May 2007 CATEGORY INSIGHT Fashion & Luxury Sunglasses retailing takes off with Runway In preparing this special report into the fashion and luxury goods market, we canvassed supplier opinion about the retailers who stand for travel retail excellence. In a poll of sunglasses suppliers, Aer Rianta International s Runway Sunglasses outlet scored highly as an example of best practice. Mary Jane Pittilla finds out why. Location, location, location. That mantra, so beloved of the property industry, holds just as true in retailing. It is certainly the case for the Runway Sunglasses duty free outlet at Moscow Domodedovo Airport, which emerged as an example of retailing excellence in a straw poll of selected sunglasses suppliers carried out by The Moodie Report. The store caters to a hard core of Russian passengers hungry for the latest fashions and who think nothing of buying three or four pairs of sunglasses each year. But it s not just location in a fashion hotspot that matters, of course. There are many other elements in the mix that make for a great store not least the knowledge and expertise of its buyers and sales staff. So far this year the Runway business has doubled its sales compared with 2006. It has just celebrated one of its busiest periods ever, selling 2,000 pairs of sunglasses in April alone an all-time monthly record for the retailer. The Moodie Report spoke to Aer Rianta International Regional General Manager John Moriarty about why and how the store has achieved the ultimate retail accolade a store that shines out in its merchandising display, product selection and, critically, turnover. What is the location and size of the Runway Sunglasses store in Moscow Domodedovo? The store is 22sq m in size in the main Gallery area of the airport s International Terminal. Along this Gallery there are eight airbridges leading to an area of two floors (a third will open within a month) where there are a further The Moodie Report 21
CATEGORY INSIGHT Fashion & Luxury May 2007 14 airbridges and gates. Most passengers have to walk through the Gallery to get to their gates. Who is the main buyer for this store? Maria Rastvorova is our specialist buyer for sunglasses here in Domodedovo, and she is helped by Alan Magan, our Retail Manager, and John Kilmartin, our Operations Manager. At the Aer Rianta International head office in Ireland Martin Waldron is the Group Buyer for sunglasses, so there is a strong team looking after this important category for us. I d guess that, between the four of them, they have about 45 years of expertise in sunglasses buying. How many members of staff does it have? What are the opening hours? The store is open 24 hours a day, with three sales staff on each of the four shifts. What do you think are the highlights of the store? The store is very striking and is really in your face. It is laid out as a six-metre back wall unit with two floor units in front. It is open from all sides, is bright and has a large variety of sunglasses on display. Considering that the store is on a wall that is against the passenger flow it is actually behind you as you walk through to the gates we are extremely happy with the actual penetration and sales from this store. Furthermore, I also have to say that one of the highlights has to be the staff we have trained staff giving quality customer service, and they actually love what they do. Who are your core customers, and how do you target them? Our core customers are definitely Russian nationals. This comes from their desire for branded products and accessories. Both men and women are very fashion-conscious here, though probably women buy more. Our customers are those who see sunglasses as a fashion item and will regularly buy three to four pairs per year. We began targeting these customers last year with a sunglasses billboard placed about 400m from the airport, followed by a large lightbox after security, followed by three small lightboxes on the actual store frame, all featuring the same generic image of a woman wearing sunglasses. We definitely believe that this led not just to the image being recognisable for passengers but also encouraged them into the store and helped to drive sales. Furthermore the price saving as compared to domestic Moscow prices is about 30 35%. John Moriarty (right): The store is striking, open and bright it is really in your face 22 The Moodie Report
