Breaking the travel retail industry

The plethora of brands and products vying for the attention of consumers in the airport shopping environment are a vibrant demonstration of the direction that the travel retail industry is taking. Increasingly, companies large and small are recognising the value of the global shop window that is our international gateways, and arguably never before has the competition for space on the shelves and within the terminal area been so fierce. But despite the contest between brands in saturated product categories, and challenges economic, regulatory and in the perspectives of passengers threatening to obstruct its growth, travel retail is burgeoning as new brands continue to launch themselves into the fray.

Here, three brands that have entered the travel retail market in recent years explain how innovative concepts and fresh, unorthodox thinking has enabled them to carve a unique niche in a sector so difficult to crack.

Breaking the travel retail industry

“We are the only company selling footwear onboard, so that means we are able to stand out, because you’d be looking through the catalogue and all of a sudden you see a pair of shoes – with one size fits all – so that gives us an all important USP,” said Philippe Homsy, Co-founder, Butterfly Twists.

It was from humble beginnings that the now acclaimed pioneer of foldable footwear Butterfly Twists took flight, after friends Emmanuel and Frank Eribo, Mark Quaradeghini and Philippe Homsy discovered an unexpected gap in the market for a fashionable, comfortable, malleable shoe that above all would be effortlessly transportable. The idea for their product was born after one of them (who shall remain nameless) learned exactly what it felt like to be in a woman’s shoes after losing a bet and attending a party wearing a pair of 6-inch stilettos.

For almost two years, the founders worked their day jobs in the City of London, and during evenings and weekends worked on developing the product that would become Butterfly Twists – , beautiful, portable shoes that women on the go could exchange for uncomfortable high heels. “We would meet up every evening at one of our houses and try to read up as much as we could on footwear and how to make it, and we tried to speak to as many industry experts as we could. At the beginning everyone would tell us: ‘No, no this can’t be done. Footwear is a hundreds of years old process.’ That all shoes need to be solid and firm and that the flexibility that we wanted wasn’t achievable. So we clearly had to look outside the box,” Co-founder Homsy said.

The founders of Butterfly Twists overcame the challenges of the savage travel retail environment by adapting their concept to suit the distinct needs of its airline customers. “People are used to footwear in six or seven different sizes, so trying to make a product that would fit onboard, and sell one-size-fits-all, was another challenge for us, because we knew airlines wouldn’t want to carry four sizes – they only had so much room on their trolley,” Homsy explained. “We started to research again the elasticity of the product, and how we could use elastic around the upper just to fluctuate with the size of people’s feet, so if you’ve got a smaller foot then the shoe would be a little bit tighter, and the elastic would expand with the size of your foot.”

Now in its second year in the industry, Butterfly Twists is sold in more than 50 countries and on 40 airlines, and continues to grow internationally. It is listed in more than 80 points of sale in travel retail, and the brand works with the some of the world’s most progressive travel retailers – Gebr. Heinemann, Aer Rianta, Dufry, Nuance, James Richardson and Salvo Grima. “We are the only company selling footwear onboard, so that means we are able to stand out, because you’d be looking through the catalogue and all of a sudden you see a pair of shoes – with one size fits all – so that gives us an all important USP,” Homsy added. “We’re always so keen on travel retail as you’re in an environment – say an airport – where all of a sudden you have 10,000 people walking through on a daily basis who represent 100 different countries, and we can reach those people that we wouldn’t do on a normal basis through a store in London or in New York. We can suddenly introduce our product to a whole new category of customer and I think that’s why travel retail, in the beginning, had an obvious pull for us.”

Another stand-out brand that has found success in the duty free channel for its uniqueness is Al nassma, the producer of the first camel milk chocolate, launched in 2008. Al nassma quickly defined the travel retail sector as a key channel of distribution for its novel product innovation, and once the Dubai-based chocolate company had crafted a well-recognised niche in its home market it developed its international business, achieving its first international breakthrough in Japan, a country that continues to play an important role in its development today. “We plan to continue developing in travel retail primarily by continuing to open doors in Asia Pacific, and Europe, where we know through passenger nationality research that Al nassma trades well,” explained Patrick Dorais, Director of Sales at Al nassma Chocolate LLC. “We are working on some interesting product innovations to continue to develop the category.”

