Melbourne Airport
“An engaging and fresh approach” – Lotte Duty Free outlines ambitious redevelopment plans in Melbourne
Lotte Duty Free officially opened its Melbourne Airport duty free operation on 13 July, revealing details of its ambitious plans for both departures and arrivals stores. The Moodie Davitt Report President Dermot Davitt spoke to retailer (this page) and got the view of the airport company (next page) about the path ahead.
Lotte Duty Free is targeting KRW300 billion (US$235 million) in annual sales once its expansion and redevelopment of the duty free precinct at Melbourne Airport is complete.
On 1 June (followed by an inauguration on 13 July), the retailer embarked on its newest airport contract, one where digitalisation and Sense of Place will play key roles.
As reported, the Melbourne Airport Duty Free business embraces 3,592sq m across departure and arrival duty free shops. This is the second-largest retail footprint among Lotte Duty Free’s global airport operations, only behind Singapore Changi Airport.
Kim Ju-Nam: Lofty ambitions to deliver at Melbourne and expand in the regional market
The retailer plans to expand the footprint to 5,634sq m, with a major enhancement of arrivals next year followed by a +40% space expansion in departures, to be completed by late 2026.
Lotte Duty Free CEO Kim Ju-Nam said: “Lotte Duty Free Shop, which has endured the long tunnel of the pandemic, will take a leap forward again based on the successful operation of the Melbourne Airport store in Australia.”
Under its plans for renovation and expansion, Lotte Duty Free aims to incorporate the lifestyle and culture of Melbourne into the stores. City landmarks it is taking for design inspiration include Hosier Lane, known as the epicentre of graffiti art in Melbourne, leafy Guildford Lane and Degraves Street, known for its European-style cafés.
While renovation has yet to begin, the company is already expanding the brand offering across core concepts, which it said will continue as it targets new traveller groups and demographics, notably Gen Z and Millennials. Alongside Sense of Place, retailer and airport are pledging a greater focus on digital engagement to attract the consumer, both online and in-store.
Kim told The Moodie Davitt Report: “The tourists who come here really seek that specific sense of locality and we plan to increase our offering to match those expectations in this area.”
Lotte Duty Free Oceania CEO and Director Stephen Timms said: “We are looking forward to the store expansions and bringing world-first shopping experiences to Melbourne travellers. We look forward to welcoming travellers through Melbourne Airport with an engaging and fresh approach to duty free, which is uniquely Melbourne.”
Beauty is a cornerstone of the offer at Melbourne Airport
Asked about the company’s insights into the local customer, Kim told us: “We are number one already in terms of our understanding of Korean, Japanese and Chinese customers. We have been operating in Australia already since 2019 [with stores at Brisbane and Darwin airports, plus Melbourne and more recently Sydney downtown -Ed] and have built up our data on the customer, and this complements what we know about the international traveller, built up over a long time.”
Alongside creating Sense of Place, the key to succeeding in Melbourne will lie in engaging a new generation of consumer through up to date concepts that grab their attention, across channels, he added.
“We want to move away from the buying and selling retail experience and create a new, innovative customer experience. For that purpose we want to combine both online and offline experiences through digital capabilities,” said Kim.
Celebrating the opening at Melbourne Airport were (above) Kim Ju-Nam, pictured with airport CEO Lorie Argus (second left) and below, with Lorie Argus, MP for Sunbury Josh Bull, Republic of Korea Counsel General in Melbourne Chang-hoon Yi and Lotte Duty Free Oceania CEO & Director Stephen Timms
With new or reopened stores in Singapore, Vietnam and Australia, Lotte Duty Free is investing heavily in its overseas infrastructure, with the Pacific a key target region. Kim says that the opening at Melbourne Airport contributes to its global expansion drive and represents “a stepping stone to further expansion”.
“For our global business expansion we are really going to focus on airport stores, and introduce new innovations and experiences,” Kim added.
“We want to create a differentiated experience that distinguishes Lotte from every other competitor. By doing that we will build on our global expansion success.”
Kim says that the retailer will place a relentless focus on customer satisfaction, and “try to understand and incorporate the diverse demands and preferences of our customers.”
With Melbourne Airport as a new touchstone and inspiration, he says, the company can push closer to its goal of being “a leading global platform” in the duty free business.
Marking a milestone
“Today is a historic moment for Lotte Duty Free, Melbourne Airport and all of our great partners, but also for the people of Melbourne who over the next few years will be able to experience some of the greatest retail concepts anywhere in the world.” So said Lotte Duty Free Oceania CEO & Director Stephen Timms said as the company celebrated the inauguration of its new operations.
“We have spent a lot of time creating new experience and concepts that will bring Melbourne to life at the airport. We focus on inspiration, destiny, love and peace, all of the emotions of life and travel.”
The retailer has begun preparation to upgrade the arrivals store, which will be transformed into something akin to Flinders Lane in Melbourne, with recycled brick, reflected ceilings and the connection of Australian product with the spirit of Melbourne’s Laneways.
“Departures is a massive project,: he added. “We’ll reflect the feel of Federation Square, there will be a huge amount of interaction with consumers, concepts to engage younger consumers from craft spirits to makeup experiences. Different precincts throughout the space will really create a duty free store like no other in the world. This is bespoke design from the ground up with the customer in mind.
“We expect big things of ourselves and from our suppliers too. We’ll take exclusives to a new level but more and more it’s about interaction. We plan to lift that to a new level. We have a good track record of growing PSR at airports, and the first five weeks bear that out.”
Stephen Timms offers a glimpse of the future at Lotte Duty Free in Melbourne
Partner's message
Partner's message
The Moodie Davitt eZine
Issue 325 | 2 August 2023
The Moodie Davitt eZine is published 14 times per year by The Moodie Davitt Report (Moodie International Ltd). © All material is copyright and cannot be reproduced without the permission of the Publisher. To find out more visit www.moodiedavittreport.com and to subscribe, please e-mail kristyn@moodiedavittreport.com