Harding+
Harding+ CEO on being fearless with a relentless customer focus
We feature the first travel retail media interview with Chris Matthews, who joined cruise concessionaire Harding+ a year ago. He talks about retail’s place in the guest experience onboard, about data and technology, and about curating bespoke retail assortments by shop and by journey. By Dermot Davitt.
In association with
When Chris Matthews was named CEO at leading cruise retail specialist Harding+ in October last year, the experienced retail and private equity expert took over leadership of a business that had been through a period of profound change.
In 2020, the company was acquired by investment management company Davidson Kempner Capital Management LP, a period in which – like the rest of the cruise sector – it was reeling from the deep impact of the pandemic.
Amid the recovery in 2022, the retailer rebranded to Harding+, a transformational move, while 2023 and 2024 has seen a rapid increase in the number of ships where Harding+ has a presence (88 today). That has contributed to a doubling of turnover, which will exceed £300 million this year, after the company won an array of new concessions over the previous years.
Reflecting on a year in the role at TFWA World Exhibition this month, Matthews says that the leap into cruise was less onerous as – like other sectors in retail – it all comes back to the customer.
Chris Matthews
Harding+ CEO
“In my career I have always leant into learning about different facets of the consumer. In cruise and with Harding+ I get to touch on many retail sectors as the offer is so vast.
“It’s also a beautiful customer journey. Ultimately what the guest goes through onboard ship, whether they are celebrating a holiday or having joyous times with family, is unique in retail. You don’t see it in any other sector.”
Assessing what has excited him about cruise in the 12 months to date, Matthews says: “I hadn’t been on a cruise ship before I joined, but spending time with our magnificent ship-based colleagues is the side that gets my blood going. I have loved that.
“And the experience of watching customers onboard, seeing and serving the same guests on a Tuesday and again on a Wednesday, means the relationships are much deeper. It is something I have always aspired to in retail. On average a guest visits our stores three times during their cruise. I have worked in retail around the world and this is the only environment where you can build that sort of relationship.”
And having overcome the darkest of periods when some observers doubted whether cruise would ever return at scale, the outlook today is bright, with forward bookings worldwide surging ahead of previous highs.
Matthews says: “The ships are full, and if you look at the passenger projections for the next ten to 15 years, it’s one of the most attractive consumer sectors, and that offers us and our partners a big opportunity. Cruise capacity alone will grow by +10% just in the next five years.
“In retail terms cruise also offers a natural hedge for brands when you see what is happening with growth or decline in other sectors; it’s showing a very steady, strong growth path.”
While the forecasts are healthy, the sector is not an easy one to navigate for retailers, with high complexity, relatively low-margin contracts and space at a premium. So how does Matthews see the role of retail in cruise today and how it is embedded in cruiselines’ thinking about their guest experience?
Curating a luxury assortment onboard the Cunard-owned Queen Anne vessel
Matthews says: “It’s right that when guests go onboard, they get the experience that they are after, whether that is pool parties or the casino or in the night venues. But actually, the vast majority of our partners are really serious about retail. It is a really pleasant aspect to the relationships we have; they want us to succeed. And it’s not just about trading or turnover. It’s about giving the guest a great experience.
“We find that our cruiseline partners treat our ship-based colleagues and management as part of their own team. And they should because from a guest point of view, we appear as one of them.
“So in my view we are pretty aligned. We work with 14 different cruiseline partners. A common theme across all of those partners is on surprising and delighting guests. And if you do that with great products, great stores, great service, you are playing your part in the experience. But the pressure is correctly on us to create that theatre in retail that makes it as enjoyable as any other aspect of the trip.”
In striving to deliver those experiences, Matthews outlines several priorities amid this period of rapid change.
Swarovski brings its A game to the cruise sector
“2023 was a milestone year for us as the industry came out of COVID towards full recovery. We almost doubled our business. The last quarter last year was very good for us, and we have been profitable and cash-generative every month since, and are ahead of where we wanted to be in terms of budget and cash flow.
“The focus has now correctly turned to what we can do for guests. One big part of that for me has been how we get availability right, and also how we use intelligence to really give the guests the best experience possible.”
With guests expecting to buy what they want when they want, technology is playing an increasing role in the business.
In January Harding+ announced a partnership with next-generation planning platform provider Dataviva to upgrade the retailer’s forecasting and replenishment capabilities. The project aims to ensure the right product availability through increased automation, accuracy and process alignment.
