GSF Düsseldorf part two: Wholesale & retail in focus

By Luke Barras-hill |

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A raft of thought leaders, decision makers and digital experts attended the boutique-style seminar at Düsseldorf Airport.

In the second of a two-part report on Global Shopping Forum (GSF) 2019, delegates were treated to a series of data-rich sessions on branding and marketing.

These including a compelling session from Global Smiling unboxing the power of Chinese social media to drive digital return on investment. Meanwhile, extracting best value from the wholesale business model was flagged as a chief challenge by two leading fashion brands.

As reported, TRBusiness was selected again as the official – and only – media partner to support GSF 2019.

Held at Düsseldorf Airport on 7 November, this year’s event was a cooperation between the airport, Travel Blue and Global Blue and co-hosted by Research and Content Partner m1nd-set. [Click here to read part one].

SHOPPING ‘LOW ON DIGITAL PRIORITIES’ 

As a familiar face to many at GSF having attended the event for several years, Jan Hieronimi, Industry Manager, Retail, Google Germany addressed attendees in the final of the main forum sessions.

For the uninitiated, Hieronimi attended GSF in 2017 prior to the landmarkGoogle Meets Travel Retail’ seminar held in Hamburg the following year.

Since then, Google has undertaken research on travel retail in Germany. Hieronimi kicked off by outlining that by 2025, 68% of the globe’s population will be millennials or younger.

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Jan Hieronimi, Industry Manager Retail, Google Germany.

In 2004, 13% of retail revenues were influenced by digital, leaping to 58% in 2017.

He then proceeded to present some auspicious [but frankly debatable – Ed] data on the level of air travellers buying at airports (89%) based on a survey of 700 who had travelled by air in the past three months, also delineated by the categories they prefer. Delegates were told 42% of travellers researched ahead of time or planned where they wanted to shop.

Search engines emerged as the most popular medium for carrying out browsing, followed by the airport website, retailer website and maps service (likely Google Maps).

Once at the airport, 83% of those stated they used digital devices at least sometimes to read emails, news, blogs and check their social network feeds (Youtube, Facebook, Linkedin etc.), with a mere 15% actually undertaking online shopping.

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Eli Fel, Founder and Honorary Chairman, Global Shopping Forum.

Of those using digital devices, 46% opted to research shopping deals at the airports, with millennials unsurprisingly showing a higher propensity to browse.

Hieronimi said the data sets point to the opportunity to capture travellers pre-trip using Google keywords, Google Maps, Google Audiences and a variety of other tools.

Google Audiences in particular was shown to help identify potential customers by their demographics, interests, affinities and intent (life events, custom intent, similar audiences, re-marketing and customer matching). 

WHOLESALE VERSUS RETAIL CHALLENGES

Following a short networking break, Till Pohlmann, Head of Global Travel Retail, Hugo Boss tackled the theme ‘Change Is The Only Constant’.

“Change for us means working more to convert the company and [while] it is great to see what is happening outside, reality happens inside. In our company, it is relatively slow change. We are not as fast as we would like to be, still, we would love to be the most innovative and desirable fashion brand.”

He went on to provide an overview of Hugo Boss’ travel retail operations, which spans wholesale and retail activities across a combined footprint of 200 points of sale straddling airports, downtown and border shops. This in addition to 25 points of sale on cruise ships and partnerships with 46 airlines.

Inflight accounts for less than 1% of Hugo Boss’s total travel retail turnover, which currently equates to approximately €105m-€110m ($115m-$121m) but it has an ambition to reach €150m.

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Till Pohlmann, Head of Global Travel Retail, Hugo Boss: “If we are not able to set up our online store with a wholesale partner, domestically, how are we supposed to set it up in travel retail?”

Change, Pohlmann continued, begins with consumers and Hugo Boss works with a view to educating younger consumers on the merits of the brand.

On digital and omni-channel services – data sharing, search and inform, click and reserve, buy and collect and home delivery – Pohlmann admitted that implementing systems in the domestic business, let alone travel retail, remains a challenge.

That is compounded by the fact that the brand has much more ability to implement services in its own shops; the operational flexibility working under a concessionaire on the other hand are much tougher.

He questioned: “If we are not able to set up our online store with a wholesale partner, domestically, how are we supposed to set it up in travel retail?”

Google’s Jan Hieronimi returned to stage to host a one-hour tutorial for marketeers on how to target travellers during the travel journey. The findings from this will be assessed in a subsequent online report.

Stéphanie Lefebvre, Travel Retail Director EMEA at Lacoste then offered another brand point of view in her presentation ‘Digitalisation Facing The Trinity Challenge’.

At present, travel retail represents a mere 2.5% of the company but like many others it is seen as an essential shop window for growth.

Broken down by channel, the largest share of the business is accounted for by airports (75%), followed by downtown and border shops (10%), cruise (9%), online (5%) and inflight (1%).

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Stéphanie Lefebvre, Travel Retail Director EMEA, Lacoste called for more co-operation and data sharing between travel retail partners.

APAC represents approximately 50% of sales, with Europe, Middle East and Africa at 40% and the Americas at 10% (predominantly in South America).

Adapting product assortments to different nationalities and languages is one of the predominant challenges in travel retail, said Lefebvre.

Similar to Pohlmann, Lefebvre highlighted challenges between the direct retail model and the lack of control over inventory, sales staff and information on selling techniques via wholesale merchandising.

Describing the difficulties in establishing synergies between operations at airports, onboard and in-store sales, she called for more co-operation and data sharing between partners.

