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By: Peter Marshall   •   email: info@trunblocked.com

It’s a sliced-up, topsy-turvy world right now. There is uncertainty in everything. In line with our agenda to provide important insights from the best placed people in the global travel retail business, I was happy to catch up with Anne Kavanagh recently, who provides her own unique perspective in the compelling interview that follows. Anne is one of the most experienced and respected communications consultants in travel retail, with a global portfolio of clients in airports, retailers, world class brands, F & B, designers and trade associations – including APTRA – driving their commercial success and reputation enhancement through aligned programmes in B2B, consumer and employee engagement. Importantly, beyond travel retail, Anne also brings a broader retail perspective from representing European clients in supermarkets, high street retail and shopping centres. Having worked as a member of Heathrow’s Public Affairs team, she is also adept in crisis management.

Peter Marshall (PM): Anne, do you think it would be fair to say that airports today are not as customer focused as they should be? Where do you think they have got it right and where wrong?

Anne Kavanagh (AK): As the sheer scale of travel has increased over the years, it has become harder to focus on the individual passenger lost in a crowd of millions. And yet some airports have taken the opportunity to transform their airport into a brand with value, personality and one that attracts loyalty.

How did they do it? By taking the leap from a commodity-driven processor mindset to a brand entity that created a shared and holistic culture, with the buy-in of all stakeholders throughout the passenger journey. For these airports, every step, regardless of who’s in charge at any point, is part of a mutual commitment to making each person feel their journey matters. Transforming a transit space into a place – a mix of brand expression, sense of place and belonging – has tremendous value, both directly and indirectly.

Asia Pacific, of course, has long led the way, boosted by the innate cultural trend for hospitality in the truest sense of the word. Brand pride as the gateway to a country or an iconic city is also key. Changi continues to reap the awards for its holistic, brand-centric approach. Their success is because every single person – from cleaners to concessionaires teams – knows the value of their personal role in achieving a shared goal. A wonderful, virtuous circle is cultivated. The same can be said for Doha.

The opportunity for airports is to create mutual relationships with a shared commitment to the goal of greater customer service and adoption of best practice from other industries, e.g in queue management. Schiphol does a brilliant job of it, with a focused mix of friendly welcome at the entrance to security and those wonderful, state-of-the-art 3D hand luggage scanners that minimise time and hassle. That experience puts me in exactly the right frame of mind to spend money in retail and F & B.

It’s a similar story in Copenhagen, with friendly staff being central to great success in creating the best F & B offer I’ve seen anywhere and a vibe that makes me want to stay longer.

What makes the traveller feel better and happier also makes for happier employees. Or is it the other way round? It doesn’t really matter.

PM: Yes, many airports can learn from the examples you have cited. But right now we are all second guessing the impact of COVD-19 on consumer behaviour and focused on how that will play out it the airport environment. It seems to me that airports generally just want to put a wet sticking plaster over an open wound. That will not suffice. Sure, they will get the functional things right with the new sanitisation protocols that they will implement (easy), and social distancing (not so easy). But in their wake comes a whole host of new problems that will, frankly, make the passenger journey an unwelcome experience. What do you think they should be doing to offset this?

AK: As a continually unfolding scenario, airport and airline standards post COVD-19 are in constant iteration. But we now have IATA’s
Roadmap for Restarting Aviation and a proposal for temporary, layered biosecurity measures. There’s no easy fix. Space is limited, people will be closer to each other than the want to be. That’s the reality until a vaccine, viable treatment or a health passport is available and that we know that the person next to us poses no threat. A spirit of ‘survival’ is not a mindset we want to see in an airport or on-board a plane and the industry must address this.

Look at Air Asia’s extensive new hygiene procedures for passengers and crew, including temperature checks for everyone, a 3 hour check-in, alternate check-in counters opened, the disinfecting of cabins, a ‘no mask, no flight’ rule and thermal screening on arrival. Now just imagine that at Atlanta or Palma….

Airports, previously crammed to the rafters at peak times, must now find ways to space the travellers (and staff) apart; the sheer lack of floorspace at most airports surely makes that an almost impossible challenge. What’s going to happen to the walk-through store journey, for example? Will we spend more time landside and what does that mean for airport design?

