“Travel Retail is the most interesting segment of retail today with e-commerce”
Airport retailing is booming as the number of travelers and low-cost airlines explode. The travel retail market has tripled in size since 2002. However, shifting demographics (like Millenials), the growing impact of new regions such as China and digital transformation are presenting new challenges. Journalist Cecilie Bahr interviewed Dag Rasmussen, CEO of Lagardère Travel Retail, a global leader in that industry. They discussed how new brands and innovation bring further growth.
Cecilie Bahr: As have shopping centers and bricks-and-mortar, travel retail needs to evolve. What key elements are important when adapting to consumers in your business?
Dag Rasmussen: Travel Retail is the most interesting segment of retail today, with e-commerce. We benefit from a continuous growth in sales, generated by an increasing number of passengers and a more sophisticated sales offer within airports and train stations. However, we must continue to adapt in order to be successful and adjust sales offerings to match different types of travelers, including business travelers, Chinese and Millennials. We will integrate domestic market trends to the specifics of the travel retail customer, and offer new services.
CB: In that context, what is Lagardère Travel Retail’s strategy for growth?
Dag Rasmussen: Our strategy for growth is to cover the full spectrum of the commercial offer in travel retail. We operate stores selling travel essentials, duty free & fashion as well as food. This strategy has many advantages: we leverage what we know about travelers across all 3 business lines and we are able to respond to landlords’ different needs and local context. This multiplies the number of opportunities. We are growing in existing operations over 34 countries and exploring new opportunities worldwide through tenders, direct negotiations or M&A. Travel retail is a global market.
CB: How do you increase visitors to Lagardère Travel Retail stores?
Dag Rasmussen: Our priority is to maximise sales in our existing stores and restaurants. We aim to continuously improve the operational excellence of our retail and food activities, by continuously introducing new segments and new brands in our stores. An example is the niche skincare or fragrance brands, or craft liquors in our duty-free shops. We are making our stores and restaurants as appealing as possible. Lagardère Travel Retail concentrate on high quality product offers, high quality fixtures, lighting and space planning. Our preference is a “walk-through” site, where a traveler has to go through our store to get from the security checks to a departure gate. An example of seasonal campaigns in our stores and restaurants this year is the “Airport Millionaire”, offering passengers a chance to win €1m by purchasing in our stores. For Chinese New Year 2018 we organised a treasure hunt for Chinese passengers in Rome and Prague. This was a virtual reality red pockets game using WeChat. We also ran a partnership with Clinique in the U.K. to offer gifts to women on Woman’s Day.
CB: How important is it for you to collaborate with retailers, like your latest partnership with Dean & Deluca?