Travel retail exclusives

Special report

Travel retail exclusives

Travel retail exclusive products allow retailers to differentiate their offer and generate in-store excitement. But is enough being done to communicate this advantage, and does the term or concept actually resonate with consumers? In this special report, Jason Holland sought the opinions of a panel of retailers and brands.

What is a travel retail exclusive? The answer may seem obvious to those working in and around the sector. It is a product that customers cannot find in the domestic market or online; only at single or multiple travel retail locations. At best, these products can bring uniqueness to the store and help generate a retail experience that cannot be recreated anywhere else.

But Gebr Heinemann Executive Director Purchasing, Fulfilment & Logistics Kay Spanger (pictured above) questions whether the travelling consumer has a full understanding of the term.

Indeed, Spanger points out, if we were to ask our non-industry friends what travel retail itself is, would they know? Of course, both the concept of what the industry is and products that are exclusive to it can be easily explained in a sentence or two. But the crucial point is that in the instant it takes to notice a travel retail exclusive in-store and decide whether it is of interest or not, that may not be the case.

Instead, Spanger says it is enough to simply call exclusive products exactly that – exclusives. “The consumer likes to hear about exclusive items,” he says. He points to research conducted by Heinemann that shows consumers were more attracted by this simple term than any variant that adds ‘travel retail’, ‘airport shopping’, or similar.

“We must pay attention with wording. Otherwise there will be an erosion of the idea of what an exclusive is.”

– Gebr Heinemann Executive Director Purchasing, Fulfilment & Logistics Kay Spanger

“It is certainly true that the wider understanding of duty free having a concept called travel retail exclusives could pass [customers] by when they make the purchase,” says Dubai Duty Free Senior Vice President – Purchasing Ms. Saba Tahir.

She agrees with Spanger that travellers do understand and are engaged by the term ‘exclusive’, though. “They are interested to buy products which are not available in other markets,” she explains. “They are looking for exclusive products and promotions for their personal needs or as gifts. The impact on sales is higher when the retailers highlight the exclusives.”

“Today’s travel retail exclusives are a part of the traveller’s journey, satisfying much more than just price or convenience.”

– DFS Group Executive Vice President Merchandising Ariel Gentzbourger

Dubai Duty Free's Saba Tahir says size matters in the channel, and not just more compact travel editions. Sometimes bigger is better: 1l liquor bottles as opposed to 70 or 75cl domestically “is a long established travel retail exclusive before the idea as we know it today was conceived”.

All this is not to say that terms such as ‘only at the airport’, ‘travel retail exclusive’, ‘traveller exclusive’ or ‘airport shopping exclusive’ have no impact at all, as Lagardère Travel Retail Fragrances Category Manager Vanina Poquet points out. “They resonate with the consumer as the offer can only be found at the airport,” she explains. “Their specific location within the store helps clients find the travel retail exclusive.”

For Poquet, the language around travel retail exclusives must be clearly communicated to be effective. “It needs to makes our customers understand that this is the last chance they have to find and buy these products before they go home,” she says. “Following customer insights, the industry could harmonise the way this kind of offer is designated.”

In the spotlight: Lagardère's travel retail exclusives area at Rome Fiumicino Airport.

Tahir notes that travel retail exclusives were originally conceived “to offer customers a point of difference from domestic market products” but were still the brands “that they wanted and aspired to own”. She adds: “Over time that can be anything from exclusive flavours, aromas, different sizes, packaging and many more options. Purchasing habits that are based on last-minute essentials (more impulse buying), personal treats, and gifting makes leveraging travel retail exclusives more and more attractive to retailers.

“Add to this the rise of the ’bleisure’ traveller [business travellers combining more leisure into their business trips], higher than average dwell times, and the continued rise in airport passenger traffic, and it is easy to understand the appeal of travel retail exclusives.”

For a retailer, having exclusive products in the assortment creates excitement among customers and builds loyalty. Dubai Duty Free's shopping complex at Dubai International's Concourse C is pictured.

Bringing exclusives to the forefront online

Heinemann’s Spanger says that the language, positioning and marketing of travel retail exclusives is talked about whenever the retailer is planning a new store. But he thinks the importance of travel retail exclusives is not taken seriously enough across the industry.