Spatial planners and technology will provide some solutions, but the basics of hygiene and cleanliness must be blatantly and consistently obvious everywhere, demonstrating that, as the airport, you really do care for me and that my health and safety are as important to you as they are to me.

Not really what passengers are now looking for. Source: Associated Press

Look at Air Asia’s extensive new hygiene procedures for passengers and crew, including temperature checks for everyone, a 3 hour check-in, alternate check-in counters opened, the disinfecting of cabins, a ‘no mask, no flight’ rule and thermal screening on arrival. Now just imagine that at Atlanta or Palma….

Airports, previously crammed to the rafters at peak times, must now find ways to space the travellers (and staff) apart; the sheer lack of floorspace at most airports surely makes that an almost impossible challenge. What’s going to happen to the walk-through store journey, for example? Will we spend more time landside and what does that mean for airport design?

Spatial planners and technology will provide some solutions, but the basics of hygiene and cleanliness must be blatantly and consistently obvious everywhere, demonstrating that, as the airport, you really do care for me and that my health and safety are as important to you as they are to me.

Making things absolutely clear is critical

This is the essential bedrock for in-store retail to return. But actually the opportunity to reach me isn’t at the store threshold – it’s online before I travel.

The evolution of online behaviour has accelerated by at least a decade in the past 6 weeks and I’m convinced travel retail must fast- track digital and omni-channel opportunities throughout and beyond the physical journey. Digital is more relevant than ever and retail should be a seamless part of the entire digital conversation. Imagine if I’ve got my travel info, boarding pass, health certification, loyalty programme, retail options, F & B pre-order, entertainment, social media etc all contained on my mobile. That means I have fewer surfaces to touch, spaces to visit and people to mix with – I feel much less stressed, more in control, and in a better mood to spend.

If retail is to revive, it must invest in approaches to penetration that don’t rely on something leaving a store in a bag. To see huge investment in travel retail stores but almost nothing invested in digital retailing seems archaic. Do we even need all those retail stores?Could we earn retail revenues in other ways?

PM: We do seem to be a very inward-looking business. There seems to be an unwritten rule that it is poor form to be seen to rock the boat in any way. But surely COVID-19 now affords the industry the best opportunity to revisit all the elements that constitute the travel journey and re-imagine it? So perhaps the first step, having got the sanitisation and logistics elements sorted, is to communicate the love of travel once again. Do you think that the business community should co-fund a global campaign to re-ignite the passion for travel? If so, how could that be managed?

AK: Riding out the storms – SARS, 911 are just two examples – has been a common strategy for travel retail. But this one demands a far bigger strategic shift. I very much doubt there will be a return to any kind of ‘normal’. Even if numbers eventually come back, the consumer mindset has changed for generations to come.

A sizeable proportion of people are desperate to get travelling as soon as they can. Some will take a risk regardless, but the majority will want granular reassurance that they are not risking their lives. People are avoiding the grocery store and ordering online to stay safe and they will walk rather than use public transport. The longer the pandemic goes on, the more that mentality is embedded.

”This is the biggest re-set imaginable, priorities have been radically re-ordered”.

I’m not sure how – or when – we really get past the sanitisation and logistics aspects you mentioned, as the cost implications for airports and airlines, already burning cash at unsustainable rates, are onerous.

The first and primary communication need is to demonstrate authenticity – from airports and airlines – in an end-to-end investment, planning and commitment that prioritises health and safety across the journey. This is the essential route to give consumers the reassurance and confidence to travel again. Do that right and the revenue opportunity begins again. Only then can we look to re-ignite their ‘passion for travel’ with aspiration and lifestyle – and to weave the fun and relevance of travel retail as part of the trip.

Delta Airlines announced this week its investment in a costly reassurance campaign, adding more flights – and charging a premium – to its schedule above regular demand, keeping planes at a maximum 60% capacity throughout July to maintain social distancing. IATA says it won’t allow airlines to make a profit if they limit flights to two-thirds of their normal capacity. Delta is therefore prioritising the reputational benefit of creating long-term goodwill, valuing customer safety over immediate profit. Compare this to the much-shared, nightmarish stories of overcrowding on United and American Airlines. Who would you rather fly with?

