Tallink ‘actively looking’ at airport bid opportunities

By Luke Barras-hill |

Silja-Europa-19

Silja Europa is the largest vessel in the 14-strong fleet, with the capacity to handle more than 3,000 passengers.

AS Tallink Grupp has told TRBusiness that international airport shops are on its radar with the Baltic cruise and ferry company suggesting it would consider bidding on future contracts.

“[Airport shops] is one of the areas we are definitely looking at,” confirms Piret Mürk-Dubout, Member of the Management Board, AS Tallink Grupp.

Asked whether Tallink would initially concentrate its efforts in its native Estonia, should opportunities become available, the former CEO of Lennart Meri Tallinn Airport said: “No. I think we are looking more internationally.

“It all depends on the agreements; airports are normally quite engaged [with retailers] on quite long-term, five- to ten-year agreements.”

Tallink already operates domestic tax paid ground shops in Tallinn within the fashion category but has made clear it sees its future travel retail presence on sea and land.

Hints were dropped that the Estonian company might foray into airport and port retail during the Tallink Duty Free conference last week (5 September).

Piret-Murk-Dubout

Piret Mürk-Dubout, Member of the Management Board, AS Tallink Grupp.

30 YEARS AND COUNTING…

Held onboard cruise ship Silja Europa, an intimate conference and dinner was organised to celebrate Tallink’s 30th anniversary, attended by key supplier and distributor partners plus sections of the travel retail press.

Addressing guests during an engaging presentation, Mürk-Dubout began by delivering a brief background on AS Tallink Grupp’s 30-year journey to date and its vision for customer-centric growth and innovation.

As a leading European provider of leisure and business travel and sea transportation services in the Baltic sea region, Tallink possesses 14 vessels (nine cruise ferries, three fast vessels, two cargo ships) serving seven routes across four countries (Estonia, Sweden, Finland and Latvia).

The Group is also involved in other activities such as hotels, restaurants and the aforementioned ground shops.

Annual Group turnover totalled €950m/$1.1bn in 2018, which Mürk-Dubout says is equivalent to approximately 4% of Estonia’s GDP.

Restaurants and shops account for approximately 55% of total revenue.

Since its founding in 1989, Tallink has grown its fleet into a position where it is today the fourth largest ferry company in the world, according to Mürk-Dubout. Its shares are listed on the Nasdaq Tallinn Stock Exchange and more recently on the Nasdaq Helsinki Stock Exchange.

The firm, which operates vessels under its eponymous name and through brand Silja, carried just shy of 10 million passengers in 2018.

Of that, almost one million are Asian passengers. Tallink has web sales in 17 languages and a shopping footprint of 15,000sq m at sea with 47 shops (multi brands and mono brands).

Pre-order and online retail services have been launched in almost all its markets, including facilities for quick-service and in-lounge shopping.

Mürk-Dubout then outlined the Group’s strategic vision, identifying heightening customer satisfaction, expanding its services in different verticals (duty free, retail, hotels etc.) and broadening its global reach.

Customer data is tracked by brand, route and different demographics depending on the channel, she continued, impressing on delegates that Tallink’s vision is to be a market pioneer in its field by striving for the highest levels of customer satisfaction while increasing passenger volumes and cargo.

It is currently working on devising a range of services aimed at different customer segments.

Tallink-Anniversary-19

The former Tallinn Airport CEO delivered an impassioned speech on injecting more entertainment, novelty and authenticity into travel retail to maximise customer experience and satisfaction levels. 

“We are constantly looking for the latest opportunities, on sea and on land,” emphasised Mürk-Dubout. “I believe success lies in win-win partnerships.”

She then addressed how Tallink is elevating its onboard retail experience and entrenching its competitive difference through storytelling and authenticity.

“Duty free is a critical part of Tallink’s business model,” she said. “It’s our common ambition to make the retail experience more easy, relaxed, comfortable and entertaining.”

Mürk-Dubout then touched on a series of trends in travel retail: personalisation, promotions, and niche, destination or special edition products designed to put the entertainment value back into shopping.

