QATAR. The Trinity Forum was held in Doha on 30-31 October, the first time the world’s most influential airport commercial revenues conference has been held in Qatar. Here we present a snapshot of all the social and business sessions. Look out for our special eZine coverage, featuring much more detailed coverage of some outstanding presentations, coming soon.
THURSDAY 31 OCTOBER 2019
20.00 An unforgettable experience with world-class entertainment rounds out Trinity 2019, as Qatar Airways, Qatar Duty Free and Hamad International Airport host one of the great nights ever in travel retail.
The Gala Evening at the Kempinski Marsa Malaz Hotel culminates in a performance of verve and style from American star Jason Derulo, after a series of other superb local and international acts, including renowned Qatari baritone Fahad Al Kubaisi. There were some surprises too, as the hosts gave away two Business Class return flights to anywhere in the Qatar Airways network to two lucky delegates.
18.00: “I think the industry is future positive and this Trinity Forum has expressed that view loud and clear.”
That’s how The Moodie Davitt Report Founder and Chairman Martin Moodie closed The Trinity Forum for 2019. He particularly noted the importance of corporate social responsibility – a recurring theme throughout the week. Moodie gave skincare brand Snowberry’s carbon offset project as an example – when Martin Moodie’s Carbon Block was born.
He also announced The Trinity Forest Project, in which The Moodie Davitt Report will plant 12,529 trees – one for each subscriber with many more to come from industry partners. More details on that soon.
Finally, Moodie called Wild Tiger’s Gautom Menon to the stage. Menon, with fellow co-pilot Paul George Vedanayagam, recently completed an epic journey in support of tiger conservation – The Roar Trip. “We are so lucky to be in the drinks and travel retail industry – everyone has really embraced us during this journey,” Menon said.
“You did a terrific job and everyone is proud of you,” said Moodie.
Delegates will now look forward to the Gala Dinner, which promises to be a spectacular occasion and will conclude a fantastic and insightful event in Doha.
17.30: The final session of The Trinity Forum 2019 aptly sought to challenge the accepted norms of the travel retail industry.
First of all, Mars Wrigley International Travel Retail Global Category Director Raghav Rekhi spoke about the hugely ambitious multi-airport advertising campaign run by the confectionery and food company for M&M’s.
The campaign, Rekhi said, came from establishing three pain points for consumers in an airport environment: shopping not a priority, boredom and stress of travel.
To tackle anxiety and boredom, the communication brought fun to the traveller’s journey throughout the airport, Rekhi said.
He added: “Digital is an enabler for transformative growth. It is not the silver bullet.”
Lagardère Travel Retail Group EVP Marketing & Digital Stéphanie Metz-Thevenod then looked at how the travel retailer seeks to better engage consumers through three approaches: reach, ease and enchant.
Reach, she explained, came about because duty free retailers don’t have brand recognition as strong as brands and airports, but they do have the connection of being there. “We all have our own audience, but we think there is a lot of value in breaking that silo by using each other’s audience to push the message to our consumers,” she said.
Ease comes through phygital solutions, Metz-Thevenod continued. For this, Lagardère uses methods such as Perfumist, click & collect, chatbots and mobile payment.
Finally, the retailer seeks to enchant by implementing innovative technologies for the in-store experience, Metz-Thevenod said.
L’Oréal Travel Retail Global Retail & Digital Director Sophie Neyertz-Ehrsam then talked about how the beauty brand is trying to “reinvent the beauty experience in order to increase conversion”.
There are three opportunities she identified: accelerating pre-order, enriching the experience and leveraging online to offline.
To accelerate pre-order, the beauty retailer is working with duty free retailers and ecommerce platforms. “Digital disruption is finally happening in travel retail and this is good because it presents new opportunities for us,” she said.
An enriched and personalised experience can be offered through in-store diagnosis and product personalisation, she continued. The challenge with this is that it can require an internet connection and personalised data.
Similarly, leveraging online to offline seeks to utilise data. This can be a successful opportunity through using digital media and KOLs to engage consumers pre-trip. The loyalty programmes of retailers are “a very interesting” touchpoint, Neyertz-Ehrsam added.