May 2007 CATEGORY INSIGHT Fashion & Luxury Captured by the glare: ARI has heavily promoted the Runway store, using the same generic image of a woman wearing sunglasses around the airport; and the results show that it s paying off Do you have specific branded areas? What visual merchandising techniques do you employ? Late last year we developed a new back wall unit for the store with Umdasch of Austria. This unit has the product displayed on lockable rods with pull-out vertical drawers of 500mm each that also give good storage space behind each drawer. Each brand is allocated a minimum of one rod, which holds 17 models. We use lockable rods as an anti-theft device, as the store is quite open. The sales girls move around the store and ensure everyone is served. What are the best-selling brands in the store? The best-selling brands so far this year are Gucci, Givenchy and Dolce & Gabbana. In total we offer 24 brands and about 408 models. We would love to have Chanel sunglasses but they are not available for the duty free market. It s a big pity as we are constantly being asked for them. Do you offer any travel retail exclusive products that are not available in any domestic market? Most brands have the same ranges for both domestic and duty free, but De Rigo does have specific products for travel retail and we do carry a large percentage of those products. [De Rigo is the sunglasses manufacturer for major fashion brands including Givenchy, Escada, Police, Guess, Loewe, Gant and Jean Paul Gaultier.] Do you give staff training in selling sunglasses? Training for sunglasses is given by the suppliers once, sometimes twice, each year. The training consists of the main selling techniques based on face shape, caring for The Moodie Report 23
CATEGORY INSIGHT Fashion & Luxury May 2007 Secrets of success: good buying, getting stocks early and, above all, excellent staff are paramount the sunglasses, and the differences between and benefits of alternative lenses. We ourselves also do in-house training, covering sales skills and customer service, which is a must for selling products such as sunglasses. We incentivise the sales girls and give them specific targets they get a bonus for reaching the target, and they do reach it, even when it s a high number. We have a very strong sales force. Do you have an aftersales service? Should a passenger/customer have a problem with their sunglasses we will always do what we can to remedy any difficulty. Service before or after the sale, it doesn t matter, making and keeping the customer happy is what counts. That is what will bring them back time and again. Please tell me about any promotions you have run. Were they successful? What worked well? The only supplier promotion was a free T-shirt (left) with every pair of Police sunglasses and we saw a +300% increase in sales. We held the promotion in autumn 2006 for two months. The sales girls played a huge role in the success of this promotion. We also had a showcard by the cash register explaining the offer. I keep saying to suppliers that it s great to have gwps, and we d like to do more promotions. We also run internal promotions/incentives with the staff where we give them specific sales target to achieve, and I m happy to say that they nearly always break the targets. One supplier told The Moodie Report that the 24 The Moodie Report
May 2007 CATEGORY INSIGHT Fashion & Luxury Runway Sunglasses fact file Outlet size: 22sq m Number of staff: three staff on each of four shifts Opening hours: 24 hours a day Store buyers: Specialist sunglasses buyer Maria Rastvorova, assisted by Retail Manager Alan Magan, Operations Manager John Kilmartin and Group Buyer for sunglasses Martin Waldron Brands sold: About 24, including best-selling brands Gucci, Givenchy and Dolce & Gabbana, plus Police, Escada, Silhouette, Emporio Armani, Chopard, Zegna, Christian Dior, Loewe, Adidas, Roberto Cavalli, Hugo Boss, Giorgio Armani, Oakley, Moschino, Ray-Ban, Swarovski, D&G, Prada, Versace, Polo Ralph Lauren, Bvlgari, Killer Loop, DKNY, Tom Ford, Burberry, Diesel, Prada Sport and Miu Miu Runway Sunglasses complements ARI s strong portfolio of Runway shops at Moscow Domodedovo Runway store does huge business. Can you quantify that further? We will sell on average about 1,100 1,200 pairs of sunglasses each month this year. That s over the course of a year, so you will appreciate that, in the peak months, the figure is a lot higher. We have three peak times, starting with the New Year holidays. Russians leave for their holidays just before the New Year, on 28/29 December, or just after, on 2/3 January. They go to the ski resorts and need sunglasses to wear. Secondly, the May holidays: this year 1 and 9 May are holiday dates, so Russians might take one or two weeks holiday over this time. Thirdly, we have the summer holidays in July and August, when we get a lot of families with kids. We offer a few children s sunglasses. Another good time for us is September, when the kids have gone back to school and we get people with more disposable income. Why do you think it is so successful? There are a number of reasons good buying for a start, getting the product early in the season (before some