The DFNI team was on the ground bringing you all the goings on from the annual TFWA Asia Pacific Exhibition & Conference at the Marina Bay Sands Expo & Convention Centre in Singapore. Here are the latest updates from DFNI Editor Kapila Ireland (KI) and DFNI Asia/Digital Editor Liam Coleman (LC).
Friday 11 May
2pm (KI): As a final farewell, we were fortunate to catch the Shiseido Travel Retail Ultimune Red Vibe Street animation held in partnership with The Shilla Duty Free on the way out from Singapore Changi Airport. Travellers can enjoy a #StrongSouls journey across three zones and learn about Shiseido’s Ultimune Power Infusing Concentrate within the Shiseido beauty bar. Knowledgeable Shiseido beauty consultant Celine gave me a skin immunity check and encouraged me to share motivational messages with other travellers passing through the airport. Do check out this inspiring activation when travelling from Singapore Changi in coming weeks and stay close to DFNI for an interview with Shiseido Travel Retail Asia Pacific’s General Manager Kenji Calméjane coming soon.
Thursday 10 May
8pm (LC): With an imminent flight, that draws to a close DFNI‘s live coverage or the TFWA’s Singapore showpiece. Keep an eye on both our magazine and website over the coming weeks for even more follow-up coverage. All that is left is to thank the TFWA for organising another slick and successful show, and the delegates for creating a real buzz around the Marina Bay Sands for the last week.
7pm (LC): It is always with great sadness that DFNI bids farewell to an event for another year, especially one as high profile as the TFWA’s Asia Pacific event. However, the silver lining of departing Singapore is getting to pass through Singapore Changi Airport. Departing from terminal three, the stunning new Louis Vuitton duplex store was immediately after the immigration area for all to see.
12.30pm (LC): DFNI and other members of the media were invited to the TFWA’s closing press conference. TFWA President Erik Juul-Mortensen was in typically good spirits as he revealed that both delegate and buyer numbers were up on 2017’s event. Read a full report on the figures here.
Wednesday 9 May
10pm (LC): The final night of the conference saw 725 delegates hit the JW Marriott for the Singapore Swing party. The invite encouraged attendees to wear white and it helped to deliver an atmospheric final-night celebration.
Tuesday 8 May
11pm (LC): As is tradition for the Tuesday night at TFWA’s Singapore showpiece, delegates were invited to the Chill-out Party at the Mandarin Oriental Hotel. The Lacoste and Korea Ginseng Corporation-sponsored event took place amid stunning views of Singapore at the hotel’s poolside.
8pm (LC): The DFNI Asia Awards saw the best of the duty-free industry in the Asia Pacific region honoured. Both finalists and delegates packed out the room to network and find out who is the best in the region. The winners were as follows:
Airport Retailer of the Year: The Shilla Duty Free
Inflight Retailer of the Year: DFASS Singapore
Cruise/Ferry Retailer of the Year: Starboard Cruise Services
Best Asian Travel-Retail Innovator: Mumbai Duty Free, Flemingo Travel Retail
Airport Authority with Most Supportive Approach to Travel Retail: Changi Airport Group
Travel Retailer Operating in a Single Country – Asia/Pacific: King Power International Group
Middle East Retailer of the Year: Dubai Duty Free
Best Marketing Activation: Around the Whiskey World at Changi Airport, Changi Airport Group
Best New Asia/Pacific Product Winner, sponsored by Qatar Duty Free: The Macallan Quest Collection, Edrington Global Travel Retail
Best New Product Packaging Winner, sponsored by Qatar Duty Free: The Macallan Quest Collection, Edrington Global Travel Retail
Best New Shop Opening: King Power Rangnam, King Power International Group
Best Supplier, sponsored by Korean Air: William Grant & Sons
Asia/Pacific Travel Retailer of the Year, Sponsored by Champagne Lanson: King Power International Group
10am (LC): DFNI joined the European Travel Retail Confederation (ETRC) for an update on how things are progressing on the prospect of duty-free returning to routes between the UK and the EU after Brexit. Read the full report here.
