“We know that pricing and promotions are important, but the true trigger points are still the assortment, the offer and the experience.” So says Pernod Ricard Global Travel Retail Vice President Global Marketing Liya Zhang, speaking to The Moodie Davitt at TFWA World Exhibition recently about consumer expectations of travel retail today.
As one of the powerhouse players in the drinks sector, Pernod Ricard is home to a multi-category portfolio that runs across great global brands such as The Glenlivet (celebrating its 200th year), Royal Salute, Ballantine’s, Chivas Regal, Jameson, Martell, Beefeater, Mumm and many more.
Travel retail has long been viewed as a ‘must-win’ channel at the group, and the division posted +3% revenue growth in financial Q1 (to 30 September), delivering a solid performance against the backdrop of sharp declines in other key markets, notably the US and China.
Taking a view of how consumer needs are evolving against this broad market softness, Zhang says the focus must remain firmly on experience rather than trying simply to leverage the price dynamic in travel retail.
“We know that offer and experience account for 50% of the purchase drivers, which is not like other categories where price matters much more.
“I take that as an opportunity because it shows you there is a big place for innovation. That can be in the product, in the experience and in collaboration, even across categories. I believe that travel retail should focus on presenting a holistic shopping experience and environment, and use data, digital and other tools to facilitate excellence.”
In engaging the travelling consumer, Zhang talks about efficiency in how brands not only employ touchpoints but connect them effectively.
“Our eco-system is more developed that it was but do we have too many touchpoints? As a marketer we love to talk about the 360-degree campaign but now we see many companies going back to basics, carefully selecting those touchpoints which may really make the difference.
“We have an ambition to connect with impact. We aim to connect with travellers knowing where they will be on their journey, from pre-trip planning to in-store and destination.”
Zhang adds: “We know for example that pre-trip digital touchpoints can have an impact on purchase decisions if amplified by a touchpoint at the airport, but you have to have a combination.
“With our retail partners we aim to select the right touchpoints in a smart way, to increase conversion and basket size. We will invest but need to be clear about what our primary objectives are. These will guide the strategy.”
Pernod Ricard GTR recently kicked off a traveller touchpoint project in the UK to examine the traveller journey across all touchpoints and ensure it can plan across the right channels with the right content. More details on this programme will follow.
Complementing the physical experience to drive conversion is the dynamism of the digital experience – and here Zhang talks about “digital with purpose”.
Elaborating, she says: “We want to use digital to connect with consumers ahead of their journey and drive them to activations and pop-up stores. Key to this is how we communicate the right messaging. What is the value-add and offer and what will make them want to include us in their journey at the airport once they arrive?
“Travel-focused campaigns with platforms like Tripadvisor and Uber have allowed us to be very targeted with our approach. Digital interactivity should benefit consumers in choosing products with or without staff, and can offer personalisation that differentiates a product from something they can buy at home.
“We have a number of boutiques and shops-in-shops that we have invested in, so we need to continue bringing newness and innovation to these spaces through forward-thinking technology that is not gimmicky, but actually helps the traveller make choices, or adds value to the product.
“It is also a great opportunity for our prestige and ultra-prestige brands to connect with high net-worth shoppers and offer them the best experience possible.”
In-store and digital experience is complemented by brand creativity, with the pipeline of launches and campaigns accelerating in travel retail, which Zhang says underlines Pernod Ricard’s commitment to the channel. The Scotch whisky portfolio and single malts in particular offer several outstanding recent examples.
The Glenlivet Groundbreaker Collection (the theme of a colourful makeover of The Moodie Davitt Report website this week) is a limited-edition travel retail-exclusive created in collaboration with artist Red Hong Yi. The release of Chapter One, the first in the limited-edition collection, marks the brand’s debut collaboration series featuring the work of the artist more popularly known as ‘The Artist Who Paints Without A Brush’.
This series of Speyside single malts is a tribute to pioneers, such as the distillery’s founder George Smith, who achieve greatness by creating their own paths. Each chapter will highlight artists who have developed their craft through their travel experiences.
Zhang says: “In the year that we mark the 200th anniversary of The Glenlivet it is natural that we showcase this jewel. We showed the extraordinary The Glenlivet 55 Year Old in Cannes, of which there are just 100 bottles.
