FAWJ report: Fashion travel retail bounces back

By Faye Bartle |

Gebr. Heinemann fashion, accessories, watches and jewellery display at Istanbul (Unifree Duty Free).

Gebr. Heinemann fashion, accessories, watches and jewellery display at Istanbul (Unifree Duty Free).

Lack of staff, reduced operational houses, supply chain issues – these are just some of the challenges that retailers in the channel have faced due to the pandemic. TRBusiness asked a selection of leading names in the fashion, accessories, watches and jewellery space to share their lessons in resilience and recovery…

Travel restrictions are continuing to ease around the world, allowing a growing number of people to rediscover travel retail. As the industry opens up again, those on the retail side are working hard to navigate the knock-on effects of the pandemic.

“The main challenges remain to be delays in the supply chain due to lockdowns in China and the shortage of raw materials with under deliveries as a consequence,” said Jan Richter, Director Purchasing Fashion, Accessories & Watches, Jewellery (FAWJ) at Gebr. Heinemann. “In combination with the reduced planning certainty in terms of pax numbers and structure, it remains a big challenge to get the right amount of goods onto the shelves at the right time.

“We also see highly increased prices for precious materials like gold and diamonds due to the war and a general price increase especially in the luxury segment.”

Having sufficient sales staff on the ground is another issue that’s in focus.

“The main challenge is that there is a shortage of staff,” said Heidi Omar, Managing Director of bespoke recruitment agency Artisan People. “During lockdown, the travel retail industry stripped back a lot of staff. Even when the staff came back from lockdown, it was never at the full capacity that it had been before. But then the airlines suddenly went back to full capacity and the shops didn’t have enough staff, which meant we had a lot more work.

“And because everyone went back to business at the same time, we had another problem. There was a huge demand for airside passes from all sides and waiting times became longer and longer. The teams doing the pass checks didn’t get bigger and this created a massive backlog. So even though we were recruiting, we couldn’t get people through the checks quickly enough. The situation is now getting better, but it has been a major challenge.”

Heidi Omar, Managing Director of Artisan People.

Heidi Omar, Managing Director of Artisan People.

While, for some, the issues are ongoing, the FAWJ space as a whole is showing signs of strength.

“The FAWJ category has proven to be very resilient overall, especially at hubs such as Istanbul Airport,” said Richter. “The strongest sub-categories recovering post pandemic are leathergoods, watches and sunglasses. These categories account for around 65% of the global FAWJ sell-out.

“We see a growing demand and strong performance for luxury products among all categories,” he adds. “This is especially true for handbags such as Hermès, Bottega Veneta or Gucci, as well as for watches, because these products are increasingly also seen as an investment and a valuable asset.”

Lagardère Travel Retail's Longchamp boutique at Terminal 1, Singapore Changi Airport.

Lagardère Travel Retail’s Longchamp boutique at Terminal 1, Singapore Changi Airport.

It’s a similar story for Lagardère Travel Retail Singapore, which carries a variety of fashion brands including Longchamp and Salvatore Ferragamo.

“The outlook for our business is extremely positive,” said Ann Pang, Chief Executive Officer, Lagardère Travel Retail Singapore & Malaysia. “Compared to the beginning of the pandemic when there was a lot of uncertainty and significant travel restrictions, we are seeing strong traffic recovery.

“Our stores’ performance is trending above expectation, driven by higher footfall and pent-up consumer demand. Passenger count exceeded 50% of 2019 levels in April 2022 on like-for-like comparison for Terminal 1 and Terminal 3.”

The majority of its stores are now operating full opening hours.

“While we continue to observe strict sanitary guidelines, we are back to business as usual,” said Pang.

The company was well prepared for a rebound, having turned its attention to offering an immersive online and offline shopping experience during the pandemic. New touchpoints and resources were added to the mix to inspire and engage the audience.

“Our team remains agile and is constantly adapting to the changing customer profile during this period of recovery,” said Pang. “Concurrently, are working closely with Changi Airport to prepare for the reopening of Terminal 2.”

Brands ‘fighting for promotional space’

All eyes are on how shoppers are behaving in the current climate.

“People still want to treat themselves to something special after the long lean period,” said Richter. “While business travel continues to be stagnant, we see increasing numbers of younger people shopping for FAWJ as well as lifestyle shoppers who are searching for an entire look or for high-end accessories to upgrade their wardrobe. In addition, the high proportion of holidaymakers and leisure travellers fuels the sunglasses category.”