LNG SHUTTLE IN 2022

Separately, Tallink is gearing up to launch its new LNG-powered Shuttle Ferry in 2022, which will have a strong commercial presence.

Mürk-Dubout says the company is working on gathering intelligence on the competitive retail landscape to design a layout offering customers the best possible service.

“It’s all about the customer journey, engagement, opportunities, the layout of the overall area to emphasise and celebrate different categories,” she said.

Mega-Tallink-overhead

The LNG-powered fast ferry Megastar features a traveller superstore, lobby shop and a spread of core merchandise on decks 7 and 8. Source: AS Tallink Grupp.

Asked whether the service offer would be fundamentally different from that offered on Tallink’s other vessels, Mürk-Dubout continued: “Sometimes you need to be a bit careful with your surprises; you need to package them in a way that is acceptable and not too difficult, ensuring technology is not providing a disadvantage to those solutions, but step by step you have to have the capabilities in place to introduce new ways of engagement with different products and brands.”

While Tallink’s short service shuttle ferries incorporate quick shopping facilities such as scan-and-go, Mürk-Dubout does acknowledge that introducing such enhanced digital services into core tax and duty free assortments without proper consideration may in some cases be counter-intuitive in an environment that relies so heavily on browsing and time-consuming experiences.

Beauty-Silja-Tallink-19-Serenade

She flags that space restrictions also means it’s not always possible to allow customers to completely immersive themselves in information to understand a product’s footprint, region or story.

“It’s about how you can package all those expectations – new technology and new ways of working dynamically with suppliers on content building, even if we’re overwhelmed with it. We still need content in this colourful landscape.”

BEAUTY GETS BOOST

On technology specifically, Mürk-Dubout says Tallink has introduced the first 5G wifi service on a ferry and this is aided by virtual assistant Nemo, which is powered by artificial intelligence.

Alipay, Union Pay, WeChat Pay online payment platforms and Global Blue’s tax refund services are also available on board.

Another crucial topic of importance is sustainability, with Tallink and Silja receiving the Marine Stewardship Council Chain of Custody Standard.

Jo Malone-Silja

A free-standing self-service unit from Jo Malone London is a recent addition onboard Silja Serenade, which has bolstered its beauty aisles recently (above).

Environmental, sustainable and community-based activities are co-ordinated and steered by Tallink’s management.

Listing MSC-certified seafood promotes sustainable fishing with technological solutions helping to reduce fuel consumption and emissions across the Tallink fleet, TRBusiness learned.

With that in mind, Mürk-Dubout points to overall fleet emissions falling by 44% in the last decade.

On the brands side, Tallink has been busy adding new names and activations, notably in the beauty category.

Silja Symphony, which TRBusiness and other members of the travel retail press were invited to visit prior to Tallink’s Duty Free Conference on Silja Europa, has listed Tom Ford Cosmetics and Jo Malone in the past month, the latter with a new self-service concept.

TallinkCEO

Paavo Nõgene, CEO and Chairman of the Board, AS Tallink Grupp.

SINGAPORE SUBSIDIARY 

Shortly after the Tallink Duty Free Conference, the group revealed it was establishing a wholly-owned subsidiary in Singapore and first in Asia in a move that tilts towards growth in Asia.

Tallink Asia Pte Ltd is designed to ‘simplify the development and expansion of the group’s activities in Asia’.

In a statement, the group was keen to emphasise that is has ‘focused heavily’ on promoting its products and services in various Asian countries in recent years, including recruiting Asian multi-lingual hosts onboard its vessels and introducing popular payment platforms such as Alipay and WeChat.

Nõgene said that such activity provides ‘a good foundation to build on from now on’ to capitalise on ‘significant’ interest for the brand as it seeks to develop its footprint into new markets.

“We have plans for activities in Asia, which we cannot unfortunately talk about more, but which we will shed more light on in the future as the plans progress,” he hinted at.

For more on the Tallink Duty Free Conference and the 30th anniversary of AS Tallink Grupp, watch out for the October issue of TRBusiness available at the TFWA World Exhibition & Conference.

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