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If you want to witness first-hand the amazing pulling power of tax free shopping, and a market where virtually every traveller makes a purchase, I urge you to take a trip on an overnight cruise ferry in the Baltic Sea. That’s what I did this week, courtesy of Tallink-Silja, and it was an eye-opening experience.
In the engaging company of Tallink Duty Free Sales Business Development Director Magnus Skjörshammer (above), I travelled from Stockholm to Tallinn via the Aland Islands, then north to Helsinki and back to Stockholm. I got to see at close quarters the incredible drawcard that is travel retail in this region, the vast power that promotions, and especially tastings, play in driving sales here, and intriguingly, the emergence of new consumer groups, such as the Russians and even the Mainland Chinese as shopping forces on board.
The ‘tax free’ message is prominent everywhere, from the terminal before you embark, to the cabin, to the corridors of the ship. When I entered my room on the M/S Victoria on Sunday afternoon in Stockholm, the TV was playing a rolling film of information about the ship’s services, most notably the tax free offer, today’s special promotions and high-class TV ads for brands such as Absolut, Rémy Cointreau, Bottega, Escada, Toblerone and Chocolat Frey.
As we left port we paid a visit to the main store (fragrances & cosmetics occupy their own separate space on board Tallink-Silja’s ships), where we witnessed a shopping frenzy in full flow. Although the crossing to Tallinn takes 14 hours, the first hour is rush hour in the store. The tasting bar was three-deep with guests trying the Cointreaupolitan cocktail, shopping trolleys were being filled with large sharing packs of confectionery (Fazer and Kraft brands are the market leaders) and the queues were backed up into the aisles.
Liquor is the key category, with Swedes’ love for Scotch evident in many baskets (The Famous Grouse is market leader on the Stockholm-Tallinn route), and the heavily branded Absolut zone also doing a strong trade.
Wines too are a proven performer on board, and with 300 references, the range is impressive too. The new ships’ wine range includes Lanson Champagne, a Luxembourg sparkling wine from Bernard Massand, a German Riesling named Geil and a Sicilian red, Gallante. As I can attest after sampling over dinner, all are fine choices, with the Riesling and the sparkling simply superb.
The goal in this category is to encourage passengers to trade up, from prices of less than €10 to the €20 or €30 range – no easy task when wine boxes are about half of all sales.
And even in the wine business, the power of branding is all-important. Novelties such as a bottle with a design from tattoo artist Ed Hardy are flying off the shelves, and the range has even been ‘All Shook Up’ by a wine sold under the Elvis brand. There are other curiosities: a rosé port wine called Porto Cruz has just been introduced, targeting the female market, and it will be fascinating to see if this can change perceptions of a traditional category. Meanwhile, Braastad, a name that carries huge resonance among Norwegians in particular, has just added an organic Cognac to its portfolio.
Our trip also took in the M/S Baltic Princess, the M/S Superstar (Tallinn-Helsinki) and after a mad dash between terminals by taxi, we left for Stockholm on the Symphony, one of the Silja Line ships that joined the Tallink portfolio after the Estonian company’s takeover of Silja in 2006.
As with the M/S Victoria on our first night, here the shopping frenzy was at fever pitch, with the profile dominated by Finns (The Symphony shopping street is pictured above, with the main tax-free store one level below). Whole families came to join what resembled a giant shopping party, virtually everyone had a basket and the promoted products did a roaring trade.
One promoter, Maryan (pictured with Magnus here), was pouring sample glasses of the fine Estonian liqueur, Vana Tallinn, as quickly as they could be made up, and the shelves stocking the item behind her were rapidly emptied under the special offer price of €9.90. Almost everyone who tried bought a bottle, she told me.
And although the ships are close to capacity, this isn’t even the peak season for shopping. That comes in the final quarter, pre-Christmas, as well as around the February ski season, when there are fewer children, more couples, plus (before Christmas) businesspeople buying for their families.
It’s been a trip full of surprise and enlightenment. And it’s reinforced just how ingrained travel retail is in the culture of shoppers in this vital region.