Monday 7 May
10pm (LC): The final event for tonight was a glamorous club night in Annexe Studio hosted by Tommy Hilfiger, with the clothing brand pushing its #WhatsYourDrive campaign.
8pm (LC): First stop this evening was Flemingo‘s event celebrating 20 years since it was formed. Taking place in the picturesque 1919 Waterboat House, the event saw Flemingo Global Director Paul Topping in a reflective mood. “In 20 years we have come a long way and we never stop,” he told guests.
4pm (LC): Back in Workshop C, Asia Pacific Travel Retail Association (APTRA) Executive Officer Michael Barrett and European Travel Retail Confederation (ETRC) President/Dufry External Affairs Director Sarah Branquinho passionately briefed delegates on the main legislative challenges and opportunities presented to the duty-free industry at the moment.
As shown by the figures presented by Juul-Mortensen earlier today, the duty-free industry is seeing impressive growth at the moment, but Barrett had an apt analogy in mind for why the industry should not be too complacent. “It is like driving a sports car on a four or five-lane highway and comfortably cruising along and suddenly out of the blue, the engine ceases up and suddenly you are forced to shift into the slow lane. You might be seeing 8-12% growth, depending on your country, and suddenly legislation comes in and sales growth drops to 2-3% a year,” he said.
Barrett, following Sunday’s APTRA Airport Forum at Singapore Changi Airport, urged collaboration from all sides of the trinity as the best way for the industry to overcome any legislative challenges presented and that data sharing would be an integral part of this.
Branquinho updated delegates on the ETRC’s labelling solution, the Protocol to Eliminate Illicit Trade in Tobacco Products (ITP) and Brexit.
It seemed fitting, given the #TRevolution theme of the day that the solution the ETRC is presenting to labelling challenges is a positive use of digital technology. Branquinho explained: “What we have been creating is a digital platform, which is completely cross category. It works on the basis of either a barcode scanner or a manual search option so we have created an app that can scan the barcode, which will give information on the product and what is in it.
On Brexit, Branquinho revealed that due to the transition arrangement now agreed between the UK and the EU that the UK will not become a ‘third country’ for legislative purposes in March 2019, as previously anticipated, which now means the earliest date there could be the return of duty-free between the UK and the EU would be the end of December 2020.
Branquinho finally updated delegates on the ITP and it was revealed that 36 countries had ratified the protocol, brining it a step closer to the 40 countries the World Health Organisation (WHO) requires to start taking the next steps for implementing the protocol. Branquinho said she anticipated it would reach 40 countries by October of this year and that the industry would need to be united and ready to continue fighting its corner.
3.30pm (KI): Matthew Brennan spoke about how e-commerce is rapidly evolving into ‘new retail’ with the boundary between online and offline commerce disappearing. In China, this merging of online and offline is represented in retailers and food & beverage operators like Hema Supermarkets, Luckin Coffee and BingoBox – all of which are revolutionising retail with frictionless, mobile ordering/payment. “Technology is being embedded into the retail experience,” he said.
3.15pm (KI): Xin Deng highlighted the difference between the Western shopping journey and the Chinese shopping journey. The former is based on efficiency, he said. With one billion digital savvy travellers in China, it is no surprise that the Chinese journey is “truly seamless”.
2.50pm (KI): Frictionless shopping essentially places the consumer in control, eliminating anything that does not add value and hinders the experience, said Sunil Tuli. “The duty free and travel retail industry has relied on impulse buy and dwell times for too long. Everything has now become digital with 75% of passengers planning purchases beforehand. We can no longer rely on dwell time. Downtown retailers have been upgrading with mobile payments and self checkout options like Alipay, WeChat Pay, Apple Pay etc. Mobile technology has changed the retail game.”
2.45pm (KI): In the main ballroom this afternoon, King Power Group (HK) Managing Director Sunil Tuli and Global Smiling Managing Director Xin Deng and Matthew Brennan, an expert on WeChat and co-founder of China Channel, came together to discuss seamless shopping in travel retail. This session was moderated by Frontier Editor Colette Doyle.