She concluded: “Beauty is limitless and data is the new engine.”
Finally, delegates heard from Alibaba Fliggy Buy General Manager Roman Zhu, who talked about what Fliggybuy can add to the travel retail journey.
Alibaba has in-depth insights on consumer profiles, such as who they are and what they want to buy, Zhu said. He added that in Alibaba’s ecosystem, they aim to connect retailers to the right person.
He concluded: “We hope for more cooperation with you. We have not come here to change the game, but we want to enable brands to accelerate the business and to satisfy the Chinese traveller and give them a better experience.”
16.30 The Moodie Davitt Report has extensively covered Philip Morris International’s (PMI) ongoing campaign to switch from traditional combustible cigarettes to reduced-risk products.
Travel Retail General Manager of MEA Operations Tomislav Vujcic explored the latest developments and the benefits for travel retail in a compelling presentation titled ‘Towards a brave new world’.
“The problem with cigarettes has always been combustion – there are a lot of harmful chemicals,” he explained. “The answer is a brave step into science and technology to develop better alternatives and to replace combustible cigarettes altogether.”
The company’s strategy is backed up by the figures. It employs more than 400 scientists, engineers and researchers, has had over 4,300 patents granted worldwide and has spent US$6 billion in R&D manufacturing capacity. The result is that some eight million smokers have already switched to smoke-free alternatives, Vujcic said.
“Cigarettes as a product remained largely unchanged for over a century,” he explained. “The extent of the transformation is unprecedented in the tobacco industry. It is a major shift for the owner of the world’s largest cigarette brand [Marlboro].”
He then outlined PMI’s portfolio of heated tobacco products and products without tobacco. Its IQOS product is being marketed currently, but several others are in development.
Vujvic introduced a highly relevant concept – to ‘unsmoke’. It means ridding smoke from your life, and according to Vujcic, unites smokers and non-smokers who want to ‘unsmoke’ themselves, family and friends. The best way is to quit cigarettes and nicotine; the next best is to switch to better alternative products.
IQOS is now sold in 116 airports, which he described as “significant progress”. “It is taking volume and value – and market share – from combustible cigarettes at airports,” he said.
The shift also changes the company itself, and PMI is becoming a direct consumer experience company. Indeed, PMI is digitally connected to almost all of the eight million fully converted IQOS users.
Finally, he described the importance of the duty free industry. “It becomes a connecting point between two domestic markets. The airport is a place where people can experience the brand and see what it is about, and make their choice in their own time,” he explained. “Duty free is also a data-rich industry, so travel ecosystem partnerships are important.
“Today consumer channels are fragmented, so we need to bridge them. This is our future and something we will be focusing on.”
15.00 Three experts from the worlds of food & beverage, hospitality and advertising took part in a fascinating session that explored ways to enhance the consumer experience.
SSP America Executive Vice President Pat Murray assessed the growing role of food & beverage in achieving this, and ultimately increasing revenue. But has anything in the airport food & beverage sector really changed over the last years? he asked.
A range of external factors have helped, such as passenger growth, new and improved airports, security changes and airline consolidation.
But the real change has come from within. “Airport food & beverage has got a whole lot better,” he said. It has evolved from basic and boring to cool.
Customers have demanded more range, choices, a better quality of service and a ‘taste of place’. Food has in recent years become a major part of our popular culture. Chefs have become household names, rock star-like, while reality food TV is becoming increasingly popular. The design of restaurants has also vastly improved, and strong art and architectural components make them more attractive to passengers, Murray said.
“Good food & beverage can make the overall experience a whole lot better for passengers,” he concluded. “We can reflect a ‘taste of place’, elevate the experience and comfort the travellers. This all means overall spend goes up. “The airport food & beverage sector has indeed changed a lot and will continue to do so.”
Fresh from the Trinity Challenge earlier today, CapsuleTransit CEO & Co-founder Ryan Loo looked at the future of airport accommodation. He asked delegates to imagine they were a famous architect and had won a contract at an airport with 60,000,000 passengers per annum. How would they manage accommodation?