Breaking the travel retail industry

Since its launch in 2008, Al nassma has been trading successfully in regional airports such as Abu Dhabi, Bahrain, Doha, Muscat and Istanbul, and has begun distribution outside the Middle East with listings in Vienna, Monastir and Kuala Lumpur airports, among others.

As consumers grow fatigued with airport retail offerings that they consider to be homogenised or repetitive, unusual and unparalleled products are inspiring new buying habits, in which consumers are drawn towards regional specialities and products that cannot be acquired anywhere else. True exclusivity, Dorais explained, is an invaluable quality in travel retail. “There are lots of confectionery brands in travel retail today but most so-called ‘travel retail exclusives’ are in fact just dressed-up versions of the same countline or bar found in the petrol station or kiosk downtown. Al nassma is in that sense different, as our distribution strategy is to be present only in the finest shopping environments. We are very strict about our distribution and merchandising guidelines in order to maintain the brand image and are successfully selling chocolates at prices in excess of US$175 (€140) per kilo.”

In travel retail, every category has distinct challenges, but the growth of the confectionery sector and the battle between brands for a presence in the crowded category is among the most discussed in the industry.

Breaking the travel retail industry

“In the competitive snack landscape, Wonderful Pistachios’ unique point of difference is that we are one of the few, if not the only, globally-recognised pistachio brand,” said James Kfouri, Director of Sales Australia, SE Asia & GTR, Paramount Farms, the producer of Wonderful Pistachios. “The benefit we offer to retailers is that we do not cannibalise existing confectionery sales. Listing Wonderful Pistachios is a win-win for retailers and consumers – adding incremental sales to retailers’ margins and providing convenient smarter snack alternatives to travellers.”

Like Butterfly Twists, Wonderful Pistachios – creator of resealable packs of snacking pistachios – has been in the duty free market for two years – and in that time, has secured more than 40 travel retail locations of sale globally. “The challenge is standing out in a competitive retail landscape. As snacks are often impulse purchases, high brand awareness, attractive packaging, and product innovation are critical factors,” said James Kfouri, Director of Sales Australia, SE Asia & GTR, Paramount Farms, the producer of Wonderful Pistachios. “In the competitive snack landscape, Wonderful Pistachios’ unique point of difference is that we are one of the few, if not the only, globally-recognised pistachio brand. The benefit we offer to retailers is that we do not cannibalise existing confectionery sales. Listing Wonderful Pistachios is a win-win for retailers and consumers – adding incremental sales to retailers’ margins and providing convenient smarter snack alternatives to travellers.”

Wonderful Pistachios approached the travel retail category with a globally recognised brand and a new product offering – one not traditionally marketed to travel retailers, and that serves a growing demand for nutritious snack alternatives to traditional chocolate, pretzels and other processed sweet offerings in the segment. The addition of Wonderful Pistachios to the confectionery category also offers significant benefit to retailers by allowing them to expand their offering with an alternative to other sweet and salty snacks.

With their product offerings these young brands in travel retail have struck the vital chord that individualises them in the crowded duty free market place, and it is by offering the all important point of difference over domestic markets and other brands available to airport consumers that new names in the sector can compete with, and bring something outstanding to, the airport commercial offer.

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The perspective of global brands on the direction of the airport retail environment will be the crux of a session entitled ‘A brands’ new terminal: If global brands had free reign to build an airport shopping experience, what would it be like?’ at the ACI EUROPE Airport Commercial & Retail Conference & Exhibition in Milan, 21-23 April. Senior executives from world-renowned brands will discuss what makes for truly exceptional airport retail, whether there should be more scope for experimentation, and the ways in which the various stakeholders in the shopping experience can work together to bring revolutionary concepts to life.

» Visit the ACI EUROPE Airport Commercial & Retail Conference & Exhibition website

 

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