He envisions a scenario where travel retail exclusives are placed front and centre in the minds of consumers. “When you open the Heinemann website today, for example, you find all the most familiar products and biggest sellers,” he notes. Although good for business, these products are available anywhere, and will not necessarily be cheaper in travel retail stores.

Travel retailers have an opportunity to do something different. Their websites could take on an appearance that reflects the advantage of exclusivity, according to Spanger. “We should first ask the customer if they are ready for surprises – and then five pages of exclusive products could follow [on the website as the customer navigates it].”

That change would require the availability of more exclusive products, but Spanger said the idea is being pushed internally at Heinemann and the improved marketing of exclusives is regarded as a next logical step.

Heinemann's duty free shopping homepage – note the prominence of the travel exclusive products, albeit lower down than the main rotating banner.

Looking at the issue from a brand perspective, Pernod Ricard Global Travel Retail Vice President Marketing Craig Johnson notes two key points from research the company has conducted. “The term ‘airport exclusive’ is more easily understood than the term ‘travel retail exclusive’ and is more appealing as a purchase at the end of a trip as a souvenir or gift,” he states.

“Generally, with airport exclusives consumers expect products to be available in a specific airport only, compared to products carrying the label of ‘duty free exclusives’, which may be globally available to all travellers.”

It is not always economically efficient for a brand to roll out a product to only one location, but airport-specific products offer the opportunity to enhance a feeling of Sense of Place, and create an airport signature. Being able to offer a combination of airport-specific and industry-specific products adds much needed variety and differentiation for an industry battling the rise of high street discounting and cross-border e-commerce shopping.

For the launch of Absolut World, Pernod Ricard created a platform and experience to bring travellers from across the world together.

Nestlé International Travel Retail General Manager Stewart Dryburgh (pictured below) offers a pragmatic viewpoint when asked whether travel retail exclusives resonate with the consumer. “Like all things, some do and some don’t – messages can be confusing and consumers who travel less often may not appreciate the differences between an ‘airport only’ product and a ‘travel retail exclusive’,” he says.

“There is as yet no industry standard and there is a good case to agree that there should be, but when consumers understand the element of true ‘exclusivity’, they value it.”

“For brands, the travel retail exclusive can be a crucial commercial exercise to enable retail margins to be met, whilst maintaining price value to the consumer.”

–Nestlé International Travel Retail General Manager Stewart Dryburgh

Most of the retailers and brand executives that participated in this article agree that marketing and communication is key in terms of the success of travel retail exclusives. “The current language [around exclusives] is understandable but for something to have longevity in understanding it has to be marketed more aggressively,” says Dubai Duty Free’s Tahir.

“Social media is probably the perfect platform for developing this segment in order for customers to be aware of it as part of the reason they want to come to the shops; not just be surprised and reminded when they get there.”

A spokesperson for The Shilla Duty Free agrees that there are many ways to enhance the marketing effectiveness of travel retail exclusive products, including online banner ads, social media, and in-store visual merchandising.

“Making travel retail exclusive products helps to increase sales and exclusive products from The Shilla Duty Free attract customers to come to our store,” the spokesperson says. “Our company uses a special logo for our exclusive products to emphasise that they are only available in The Shilla Duty Free stores. Additionally, [we] train staff members to help customers differentiate between exclusive products and non-exclusive products.”

This online banner introduces The Shilla Duty Free's exclusive products.

International Beverage Sales Director for Global Travel Retail, Gulf & Indian Subcontinent James Bateman notes that it is not just the retailers’ terminology that matters. [Global drinks businesses International Beverage specialises in developing distinctive, premium local brands for global growth, with a portfolio of whiskies, beers and spirits].

He acknowledges that some of the language on travel retail exclusive products themselves “can get confusing”. He says: “Sometimes the message is subtle, complex and the product ‘copy’ is just too awkward for an international retail environment. Confusion is a barrier to sale. This is why product training for retail staff should be a fundamental requirement of the supplier’s offer.

“The language, like the products offered, keeps evolving. Anyone with a genuine stake in being successful needs to spend time in stores and to listen to both retail staff and to travellers. It’s a natural challenge for product marketers to anticipate the requirements of the retail environment by first understanding it.”

“Brands need to adapt their products and packaging to target different age groups and meet their needs.”

