FAB TALKS
The ever-changing landscape of travel retail
The conference began on a highly topical note with Dufry (since renamed Avolta) CEO Xavier Rossinyol speaking about the convergence of travel retail and food & beverage.
Speaking prior to the unveiling of Avolta – which The Moodie Davitt Report recently revealed with an exclusive interview with Rossinyol – he explained the challenges behind the Dufry-Autogrill merger while laying bare the huge opportunities it presented.
Consumer first
Outlining some of the big picture dynamics that are transforming our sector, Rossinyol highlighted the generational change taking place in travel.
“Generation Y and Z were 40% of the people travelling in 2019; by 2025 that will be 70%. This is not something for the distant future; it’s the coming reality. Also, sales directly influenced by online in our industry were around 10%, now it’s already 30%. Another topic that has more significance for retail is the rising proportion of Chinese luxury shopping that takes place within China.”
Reflecting on how these trends will influence the business, he noted that our sector needs to be laser-focused on personalisation and to have more disruptive store experiences to appeal to a new generation.
“Many times in our retail and our F&B we are boring. Consumers are used to having more accelerated needs so we have to introduce more local and more seasonal items.
“Yet we have to be smart with that, as we want to be more local but we also have to run successful businesses.
“Looking at history we can see that travellers keep travelling but they do so in different ways. We have to adapt to new needs but do so in a more accelerated way, and that is perhaps the biggest change.”
He explained how the group had come up with a ‘four pillars’ strategy, among which the most important was ‘Traveller and Consumer Centricity’.
Airports, he said, had a huge advantage over high street retailers because “nothing has replaced the point of sale in an airport”.
He continued: “We always start by thinking not as a manager, but as a consumer. And we have to increase customer engagement.
“I travel four times a week and I am sure all of you here also travel a lot. We are frequent flyers. But it is important to remember that the average traveller makes one or two journeys a year. And it is very hard to have regular engagement with those consumers.
“I tell our teams, we don’t have to be the best, but we have to be better. And it’s very important that we are a little better every day. For us the future, well the present, means a holistic approach. We do not separate the consumer who is buying a perfume from the one who is buying a coffee. By combining you can have cross-selling, up-selling; you can have hybrid concepts and you can increase digital engagement.
“At the end of the day, the name of the game is to increase sales. If we increase sales because we have managed to increase customer satisfaction, then we as operators have more money but you, as airports, also have more. And that’s the point, to increase the potential of this business.”
“In ten to 20 years, this industry is going to double in size. And if we achieve that, then everybody is going to make a very nice return. We want to invest more at airports, but we can only do that if we have long-term approaches. We cannot have a vicious circle where we cannot afford to invest and so the environment and experience is not interesting.”
On the future, there will be more hybrid stores, up to 20-25% of the industry, said Rossinyol, where traditional F&B and retail is combined into one offer. Dufry itself is aiming to increase the number of airports in its network with hybrid concepts by mid-2024.
“This won’t just be the obvious cross-overs from coffee to convenience, but luxury bars with luxury retail, with supportive brands, and with enhanced concepts in those place where it makes sense.
“We have to do that and be more fun. We compete with devices, not other physical shopping channels. We have to make people want to enter the store. That means being more flexible. This industry think in silos of five to ten years, the length of the contract, but now you have to be able to adapt and be flexible, moving faster than ever.”
Following his presentation, Rossinyol took part in a question and answer session with The Moodie Davitt Report Founder & Chairman Martin Moodie (above) and fielded questions from the audience. Themes included the post-pandemic concession model, digital and staffing challenges, and the key role of Sense of Place in the modern consumer F&B offering.
The session ended with Moodie asking Rossinyol if he sees a bright future for the modern travel retail industry. He replied: “Absolutely. I see brands working in some industries that know their capacity for future growth is extremely limited; because they know they are in a dying business. A few years from now such businesses are going to be taken over by Amazon or someone else.
“Our industry? It depends only on the people in this room. It’s for us to decide if we want a great future. One thing I can tell you, there will be more people travelling for sure.”
FAB eZine
January 2024
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