Tobacco & Reduced Risk Products I

The consumer-driven digital revolution at PMI Duty Free

In this section we home in on tobacco and in particular the important reduced risk products category, and the strategies of leading companies to progress it. We begin with Philip Morris International Duty Free’s assessment of how the consumer-led digital revolution can offer big opportunities for travel retail.

During the recent Virtual Travel Retail Expo, Platinum Partner Philip Morris International (PMI) outlined its thinking around omnichannel, digital innovation and revealed details of its new IQOS ILUMA line. A core component of its Expo presence was an Experience Arena session in which PMI Duty Free presented its insights into the evolving consumer journey, with digital at its heart (see video below). The session was led by Head of Commercial Planning (Middle East & Africa), Anthony Fysh and Head of Consumer Journey Duty Free Ksenia Klenova. Fysh said: “Without doubt, duty free [pre-crisis] was the perfect platform to launch a brand”. But how does the opportunity look today, and how has the consumer changed since? Klenova noted: “We have seen shifts in consumer behaviour. Number one, 42% [m1nd-set figures supplied by PMI] are stressed about their upcoming trips. We also see a growing importance of pre-travel with travellers exploring online before they even travel. Also, many plan to spend less time at the airport or won’t even visit the duty free shop. Digital adoption means that touchpoints have changed.”

As a result of new behaviours, PMI has rethought its digital strategy and omnichannel approach. Klenova said: “First we have focused on improving the consumer experience on existing digital touchpoints.” This includes ecommerce, CRM and digital out-of-home (OOH) and digital media. “The second element was scaling our digital tools at retail, namely digital kiosks and QR codes. The third element is to enhance our omnichannel synergy across these touchpoints to offer a seamless experience.” PMI Duty Free also highlighted some of the initiatives it has taken across the various consumer touchpoints. Fysh said: “The pre-travel phase is growing in importance for consumers. We needed to focus more on ecommerce to offer more personalised experiences. We worked with operators to deploy bespoke digital brand spaces, particularly around RRPs, within the existing ecommerce platform. Inside these spaces we developed two distinct consumer journeys. One was for the legal age smoker with a focus on category awareness and category education. New users of IQOS are comfortable self-educating online and to make their purchase to be collected later at the airport.

Relevant content delivered at the right time: PMI Duty Free outlined the keys to communicating about IQOS and its new innovations in the channel

“The second journey was for legal age users of existing IQOS users. We used new and fresh category information, and tried to bring new and compelling offers to their attention. We also leveraged our own communications spaces, on-shelf communication and CRM databases to communicate the benefits of ordering online and the availability of their chosen products.” A key touchpoint pre-travel is CRM, through which the company communicates with legal age smokers about the latest novelties in duty free. It developed specific mailings around IQOS in travel, with a 45% opening rate, meaning that the content was “highly relevant” it added. Working with retailers using their CRM has also proved productive notably in Japan duty free, added PMI. Once at the airport, digital OOH media becomes critical. “We wanted to leverage these massive communications platforms to deliver more targeted communications,” said Fysh. “We opted for a sequence of messages.” These ranged from category images and communication on arrival at the airport to message related to product in the concourse – including QR codes embedded in its communications. Digital media plays a further role along the journey too, driving legal smokers to the point of sale in duty free. Geo-targeted communication in smoking lounges is one vital tool. Post-COVID-19, PMI Duty Free has focused on personalisation of the experience at digital touchpoints, using increased segmentation of the audience, testing and trialling various messaging and visuals to enhance efficiency in this channel, and increase engagement. PMI revealed its digital eco-system in 2020, through which consumers are encouraged to learn, try and buy. The tools are PMI Duty Free’s Loop, Discover IQOS and Shop IQOS (explained in detail in the video above), with deployment rolled out in 2020 and 2021. Fysh said: “We expect to be at 254 deployments by the end of 2021. The key is to deploy at scale, and integrate these technologies seamlessly into our spaces.” With all of these tools integrated into its spaces, said Fysh, “the digital environment now truly blends digital and physical elements, allowing consumers to learn about IQOS in the way that they choose.”

How PMI Duty Free presented its new ideas to the industry at the Virtual Travel Retail Expo

PMI also introduced the newest member of its shop floor team, ‘Q’, a robot that engages with travellers at Dubai Duty Free, DXB. Services include meet and greet, assisting with a smart queueing system, informing and educating, communicating offers and fast tracking sales. PMI Duty Free summed up with some key lessons from the deployment of its digital tools that will be useful to other stakeholders. First, digital solutions are not a silver bullet but rather complement the vital work of in-store ambassadors. Klenova said: “We will continue scaling up our digital efforts…and will evolve the role of our IQOS experts, who have more time, and can focus more on high-value interactions, for example guided trial for legal age smokers.” Second, different customer profiles have different preferences for digital touchpoints on their learning journey, from QR codes to kiosks. Third, using data and agile ways of working are keys to success in consumer adoption of digital tools. PMI Duty Free for example tracks consumer feedback and KPIs in real time, allowing the company to learn fast and pivot where required.

Category innovator: PMI Duty Free introduced the latest IQOS ILUMA smoke-free product device, new for global duty free, during the Virtual Travel Retail Expo

Fysh concluded: “Consumers have broken down adoption barriers to new technologies and raised their expectations towards digital. We might have the most advanced technologies in the world but consumers will determine which ones are the most relevant and widely accepted. “Final thoughts: Start your digital journey and start it today. The sooner you start, the sooner you start learning. Every touchpoint or solution needs to be developed to address a specific consumer pain point. Don’t hold back, deploy at scale.” Crucially, a mindset of constant improvement is required. Klenova said: “Our future development of digital tools will be dictated by consumers. Based on their feedback, areas we are looking at now are how to make our digital tools more interactive and creative. It’s important to put the consumer at the core of everything we do.” *This session complemented an earlier Experience Arena session in which PMI representatives introduced the new IQOS ILUMA smoke-free product device, new for global duty free, initially in Japan. The full session can be viewed in the video above.

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The Moodie Davitt eZine Issue 304 | 21 December 2021

The Moodie Davitt eZine is published 15 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 and to subscribe, please e-mail

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