keep the company as it is and try to compete to the best of our possibilities, or two, move up a gear, developing faster, to make us an industry leader.” He has chosen the second option. The house that Benny Klepach built has indeed come 3Sixty.
[Above: It was nice to read the fruits of my late-night labours on the big desktop over breakfast at the Courtyard Marriott in Miami. Note to Peter Marshall: It’s amazing what ‘fawning, lazy, unchallenging trade press, who do little more than replicate press releases’ get through isn’t it?]