The Central and Eastern European Travel Retail Association (CEETRA) has urged its members to be nimble in the face of residual macroeconomic and geopolitical volatility across the region.
Key stakeholders from the regional business gathered in Budapest, Hungary on Thursday 13 October to network, exchange views and best practice at the CEETRA Travel Retail Forum 2022.
Opening the conference, Andrzej Milaszewicz, Chairman of CEETRA and CEO at Lagardère Duty Free (Polska), said: “With the war in the Ukraine still raging, we need to get ready for even tougher trading environments. People in Central Europe are uncertain about their disposable income in the future, and we have a crawling crisis to manage.”
He went on to explain that those companies able to excite travellers and tap into their insatiable appetite for travelling in Central and Eastern Europe will thrive.
“Attracting and motivating staff to deliver excellent service and adjusting assortment and design to get the most out of our spaces is key,” he continued. “Innovation can include digitalisation, but only where it makes sense. For example when it speeds up processes, improves staff efficiency or creates real customer benefits, such as avoiding a queue. Also, product knowledge is key, and digital solutions can helping staff to assist customers better.”
Update on arrivals duty free opportunity
During the forum, Anna Marchesini, Head of Business Development at Swiss travel retail research firm m1nd-set, presented changes in consumer shopping behaviours such as the increase in self-purchasing at the expense of gifting.
However, Marchesini highlighted the tendency towards ‘gift sharing’, where products bought for someone else are also shared with the shopper.
According to m1nd-set’s data, more travellers are arriving at shops with an idea of what they intend to purchase.
The share of passengers that plan their shopping trips but are undecided on what to buy remains unchanged at 49%, with decisions taking place inside the store.
Interviews undertaken in the first half of 2022 reveal that travel retail remains a major opportunity for brands, with 62% of passengers electing to purchase a new brand for the first time in a duty free store.
During the CEETRA Travel Retail Forum, Julie Lassaigne, Secretary General at the European Travel Retail Confederation (ETRC), updated delegates on the EU Commission’s forthcoming VAT Tourism Package.
As reported in the TRBusiness October e-zine, on arrival duty free at airports and railway stations for those passengers travelling to the EU from third countries could become a part of the new package.
“Our objective is deepening engagement with 27 member states in the coming months,” confirmed Lassaigne. “The Commission should be made aware by governments that this is worth pursuing.”
It is widely acknowledged that countries such as Turkey, Switzerland and Norway have benefited greatly from the introduction of arrivals duty free.
In the case of Norway, the airport’s commercial income from arrivals duty free exceeds that of departure’s.
In Switzerland, arrivals duty free accounts for 26% of total sales.
“Revenues will grow, which will mean more sustainable revenue for airports, and less dependency on aeronautical charges or government aid,” added Lassaigne.
Delegates also heard from Wassim Saadé, Founder and CEO of duty free tech start-up Inflyter; Witold Janiszewski, Head of Legal and Head of Commercial, Marketing and PR at Polish Airports State Enterprise (PPL); and Anca Apahidean, Regional Director Eastern Europe at IATA.
Apahidean said the airline association is “working with airlines, airports, governments and industry associations on priorities technology, passenger process and baggage operations”.
She shared the details of the latest 2022 IATA Global Passenger Survey.
Among the findings, 57% of passengers are interested in receiving information on fast-track options, followed by upgrades (56%) and lounge access (42%).
However, this percentage fell when it came to duty free offers (21%),
Elsewhere, Ildikó Jankovich, recently appointed VP Sales at Gebr. Heinemann, said the Hamburg-headquartered company is eying €4.2 billion in turnover next year, up from a forecasted €3.6 billion in 2022. The company notched group turnover of €2.1bn in 2021.
The in-person CEETRA Travel Retail Forum featured a networking dinner and factory tour of Hungarian liqueur Zwack Unicum.