AUSTRALIA. Powerful beauty retailer Mecca has revealed ambitions to extend its reach at domestic terminals in Australia, and to build a footprint at international terminals for the first time.
In a fascinating session on speciality retail at last week’s Australian Airports Association Retail & Commercial Forum (17-19 July), Mecca Chief Financial Officer Sylvain Baudens outlined the company’s approach and strategy.
Mecca offers a brand-agnostic, convenience-based, fast-paced beauty experience at several domestic terminals including Brisbane (where it opened its first store in 2015), Sydney and Melbourne airports. It has a range of exclusive agreements with brands for the Australia market that cover both domestic and travel retail.
Baudens said: “We are talking to the airports where we are currently, and would like to extend our space – currently that ranges from 80sq m to 110sq m – and we are interested in other locations. There are others that are the right size with the minimum traffic allowing us to have a profitable business.
“We have the ambition to expand Mecca internationally and will test some markets in the coming years. International airports and airside environments are an opportunity to drive awareness and build the brand representation in front of international travellers. We’ll go small and test. If it works, we’ll extend.”
Travel retail offers incremental sales to domestic channels, he said. “It’s a different experience as you have less time, lower ATV, lower price points, but it’s still incremental. From a productivity per square metre point of view, the airport stores are not the strongest in the fleet but they are are pretty strong.”
Baudens said that the company will keep testing its proposition in the travel market.
“We feel there is an opportunity to represent the broader range at airports. We carry around 200 brands and about 80% are exclusive to us in Australia and New Zealand so it’s an opportunity to bring those to the airport. The question is can we get the dwell time – it’s difficult to replicate in domestic terminals – and is there room to introduce the services that we have in our other stores?”
On the criteria to enter the market, he cited capital allocation, the customer proposition, quality of location, size of space, traffic, configuration of the terminal and mix of retail.
“We would like an agreement with the airport on what we can add to their retail space. Also, how do we bring a bit more entertainment and experience to the terminal to increase dwell time?” ✈
