Exclusive interview: Mohit Lal, Pernod Ricard GTR on the recovery from Covid

By Andrew Pentol |

Mohit Lal, Chairman and CEO, Pernod Ricard Global Travel Retail.

Pernod Ricard Global Travel Retail (PR GTR) is preparing to introduce a new space for DF&TR environments equipped with a robot bartender to ensure clean tastings.

The robot bartender is a first in duty free and embodies what PR GTR envisions for the future of the channel. It also addresses the heightened expectations of travellers around hygiene.

In conversation with TRBusiness as part of an extensive interview, Mohit Lal, Chairman and CEO, Pernod Ricard Global Travel Retail said: “Our insights show that once shoppers are back in duty free, they will expect an elevated shopping experience, which takes into account safety concerns around physical touch-points.”

Additionally, PR GTR has revealed the Martell Perfect Door, the brand’s new digital merchandising wall-bay.

“Designed in a GTR-specific retail feature format, the Perfect Door is equipped with motion sensor screens that activate brand content within the world of Martell. It allows consumers to learn more about products without physical touch,” Lal explained.

JAMESON TASTEHOUSE FLAGSHIP

Other projects include the upcoming launch of the Jameson TasteHouse flagship store in Dublin and two new product developments which will launch in the channel.

The new Pernod Ricard Global Travel Retail robot bartender will be a first in duty free.

The first is an end-of-year Martell Cordon Bleu limited edition which is exclusive to travel retail. This will be joined by the Chivas Extra 13 range with its selective cask finishes. The Chivas Extra 13-year-old rum is a GTR exclusive.

In the first quarter of FY21 to 30 September 2020, Pernod Ricard reported a significant -64% drop in travel retail sales to €2,236 million/€2.6 billion.

Looking ahead to the remainder of FY21, Lal is confident travel will bounce back once a vaccine is available, but is unsure when this will be. He said: “Our sales in the channel have dropped and will only really pick up when international travel is back.

“We’re already seeing encouraging developments in the channel, including the opening of Hainan island to spirits duty free sales.”

On the new opportunity in Hainan, PR GTR has already introduced its first high-profile promotion for Martell, along with its high-value scotch brands at Haikou Meilan International Airport.

Pernod Ricard Global Travel Retail has revealed significant developments associated with its Martell brand.

Lal added: “We remain agile and ready to explore all opportunities introduced to the channel. It is how we will recover and will hopefully be reflected in our end-of-year results.”

Recognising opportunities created as a result of the coronavirus (Covid-19) by closely examining changing consumer behaviour, has formed part of Pernod’s strategy to mitigate against the impact of the pandemic.

Lal explained: “The impact of Covid-19 across the travel retail industry has been incredibly challenging. Initiatives such as our Travel Trail, which targets travellers from the very outset to the end of their journey are even more important today.

“At Pernod Ricard Global Travel Retail, we are re-imagining the traveller experience, making it more digital and inviting consumers to connect to duty free in new and innovative ways.

“We’re confident in the resiliency of our brands and our upcoming brand innovations and we know that consumers will want to buy from the brands they trust and love.

“Loyalty to our brands is high. I’m confident this will remain the same in the future.”

CONSUMER-CENTRIC RESEARCH

Consumer-centric research has been a major focus for PR GTR’s strategy and insights team in recent months, as the company prepares to re-emerge from the crisis.

The Martell Perfect Door is equipped with motion sensor screens that activate brand content within the world of Martell.

The research has been key to understanding shifts in consumer behaviour, the impact this will have on business and ultimately the strategy implemented to be ready for the ‘new normal’.

Lal said: “The teams are tracking industry recovery with the Pernod Ricard GTR dynamic dashboard. This measures the status of the virus, levels of lockdown and mobility in domestic markets, looking at airline capacity, forward bookings and actual passenger traffic.

“This dashboard provides easy tracking of trends and inputs in the business.”

Pernod is also undertaking thorough consumer research through its own consumer sentiment tracker. “We’ve spoken with over 10,000 people across nine nationalities to understand their willingness to travel and expected behaviour once back in airports.

“What is clear is that people want to travel again. We’re seeing approximately 3.4 million posts about travel every month, so there are clear signs of latent demand for travel.”

