Feeling the buzz – and appplying the Max factor

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Martin Moodie
Martin Moodie is the Founder & Chairman of The Moodie Report.

You can feel it. This time you can really feel it. The much-touted ‘recovery’ of the aviation, tourism and travel retail sectors is well and truly under way across geographies, channels, categories and companies. Yes, there will be setbacks. Yes, there will be new COVID variants. Yes, the supply chain is a nightmare. But the world is on the move and that momentum will surely only accelerate in the months ahead.

You sense (and see) it in the results of retailers (Lagardère Travel Retail, Dufry, Gebr. Heinemann) and their related comments. You read it in the numbers from suppliers (The Estée Lauder Companies, L’Oréal, Pernod Ricard) even despite the war-related setbacks in Russia and Ukraine and the hiatus in China caused by recent COVID outbreaks, lockdowns and supply chain difficulties. And you witness it with a welter of increasingly encouraging air traffic figures.

ACI Europe, for example, announced today that its airports posted a two-year high in March in terms of recovering air passenger traffic, down a comparatively modest -34.1% on pre-pandemic March 2019 numbers.

You don’t see it but you sense it in the more intangible dynamic of ‘buzz’. Enthusiasm and optimism instead of concern and fear among those one speaks to. Executives talking up, not down, travel retail. Job ad after job ad for roles in the channel. Food & beverage providers lauding their latest concepts and openings on LinkedIn. Senior executives on tours of world locations.

And events. Suddenly the activations we are writing about are not confined to Hainan. There are brilliantly compelling initiatives going on in the Americas (L’Oréal Travel Retail with DFS Group in opening the first Valentino Beauty makeup stores in Americas travel retail at JFK and San Francisco International airports); and in Australia (local niche fragrance brand Goldfield & Banks with Dufry at Melbourne Airport).

The flagship DFS and L’Oréal Travel Retail boutiques showcase Valentino Beauty’s hero makeup lines and highlight the ‘Cool, Colour, Couture’ ethos of Valentino Creative Director Pierpaolo Piccioli
(Left to right) Goldfield & Banks Founder & CEO Dimitri Weber, Dufry General Manager Australia Philippe Boyer and Melbourne Airport Chief of Commercial – Property & Retail Andrew Gardiner address guests at the launch

The same is happening in the Middle East (Qatar Duty Free’s non-stop round of store openings and brand activations; Nestlé International Travel Retail with Dubai Duty Free in the launch of the retailer-exclusive KitKat Arabic Coffee); and in the UK (Mondelez World Travel Retail’s superb concept of the Cadbury Football Club global tour in travel retail, launched with World Duty Free at London Stansted Airport).

And, at last, you are seeing buzz, oodles of it, in non-Hainan Asia. Nowhere more so than in a resurgent Singapore Changi Airport, a great global gateway that has been horribly moribund for much of the past 27 months but which is on an irresitible resurgence.

Passenger traffic at Changi Airport spiked from under 15% of pre-Covid levels in February to close to 40% in the last few days. Ok, that’s a long way off 2019 but what matters here is the trajectory, as steep as those Singapore Airlines planes now taking off in much greater numbers from Changi.

This week Changi Airport held its first in-person airline awards ceremony after a two-year hiatus, attracting over 120 representatives from 71 airlines spanning 36 countries. An important event. And an indicative one. Indicative of resilience (in a nice touch Changi Airport Group presented 25 airlines which had continued to operate from Changi throughout the pandemic with a ‘Resilience Award’) and more importantly of confidence.

A key to maximising ‘recovery’ is timing. When do you push the button and say it’s time to invest? I mean really invest. In innovation people, promotions, technology.

Look no further than Changi Airport’s wines, spirits and tobacco retailer Lotte Duty Free. The timing of its contract commencement (9 June) was about as lousy and unlucky as you can get, coinciding with the advent of nearly two years of draconian travel restrictions, border closures and collapsed passenger traffic. But take a glance at our home page in recent days and you’ll see story after story of Lotte Duty Free product launches (The Macallan, Dewar’s, Deanston), several of them exclusive to the retailer or the channel.

And watch the same retailer in its home stronghold of South Korea. I love its ‘Travel is Coming’ message and related shopping promotions. Or in Australia, where today Lotte Duty Free opens its beautiful new downtown store in Sydney, ready to benefit from a boom in travel into and out of the now fully opened market.

Across the ‘pond’ as we Antipodeans like to call the Tasman Sea, things are gearing up also in my native New Zealand as the country’s near total lockout (rather than lockdown) of visitors for the past years gives way to a phased reopening of real momentum and related great emotion.

He pō, he pō. He ao, he ao.
Tākiri mai te ata, korihi te manu,
Ka ao, ka ao, ka awatea.

