Its multi-formatting strategy is a key focus in Luxottica’s strategy for growth – especially through maximising Luxottica Group’s vertically integrated expertise as manufacturer, brand owner, licensee, wholesale supplier and retailer. In 2014 Luxottica’s innovative travel retail strategy saw the openings of 31 Sunglass Hut stores within the channel.
The growth of the sunglasses category has been one of the great success stories of duty free in recent times – with a significant share of its growth the result of the pioneering approach of one of travel retail’s trailblazing brands. Francis Gros, Head of Global Channels, explained how Luxottica’s category vision shone new light on the sunglasses sector.
According to Generation travel retail research, in 2007 sunglasses sales were a mere US$777 million in the duty free channel. It was a time in which the category was severely under-represented, poorly executed and not a focus for travel retailers. However, in 2007 Luxottica Group established its dedicated travel retail division, having identified the market as a huge growth opportunity for its premium, luxury and sports eyewear brands. Determined to take the leadership role in the sunglasses sector, in 2008 it launched its pioneering category management programme, and with it a clear vision – to double the size of the sunglasses segment within five years, and to break into the top 10 categories from a starting position of number 16.
“We saw sunglasses as the perfect category for travel retail,” explained Francis Gros, Head of Global Channels, Luxottica – the group behind iconic names in sunglasses such as retailer Sunglass Hut. “Providing entry level into luxury brands, a future-proof category without legislative threats, constantly refreshed assortments, and a product that is itself inherently related to travel.”
Luxottica has invested significantly in its category management programme ever since, establishing workshops, awards and regional activities, as well as commissioning bespoke traveller research. “Most significantly, it is not just about Luxottica anymore. All major brand owners in the sunglasses category participate and work together with us on a category approach,” Gros said. According to Generation’s latest figures, the sunglasses category was worth US$1.66 billion in 2013. Luxottica’s strategy helped the category achieve the doubling of sales inside four years, and has now re-set its targets for sustained growth towards what Generation has forecast could be a US$7.85 billion category by 2025.
In pursuit of perfection
“We will not relent in our pursuit of perfection for the category. Travel retail can be the expert channel for buying sunglasses,” Gros stressed, explaining that Luxottica has a number of key strategies for sustained growth – including significant investment in dedicated travel retail training teams in each region. Its multi-formatting approach is also a key focus – especially the maximisation of Luxottica Group’s vertically integrated expertise as manufacturer, brand owner, licensee, wholesale supplier and retailer.
Luxottica’s multi-formatting strategy revolves around executing the sunglasses category in different formats at different stages in the passenger journey through an airport, targeting varying shopper needs and behaviours. This spans a sunglasses department in the main duty free shop, sunglasses in a brand boutique with a genuine brand experience, and a specialist standalone sunglasses shop with definitive specialist service. “Then we have the last-minute and arrivals stores for distress purchases – often of the best-sellers – and pop-up promotional concepts, which bring additional tactical visibility and interaction for the category,” Gros explained. “Multi-formatting is crucial to the future growth of the category. As we know from airports where it is executed best, such as Heathrow and Gatwick, we drive incremental sales and do not cannibalise sales from one point of sale to another.”
Sunglass Hut is a natural partner for airports. It is the world’s largest specialty sunglass retail brand with over 3,000 stores – recognised and trusted by consumers worldwide. In 2014 Luxottica’s innovative travel retail strategy saw 31 new openings of the store within the channel. Much hard work and collaboration with stakeholders from every aspect of the industry was required to maximise the potential of the category, and continued growth remains a priority across all regions and with all partners. “I’d like airport authorities and travel retailers to talk to Luxottica about setting a spend per passenger target for the category at their airport, as we have done with Heathrow Airport and World Duty Free Group. This creates a platform for us to work together to achieve mutual objectives and it’s amazing what can be achieved through greater collaboration,” Gros said. “From a Sunglass Hut perspective, we seek new leasing opportunities to continue to grow our footprint in travel retail and help maximise the sales of the category.”