Delta are valuing customer safety over immediate profit

PM: From a personal point of view, that’s a no-brainer and I think that Delta should be applauded. But moving now into retail,
‘personalisation’ has been a key driver in the business. But in the post-COVID-19 era, it takes on a whole new meaning. From a purely human perspective, how will passengers now react to clothes being bought or tried on in stores, liquor or lipsticks sampled, or perfumes touched, smelt, sprayed? Whatever rules of social distancing are applied in the very near future – whether imposed by governments or recommended by trade bodies – how will this play out on the shop floor?

AK: It’s still early to predict with any degree of certainty, but I’m sure it’s not exclusively about the shop floor. There will be an element of shop door, in click and collect. On its re-opening in Paris last week, Sephora enjoyed a huge surge in demand for that opportunity.

Beauty brands have been fast to adopt online tutorials and augmented reality to enable shoppers to try new products. For the first quarter of 2020, L’Oréal (globally) reported e-commerce sales growth of almost 53% yoy, accounting for almost 20% of total group sales.

Luxury brands that have closed their downtown stores may see the airport as a safe location, with a guaranteed footfall that has the money and the mindset to shop. I can see that opportunity working really well for fashion accessories. Inevitably, I’m less convinced about the consumer appetite for trying on apparel and footwear in an airport store.

Again, the advantage of online players keeps popping up, such as Auckland Airport’s digital platform, incorporating downtown stores, too, giving them a huge advantage in this climate.

PM: In rank order, brands tend to come at the bottom of the pile after the airports and retailers have agreed their commercial arrangement. Yet brands are the magnet for retail. From your own discussions with major brands, what is their position regarding coping with the new retail environment?

AK: Given the power of the incredible shop window that is travel retail, brand owners know that this is where they will find a desirable audience, open to spending time with their brand and that, with many consumers – whether existing or new travellers – driven by the discovery of a new product or experience on their travels, there is a lucrative opportunity to be had.

Brands invest significantly in understanding their customers and they are already deeply engaged with them in multiple omni-channel opportunities. So I believe we’ll see a demand for more use of digital, travel retail exclusive content and opportunities to buy via our phones, with less reliance on in-store purchase.

Digital is clearly the path for future performance and luxury brands have grasped that fact far more quickly than airports and travel retailers. Consumers are incorporating digitalisation into their daily lives more rapidly and deeply than ever and any retail experiences that don’t integrate with digital can seem increasingly archaic.

Brand marketing has become so sophisticated and accurate that a Millennial is baffled when they’re targeted with a product recommendation that doesn’t suit their lifestyle; and they’re absolutely amazed when they find a product they like but they can’t order instantly and get home delivery!

Travel retail needs to look carefully at the retail/brand experiences that customers are having away from the airport and ensure we are evolving in step. For example, pre-ordering is the dominant motivation among Asian shoppers (m1ndset research suggests over 80%),
making impulse purchases increasingly challenging.

PM: Developing this, it’s the brands that have a genuine connection with their customers. Retailers are just the go-between.
As you’ve said, brands are also far more into social media. The worry for airport retailers, I guess, is that the brands – who will unquestionably suffer in the coming 18 month to 2 year period – will start to look more carefully at their own direct-to-consumer efforts. And, quite possibly, move more robustly into the grey market to generate faster cash traction.

How do airport retailers combat these twin threats? Should developing their online projects now be at the very top of their
to-do list? Or should airports, retailers, brands and airlines combine to develop far more robust omni-channel platforms, like Heathrow, Frankfurt and Auckland?

AK: Brands are the beacons shoppers look for and they are accelerating both their direct-to-consumer relationships and retail opportunities. Airports and retailers therefore need to extend their relevance and reach with the traveller and to think beyond the confines of the airport.

Auckland, again, is a strong example. The airport has developed its ancillary revenue approach not just by technically adopting an omni-channel strategy, facilitated by AOE’s OM3 platform, but also through commercial thinking in driving new partnerships with downtown operators to integrate them into the customer experience. Basically, while Auckland Airport is driving a new Tesla, many airports are still driving a 1980’s diesel.

Apart from some notable exceptions, such as the pioneer airports already mentioned as well as KrisShop and Lufthansa’s WorldShop, I’m not sure many travel retailers, airports or airlines, are anywhere near the pace that the customer and the brands are currently moving at.