Perhaps they might create a hotel. If 1% of those travellers needed accommodation, that would require 1,643 rooms. So the traditional hotel would be bigger than the airport in height. “If you built this then I guarantee you would be famous for the wrong reason,” Loo said.
So rather than build a large hotel next to the airport, why not integrate sleeping facilities within the airport building to maximise the area covered?
That’s exactly what CapsuleTransit’s disruptive model does, and it is firmly in line with the needs and values of millions of transit travellers.
Loo explained that CapsuleTransit emphasised tailoring the experience to the needs of travellers by offering stays in blocks of time of three, six and 12 hours. Booking and check-in can be conducted using a smartphone, with passengers using their mobile phone to unlock the door after receiving an authentication code.
At Kuala Lumpur International Airport 2 (KLIA2), weary travellers are able to use multiple sleeping areas and ‘chill-out’ zones. The KLIA2 operation now embraces 9,500sq ft of landside space, containing 204 ‘capsule pods’, ranging in size from single occupancy up to units suitable for small groups of friends or family.
As revealed in the latest issue of The Moodie Davitt eZine, CapsuleTransit plans to expand the mini-hotel venture across Southeast Asian airports and perhaps beyond. Loo said the company was delivering an efficient accommodation network.
“Importantly we will improve the airport vision as sleeping on airport benches will be a thing of the past,” Loo concluded. “Join us in reimagining the future of airport transit.”
From the airport advertising perspective, delegates heard from oOh! Media Chief Commercial & Product Officer Robbie Dery.
He argued that technology developments allow advertisers and, therefore, brands to better connect with consumers, thanks to increasingly sophisticated data.
“We knew with the rise of data that we would have to continue to evolve and keep getting smarter,” Dery said.
To deliver a stronger return on investment for brands, airport advertisers should look to use transactional data more than claimed data, he argued. Dery added that oOh! Media has managed to use its transactional database to create transactional data for a number of brands.
The deepest engagement is created by combining content, environment and audience, he concluded.
14.30: Nestlé International Travel Retail General Manager Stewart Dryburgh opened the afternoon by looking at sustainability and the role travel retail has to play in preserving the planet, a topic he described as “really critical”.
Sustainability has come to the forefront of conversation in recent years, driven by millennials and Generation Z, who are both “expecting an awful lot of us as businesses”. “People like Greta Thunberg are holding us to account,” Dryburgh added.
Nestlé is trying to live up to these expectations by removing all single-use plastics from its Smarties brand by the end of 2020 and being a carbon-neutral company by 2050.
Dryburgh offered three radical “first steps” the travel retail industry must take in order to improve its sustainability as a whole. Firstly, he said air travel should be cut by all trade shows being consolidated into one global event by 2025. Secondly, solely recyclable materials should be used at trade shows. Finally, he called for all industry conferences to be live-streamed, in order to take away the necessity of travel by stakeholders.
Dryburgh concluded: “We’re not necessarily far behind, but this is coming so fast that we need to get moving on this, otherwise we will be left behind.”
12.30: A strong panel session featuring a pair of airport leaders concluded the morning session.
Jordan Airport International Group Chief Commercial Officer Deema Anani opened by talking about the recent renovations for duty free at Queen Alia International Airport, which will be followed by a revamp of the airport’s speciality retail. She also revealed that the F&B concession at the airport has been won by a consortium from BTA and Lagardère Travel Retail.
Delegates then heard from Emmanuel Menanteau, who is VINCI Airports Area Director for Northern & Eastern Europe and Southeast Asia, who predicted that the industry will need to soon be less reliant on Chinese consumers.
“Chinese passengers buying new collections because they are not in China will stop, so we need to change,” he argued, adding that new collections that are currently bought in travel retail will soon be available in the Chinese domestic market.
Both Anani and Menanteau agreed that as biometric technology progresses, passenger dwell time is set to drop, presenting a challenge for airports and retailers. Anani asked delegates: “The dwell time is going to decrease. Instead of waiting until that happens, why can’t we address that now?”
As several challenges are presented to airport retail, both panellists talked about the most sustainable partnership model.
“If we come to the table with a mindset of what is in it for me, that becomes a challenge for negotiation. If you sit around the table with the objective of finding something new, you will get somewhere,” Anani said.
