Tobacco & RRP Report
View from the brands: Oettinger Davidoff
Oettinger Davidoff takes an upbeat view of the prospects for the premium cigar category as the travel retail business emerges from the pandemic – but says there are many opportunities that can be tapped.
Oettinger Davidoff Director Global Key Accounts Duty Free Adrian Hayes says: “We know that consumers and shoppers (often not the same) of our category are the most valuable for any travel retailer. Strategically, we are focused to develop and communicate their untapped potential through our best-in-class category management approach.
“If travel retailers embrace understanding the enormous commercial gap (only 9% of purchase opportunities are utilised), the retail implications are immense and revenue expectations for the business would need to be redefined.”
In pursuing this goal, the cigar company identifies core priorities that include “tactical initiatives to support our key success pillars, which will deliver transformational increases in total basket spend to our travel retail partners. Pre, and especially post pandemic, we continue to research our global consumer, converting profound insight into pragmatic, innovative ideas which deepen affinity and loyalty to our brand.”
The company leans heavily on its category management approach, created and built specifically for travel retail, to drive its agenda in the channel.
Head – Partner Markets & Duty Free EMEA Jean-Christophe Hollay says: “This is an innovation centred upon recognising a need to change today’s category scenario and transform the consumer / shopper proposition to deliver sustainable high growth tomorrow. We are accelerating our partner engagement plans and commercial results are already exceeding our ambitious forecasts.”
Alongside this, limited editions and travel retail exclusives are a “must” for the channel and are integrated into its planning cycles. Top of mind here are dedicated travel retail editions from 2021 for Zürich, Paris, Dubai, and Istanbul.
In addition, notes Hollay, “the success of the recently launched Zino Nicaragua fresh packs (which do not need to be stored in a humidor) has provided the travel retail industry with an innovative proposition and allowed for placement outside the traditional space, increasing opportunities to purchase while meeting the needs of the traveller today”.
Further opportunities can be harvested through “shared commitment” to the business, says Hayes.
“Such a commitment requires the sharing of appropriate and relevant knowledge, investments, and resources. We clearly distinguish between a long-term strategic partnership and a transactional approach with the travel retailer deciding which they prefer.
“Engaging consumers cannot be a subjective exercise. Industry stakeholders must have an openness to insight and facts and to ensure the right operational focus for enticing extremely high value shoppers.
“For example, minimisation of a high-value category and/or brand like cigars to enhance the proposition and retail space for a lower-value generating category, will only alienate the high-value shopper, probably even forever. Conversely, the right operational solution will achieve heightened shopper experience and loyalty, a platform for repeat purchase, engagement through technology, and massive incremental basket spend.”
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The Moodie Davitt eZine Issue 316 | 31 October 2022
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