Estonia’s Tallink Group has high hopes that the refit and total retail revamp of its second Silja cruise ferry, Symphony, on the Stockholm-Helsinki route – one of its most important for shop sales – will push up spending per passenger.

 

The refurbishment of Silja Symphony (left in picture) follows the February overhaul of Silja Serenade which was, itself, an experiment for Tallink Group which has taken a gamble by moving its product offer – the biggest in the Baltic Sea – to a much higher level, with a number of luxury brands such as Gucci, Tag Heuer and Orobianco making their debuts.

 

That change – part of a €25m ($32m) shopping and restaurant investment on these two flagship vessels – also marked the start of a unified branding of the main duty and travel retail stores [now called Taxfree Superstores] across the whole Silja and Tallink fleet of 18 ships. Tallink Group’s entire retail and F&B business last year was worth €507.3m ($646m).

 

It has also resulted in over 1,500sq m of additional retail space which has allowed the sister Silja ships to open a number of speciality shops for fashion, electronics, children and luxury goods – as well as an even larger assortment in the main DF&TR store.

 

LUXURY TARGET

Silja has traditionally been the Baltic Sea’s prestige cruise ferry brand and the upscaled retail refit was designed to reinforce that message. But have luxury items been selling?

 

“The high-end products are moving… we don’t keep products on board that don’t sell,” says Magnus Skjörshammer (left), Business Development Director for Tallink Duty Free, commenting on the performance of Silja Serenade. “We have continued with them on the next boat [Silja Symphony] and that is something we would not have done had they not been going in the right direction.”

 

Symphony made her first sell-out voyage with the new fit-out last Thursday night and TRBusiness was the first media on board to review the new retail offer.

 

As with its sister vessel, the main DF&TR store – where trolleys are preferred to baskets such is the volume of shopping undertaken by many passengers – is now much larger at 1,100sq m.

 

“We doubled our area which has allowed us to increase space for beauty, jewellery, and other categories too such as wine and spirits,” says Silja Symphony Shop Manager Milla Ahlqvist (above).

 

For example, Victoria’s Secret (below right) has been given a large dedicated space in beauty while Silja has become the first travel retailer in the Baltic region to launch Swedish electronic beauty device Foreo.

 

In liquor, the departments are now more segmented: whisky, for instance, has a dedicated wall for non-Scottish labels which span Japan (below left), India and even Finland, while a specially lit, glass-fronted section houses super high-end Cognacs and other spirits.

 

CHANGING SERVICE LEVELS

The new 86sq m Luxury shop on the next level (see bottom image) houses scarves, luggage (Orobianco shown above), leather goods, sunglasses, watches and jewellery in a high-service environment where shoppers can sip sparkling wine while discussing potential purchases in armchairs.

 

The concept seems to be working. Some 2,700 passengers had access to the new shops on the first sailing and Ahlqvist tells TRBusiness: “We sold two expensive Tag Heuer watches and two Louis XIII Cognac bottles from Rémy Martin at €1,375 each”. And the latter were not to Asian or Russian passengers, as one might expect, but to a single Swede.

 

She adds: “We were wondering whether we really had the clients that would buy at this level, but we saw that we do, on the very first voyage.”

 

Russians – an important profile for shopping – have been on the wane in recent months but Chinese and Asian passengers are compensating, according to Skjörshammer.

 

“We now have a focus on three main areas: Nordic, Russia and Asia, so we are lucky in that we are riding on several horses,” he says. “We still have Russians on board, just fewer of them.”

 

As for the effect of their reduced numbers on sales he adds: “We will see the reality in January [when it is the Russian Orthodox Christmas] because that is their biggest shopping holiday.”

 

FIRST REFURBISHMENT RESULTS

In general, however, Skjörshammer is confident that the move to more luxury, and brand expansion, is working. We were able to compare the results of one vessel (Serenade) that was refurbished with one that wasn’t (Symphony). The results after the refurbishment of the first ship, led to sales from some product groups actually doubling.”

 

One example of that was Champagnes – and not simply because of more space or the extra variety of products available – but because of the upgraded presentation.

 

 

Retail-wise, Tallink Group has taken some knocks, not least because both Silja cruise ferries have been out of service for three months in total [six weeks each] which has dented results in this financial year.

 

In the first six months, retail and F&B sales fell by -1.1% to €236.9m ($302m) despite a small rise in passenger traffic in the first half of +0.5% to 4.27m passengers. However the third quarter of the year saw a traffic fall of -5.8%, and on the Finland-Sweden route plied by Silja, the fall was -5.5%

 

WINTER LITMUS TEST

Now that both cruise ferries are back in business expectations of both traffic and retail sales are rising. “Bookings for Serenade in the first eight months were high, but of course for the last six weeks [while Symphony was being refurbished] it has been the only option,” says Skjörshammer. “But even when both were in service Serenade was full booked all the time.”

 

The winter months are crucial to the retail business. “Now – from October to January – is the real shopping season, and this will be the litmus test to see how the assortment really works,” says Skjörshammer.