The duty free retail at Lisbon Airport is operated by a consortium from Dufry and airport operator, VINCI. Speaking about this model, Menanteau said: “Once you are in a joint venture, you are partners. That is what we do in Portugal and is something we have been considering for other airports.”
12.00 In a compelling presentation, Alibaba Global Business Group President Angel Zhao introduced the concept of a New Travel Retail. The Chinese ecommerce giant is aiming to enable an industry upgrade through digitisation and enhancing the consumer shopping experience.
To do that, it will work with travel retail partners to link the online and offline worlds, leveraging mobile capabilities to connect merchants to consumers.
“We welcome more industry players to join forces with us and inject new ideas into the travel retail sector,” she said.
In a digital transformation, engaging the consumer is paramount, she said. Zhao highlighted four areas of digital empowerment: transaction, marketing, membership and service.
Zhao’s presentation focused on Alibaba’s globalisation efforts – a key strategy for the company – and how its ecosystem can support the travel retail business in its digital transformation. It already has capabilities in the four areas noted, and launched its Fliggy Buy platform earlier this year.
Fliggy Buy is an online travel service platform that allows Chinese travellers to make purchases online at duty free and tax free shops, international retailers and speciality stores overseas – before they leave home.
The platform, part of Alibaba’s Global FUN travel business, also gives Chinese consumers product information and reviews in their own language before reaching their destination and allows for the collection of products after arrival. “It is a single touchpoint to engage consumers,” Zhao said. There are opportunities for cross-campaigns at branded retail stores, for example, she explained.
We are also seeing more stores globally offering Alipay as a method of payment, and this makes travel more comfortable for Chinese passengers. Crucially, Alipay has evolved from a payment service to become a lifestyle service – and there are certainly lessons to be learnt from this transition.
The travel retail business can’t now go back to an offline-only model, and this is why the concept of a New Travel Retail is so relevant. Ultimately, Zhao said Alibaba’s goal was to bring more value to the consumer by working with partners and developing new solutions.
11.15: Hamad International Airport, Zurich Airport and the Parisian airports are all airports with exciting expansion strategies.
The Changing Airport Perspectives panel session heard from representatives of each of these airports about their growth and their varying visions for the future.
Hamad International Airport Chief Operating Officer Engr. Badr Mohammed Al Meer, first of all, spoke about the much-discussed expansion plans announced for the Qatari airport.
The second phase of expansion at Hamad Airport is due to be completed by 2022 and will see 11,000sq m of retail and F&B added to the airport. Al Meer added: “We wanted to do something special. If you go to most of the airports in the world, it is copy and paste. What we did over here is tried to do something unique or special by thinking outside the box. We invite our travel retail partners to follow this.”
He added that he expects Hamad Airport to maintain its status as a hub airport, despite the increasing allure of Qatar as a destination in its own right.
Groupe ADP Chief Retail Officer Aude Ferrand then discussed the planned expansion and retail growth at both Paris Charles de Gaulle Airport and Paris Orly Airport.
66 new retail or F&B outlets will be opening across the airports this year, with a similar number planned for 2020, Ferrand said.
She added that she wanted to see the airports become even more quintessentially Parisian as they introduce new retail outlets. “Our ambition is to be the only place in Paris to have excellence in four key areas: interior design, Parisian brands, service and price positioning,” she added.
Zurich Airport is currently working on The Circle: the single largest real estate development in Switzerland located on the airport’s doorstep. The new facility will ultimately have 180,000sq m of leasable space and feature 25 retail stores.
Zurich Airport Head of Commercial Centres Heidi Köpple identified several key factors the airport takes account of as it develops: ambience, Swissness, experience, everchanging platforms, convenience and local operators.
The trio then took part in a panel discussion about this year’s theme of the phygital airport of the future. Summing up his perspective, Al Meer said: “Having a smart airport is very important, however this should not force us to eliminate the human factor. That must be there at all times.”
10.30: Aircommerce – an innovative tool that provides information and offers through existing messaging apps – won the inaugural Trinity Challenge, receiving a US$10,000 donation to chosen charity Room to Read.