Artisan People, which is focusing on talent scouting and utilising social media to attract top talent, is seeing a rise in demand for promotional activities with ‘a lot of brands fighting for the promotional space’.

Commanding the attention of travellers is, naturally, top of mind.

Left: Isabel Tester, Senior Account Manager at Blackjack. Right: Ann Pang, Chief Executive Officer, Lagardère Travel Retail Singapore & Malaysia.

Left: Isabel Tester, Senior Account Manager at Blackjack. Right: Ann Pang, Chief Executive Officer, Lagardère Travel Retail Singapore & Malaysia.

“Engagement is at the core of everything brands are doing right now and so there are multiple strategies being deployed both on and off of the shop floor,” said Isabel Tester, Senior Account Manager at Blackjack Promotions, which delivers global campaigns for clients.

“From using social media and influencers to inspire shoppers to visit the store, to ensuring there are trained brand ambassadors ready to deliver the face-to-face experience when they get there – there is an end-to-end approach being deployed.”

She cites ‘delivering human connection as part of the brand experience’ as one of the major challenges facing the FAJW space right now.

“Recent research we commissioned revealed that the experience of the pandemic has compelled almost two thirds of consumers to appreciate how important human connection is now, when shopping and enjoying leisure facilities. People are still thirsty for that face-to-face moment which helps them to engage with brand values,” said Tester.

“It’s about being able to try on the items while hearing the story of the brand and having an honest opinion from someone who can also suggest alternatives which meet your needs,” she continued.“However, with staffing shortages across the board, retailers are at risk of continuing to miss sales from customers who are not receiving the connection they crave.

“For example, the watch market is currently being driven by the younger customer in addition to collectors and cost-conscious shoppers. These are all people who want to gain knowledge, discuss trends and make their purchase a considered, enjoyable experience.”

Fashion and accessories – a ‘global growth driver’

In terms of what we can expect to see in the future, Heinemann is banking on FAWJ on being a significant boost to business.

“The FAWJ category continues to be a global growth driver for Gebr. Heinemann, especially at airports but also in other channels,” said Richter. “Our goal is to roll out the FAWJ category at all top tier airports as well as at selected smaller airports, in different price categories and style segments from low cost to top luxury depending on the passenger profile.

“As part of our strategy, we are putting a high focus on the roll-out of our most recently developed multi-brand concept, which we just opened in our core Duty Free shop in Frankfurt. Some of the brands were already represented in our shops at the site, but in our new multi-brand concept we curate them in a very special way and thus create a whole new elevated shopping experience for the passengers.”

Gebr. Heinemann, fashion accessories, watches and jewellery displays at Frankfurt Airport.

Gebr. Heinemann, fashion accessories, watches and jewellery displays at Frankfurt Airport.

The concept groups everything from ready-to-wear to sneakers, bags, sunglasses, watches and jewellery. It stands out visually from the rest of the shop area with materials such as oiled oak, brass and white marble creating a luxurious look and feel.

“One main pillar here is to unite special lifestyle products; it is not about presenting the full assortment of a brand, but about bringing together an extensive assortment of different brands curated in a certain thematic style, so travellers can quickly get an overview of the entire range while shopping for a complete look,” said Richter.

It’s a beacon of the retailer’s agility and flexibility.

“The tailor-made concept offers a high degree of flexibility to respond to significant trends, curate themes and thus keep the space constantly different, inspiring and surprising for passengers,” said Richter.

Pang is looking forward to a ‘strong recovery’ of the fashion category as travel restrictions continue to ease.

Gebr. Heinemann, fashion accessories, watches and jewellery displays at Frankfurt Airport.

Gebr. Heinemann, fashion accessories, watches and jewellery displays at Frankfurt Airport.

“Many fashion brands expanded their omnichannel capability during the crisis,” she said. “While some would consider it a threat to travel retail, we believe the increased multichannel exposure is synergistic to the ecosystem.”

Ultimately, much like the SS22 fashion trends, the outlook is bright.

“Consumers are adjusting to the new environment after a period of severe restriction,” said Pang. “There is a strong urge to lavish in freedom and treat oneself. At the same time more comfortable and relaxed silhouettes have become the expectation. This creates a significant opportunity for both fashion brands and travel retail as style and comfort are valued ideals in our industry.

“The fashion category possesses a good potential to capitalise on new opportunities, to recover through agility, being sensitive to and embracing the changing behaviour by adapting its extensive assortments to meet the forever evolving consumer needs.”

This report is an extension of the edit that appeared in the TRBusiness June/July e-zine

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