RegStaer group of companies has vowed to open as many arrivals duty free shops as possible in Russia following the unveiling of its first two stores at Vnukovo and Platov International Airports.

As first reported by TRBusiness in January, travel retailers were finally given the green light to operate arrivals duty free shops in Russia based on an order from the Russian government issued on 12 December 2018.

The order, which came into force on 12 January 2019 follows the implementation of a Customs Code in December 2016 for the Eurasian Economic Union (EEU) to allow the new arrivals channel.

RegStaer became the first Russian duty free operator to operate an arrivals store in the country, when it unveiled its 120sq m store at Vnukovo International Airport on 19 January 2019. A second arrivals store soon followed at Platov International Airport in February.

FURTHER ARRIVALS OPENINGS PLANNED

Vadim Sagiev, Commercial Director, RegStaer group of companies told TRBusiness: “Our strategy is to open as many arrivals shops as possible, inform departing passengers about the opportunities to shop on arrival to Russia and to optimise the mix of goods in accordance with the needs and demand of arriving passengers.

“All of this will help achieve maximum sales within these limited spaces. We also plan to launch a loyalty programme which will motivate passengers to shop in our arrivals stores.”

Reflecting on the legislative changes which allowed the opening of its arrivals stores at Vnukovo and Platov Airports, Sagiev commented: “We had been looking forward to the enforcement of the new Eurasian Economic Union Customs Code, regulating operation of the duty free stores on arrivals. We approved the store concepts and started their construction beforehand. This allowed us to be the first Russian duty free operator to open duty free stores on arrival.”

Earlier this year, Dufry Group acquired 60% of RegStaer’s Vnukovo Airport business, straightening its partnership with the company which commenced in 2012. This followed the acquisition of a 51% stake in a joint-venture with RegStaer at Sheremetyevo International Airport.

RegStaer operates more than 50 stores at Sheremetyevo, Vnukovo, Platov and Mineralnye Vody Airports located in Moscow, Rostov-on-Don, and Mineralnye Vody. It also celebrated its 20th anniversary in December 2018.

According to Sagiev, each new shop — arrival or departure — is an excellent opportunity to deliver further growth and develop the business. “In this particular case, duty free on arrival was the start of a whole new direction for the Russian travel retail business. Potentially, this is a double performance driver since passenger traffic on arrival is the same as on departure and arriving passengers were not able to shop before.”

The opening of arrivals duty free stores in Russia was a ‘total surprise’ for passengers and completely new experience for Russia. This represented a significant challenge for RegStaer. “There was minimal coverage in the mass media so we needed to ramp up sales in the first few days. Gradually, passengers are becoming more aware of the opportunity to shop in duty free stores on arrival to Russia and sales are starting to grow on a monthly basis.”

RAISING AWARENESS

He added: “We have undertaken a series of actions to inform passengers departing from Vnukovo and Platov Airports. Information about the arrivals stores is posted on the company website and on social media, in the Aeroexpress magazine [which appears on trains carrying passengers to the main Moscow airports], on screens in airports, in our departures stores and even on the back of receipts handed to our customers when shopping in departures.”

Sagiev (below left) believes the potential of arrivals duty free shopping in Russia, should be the same as purchasing on departure. “At the moment, however, this is not realistic as the design of the airports do not provide the same amount of space for arrivals stores as they do for departures shops.”

Regarding the Russian DF&TR market in general, Russian travellers continue to follow global trends, seek enjoyable experiences and crave access to exclusive, limited edition and novelty products. He explained: “Most customers at our airports are Russian citizens. Purchasing power is currently impacted by the exchange rate of the ruble, but the main reasons for buying in duty free have not changed. Airports continue to be seen as attractive shopping environments.”

Staff play an important role in creating optimum shopping environments. Some RegStaer employees, which hold key positions or work on the operations side of the business have been part of the company from the outset. “We pay a lot of attention to training and staff development. This is an essential part of our daily routine and investment in the business. Over the past 20 years, the company has grown in numbers and quality and our growth continues to accelerate. This is only possible with the corresponding development of our employees.

“Each day brings new goals and objectives and we must find effective solutions which contribute to the development and progress of management and professional knowledge and skills.”

The development and implementation of a company-wide annual staff training and assessment programme has helped ensure staff progression. “Special attention is paid to the sales consultants who work in the shops. If there is a need in formal training, we organise it using our own resources and the experience of internal specialists and managers.

“We also invite external experts, suppliers and brand representatives to participate in specific events to add their own expertise and knowledge.”

See the October edition of TRBusiness for the full interview with Vadim Sagiev, Commercial Director, RegStaer group of companies.