of it may arrive on the domestic market) and, after that, it really does come down to the staff. Remember that the product is on lockable rods, so the staff have to open them for the customer this gives them the initial opportunity to start their sales pitch. Sunglasses, whilst being a fashion item, are very personal for Russians and it is important that the customer gets good and correct help and feedback when trying them on and making a decision to buy. Having quality staff certainly makes the difference. What are the keys to successful sunglasses retailing in your opinion? Having a good rotation of models and holding a wide variety of colours for each, experienced staff, and a store with a simple but effective layout. And we change the styles on display frequently. Can you give me some examples of how you work well with suppliers? All our suppliers receive their respective sales (by reference/sku) on a monthly basis. Regular discussions are also held with them concerning order fill rates and on the sales and ranking for each brand. Obviously we discuss all aspects of the sales and development of our sunglasses business as a whole when they visit the store. De Rigo and Silhouette are among the great suppliers to work with, for their proactiveness in all aspects of developing the business. As a general comment, the suppliers need to give some thought to what the customers want, and then the retailer should develop the business by incentivising staff. The Moodie Report 25
APRIL 07 FAST, FACTUAL, FREE WWW.THEMOODIEREPORT.COM A partnership between Hosted by Platinum sponsors Gold sponsors Lunch sponsors Sponsors Official carrier WEDNESDAY 8 MARCH 2006 FAST, FACTUAL, FREE PERSONALITIES OF THE WEEK This week s edition comes from Abu Dhabi, home of ACI s Airport Service Quality conference. It was a good conference built around an important and too often overlooked theme. Jaehee Lee, President & CEO, Incheon International Airport But the highlight of the event was the annual AETRA awards, a consumer-voted scheme COLM MCLOUGHLIN: THE DUBAI Corp: No wonder that asks passengers to assess airports via a range of criteria including staff courtesy, airport DUTY FREE MANcleanliness, clear directional signage, ground transportation and parking. Others include AGING Mr Lee DIRECTOR looked service offerings such as shopping, dining, telecommunications and computer services. THIS happy WEEK on Monday ANNOUNCED night. His airport A Too many of the award schemes in this industry are little more than an excuse for the NEW had just DAILY won SALES every organisers to make money. One retailer told me this week he had been presured to buy RECORD accolade OF going in an advertisement simply for being nominated for an award an abhorrent practice. Our US$4.9 ACI s annual MILLION, advice? Just say no. But the AETRA awards are different they re run with impeccable POSTED AETRA awards ON THE neutrality and sound methodology on a RETAILER S including Best 22ND Airport ANNIVERSARY. Worldwide. Deserved A PERFORMANCE recognition for SOME INSIDE THE MOODIE REPORT non-commercialised basis and, most WHAT More than money at Sharm El Sheikh... 7 importantly, are voted by that most +57% an airport AHEAD that OF puts THE itsprevious The AETRA results in full... 9,10 critical of judges, the consumer. 24-HOUR customers RECORD. first every time. Find those Irishmen... 10 Stop Press: DFS in major Macau deal... 12 It was no surprise then that Asian airports Halifax International Airport swept the board, taking the top four President and CEO Eleanor places in the Best Airport Worldwide category. And at the top of that league was Seoul Humphries: Humble Halifax no Incheon Airport, the outstanding South Korean gateway that is such an impressive contrast to its much-maligned predecessor Kimpo. The Korean contingent were understandably ecstatic but the most popular winner was Canada s Halifax International Airport, a Scotia, Canada air- longer. The Novia minnow that swam with the big fish in the Americas and left them all trailing in its wake. port headed off all its rivals, big and This year s passenger survey is the last under the AETRA name. Since January 2006, small, in the Americas as well as being ACI has offered a revamped programme under the name Airport Service Quality (ASQ). ACI expects to reach 100 participants by year end. It s an ambitious scheme and a laudable one. We think ASQ is set to become a crucial acronym in this business. voted Best Airport Worldwide With Less Than Five Million Passengers at the AETRA awards. THE MOODIE REPORT DATA ROOM TRAFFIC NEWS of China (CAAC). The total number of passengers using the country s airports rose by +17.5% to 284.4 million. Aircraft movements grew +14.7% to 3.1 million last year. Airports in three major cities Beijing, Shanghai