The Trinity Challenge is a new feature for The Trinity Forum, the result of a partnership between Mondelez World Travel Retail and The Moodie Davitt Report. Ahead of the event, participants pitched a new idea that could be implemented at Nirvana Airport – the original concept airport from the 2005 Trinity Forum. It had to involve the participation and investment from all three members of the Trinity and was required to drive increased penetration, higher average transaction value and greater frequency of purchase.
Three shortlisted finalists – Airbuy, CapsuleTransit and Aircommerce – pitched their concepts to an esteemed industry panel today. Led by Mondelez World Travel Retail Managing Director Jaya Singh, the panel also featured PSI Managing Director Ben Milne and Harding Retail Senior Vice President, Asia-Pacific Glyn Williams.
Ahead of the finalists’ pitches, Singh described Mondelez’s thinking behind the contest and his hopes for it. “The Trinity Challenge is about delivering innovation and thought leadership and is a place to share new ideas,” he said. Singh said that while Mondelez’s category vision has driven many innovations, more can be done within the Trinity to share ideas.
“This shortlist of three brave organisations have stepped up to the challenge and may have a breakthrough for our hypothetical Nirvana Airport,” he said.
First up was Airbuy, an AI-driven customer engagement platform that delivers “a seamless omnichannel solution” according to Chief Product Officer Madar Garge. The company’s approach is to engage customers early and expand the shop window beyond the airport.
Next, CapsuleTransit CEO Ryan Loo offered a solution to the problem of a lack of time at Nirvana Airport – a capsule hotel. Crucially, the pods can be located throughout the airport and passengers can choose their timeslots rather than paying for a full night.
Finally, Aircommerce Founder and CEO Melvin Broekaart introduced his innovative tool, which seeks to increase penetration “by seducing more passengers to make use of the already existing, amazing commercial venues present” at the airport.
“Aircommerce informs passengers about airport commercial venues, brands and experiences that can be found on their route to their gate and that truly matter to them,” he explained. “The AI based conversational commerce tool doesn’t require any new apps on the passengers’ phones and is heavily personalised and self-learning.”
Passengers simply start a conversation on existing messaging apps such as WhatsApp by scanning a QR code or clicking a link. QR codes are placed at landside and airside locations throughout the airport. They can instantly receive a special offer, immediately pay from within the conversation and then pick-up in the indicated store.
The simplicity of the Aircommerce concept won over the judges, who unanimously selected it as the winner. “It talks to passengers in a way they are used to engaging with,” said Williams.
Accepting the Trinity Challenge award, Broekaart said the next step was to rollout the solution in airports, and it is ready for large-scale testing.
Some 10,000 children in Cambodia will benefit from Aircommerce’s win, as that number of books will now be distributed in the country as a result of the winning charity donation. Room to Read aims to help children learn to read in a fun way.
Singh praised all the shortlisted finalists, saying that combined they could help create a “potential silver bullet solution”. “They all mentioned a need to co-create, and this is a function of having all stakeholders involved,” he said.
7.30: The second day opened early with a special APTRA Exchange event organised by the Asia Pacific Travel Retail Association (APTRA).
The event was organised especially for the release of the Economic Impact Report, which helps to explain how much the travel retail industry contributes to the economy of the Asia Pacific region. The research shows that travel retail brings 140,900 direct jobs in the region and contributes US$7.6 billion in GDP.
APTRA President and Lagardère Travel Retail Head of Strategic Development Asia Grant Fleming described the report as “a tool for our teams to take to the regulators and remind them that their decisions do affect in a bigger way than they think”.
A panel featuring Fleming, APTRA Board Member and William Grant & Sons Travel Retail Managing Director Ed Cottrell, JTI Corporate Affairs & Communications Pan Har Ying, APTRA Board Member and Mondelez World Travel Retail Managing Director Jaya Singh and ACI World Director General Angela Gittens then discussed the importance of the research and how it can be used to help regulators see the value of the travel retail industry.
Cottrell and Pan represent a liquor and tobacco company respectively, both of which are categories subject to intense scrutiny from regulators.