“A year ago, we only dreamed of having the level of CRM and insight that we are now getting”
“We are now using intelligence, through this system, to forecast exactly what demand should be, and in this industry, that is crucial,” says Matthews. “You have to have a bespoke mix per ship, those ships move a lot and the logistical demands are huge. Using AI gives us a big advantage in this respect. This is the most complex operating model of any retail business I have seen anywhere in the world.”
Matthews says that Dataviva is now operating across around 70% of the portfolio, and has reduced stock-outs by -60% in just nine months.
Customer relationship management (CRM) has been another area of high investment for Harding+ in recent years, and this feeds into all aspects of company activity, says Matthews.
“Guest data allows us to understand who is coming onboard, who they are coming with and you can then adapt your marketing promotions accordingly. That has been a big focus this year. It allows us to ensure that marketing activity onboard matches the itinerary of the guests.
Leveraging luxury to capture traveller attention
“You then map that across sales and demographic data and in time you are in a position of strength to understand what the guest expects, how the ranges should change and what brands should meet that profile. But you only know that from the data you can produce.
“A year ago, we only dreamed of having the level of CRM and insight that we are now getting, whether that helps us lean towards a more luxury offer or a destination-led offer.
“For example this has been the most successful season Harding+ has had in Alaska. That is because of our wonderful team of buyers and merchandisers, who used the data but were also fearless in putting together the Alaska ranges this year. The offer gave guests something quite unique and experiential that they were not going to find shore-side. But you have to also be brave to buy those items in advance.”
Getting the model right is also about striking progressive agreements with cruiselines. So what does a good partnership look like to Harding+?
Seeing the shipboard teams in action is among the most exciting elements of the role, says Chris Matthews
Matthews says: “We have a multitude of different agreements across cruiselines. Post-COVID I believe there is an alignment with our partners in general that looks to the longer term, and it works, as long as you put the guest at the heart of it.
“We have expanded our network with many new ships but equally the future will not be about expansion just to get ships on our roster. This is about making the right choices and doing a great job for the partners we work with.”
A year into the journey, Matthews says the aims he set out a year ago are around “two-thirds” fulfilled. “We have some way to go in the customer transformation programme we began last year. We have put new systems in place, CRM, and now have fantastic data from our cruise partners that meshes with the expertise of our buying team, which we aim to use to take the guest experience to a new level.
“And we have to take that next step. If you look at where cruise sits within travel retail, our guests spend far more time in cruise stores than they do for example in retail at the airport. Some of them come three or four times on their cruise, for 30-40 minutes each. Some even come into the shops for an hour per day.
“You have got to create a bespoke offer that goes far beyond what the industry recognised was needed pre-COVID as there are different expectations.”
Examples of how Harding+ has adopted a fresh approach to store layout and presenting the assortment include recent launches onboard Cunard’s Queen Anne and Princess Cruises’ Sun Princess. In each of those, Harding+ opened up the environment to customers in a move away from a traditional shop-in-shop environment.
Matthews says: “Both of those ships are performing ahead of plan. If I look at where we go in future, it will be much more in that direction. Less traditional tax and duty free, more in line with the guest experience and expectation onboard.”
Deepening brand partnerships that offer newness and relevance to the guest are key
The brands have a huge part to play in delivering that guest experience, and while many recognise the opportunity, investing in a complex channel such as cruise is not always an easy call for them to make.
“We need to help the brands understand that they should be investing in that experience, because there is no other retail environment like cruise that gives you that proximity to the guest for as long as cruise does,” says Matthews.
“Post-COVID it was about recovery and getting the basics right. Now, if I look at where the brands are, those that are winning onboard are those that are investing in training, in collateral, in bespoke offers for cruise retail, and we are seeing phenomenal growth for some of them.
“We are also seeing new brands participate much more, brands that are early in their journey. Bringing those onboard as first-to-cruise labels is an exciting part of what we are doing now and will be doing more of in the year ahead.”
Matthews also pays tribute to the quality of the Harding+ teams, both onboard ships and across its offices in Bristol, Miami and Australia, saying they are the key contributor to ensuring both guest experience and financial goals are met.
“I want guests to have a joyous experience with us on every single ship that we serve, and that is the driving force behind where Harding+ is going over the next two to three years. Our DNA has always involved the company being fearless, bringing different things to market and in how we operate. That is going to continue, and you’ll also see us being even more disruptive as we carry that vision forward.”
Partner’s message
The Moodie Davitt eZine
Issue 339 | 22 October 2024
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