“Most of the time we forget the traveller, which should be the number one preoccupation,” she asserted, flagging the lenses of personalisation, experience, connected journeys, immediate responses and consistency as cornerstones of the Lacoste travel retail business.

She said physical boutiques should remain a ‘strategic place’ where customers experience the brand, while digitalisation should enhance the experience but not be the tool that damages the consistency of the message.

“We want to implement more and more digital tools that we have in the local market into travel retail,” she stated.

TIKTOK: A TUTORIAL

Lexi Guo, Managing Director of Hamburg-based digital marketing agency Global Smiling, then indulged delegates with new digital trends in China and provided some important pointers on leveraging Chinese social media – an increasingly critical vehicle for converting browsers to buyers.

Her presentation focused on WEChat’s Mini Program and TikTok, the former being a social media app-based platform and the latter a social media video app.

According to Global Smiling research, WeChat placed fourth and TikTok sixth in a ranking of mobile apps by monthly active users in Q3 this year.

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TikTok, which offers music-based videos and live streaming functions, has achieved one billion downloads since February and enjoys 150 million daily active users.

Guo highlighted an example of an influencer in China trialling a lipstick product via TikTok.

As a result, the influencer sold a staggering 14,000 lipsticks as a result of the one-minute video, accruing more than RMB3.7m in five hours while affording significant exposure to the product and brand.

“The amazing thing about TikTok live streaming is the sense of interaction and participation as a user,” explained Guo. “While watching the live streaming you can directly comment and the influencer will answer your questions about the product. This is important for merchants as they will have up-to-date feedback on how the market is reacting to their product. This brings in sales.”

Guo then described the fusion that can be achieved between the TikTok branding exercise and We Chat’s Mini Program, an app-in-app embedded into the WeChat ecosystem.

By including a QR code or link within the live streaming feed, the featured TikTok influencer is able to drive traffic to the Mini Program website. Currently the app-in-app attracts 170 million daily active users, with each user opening four mini programs per day on average.

Cost effectiveness, Guo relayed, is a USP for the mini program platform.

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Lexi Guo, Managing Director, Global Smiling illustrated the enviable revenue links that can be built between Chinese social media video app TikTok and WeChat Mini Programs.

To illustrate this, she drew comparisons with Tmall (Alibaba) and JD ecommerce sites.

The set-up fee for a merchant on Tmall is a minimum €20,000 with a service fee of €4,000, while JD attracts a €15,000 minimum set-up fee and €10,000 service fee. The commission fee for Tmall and JD is around 2% each.

WeChat’s Mini Program on the other hand offers 0% commission, no set-up fee and a service fee of between €2,000 to €4,000.

“The advantage is this is embedded in WeChat’s system, meaning I can direct and use traffic from WeChat,” said Guo. “If I already have WeChat in my phone, there is no need to download another app. I can finish the reservation and purchase process with a WeChat Pay wallet.

“If you want to have a piece of cake in the Chinese market, you need to know what is going on there.”

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Anna Marchesini, Head of Business Development, m1nd-set, led delegates through metrics pointing to the importance of pre-trip touch points, price comparisons between duty free buyers, airport web usage and the influence of social media on the purchase decision.

The final session of GSF was delivered by Anna Marchesini, Head of Business Development at swiss research firm m1nd-set.

In this, she unboxed the influence of online information searches in the purchasing decision process, among a number of other topics. [For a more focused report on the findings, watch out for the December print edition of TRBusiness].

SUSTAINABILITY IN FOCUS

Before GSF Founder & Honorary Chairman Eli Fel wrapped up proceedings with a condensed view of the key takeaways and learnings, TRBusiness was offered a platform to share with the audience some thoughts on the critical sustainability challenges facing travel retail and to present two groundbreaking initiatives.

The Travel Retail Sustainability Forum (TRSF) is a clarion call to the industry to tackle in a more astute manner detriments such as single-use plastic bags that represent an every-day plight to our environmental existence.

With responsible consumption becoming more important for consumers today, TRBusiness and partner Duty Free Innovation (DFI) have created a movement for more affirmative action and change.

TRBusiness-sustainability

TRBusiness was grateful to be given a platform to promote the Travel Retail Sustainability Forum (TRSF) and Plastic Pledge ahead of the first TRSF meeting in March next year.

In subscribing to the TRSF and signing the Plastic Pledge, stakeholders join a committed and growing coalition of individuals and organisations making more discernible consumption choices every day. This forms a more broader pathway fostering more ethical approaches to the way we conduct business.

During its address, TRBusiness flagged estimates that put the consumption of plastic bags and sale of plastic bottles in DF&TR shops annually at approximately 10 billion and three billion, respectively.

This is in the context of roughly 500bn – one trillion plastic bags consumed worldwide, with billions ending up as litter. These three statistics are just a drop in ocean when it comes to the wider problem of plastic pollution, which in itself is but one issue [for more comprehensive information on the TRSF and Plastic Pledge, click here].

The Travel Retail Sustainability Forum recently published its manifesto and will hold the inaugural TRSF meeting on 30 March during next year’s Duty Free & Travel Retail Summit of the Americas at the Hyatt Regency, Orlando (30 March – 2 April).

At the meeting, a panel of thought leaders will discuss and debate a series of green initiatives.

Stay close to TRBusiness.com for more information on the agenda…

Click here to read GSF Düsseldorf part one: Technology, value and brand building lessons for TR, featuring presentations from Düsseldorf Airport, and dos Santos, Global Blue and Portland Design.

All images courtesy of Global Shopping Forum.

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