PM: And just how important is price going to be in your view?

AK: Value and values matter more than ever. Brands will be judged on how they performed during the pandemic, and we’ve already seen a backlash against retail practices that exploited us in our hour of need. People will be prepared to pay the right price, but they will be more discerning and choiceful across a range of criteria. Giorgio Armani was one of the first voices, in the early days of lockdown, to challenge the lack of sustainability in fashion. He called for the fashion industry to use this time of change as a chance to reset fashion’s responsibility for the workforce and the environment – set against the change in the consumer, who will prioritise brand credentials while they choose to buy less, but buy better.

We must remember what’s important to consumers in the new re-ordering of things and avoid temptation to take advantage of them. ‘Give me my basic human rights free of charge while I travel or shop – hand sanitiser stations, free disposable gloves and masks, water fountains, quality air and a clean environment. I’ll happily pay more if I want a fashion-forward mask or a special sanitiser. But, as an airport or airline, make sure that, as your customer, I feel safe and cared for. Charge me for these basic essentials and you’ll be the one paying – in that most valuable of commodities, reputation’.

PM: Let’s move onto industry events and trade media. Do you think we actually need all the awards events that are currently in place? What value do you think they have? Given the budget crisis that just about everyone will be facing, do you think that 3 global industry events are merited or sustainable? The dynamic of webinars, albeit still largely unproven, are surely the way forward?

AK: As a tightly-knit industry, we need to ensure that there’s space for external perspectives, especially the shopper voice. So that does mean awards that share consumer opinions on products and value, because that is ultimately the voice that matters most. Without shoppers there is no industry. With low penetration levels, that continually perplex the industry, insight that helps us understand what drives purchase is incredibly valuable.

However, there’s also a credible role for awards that recognise and celebrate joint successes between brands and retail customers – when those awards are judged by a balanced mix of sector expertise and knowledgeable impartiality.

I expect we’ll see much less budget for discretionary spend for awards and events. CFO’s are now accustomed to T & E savings, and there is also the issue of employer liability to factor in travel. After this year’s virtual events fromThe Moodie Davitt Report and now
also Travel Retail Business, I expect appetite for one trade show in 2021. Singapore next May makes good sense, with all eyes focused on Asia Pacific as having the most significant opportunities for recovery and growth.

Moodie Davitt’s Virtual Travel Retail Expo: the way forward.

PM: Budgets won’t just be an issue this year. There will be casualties – airlines, some regional airports, even a number of brands. There will also likely be divestments from some retailers, some potential bankruptcies as well as some mergers and acquisitions. Trade media as it stands will also need to innovate or re-invent itself to survive. We’ve touched on that already. So what criteria do you think brands should now adopt when assessing trade media.

AK: Brands assess trade media on their credibility both in terms of content and readership. Times are tough, all discretionary spend is under the microscope and everything is judged by relevance to business continuity. As with all media, there is always room for a more scientific analysis of audience metrics and behaviours resulting from the content they engage with. We all have complete control over the content we consume – and that now means forums, resource downloads, networking, representation of all voices in industry dynamics, and it’s healthy to ensure we learn from other sectors to avoid being overly introspective. These are all valuable tools that help travel retail executives do their job.

PM: Finally, Anne, if there is one thought you want to leave with our readership, one thing that should now be adopted by the industry, what would that be?

AK: There’s no going back. COVID-19 is a seismic moment in history and, whether we like it or not, we are living through change. We don’t know when or where the other side is. We need to get used to it. Change makes us more resilient, and we need to be agile, to pivot, to innovate.

Confidence will hopefully return if we make people feel safe and passenger numbers will increase over time.

But let’s always remember that our values as consumers have changed irreversibly. We may have lost people ourselves or had our own close brush with illness. Many of us will think about our environmental impact and also how we judge the credentials of our preferred brands. We will be more circumspect in how and where we spend our money and our time.

Digital is key to personalising solutions. It addresses how to handle multiple people and multiple processes. As an industry, if we adopt it right along the journey, it delivers efficiencies and flow, eases stress and creates a more positive mindset.

And that has to be a good thing.

Anne Kavanagh can be contacted at: anne@kavanaghcommunications.com

Peter Marshall

Founder: trunblocked.com/Marshall Arts

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