[UPDATE] Venice fuels Lagardère’s three-pillar vision

By Luke Barras-hill |

Aelia-Duty-Free-Lagardere-Venice-Nov-2018-leadA strategic partnership between Venice Marco Polo Airport and Lagardère Travel Retail has borne fruit as the latter today officially unveiled a new and dynamic commercial area.

Playing very much to the collective strengths of the travel retailer’s three business units – Duty Free and Fashion, Travel Essentials and Foodservice – passengers can now enjoy a total of seven new retail shops and five restaurants [see below video].

The travel retailer – ranked third in TRBusinessTop 10 Operators report with managed sales of $4.4bn in 2017 – has declared the combined openings as the ‘perfect expression’ of its strategy across its three core business lines.

Speaking to TRBusiness, Lagardère Travel Retail Chairman and CEO Dag Rasmussen said: “This is really a model for us as we are in all three business lines in partnership with the airport and we are able to reinvent the way things work. It is a perfect example.”

AELIA ANCHORS THE MIX

Lagardère Travel Retail established a joint venture with airport operator Save S.p.A., which also manages Treviso and Brussels Charleroi Airports, in 2014.

It has since cemented its association with Venice Marco Polo during a period of significant transformation at the airport in line with an €800m ($906m) capital expenditure plan.

Lagardère Travel Retail declined to comment when asked by TRBusiness what share of the total expenditure has been invested in the retail areas.

World-of-Venice-18

Opened in June, the restyled World of Venice outlet (above and below) houses traditional and regional gifts in an environment that is typically Venetian.

Central to the offer is a 1,200sq m Aelia Duty Free walkthrough shop centred on four distinct areas that merchandise a comprehensive selection from the core categories, including perfumes & cosmetics, confectionery, watches, wines & spirits and gifts.

Staying true to the ‘local’ concept, ‘Here and Nowhere Else’ features products that permeate customers’ sense of the ‘local’ via popular brands such as Bulgari, Pallini, Acqua di Parma, Dolce & Gabbana, Diego dalla Palma, Trussardi and Armani.

Drawing on ‘sense of place’, Venetian inspiration is similarly found in the Italian fine food and wines area.

In a bid to ensure a seamless passenger journey, Lagardère Travel Retail has devised ‘Facilitation’ as an objective to improving wayfinding in store with the aid of multiple flight screens.

A gift-wrapping service offered at the cash-till matched with gift-giving opportunities offered throughout also feeds into ‘The Art of the Gift’.

Finally, ‘From a customer to a guest’ underpins Lagardère Travel Retail’s philosophy that shopping is – and will remain – a highly interpersonal experience.

Aelia-Venice-Airport-World-of-Venice-2018

That has led to the creation of a bespoke service to welcome and assist travellers throughout the store.

The introduction of the new walkthrough format store (which replaces a previous smaller, non-walkthrough unit) followed up to 50 discussions between the operator and landlord to agree on the most suitable configuration to rationalise and optimise the passenger flow, Lagardère Travel Retail COO EMEA Frédéric Chevalier told TRBusiness.

Over the past 18 months or so, Save S.p.A. in close partnership with Lagardère Travel Retail has set about overhauling the post-security retail experience, with roughly 30 stores being impacted in one way or another by the reconfigured space.

This was carried out in a phased programme that did not affect the closure of any existing units and included the travel retailer’s ‘Fashion Place’ concept that focuses on traditional to contemporary mid-range items from the likes of Longchamp, Swarovski, Tumi and Calvin Klein.

“Continuing operations as smoothly as you can without too much disruption is a huge challenge – either it takes 10 years because you either choose to do it that way or are sub-efficient in the transformation,” said Chevalier, who says the shops’ eventual completion represents a ‘milestone’.

“We’ve had a lot of temporary stores, we converted one space from one category to another just for the sake of speeding up the transformation of the airport. Ultimately, if you look airside it is quite remarkable what has been achieved in two years with more than 10 million pax passing through this terminal.”

Aelia-fascia-Venice-Lagardere-TR-2018

Lengthy discussions between the operator and retailer on the optimal duty free trading model took place before the launch of the central walkthrough format.

Indeed, Chevalier admitted on reflection that the ‘badly needed transformation’ would be very complex given the aforementioned requirement to keep the business running without closing units temporarily.

“What is fundamental– and we can be proud of on all sides – is the ability to work together while maintaining a smooth and efficient passenger experience,” he added.

In recent months, Lagardère Travel Retail has introduced labels such as Max Mara, Ferrari and Ray Ban boutiques (with Rimowa set to open at the end of the month).

Located airside post-security, the shops are accessible through one of two exits from the Aelia Duty Free walkthrough, with the other taking passengers to a Bottega dei Sapori outlet that sits adjacent to a facelifted ‘World of Venice’ store.