2.30pm: Over in Workshop B, be Lewis Allen, Director of Environments at Portland Design; Paul Bulencea, co-author of Gamification in Tourism; and Jessica Lau, Travel Retail Area Manager China and Taiwan at Guerlain discussed the “gamification” of customer-facing industries – whereby elements of video game design are used to enhance user engagement. More to follow on this session.
2.30pm (LC): Workshop C, titled Safeguarding our Industry, assessed the challenges currently faced by the duty-free industry.
ACI Asia Pacific Regional Director Patti Chau was the first of the panelists to give a presentation. She looked at passenger traffic trends in the Asia Pacific region and how customer experience defined non-aeronautical revenue for airports.
“The airport should maximise and make the most of the captive audience by leveraging on the power of impulse buying,” Chau said. She added airports needed to share data with partners in order to minise the threat to the duty-free industry from disruptors.
1.20pm (LC): Looking to offer a positive solution to the trinity challenge, Jack MacGowan said: “What we [as retailers] have to do is present a picture that will be more attractive to them [airports], where they will gain more. The threat of online and leakage of passengers to other channels is the most likely way to convince airports [to bring about a change of tact].”
1.10pm (LC): From the airport side of the trinity, Scott Collier admitted that it was in the interest of airports to maximise rent from concessionaires, saying: “As you would expect, the landlord of properties would try to maximise rent.” However, he also offered a more optimistic assessment for the future, saying: “I think there are airports across the world that are ready to change.”
1pm (KI): Keith Hunter said a struggling retail operation affects the image of the airport, and the only way to overcome that is to address the situation together. Drawing on his past experience with an organisation that owns airline, airport and the retailer operation at Qatar Duty Free, Hunter said they were encouraged to look at things in different ways and work closely together.
12.50pm (KI): Sunil Tuli outlined the traditional MAG airport concession model, arguing how it does not allow any flexibility for retailers when sales forecasts don’t align with reality.
12.45pm (KI): TFWA Managing Director John Rimmer leads a constructive debate on the travel retail and duty free business model, specifically the Minimum Annual Guarantee airport concession model. Lagardère Travel Retail Asia Pacific COO Emmanuel de Place, King Power Group (HK) Managing Director Sunil Tuli, Aer Rianta International CEO Jack MacGowan, Hunter Palmer Global Retail Solutions Co-founder Keith Hunter, Neuhaus CEO Ignace van Doorselaere, and Greater Toronto Airports Authority Vice President, Customer and Terminal Services Scott Collier discussed how stakeholders can work together to deliver growth more effectively.
12.30pm (LC): Neuhaus CEO Ignace van Doorselaere opened by arguing that strong brand building would always survive a disruptive economy. He revealed the lengths Neuhaus was going to in order to develop its brand identity, including paring the chocolate brand with coffee in airport lounges.
12.15pm (KI): Bianchi said all stakeholders in travel retail must start behaving like an eco-system. By collaborating, the industry can reignite spend per passenger and generate a value pool of up to $5bn more for the industry per year, and additional revenue of up to $10bn.
11.45am (KI): Boston Consulting Group Partner and Managing Director in Milan, Filippo Bianchi, presents the key findings and recommendations of a TFWA commissioned report.
Bianchi outlined how the airport travel retail market has tripled in the last 15 years and the industry has proven it can grow quite dramatically despite volatility. Passenger growth has been a major tailwind, but also an improvement in the offering and experience – that is until recently. There has been a potential slowdown in the last few years, some of it due to volatility, that is worrying, he said.
“Have we reached the peak in value creation?” Bianchi noted. “The simple answer is no because there are three key assets to this industry that we still believe are there, which remain under-leveraged – a data-rich environment, predictable customer base and unique pricing value proposition.
