‘Destination 2027’ (continued)
A Travel Experience Revolution
At its Capital Markets Day, Dufry management addressed in more detail the four pillars on which it is building its strategy.
The first element is to launch a Travel Experience Revolution by creating – together with brand and landlord partners – a unique new value proposition for customers. This value proposition, Dufry said, is based on customised offerings for travellers, including elements of experience, new categories and exclusive products.
This experience will be delivered both in physical ‘smart’ stores, featuring a modular concept that allows customisation of the offering to different passengers, routes and nationalities, as well as through digital channels. Extensive digital engagement before and after travel will drive consideration and loyalty, Dufry said.
Pushing beyond the boundaries of retail, the travel experience revolution brings together travel retail and food & beverage. This will be underpinned by the “transformative” business combination with Autogrill, which will allow the group to engage consumers with a broader set of products and a wider range of experiences, providing a platform to make travellers happier during travel.
With more convergence between these channels, cross-selling opportunities arise through voucher and digital offers; hybrid store formats and experiences and new touchpoints and CRM.
In retail, more dynamic range management will open fresh opportunities. As an example, in beauty this may mean Indie brands, clean beauty, grooming and more. Existing categories can also be developed, said Dufry. For example there is opportunity for private label goods, notably in souvenirs and food destination products, with a focus on airports with more leisure travellers and where particular brands [in these categories] are not especially sought by customers.
It also cited multi-category concepts for wellbeing and sustainable goods, as already launched in Amman and Rio de Janeiro. These include dedicated space for well-being, healthy and sustainable products and separate marketing communication to target relevant customer groups.
In-store entertainment also remains a big opportunity, said Dufry, with experiences offering an attraction and extending shopper dwell times.
Allied to this is a drive to tailor customer service to store concept, geography, passenger mix, and retail added value. New initiatives here will be supported by advanced engagement, training, incentives and technology.
For customer-facing digital, Dufry identified three main goals: engage more with frequent flyers (CRM, personalisation, mobile app and partnerships for increased loyalty); to excel in sales influenced by digital (new touchpoints with partners in the journey, Reserve and Collect, omnichannel) and to transform the in-store experience (technology for enhanced engagement and experience, Dufry employee app).
Underlining the importance of social media marketing, Dufry said that 68% of consumers today expect online experiences to be linked to offline. This means notifying travellers of what’s new in-store, creating excitement through pop-up events, promotions and contests; and ensuring activity during events such as live tweets and video, along with attendee-created content. In this, the retailer highlighted how it can promote its brand partners throughout the journey.
All of this can create value by building spend per passenger through better conversion and increased spend per ticket. Dufry said it would also allow engagement with airports in a way that can mitigate the increase of concession fees. Plus it would give brands a broader consumer platform and greater engagement to tackle gross profit margin and advertising income.
What will change via the Travel Experience Revolution?
Dufry said that 50%+ of stores will be ‘smart stores’ by 2025. 50% of customers will be digitally engaged by 2025. A new loyalty programme will be deployed through all points of sale and a new, enhanced and dedicated digital team will reach across the combined business. It also cited an additional 50bps on revenues of investment to drive this Travel Experience Revolution.
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 firstname.lastname@example.org