Pernod Ricard reported a -64% drop in travel retail sales during the first quarter of FY21 to 30 September 2020, versus the fourth quarter of FY20.

Regarding the changing buying habits of consumers, Lal points to insights which show value-driven purchases have precedence over luxury ones. “We don’t believe this is a long-term change. As travel retail discovers a new way to exist, the exciting perks of buying duty free, such as product exclusivity, may prove one of the ways the channel wins.

“Ease of purchase will be another key factor for consumers, as reimagining the channel through digitalisation has become critical in this ‘new normal’.

Many digital initiatives which the company had planned for the next two or three years have been greatly accelerated. “We’ll see them roll-out in a matter of months,” Lal remarked.

The pandemic has transformed the consumer landscape, bringing about new ways of living, working and of course, shopping. The digital impact on the channel was already a growing trend, but it has now become a reality.

“E-commerce and omnichannel shopping such as click and collect have been available to travellers in duty free for some time but were less widely known about.

“Now, successfully educating consumers on what is available within the channel will be key to forming new consumer behaviours and driving purchasing trends forward.”

DIGITAL OPPORTUNITIES

Online, e-commerce and digital opportunities will be of ‘tremendous importance’ for PR GTR in the future, emphasised Lal. “Achieving seamless e-commerce journeys by engaging with consumers earlier on their ‘Travel Trail’ will no doubt be one way the channel will develop.

“In some markets, we have already seen the evolution of social platforms into e-commerce channels, demonstrating there are many possible ways to re-think the purchase journeys of our travellers.”

Aside capitalising on the immediate and extensive growth of digitalisation due to the pandemic, which Lal is confident will feed into duty free, the company is looking to make meaningful connections with customers. Reaching them earlier in their journeys is the way to do this, as previously eluded to.

“As a result, our Travel Trail strategy has not changed and will not change. It is rooted in the need to speak with consumers before their arrival at the airport, to educate them on what they can find in duty free and get them excited about their airport shopping.”

Leveraging technology to ensure travellers feel they have safe access to Pernod’s brands at airports, when they are ready to travel again, has also become another core focus.

The Pernod Ricard Global Travel Retail teams have been working hard to re-imagine retail theatre.

The company’s innovative digital experiences will compensate for the fact consumers can’t — and in many cases don’t want to — handle products. Lal commented: “We are working on ways to allow sampling without physical contact or to enable consumers to know more about products without having to directly engage with them, by tapping into digital solutions.

“Interactions with products will still be there, but it will take a different form. This is again where we see the opportunity for innovation to arise. Many things will be tried and tested across the channel for the first time and we will rely heavily on consumer insights to find out what is and isn’t working.”

Despite all this talk of digital and technology, the role of brand ambassadors remains essential. “While travellers may want to cut down on interactions in the airport in the short-term, the value of brand ambassadors is undeniable, as they are the ones to provide opinions and insights.

“The key lies in consumers feeling safe when they shop and engaging with the staff. It is our collective mission to ensure this.”

A Dufry activation at Heathrow Terminal 5 last November featured a specially curated selection of rare 18-30YO single malt whiskies under Chivas Brothers’ Secret Speyside collection.

Retail theatre will also remain important to the channel, despite the rise of e-commerce. “Consumer insights tell us shoppers want experience, but the retail environment will have to change to adapt to altered consumer behaviour.

“Our teams have been working hard to re-imagine retail theatre and we’re confident future developments will keep purchasing within the channel exciting and engaging for travellers,” he concluded.

 

 

 

 

 

 

 

 

 

 

 

International

NOW LIVE: January ezine + landmark Annual Survey

The TRBusiness January 2024 ezine, containing the flagship Global Industry Survey, is now...

International

Harding+ announces departure of Chief Brand and Culture Officer Sue Gosling

Harding+ Chief Brand and Culture Officer Sue Gosling has stood down from her...

International

"Growing appetite for sustainable & local products"

With international passenger traffic rebounding, consumers are demonstrating a craving for...

image description

In the Magazine

TRBusiness Magazine is free to access. Read the latest issue now.

E-mail this link to a friend