–Dubai Duty Free Senior Vice President – Purchasing Ms. Saba Tahir

For Kurate International Travel Retail Manager Claire O'Donnell, it’s “all about traveller education”. [Kurate is a manufacturer of fashion jewellery and watches, with brands Aeon, Moon watches and You. The company has been a mainstay of the travel retail industry for over a decade.] She says: “The language around these products could change, but if consumers aren’t informed and educated about the meaning then it’s irrelevant.”

The ‘From (DFS) with Love’ campaign pays homage to destinations around the world through the promotion of local products, and ties in with the offer of travel retail exclusives.

Quality over quantity – but both would be ideal

Heinemann’s Spanger says that while industry exclusive products ultimately “make our market more attractive, and attract consumers in a different way”, some consumers still have a false perception that exclusives are only available in the high price point categories. “We need to have exclusives for all price points and communicate this effectively,” he reasons.

“Travel retail exclusives offer travellers an opportunity to explore new flavours, recruiting new consumers and increasing loyalty as a result.”

–Diageo Marketing and Innovation Director Anna MacDonald

But not all products that claim to be travel retail exclusives should really be entitled to label themselves as such, he says; putting existing products in different packaging, or selling them at different price points or sizes does not count. “We must pay attention with wording,” he explains. “Otherwise there will be an erosion of the idea of what an exclusive is.”

Nestlé’s Dryburgh says that “simply offering the same product in a slightly different pack size and calling it a travel retail exclusive, whilst legitimate, is significantly less impactful”.

“It should either be a brand that is only available to purchase within global travel retail and nowhere else, or a variation of a brand that is not available elsewhere,” he states.

If marketed correctly, brands such as Nestlé Swiss can be unique to the channel with no domestic counterpart.

DFS Group Executive Vice President Merchandising Ariel Gentzbourger agrees that exclusives “are not items that are also available on local markets and that have simply been repackaged”. She adds: “We do, unfortunately, still see a lack of differentiation in some cases that does not enhance the credibility of the industry. An exclusive should be unique, desirable and practical.”

The quality of an exclusive product is of vital importance, argues Kurate’s O'Donnell. “We don’t think travel retail exclusives should be ‘just a bigger size’ of a product you can find on the high street or online. That doesn’t make something truly exclusive – it’s not exciting or innovative.”

She notes that without travel retail exclusives, the industry “differs very little” from the high street and online. “Being able to offer exclusive products, no matter what they are, means that travellers have a real reason to shop in travel retail,” she states. “Exclusives differentiate travel retail from the rest of the retail industry.”

Mondelez World Travel Retail (WTR) Head of Brand Marketing Irina Tarabanko notes that the ‘airport only’ label is also considered a marker of quality, “a statement that the product is not counterfeit. For that reason, we need to distinguish the role of such labels for different categories and regions.”

“Exclusives should be emotionally compelling to shoppers, easy to recognise on shelf, and convenient to shop and carry while travelling.”

–Mondelez World Travel Retail Head of Brand Marketing Irina Tarabanko

DFS's spectacular Masters of Time event showcases products that are only available at DFS and which have been especially created for its travelling customers.

Quantity is an issue too, though. Spanger believes there aren’t enough true travel retail exclusives in the marketplace. The liquor category is at the forefront, he says, but in this category there is always the challenge of correctly explaining products to the consumer. He believes there is room for many more exclusives in other categories and at different price points.

To achieve this, retailers and brands need to talk more, he says. “Both have a responsibility to initiate such talks, as both want the industry to stay as big as it is.” With the rise of e-commerce, duty free can’t always be the cheapest anymore, he explains, so travel retail exclusives are a vital form of differentiation.

Tarabanko challenges industry players to think about travel retail exclusives as more than just product related features, “but rather as an opportunity to create exclusive shopping experiences for shoppers”. She says: “It is necessary to adopt a 360-degree approach that involves all members of the Trinity, not just the brands owners. We should think about the format and presentation of a product; the added value we can create in-store (for example, gift wrapping, personalisation); and innovative ways of selling.

“This ensures a more considered approach through collaboration between the Trinity players to offer more than just a product different from shops outside of duty free. Together, we can create memories that compel shoppers to talk about, share and repeat their experiences.”

DFS Group’s Gentzbourger says that the offer of exclusives will increasingly become an expected, and fundamental, part of the traveller journey. “Done well, travel retail exclusives are an incredible opportunity for brands to attract new customers as well as increase loyalty with their existing customer base.

