Tobacco & RRP Report
View from the brands: BAT
BAT Travel Retail has been transforming its portfolio to offer more reduced-risk alternatives in line with its ‘A Better Tomorrow’ corporate strategy. The acceleration of this drive comes against the backdrop of a rapid return in business today, as BAT Global Travel Retail Head of Customer Management Tony Clayton advises.
“We have seen a recovery trend in the majority of airport locations since 2021 in Europe and the Middle East. For BAT specifically, business is almost back to normal with an 80% or above recovery versus 2019. We are confident that with less travel restrictions towards the end of the year and next year e.g. Japan, will be much back to pre-COVID situation.”
BAT Travel Retail, he says, has seen a shift in consumer behaviour post-COVID with an emphasis on improved health. “Our focus is to offer a multi-category portfolio with reduced-risk products.”
In addition, BAT Travel Retail has seen digital transformation across retail touchpoints where consumers are looking for new ways of engagement through digital.
“Our global travel retail activations focus on engaging and educating consumers on our multi-category portfolio and potentially reduced-risk alternatives via physical and digital platforms across the consumer journey. Just like the pop-up store we have in Frankfurt, consumers can get access to product information through digital touch screens as well as interacting with our brand ambassadors based on their preferences.”
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As we reported in August, that ‘Inspiration Store’ pop-up is a partnership with Frankfurt Airport Retail and Frankfurt Media at Frankfurt Airport Terminal 1.
Taking insights and learnings from previous activations, BAT GTR’s pop-up store is designed to engage with adult ‘New Categories’ customers through an immersive, highly-digitalised experience. The store features a dedicated team of brand ambassadors, an innovative sensorial flavour experience, as well as several interactive digital touchpoints and digital tablets with educational brand content.
The new approach to retail also chimes with the company’s updated innovation agenda.
Clayton says: “We have been looking at driving digital initiatives to achieve company goals. It seems simple but a digital business strategy requires not only expertise but relevancy.
“The travel retail sector is slightly different compared to the ‘regular’ retail business as we rely on airport passengers and spontaneous shopping. But now that consumers are more familiar with blended online to offline models such as ‘click & collect’, from a commerce point of view, we highly trust that our duty free partners can offer customers a great shopping experience via ‘click & collect’. Our responsibility is to make sure we are providing the right support in terms of stock and logistics.
Non-combustible products made up almost half of BAT’s revenue growth in 2021
“Within BAT Travel Retail, digitalisation is happening across all consumer funnels from awareness to retention. We are exploring new and exciting channel of interactions with our target audience to create a long-term relationship and build the reputation of a brand.”
Looking ahead, the travel recovery phase represents a “golden opportunity” for travel retail to transform the way it engages consumers and provide a seamless experience to travellers, notes Clayton.
“To do such transformation, airports, retailers and suppliers must work together with one common goal i.e. to achieve the next level of growth for the travel retail market.
“We believe it’s the responsibility of all parties to encourage people to buy at the shops. The consumers’ journey in the travel retail industry really begins the moment they get into an airport. Having said that, airports play a big role in ensuring an efficient airport experience and increasing dwell time which could translate into increased sales and more profits. Suppliers and retailers equally share responsibility to provide consumers with a good experience through product quality, seamless shopping, and after-sales services.
“In short, if any of these stakeholders fail to provide customers with a good experience before, during or after their journey, then the overall impression of a travel retail market will decline in the eyes of our customers.”
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