As the travel retail market adapts to meet the requirements of the ‘new’ normal, the way we do business is changing. Could the increased use of partnerships create a more adaptable and flexible industry and finally bring an end to silos?
Travel retail is changing, as seismic shifts such as emerging shoppers, changing buying habits, digital revolutions and the birth of zero value have changed the industry’s landscape.
But truth be told, the current working model is simply not keeping up with the requirements for more flexible and experiential shopping spaces. Good ideas are coming, but they simply cannot be implemented fast enough.
Portland Design’s Director of Environments, Lewis Allen, recently opined that airport plans being produced today are still ridden with ”the DNA of the past” rather than the future, concluding: ”We need to get this new way of thinking into the master plan.”
But the implementation of new ideas is hindered by the challenges of any one member of the so-called Trinity bringing about a change which meets the approval of the others.
To create change and evolution, collaboration and partnership is needed. In this new world, involved parties must be able to work as one, to both plan for the future and meet the market’s changing dynamics and requirements. Sticking with a tried-and-tested, but outdated way of working has wrought havoc to domestic retailers – which GTR must avoid. Simply put, the current Trinity models needs reworking and the age of silos is over.
New way of thinking
Of course, none of this is revelatory. High profile people within TR have been calling for a review of the Trinity model and an end to the ”information silos” which have existed within it for years.
In his TFWA World Conference address in Cannes last year, former TFWA President, Erik-Juul Mortensen warned: ”We are not the Trinity we talk about.” He called on those present to undertake a ”fundamental recalibration” of the way the industry works to help secure its future.
One such model, and one that has paid dividends so far, is the increased use of partnerships and joint ventures, particularly between airports and retailers. Rather than requiring retailers to produce a certain profit out of a space designed by the airport, this allows the two stakeholders to plan the space and its future development together, thereby creating a site which is fit for purpose by bringing their shared expertise together.
The team at Gebr. Heinemann have been successful pioneers of this model, and the company’s co-owners, Claus and Gunnar Heinemann, have extolled its virtues on a number of occasions. They say their joint ventures, such as Imperial Duty Free at Sheremetyevo Airport, Frankfurt Airport Retail and Travel Retail Domodedovo mean they have a ”seat at the table” when redevelopment discussions takes place.
Heinemann’s Imperial Duty Free joint venture was key to the creation of a new retail space at Moscow’s Sheremetyevo Airport
The benefits of such a ”seat” were evident when the German retailer unveiled its new offering at Sheremetyevo Terminals B and E last September. The new stores were the first example of the Heinemann group’s long-discussed vision of moving away from ”box stores” to a more fluid shopping environment.
Claus Heinemann admitted it would not have been possible without the partnership. ”Thanks to our joint venture partnership with the airport, we are extremely close to what is going on and can develop the best concept for the other new terminals, thus guaranteeing economic success.”
So, the unified approach benefits both parties. But the key to the Heinemann mentality is that the partnership spreads to all aspects of their business. Reflecting on the recent announcement of the company’s corporate responsibility goals, Chief Commercial Officer, Kay Spanger, said that the changes would require collaboration from suppliers and business partners, adding: ”This means sitting together at one table and setting standards.”
His sentiments echo those expressed during Heinemann’s annual press conference this year, when new CEO, Max Heinemann, reinforced the company’s determination to ”co-shape travel retail in the future.”
Heinemann is by no means the only company making such moves. Lagardère Travel Retail has recognised the benefits of collaborative working, too.
EVP Marketing and Digital, Duty Free, Stéphanie Metz Thevenod, explains: ”(We are) establishing innovative partnerships such as our WeChat Mini programme or the collaboration with the Perfumist application to develop the recommendation skills of our staff in our duty free stores in Paris or Nice.”
Lagardère Travel Retail, JC Decaux and Groupe ADP collaborated on the award-winning Buy Paris Duty Free concept
The power of partnerships goes beyond just developing retail areas, but can also help create concepts by bringing together expertise.
Lagardère’s partnership with JC Decaux and Groupe ADP to develop the award-winning Buy Paris Duty Free store highlighted the innovations which are possible when barriers to partnership are broken down.
Jean-Charles Decaux, Co-Chief Executive Officer of JC Decaux, highlights what can be achieved when working in partnership: ”The (Buy Paris beauty) platform’s unique format redefines communication in the airport and gives brands the opportunity to showcase campaigns that are as spectacular as they are memorable.”
The use of connected and flexible working practices creates retail areas which are beneficial for all parties by meeting the requirements and desires of shoppers. But in today’s market, such results cannot be achieved without companies uniting in a common goal – not just on paper, but in practice too. Partnerships means that everyone is invested in developing the future, while the rigid and removed model of silos cannot survive the modern world.