This is characterised by its Venetian history, ambience and spirit of gifting, such as the region’s world famous Murano glass.

Other strengths in the commercial lineup is travel essentials, with a renovated Relay outlet selling news and convenience options.

Throughout the mix, international and local experience twins to deliver a number of tailor-made options.

These include foodservice names such as Emporio del Grano, which blends traditional Italian cuisine in a stylish and modern landside setting; Natoo, Healthy All The Way, a 130sq m health food shop airside; Rustichelli & Mangione, a colourful parade of Italian and Mediterranean cuisine; C. Coffee Lovers, a quick-service offer targeted at international pax; and Torrefazione Cannaregio, offering Italian coffee, desserts and sandwiches.

Aelia-Venice-Lagardere-C.Coffee_2018

C. Coffee Lovers targets a predominantly international passenger audience seeking quick-serve, authentic Italian fare.

“The main objective for Lagardère Travel Retail is to keep up with new trends by inventing, creating and designing original and innovative concepts to be a pioneer and a role model in the travel retail sector,” commented Chevalier.

EARLY TRADING +80%

Dag-Rasmussen-Lagardere-Nov-2018

Dag Rasmussen, Chairman and CEO, Lagardère Travel Retail.

According to a senior airport official, the new commercial areas have witnessed growth of +80% several months in since trading began when the store opened in May.

Indeed, the majority of the above growth has come from duty free itself, TRBusiness learned.

Lagardère Travel Retail Chairman and CEO Dag Rasmussen also confirmed the ‘strong’ performance of the shops, which completed around one year ago, during a recent interview.

Spend per head has also risen in the region of +25% in the approximate five months since the duty free store opened year-on-year.

“The new commercial area inaugurated today demonstrates the efficiency of the joint venture between Save and Lagardère Travel Retail,” commented Monica Scarpa, CEO, Save Group.

“The attention of our company to the quality of services and the constant commitment to develop solutions that meet the needs of our airport guests, combined with the international experience of Lagardère Travel Retail, has determined a result that raises the level of Marco Polo’s offer through commercial spaces that fit well into the elegant architectural context of the terminal.”

Speaking to TRBusiness separately, Scarpa explains that following some initial budget worries concerning projected sales, the shops are now performing better than budget.

“This is a great result and an increase over previous travel retail sales in this (duty free) area,” she said.

Aelia-walkthrough-Venice-dutyfree

Venice Marco Polo Venice Airport has already hit 11m pax this year.

“We have some benchmarks: our goal is to have around 1,200sq m available per million passengers in terms of F&B and retail space.”

She continues that a 50:50 split in terms of retail and F&B space across airside and landside is the eventual objective for the airport, which handled 10.4m pax in 2017 on an international and business traffic split of 87% and 26%, respectively. Year-to-date, it has broken the 11m pax mark.

The master concession framework that Lagardère Travel Retail operates under at Marco Polo remains an important contributor to the result, adds Scarpa.

Monica-Scarpa-SaveCEO-18

Save Group CEO Monica Scarpa says the airport’s ambition is to reach 1,200sq m of commercial space per million passengers served.

DECREASING LCC SPH

Lagardère Travel Retail’s Italian operations contribute more than €330m ($374m) per year to Group revenues and remain a top three market in segments including fashion, fine food and duty free.

Currently, it operates in 15 airports and 13 rail stations and accounts for more than 50% of the country’s duty free market.

In fashion and accessories for example, it manages retail areas on behalf of airports and/or and acts under franchise agreements, allowing luxury and mainstream brands to compete against each other.

“In Italy growth is on all the business lines; we’ve grown the Relay network in a very impressive and successful manner and will continue to do so – it’s now at 10 airports from zero a few years ago. We’re very good in food here in Venice and Rome and we think the good momentum will continue in the segment,” added Rasmussen.

“For us, Italy is the third market for us worldwide and very important. We try to adapt and tailor our offer to the evolution of the passenger.

“Low-cost passengers represent all the growth in Europe; they like food and travel essentials, but duty free spend per pax is decreasing. If you travel ten times per year, you won’t buy more than when you travelled the first time.

“The fact that people fly more frequently and have more low-cost passengers means you have less spend per pax, but our three-line business strategy is a good response to that.”

Moving into next year, the airport will begin enlarging the north side of the terminal as part of the ongoing expansion programme.

Venice Marco Polo Airport has enjoyed an average pax growth of +6.1% in the seven years to 2017 and has already realised €430m of the €800m in its capital investment plan.

This year, it expects to surpass 11m pax supported by a long-haul network of seven routes in North America including Newark, New York JFK, Atlanta and Philadelphia; two in the Middle East (Dubai and Doha); and one in the Far East (Seoul).

Asked about plans to introduce more long-haul direct routes to Asia, Scarpa added: “Of course, we are working on this. It is important for us.”

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