In the beautifully lyrical language of New Zealand’s indigenous Māori people, that means: As we emerge from the darkness, the rising sun heralds the beautiful melodies of our birdlife and the promise of a new day.

 

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A post shared by Auckland Airport (@aucklandairport)

 

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Timing. Investment. And plenty of imagination. Take  Shiseido Travel Retail’s riveting ‘Nonstop Nars Virtual World’, the brand’s first ever 3D Virtual Animation, launched with China Duty Free Group in Hainan. It’s a delightfully innovative digital platform showcasing Nars’s travel retail-exclusive products and engages with consumers throughout their travelling journey.

Or another personal favourite, as L’Oréal Travel Retail Americas and EMEAI joined forces with Tripadvisor and Dufry to launch an online+offline (O+O) engagement model dubbed ‘Beauty to Go’. The wide-ranging media and data partnership targets UK and US travellers during the recovery period from the COVID-related sector crisis.

Each visitor browsing Tripadvisor to prepare an upcoming trip is targeted by media ads which promote L’Oréal brands in duty free by redirecting them to an exclusive Beauty to Go landing page. Visitors can then access a selection of L’Oréal Travel Retail best-sellers and the Reserve & Collect option on Dufry’s site, or buy at the airport.

L’Oréal Travel Retail EMEAI Managing Director Gianguido Bianco called the partnership “a true game-changer”, underlining that claim by noting “We are now stepping up the game in terms of tailored and connected experiences for our customers, leveraging all beauty engagement touchpoints.”

I also feel the buzz as a business owner. For 27 months, my team and I have received barely a handful of invitations to attend launches, store openings, media conferences or press trips. Suddenly we are inundated with them and we don’t have enough people to cover them all. And that’s without Hainan or Macau, which will surely explode back into full-on activity sooner rather than later (they have been the two brightest spots of recent times) and, yes, Hong Kong, whose moment surely awaits.

And so as we emerge from the darkness, so shall I emerge from Hong Kong. It’s ten months since I took a plane – the ferry ride to and from Discovery Bay is what passes for an overseas trip for me these days – but I’ll set that straight from Saturday on as I head to Qatar, Dubai, Switzerland, Saudi Arabia, Vietnam, Switzerland, The Netherlands, Ireland, the UK and no doubt a few other stops along the way before returning to Hong Kong in three months.

By then, hopefully, they will have scrapped the seven-day hotel quarantine on arrival (at least for residents) policy here. If not, I am just going to have to suck it up every time I travel (Cannes in October, The Trinity Forum in November), amalgamating as many obligations as I can each trip.

I want to see that recovery with my own eyes and not just describe it from my Moodie Davitt Asia Bureau. I want to walk airports and stores again (I will be doing exactly that with Qatar Duty Free at Hamad International Airport and Dubai Duty Free at DXB in coming days) and to let the scenes help me tell the story.

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To conclude on this upbeat note, if you haven’t had the chance yet to read Dermot Davitt’s fine report on Gebr. Heinemann’s recent annual press conference, I urge you to do so. Max Heinemann, the fifth-generation flagbearer of this fine family company, summed up perfectly the sense of renaissance that I have been talking about.

Max Heinemann: “We were comfortable before as an industry, surfing a good wave… now we aim to be the best at what we know and become great at what we might not yet know”

“We want to intentionally make people feel and understand that the industry itself is very much alive. It’s getting more exciting by the day. And there’s still a lot of potential to go,” he said.

And take a listen to this. Two years of struggle, searingly difficult circumstances, self-realisation, determination (and self-determination), adaptability and honesty wrapped into a few spontaneous, beautifully articulated sentences.

“We understood early that we needed to remain positive no matter the challenge. We switched into future mode quickly along the way,” Max said. “We are definitely hit. It has made us humble and sharpened our instincts. The industry now has a more volatile business model.

“It [the pandemic] has opened our eyes to the vast potential that is there. We were comfortable before as an industry, surfing a good wave. Now we have seen the fragility of the business and confirmed the business model and our ability to survive the greatest crisis we have had.

“Now we aim to be the best at what we know and become great at what we might not yet know. It has shown us what we are good at and what we are not yet quite that good at yet. It has shown us that we can build bridges to make the industry a brighter place.”

Wow. With young, articulate, driven leadership like this in place – let’s call it (if you and he will forgive me) the Max factor – Gebr. Heinemann is clearly in good shape to deliver on those lofty pledges.

And so, I believe, is travel retail as a whole. Let’s apply the Max factor and emerge from the darkness. It is time to bathe in the light and to feel the buzz.

A virtual press conference but a powerful combination of digital and physical retail messages. Pictured below are from left Chief Operating Officer Raoul Spanger; Chief Commercial Officer Dr. Dirk Schneider; Head of Corporate Communications Nina Semprecht and CEO Max Heinemann.

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