11am (KI): Mixed reality solutions, combining virtual reality and auditory technology with touch using haptic technology, are being used by brands globally. Jervis looked at how these can be used to create immersive experiences allowing the traveller to enjoy an element of discovery in travel retail. Meanwhile, the use of emotionally responsive avatars to assist customers could help to drive sales and gather invaluable ‘conversational’ data.
10.45am (KI): Next up, Shivvy Jervis, one of Britain’s leading digital influencers and voted one of Europe’s 30 leading women in the tech business, shares some digital ideas that duty free and travel retail can use to target the consumer. The digital developments Jervis outlined are emotionally evolved forms of AI that will actually respond to our needs.
“As we are becoming more digital, digital technologies are becoming more human. The biggest trend I am seeing as a futurist is the use of tech to drive our needs,” she said.
Jervis pointed out that 62% of travellers would make an unplanned purchase off the back of an immersive brand experience.
10am (LC): Siri Founder Adam Cheyer is somebody well placed to give an overview of artificial intelligence (AI) as the man behind the renowned AI software found in Apple products. He outlined the history and achievements of AI over the last decade. Looking at a wide variety of sectors, Cheyer summarised what travel retail can learn from other industries and how they have harnessed AI.
9.50am (KI): The Asia Pacific Travel Retail Association (APTRA) President Andrew Ford took to the stage to discuss the group’s efforts in defending the interests of the regional industry.
Ford said the figures presented by TFWA President Erik Juul-Mortensen show how Asia Pacific is forging ahead in travel retail sales.
“There is a wave of excitement in Asia at the moment. Look at Kansai Airport for example, it serves 11 million passengers, each spending over $55. February traffic figures were up 25% – where else do you see this kind of growth?” said Ford.
Ford outlined key initiatives currently undertaken by APTRA including its series of airport specific studies, Responsible Retailing Programme and educating members on the WHO’s Illicit Trade Protocol for tobacco sales in duty free.
9:30am (LC): Discussing the conference’s #TRevolution theme, Juul-Mortensen touched on how the duty-free industry is defined by external factors and constantly evolving international relationships – from Brexit to the Korean peninsula.
Close to one year on from the THAAD dispute between China and South Korea, Juul-Mortensen revealed there had been a 40.3% fall in sales to Chinese consumers in South Korean duty-free. However, the South Korean industry has proved resilient to this with 2017 seeing a 20.7% increase in duty-free sales in the country to $12.8bn.
The second motivation behind the #TRevolution theme, according to Juul-Mortensen, was to discuss the opportunities resented to all parties in the duty-free industry by the latest digital technology.
9:20am (LC): TFWA President Erik Juul-Mortensen opened his keynote address by giving the latest figures from Generation Research on the duty-free market. Preliminary figures for 2017 show that global duty-free and travel-sales reached $68.6bn.
Calling the Asia Pacific region a “powerhouse,” Juul-Mortensen revealed that it accounted for 45% of global sales and accounted for $30.6bn of sales.
The fastest growing category globally was once again perfumes and cosmetics, which grew 13.8% year-on-year. This was even more pronounced in the Asia Pacific region where it increased 19.9%.
From the channels point of view, airports had the largest chunk of global sales and accounted for 38.3% of sales, an increase of 7.7%. ‘Other shops’, which includes downtown duty-free, saw the fastest growth as a channel and grew 9.3%
9am (LC): TFWA Managing Director John Rimmer introduced the conference’s #TRevolution theme, saying the conference would address the theme of how the industry would need to “innovate, adapt and evolve”.
Sunday 6 May
11pm (LC): The first official event of the week saw the Opening Cocktail held at the awe-inspiring Gardens by the Bay. Delegates thrived in the opportunity to reconnect with friends in the industry and also with the opportunity to meet new people in stunning surroundings.
Saturday 5 May
10pm (LC): DFNI landed at Singapore Changi Airport this afternoon and has arrived in the Marina Bay area. This evening saw myself and DFNI Associate Publisher Amanda Felix join King Power Group HK Managing Director Sunil Tuli at the annual welcome event he hosts for figures in the duty-free industry arriving in Singapore.