and Guangzhou handled 37.3% of total air passengers. And here s a telling statistic the number of airports with annual passenger traffic of over a million stood at 42, three more than a year earlier. China has 135 airports in 133 mainland cities (excluding Hong Kong and Macao). By 2010 that figure is set to soar to 186. In related news, Chinese airlines carried 138 million passengers (including domestic) in 2005, up +15.5% year-on-year, according to the CAAC. It expects passenger traffic to grow at an average of +14% a year through 2010, and then slow to +11% annually from 2011 to 2020. Talking to the Wall Street Journal Asia, a CAAC official said he hoped that at least three Chinese airlines would break into the ranks of the world s ten largest carriers by 2020. China s largest airline in terms of passengers carried, China Southern Airlines, ranked 11th worldwide in 2004, according to IATA. China s next two The Moodie Report is published by Moodie International. All rights reserved. Please send any comments or stories to martin@moodie-international.com Page 1 Ed Brennan. Most who have seen the DFS Galleria Okinawa rank it as the pinnacle of DFS and industry achievement to date. But just as we were set to go to press, news broke of the retailer s most ambitious store development ever, in Macau, China. It s a classic case of Hold the front page so we did. Chairman Brennan and his team are understood to be hugely excited about this latest opportunity. Travel Retail Intelligence Editor s introduction: This project has transformed Aldeasa and will continue to transform Aldeasa, says Aldeasa National Commercial Sales Manager Lorenzo de Benito proudly. He s talking about the Spanish travel retailer s elegantly impressive offer at Madrid Barajas New Airport Terminal Four, a facility that has revolutionised the look, capacity and performance of the Spanish capital s hitherto overcrowded gateway. It s a stunning new building, bright, open and airy. Sunlight is an integral element, a natural feature reinforced by the canary yellow colours that dominate the airport and which are mirrored in Aldeasa s vibrant new logo. ISSUE 19 MARCH 2006 Glass walls open the terminal to the runways outside, offering splendid views of the waiting aircraft and the hills beyond. High above the passenger walkways the undersides of the roofs are lined spectacularly with Business commentary and analysis of key developments in bamboo slats a beautiful and wholly unexpected touch. the global duty free and travel The 6.2 billion project will allow Barajas to become Europe s second-busiest retail industry for readers of airport after London Heathrow and the tenth busiest in the world. Having The Moodie Report faced chronic capacity pressures for years, T4 doubles the passenger volume that can be handled at Barajas from 35 million to 70 million, with aircraft able to operate from any of the four runways. It features 470,261sq m of The Moodie Report PLUS is space divided into six levels three above ground and three below. published by Moodie International T4 comprises a main terminal and a satellite building. The latter connects Please direct any comments to to the main facility through a shuttle transport system capable of moving Martin Moodie by e-mail: 13,000 passengers per hour. Around 11 million passengers a year will use Martin@TheMoodieReport.com the main terminal initially, with a further three million moving through the satellite. Back issues can be found at www.themoodiereport.com For Aldeasa, Barajas duty free and travel retailer for the past 30 years, the new terminal offers vastly expanded shopping space. This has allowed the company to develop what it claims to be the widest and most competitive offer amongst all Spanish airports. So let s examine that claim in detail. How it all began...2 The key retail principles...3 The purchasing triangle...4 The Shop...4 Fashion & Fun...5 Les Boutiques...5 Thinking España...6 Spanish pride...7 Published by The Moodie Report I read it in The Moodie Report THE OFFICIAL Workbook DUBAI, 11-13 MARCH 2007 AIRPORT COMMERCIAL REVENUES - THE BIG PICTURE TALKING TRINITY WELCOME to The Moodie Report. CHINA. International passenger traffic at China s mainland airports climbed +14.1% to reach 30.6 million in 2005, according to the General Administration of Civil Aviation inside this issue Y mucho más Aldeasa brings much more to Barajas Airport s new T4 The WORLD ROVERS The story of the Irish influence on the global duty free industry How it all began: the Shannon story The great East European adventure Changing the face of Middle East airports The retailing pioneers TORONTO PARTNERSHIP EZEIZA ELEGANCE ASQ AWARDS The most respected and widely-read media in the travel retail industry Fast Factual Free www.themoodiereport.com