AUSTRALIA. Lotte Duty Free today officially opened its Melbourne Airport duty free operation and revealed an ambitious vision for expansion and redevelopment at the location under its ten-year contract.
The Moodie Davitt Report was on hand for the inauguration as the sole representative of the travel retail media.
The opening ceremony featured a traditional ribbon-cutting led by Melbourne Airport CEO Lorie Argus, Lotte Duty Free CEO Kim Ju-Nam, Lotte Duty Free Oceania CEO & Director Stephen Timms, Republic of Korea Counsel General in Melbourne Chang-hoon Yi and MP for Sunbury Josh Bull (representing the Premier of Victoria Daniel Andrews).
The official opening was followed by a Korean-themed celebration at the Melbourne Airport Private Jet Terminal, involving a variety of superb cuisine prepared by renowned chef Heather Jeong, and a lively performance from K-Pop band Truth Crew.
The Lotte Duty Free business at Melbourne Airport embraces 3,592sq m, including the departure and arrival duty free shops. This is the second-largest retail footprint among Lotte Duty Free’s global airport operations, only behind Singapore Changi Airport.
The retailer plans to expand the Melbourne Airport footprint to 5,634sq m, with a major enhancement of arrivals next year followed by a +40% space expansion in departures to be completed by late 2026. Once these investments are complete, the company is targeting KRW300 billion (US$235 million) in annual sales.
Kim Ju-Nam said: “Lotte Duty Free, which has endured the long tunnel of the pandemic, will take a leap forward again based on the successful operation of the Melbourne Airport store in Australia. We will be reborn as a leading global platform.”
Kim said later: “Opening Lotte Duty Free’s store here is truly touching. Melbourne is renowned for its culture, art and beautiful urban landscape.
“Lotte Duty Free will provide an excellent shopping destination for visitors, making their experience even more special. At Lotte Duty Free Melbourne Airport, you can encounter global brands and speciality products from Australia in one place. We will strive to provide customers with even more satisfying products and services.
“Our goal is to prioritise customer satisfaction. We will try our best to understand and incorporate the diverse demands and preferences of our customers.”
On the wider significance of the opening, Kim told The Moodie Davitt Report: “Lotte Duty Free has long been number one in Korea and has been making a lot of efforts towards global expansion. This opening in Melbourne and in Australia is a stepping stone to further expansion.” [Note: An interview with Kim will appear shortly.]
Lorie Argus told guests: “It’s wonderful that we can celebrate the partnership and commitment between Melbourne Airport and Lotte Duty Free for the next ten years.
“We know that Lotte Duty Free has a strong focus on customer service, one of the factors that stood out in its presentation during the tender.
“We like their approach to luxury, which you can see in the store already, and we love the fact that they have so many staff on the floor as we also know that people want experiences.
“Melburnians have high expectations of shopping as we know. Our team in retail are committed to bringing the city experience to the airport and we do really want the airport to be something that Melburnians can be proud of.
“Lotte is aligned to our vision to be Australia’s favourite airport. We are also excited about the renovations that you’ll see over the next few years, which will increase floor space by +40% and that is a very large commitment from us and from Lotte Duty Free. We believe it will be very special and one of the best experiences in Australia.
“We’ll be adding that space to meet the needs of our 76 million passengers a year by 2042. Melbourne will be the biggest city in Australia by 2031 and the airport needs to be ready for that.”
Under its plans for renovation and expansion, Lotte Duty Free aims to incorporate the lifestyle and culture of Melbourne into the stores. City landmarks offering design inspiration include Hosier Lane, known as the epicentre of graffiti art in Melbourne, leafy Guildford Lane and Degraves Street, renowned for its European-style cafés.
While renovation has yet to begin, the company is already expanding the brand offering across core concepts, which it said will continue as it targets new traveller groups and demographics, notably Gen Z and Millennials. Alongside Sense of Place, retailer and airport are pledging a greater focus on digital engagement to attract the consumer, both online and in-store.
Melbourne Airport Chief of Retail Jai McDermott said international travellers can expect new luxury brands and travel exclusives as they head overseas or return home.
“Melbourne is widely regarded as Australia’s fashion capital and the Lotte brand will enhance that reputation with luxury items and travel exclusives that can only be found in duty free,” he said.
“Significant savings can be found across popular categories including alcohol, cosmetics, perfume and eyewear thanks to GST and tax savings, and Lotte’s loyalty programme.
“Key in-store features include a mixologist providing holidaymakers with free cocktails, makeup artists offering complimentary tutorials, and skincare consultations, as well as pop-up activations.
“We look forward to partnering with Lotte to enhance the airport’s retail offering, while delivering an improved shopping experience for guests.”
Lotte Duty Free Oceania CEO and Director Stephen Timms said: “We are looking forward to the store expansions and bringing world-first shopping experiences to Melbourne travellers. We look forward to welcoming travellers through Melbourne Airport with an engaging and new fresh approach to duty free, which is uniquely Melbourne.”
Timms said later: “Today is a historic moment for Lotte Duty Free, Melbourne Airport and all of our great partners, but also for the people of Melbourne who over the next few years will be able to experience some of the greatest retail concepts anywhere in the world.
“We have spent a lot of time creating new experience and concepts that will bring Melbourne to life at the airport. We focus on inspiration, destiny, love and peace, all of the emotions of life and travel.
“We have begun preparation for the arrivals store, which will transformed into something akin to Flinders Lane in Melbourne, with recycled brick, reflected ceilings and the connection of Australian product with the spirit of Melbourne’s Laneways.
“Departures is a massive project. We’ll reflect the feel of Federation Square, there will be a huge amount of interaction with consumers, concepts to engage younger consumers from craft spirits to makeup experiences. Different precincts throughout the space will really create a duty free store like no other in the world. This is bespoke design from the ground up with the customer in mind.
“I want to also thank Melbourne Airport for the support and partnership they have given us. We saw in the transition when some of their teams came in to help us deliver that changeover [from Dufry on 1 June] in just three hours, and we honoured our commitment not to miss service to a single flight.”
Melbourne Airport has also relaunched its Laneway online duty free store, allowing travellers to click and collect when flying overseas or re-entering Melbourne. International travellers can purchase products up to two months ahead of travel and redeem items inside Lotte’s arrivals or departures store on the day of travel.
Lotte Duty Free triumphed in the Melbourne tender against strong competition from five other global players [the final consideration came down to a choice between long-time incumbent Dufry, Lotte Duty Free and Aer Rianta International -Ed]. The contract began on 1 June and runs to May 2033.
Melbourne Airport international passenger traffic has come back strongly since the pandemic, reaching around 740,000 in May, or 87.6% of the May 2019 figure.
Separately, Lotte Duty Free said that in the first half of this year, business at its six stores in Oceania is showing strong signs of recovery, with sales rising by about +260% compared to last year.
More to follow. 