“Traditionally, the idea of buying something duty free or ‘on the go’ brought with it a set of expectations about value and convenience, and those expectations are still valid today. However, today’s travel retail exclusives offer even more than that – they are a part of the traveller’s journey, satisfying much more than just price or convenience.

“At DFS, we aim to offer travel retail exclusives in all categories that offer a clear point of difference – in other words, truly exclusive to DFS and therefore incomparable to any other omnichannel retailer. Such items allow us to flex our creativity with 360-degree campaigns where the brand is magnified as a whole throughout our network.”

The travel retail environment also offers a unique setting to showcase a more niche, less mass-produced product, or even a collectible, she says. “It provides a space for brands to experiment with product ideas that might then be made more widely available outside travel retail. Overall, it makes the store and airport environment a place of discovery and experience for discerning customers who are looking for something new.”

Rituals's travel retail exclusive Namasté Face Care Set will be launching with Heinemann and other retailers on 1 April 2019.

Dubai Duty Free’s Tahir and Lagardère Travel Retail’s Poquet argue that travel retail exclusive sizes and packaging remain popular and that there will always be a place for them.

“A true travel retail exclusive can be either a set or a single product (make-up palette, pouch, bundle), or a product in a size convenient for travelling, that customers will not find on the local market,” says Poquet. But a travel retail exclusive “should not be too similar to an existing product on the local market, otherwise customers will not perceive it as an advantage to buy in duty free”.

Tahir notes that smaller compact sizes and packaging are popular compared to the more elaborate packaging found domestically. “Sets of travel size products, meant for use during customers’ holidays or business trips are also bestsellers. Whereas for some products the bigger sizes are more suitable – 1l liquor as opposed to 70 or 75cl domestically is a long established travel retail exclusive before the idea as we know it today was conceived. Products incurring heavy duties therefore make the customer more inclined to buy bigger sizes.”

She adds: “More and more brands are launching travel retail exclusives as a way of driving purchase and ensuring travellers feel like they are getting their hands on something that isn’t available outside of the airport environment. Some brands are exclusive to travel retail while others have private collections only available in travel retail. The increased global passenger traffic and big demand for travel exclusives drives economies of scale for brands while increasing profitability to retailers placing travel retail exclusives in the limelight of travel retail more than ever.”

“Travel retail exclusives are often perceived as thoughtful gifts – so have an elevated position when given as a gift.”

–Pernod Ricard Global Travel Retail Vice President Marketing Craig Johnson

Retailers and brands must always be prepared to adapt and change, she says. “With the onset of hand carry luggage restrictions imposed by multiple airlines and the influx of millennials and Gen Z shoppers, who prefer travelling light, brands need to adapt their products and packaging to target different age groups and meet their needs.”

Pernod Ricard’s Johnson says travel retail exclusive products appeal to consumer desires to experiment when travelling. “By nature, travellers have more exploratory mindsets, so travel retail exclusives address this consumer need,” he explains. “From our research, we know that high value gifting takes place all year around, and as this concept also remains very relevant in the channel, travel retail exclusives are often perceived as thoughtful gifts – so have an elevated position when given as a gift.”

Diageo Marketing and Innovation Director Anna MacDonald says travel retail exclusives provide a great way to create visibility for new products. “They offer travellers an opportunity to explore new flavours from our much-loved brands they know and trust, recruiting new consumers and increasing consumer loyalty as a result,” she explains.

International Beverages’ Bateman says exclusives offer an opportunity for creating a positive brand experience based on innovation and exclusivity. “This is balanced with the business case reality of communicating these brand values with the ‘travel retail’ or ‘duty free’ price value required for both retailers and consumers, from many different countries and backgrounds,” he says. “It’s easier to manage a product and invest in its promotion if contained in an exclusive environment.”

Travel retail exclusives – or just exclusives if we adopt the customer-centric parlance advocated by some – are a key weapon in the industry’s armoury amid an ever-changing environment where travellers’ tastes are changing and the shadow of omnichannel and e-commerce giants looms large. For if a product is only available in duty free, then there’s nothing Alibaba or Amazon can do to undercut or out-promote it. The concept arguably carries more credibility than ever – the trick will be to ensure the travelling consumer understands it.


The Moodie Davitt e-Zine | Issue 256 | 4 February 2019