Dufry North America
A focus on duty paid and digital
Dufry CEO North America Roger Fordyce says that there are opportunities in the convenience and speciality retail business as travel recovery in the US domestic market gathers momentum. Dermot Davitt reports.
Dufry’s North American business represents 25% of group turnover, and was partially insulated last year (relative to other regions) by its high exposure to US domestic travellers as that market recovered from Summer onwards. Overall, North America delivered CHF644.4 million (US$696.6 million) in turnover for the retailer in 2020, down by -65.3% in organic terms year-on-year. But within this, the performance of duty paid activities, led by travel essentials and food & beverage, held up reasonably well. Recovery in travel growth from the US to Central America also benefited the business, though tight travel restrictions in Canada held back Dufry’s duty free sales in that market. Hudson CEO (and CEO North America) Roger Fordyce says that demand continues to return as domestic travel rebuilds. “In alignment with the construction of new stores, Hudson continues to reopen many of its temporarily closed stores as travellers return to airports,” he says.
The retailer is striving to develop a new generation of travel essentials stores, says Roger Fordyce
Where stores have reopened, average spends have risen. “We are seeing increased interest in the audio and electronics category, where we’ve introduced new products and brands, and growing sales of eyewear through the recent roll-out of our Sunglass Hut shop-in-shops in our duty paid convenience stores,” adds Fordyce. “Additionally, the food & beverage business has grown as we have expanded our product offerings.” The first quarter of this year saw a busy period of new openings across the division. Hudson opened new duty paid stores at Nashville and Salt Lake City airports, alongside the first-ever Hudson Nonstop convenience store using Amazon’s Just Walk Out technology at Dallas Love Field Airport. As reported, the store – a potential template for the future – delivers a contactless shopping experience for travellers with the emphasis on safety, speed and convenience. Just Walk Out technology allows travellers to enter the store using their credit card, take the products they’re looking for, and then walk out. After they leave the store, shoppers are charged for the items they selected and left with.
Hudson’s shops at New York LaGuardia Terminal B were among its first to reopen last June; the retailer also gained several more new concessions and contract extensions in North America last year
Commenting on the wider digital agenda, Fordyce says: “With consumers seeking out contactless shopping environments when visiting brick-and-mortar stores, we needed to find a way to blend the physical and digital experience in-store to meet demand. “At the onset of the pandemic, Hudson immediately made modifications to its checkout process, implementing ‘Tap To Pay’ capabilities on eligible purchases and providing the opportunity for ‘Scan, Bag & Go.’ “While a percentage of Hudson stores already had traditional self-checkout capabilities, Hudson also made the decision to expedite the roll-out timeline for 250 additional self-checkout machines, acknowledging that travellers were looking to shop at the speed and convenience that best fit their schedules and within a contactless environment.”
“We are working to enhance the shopping experience by providing travellers with immersive, integrated brand experiences that combine the accessibility of Hudson stores with speciality retail offerings”
The new Hudson Nonstop concept will be rolled out to other airports this year, as will further digital innovation, pledges the retailer. Even in this difficult period – one during which Dufry has reintegrated Hudson after its stock exchange delisting in Q4 – there will be further opportunities, insists Fordyce. “With customers increasingly looking for contactless shopping experiences, we see opportunities to introduce new store concepts, such as Hudson Nonstop as well as 24/7 shopping experiences through automated retailing.
Hudson is blending categories as it seeks to meet changing consumer demand
“Additionally, we are working to enhance the overall shopping experience by providing travellers with immersive, integrated brand experiences that combine the accessibility of Hudson stores with speciality retail offerings, all in one place.” An example is the roll-out of Sunglass Hut shop-in-shops within Hudson’s travel convenience stores, as noted above. F&B is also an opportunity, says Fordyce, who flags up the potential of enhanced grab & go ranges in its stores. That represents an upbeat view of how recovery might take shape, after the most challenging period in company history, one in which Dufry’s people have also been profoundly affected. Reflecting on this, Fordyce says: “When I became CEO in 2019, I could have never imagined the position we’d be in just one year later. We have had to make some difficult decisions. Many of our team members have had to leave the business, including those with extensive years of service to the company. We have also sadly lost valued colleagues, friends, and family members during the course of the pandemic. All of this has taken its toll on our people, and is not something I take lightly.
Duty free in Canada remains heavily hit by the closure of the border to international travel; Dufry at Toronto Airport pictured
“However, what I have seen throughout this difficult period has been an unwavering sense of camaraderie, dedication and commitment. People have helped and supported each other whenever and wherever possible, and have made extraordinary efforts to keep the business running, all of which has ultimately enabled us to create the solid and resilient base on which we can build on going forward. “This demonstrates the strong level of team member engagement and commitment across the organisation, and has made any challenges I have faced in my leadership role that much more manageable. On that note, I thank all of our team members, both in the field and at our corporate office, for their ongoing support and their extraordinary dedication.” *The full text of this interview will appear in the April edition of The Moodie Davitt Magazine, published to coincide with the Summit of the Americas – A Virtual Experience.
The Moodie Davitt eZine Issue 293 | 29 March 2021
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