“The Glenlivet is one of what we call internally our global power brands and we are stretching the boundaries of what we can offer with this brand to meet various customer needs.” Watch out for much more travel retail activity around The Glenlivet and other single malts in 2025.
Aberlour is another core focus within the malts range, with an updated travel retail-exclusive offer.
Zhang says: “Aberlour is a brand loved by malt connoisseurs and afficionados. Today our vision is to lead the progressive craft movement in single malt, and we are ready for global expansion. For GTR we have designed a bespoke range, including three travel-retail exclusives, to be rolled out from October, sporting modernised and elevated packaging.”
The channel-exclusive offer includes Aberlour 13 Year Old (double cask matured in American oak and Oloroso sherry casks); 16 Year Old (double cask matured with a selective finish in extra charred American oak casks) and Aberlour Suthainn (double cask solera – Suthainn means ‘everlasting’ in Gaelic, a name intended to capture the essence of the solera where each batch of Suthainn includes a portion of the previous one). Aberlour A’bunadh and 18 Year Old remain part of the range with elevated packaging.
Zhang says: “We want to establish Aberlour as ‘A Craft with Purpose’ for malt shoppers. This will be translated with a new retail identity highlighting the brand’s sense of place.”
The new range begins shipping in November and is expected on-shelf in key EMEA markets by December; other regions will follow.
Other notable launches and campaigns that underline the diversity of the group’s collections include Noblige Noir, a new travel retail-exclusive Cognac from Maison Martell launched this month via Duty Zero by cdf at Hong Kong International Airport, and the introduction of Mexican tequila brand Código 1530 to duty free, initially via DFS Group.
Special editions introduced recently that also underline the channel’s power include Redbreast Cuatro Barriles Edition with ARI, Martell Paris Exclusive Edition with Extime Duty Free, timed for the Paris 2024 Olympics and Paralympics, and Royal Salute 21 Year Old Miami Polo Edition, launched via partners worldwide.
The investment behind these and many forthcoming projects emphasise how the Global Travel Retail division contributes to the Pernod Ricard universe, summed up as follows.
*Brand awareness and consideration via global visibility: A prime example of this was the ‘Absolut Warhol’ campaign that ran via a pop-up supported by digital communications at Amsterdam Airport Schiphol. This was for a special limited-edition partnership between Absolut and the Andy Warhol Foundation inspired by a painting Warhol created for Absolut, which was thought lost but then was found.
Travel retail was granted a two-month exclusivity for the launch, with shoppers also offered a print of the Absolut x Warhol artwork to take home as a GWP.
Zhang says: “We had the unique pop-up in Amsterdam, as well as OOH media in key airports such as London Heathrow, Dubai International, São Paulo Guarulhos International, Sydney, Madrid and Santo Domingo. We also created bespoke 3D OOH content for some locations really pushing the impact and innovative of bringing creativity and art to airports.
“We used many touchpoints and that amplified our artist partnerships while driving volume, and it involved great internal alignment that you need to make any campaign succeed.”
*Premiumisation via innovation: This is summarised by the launch for example of Jameson Triple Triple as a travel-retail exclusive, one that built on its success by going global to other channels. “We have a greater weight of premium products than other channels and can use that for impact,” notes Zhang.
*Globalisation via expansion & ‘borderless consumer connection’: The borderless element reflects how Pernod Ricard chooses to promote brands that work best in a particular season, whether it’s summer in Europe or Chinese New Year, with focused, relevant campaigns across channels.
*Brand seeding & acceleration: An example is Malfy, which has achieved triple-digit growth in the past three years. Zhang says: “This performance is down to its strong retail DNA which includes its eye-catching packaging, approachable pricing and its story-telling, which speaks to how GTR plays a role for emerging brands.”
*Win prestige+: “At Pernod Ricard we are the leader in this prestige+ segment,” Zhang says: “We want to drive revenue of course but we also want to connect and engage with high net worth individuals via our programmes. That is another cornerstone of our strategy.”
These values, backed by investment in relevant physical and digital touchpoints, plus a relentless focus on innovation, will support Pernod Ricard’s approach to the channel in the years ahead. Despite the challenges facing the channel, these remain exciting times for the group as it explores the boundaries of brand creativity and seeks to take the travelling spirits consumer on new journeys of discovery. ✈