Talking of how the research can be used positively to proactively combat regulatory threats, Cottrell said: “The number of regulatory issues and headwinds that liquor is beginning to face means that we have to be more proactive.”
Pan added: “What we had been lacking were quantifiable measurements. This will be a very critical stakeholder engagement tool to demonstrate the entire value of the duty free industry.”
Speaking from an airport perspective, Gittens commented: “You have to establish a sense of trust with potential regulators.”
The importance of the research, which is now available to APTRA members, was summed up by Singh. “Divided we stand every chance of being conquered and finally we have a document that can unite all of us stakeholders: airport authorities and brands as well as retailers. Those facts should not only be used for defensive purposes, we now have the basis by which we can proactively engage with key decision makers,” he told delegates.
WEDNESDAY 30 OCTOBER 2019
21:00 Sounds of Trinity: Qatar Duty Free Vice President Operations Thabet Musleh introduces a special industry DJ for the later stages of the Cocktail evening, Parfums Christian Dior Director Travel Retail Africa/Middle East/ Indian Subcontinent Frank Dagher Hayeck (below)
19.00 ‘Think Pink’ was the theme of a wonderful Opening Cocktail evening at St Regis Hotel, hosted by Hamad International Airport, Qatar Airways and Qatar Duty Free, with cocktails kindly provided by Diageo Global Travel.
17.30: “The future of the transportation experience is about changing the way we deliver the experience. Design at its highest level must be inherently woven in the culture of each of your brands. We must define why we matter beyond duty free and convenience.”
That was one of the key messages delivered by Global Retail Sector Leader Kevin Roche in the last presentation of the day.
“Gone are the generic ‘anywhere’ departure halls. Instead, airports are letting passengers know they have arrived somewhere special that is deeply tied to the city they serve,” he said.
“Today it is all about context and Sense of Place. After all, we travel with expectations to experience the destination. This has become so obvious, it is imperative we offer ‘local wonder’ in both the designs we create, the products we offer and the services we deliver.”
However, talking about Sense of Place and delivering it are two very different things, he said. How do we drive culture into experiences and products? he asked.
“Today’s airport guest expects an extraordinary arrival and departure experience with choices, and an experience they can control,” Roche continued. “Amenities, expanded services, contextual choices and social activities are not optional. They [airport guests] don’t want to be forced through walkthrough stores, for example.”
Airports are now competing for ‘Share of Time’; people spend their money where they spend their time. Presented with a choice of departure and stopover terminals, passengers are booking flights based on their favourite airports.
Roche then explained how to become a destination of choice rather than convenience. “Travel retailers can no longer compete on price or convenience: to draw the consumer in and convert, even in the captive airport, retailers must generate excitement and a reason to buy beyond duty free.”
But you can’t really capture hearts and minds – instead you have to earn them, he said. Roche emphasised the need to design experiences and to have the courage to imagine.
Roche also discussed the power of design. “The act of designing is an inherently powerful act. Design has the power to galvanise places, communications and content towards a greater value for the consumer. It adds economic, emotional, social and aesthetic value.
“Good design is making something intelligible and memorable. Great design is making something memorable and meaningful. When design is memorable and meaningful, an experience is realised.”
Don’t sacrifice the quality of experience for growth, Roche explained, but derive growth from the quality of experience.
He concluded: “In a world where everything conceivable is available in the palm of your hand; where brands, services and merchandise will be dropped at your door from the sky and there is always a better price; where the traveller travels to experience the destination, whether for leisure or for work; there is a significant opportunity for these centres of humanity we call airports converging to not only serve their purpose of transporting, but to ensure in themselves they deliver local context and all the richness of the vibrant city they serve.”
16.30: In a hard-hitting session that saw the three sides of the traditional Trinity model come together for a debate, delegates heard from Pernod Ricard Global Travel Retail Chairman & CEO Mohit Lal, London Heathrow Airport Retail Director Fraser Brown, China Duty Free Group (CDFG) President Charles Chen and Lagardère Travel Retail Head of Strategic Development Asia Grant Fleming.
From the brand perspective, Lal said the travel retail ecosystem needs to adapt to stay fit for purpose. Lal called on industry stakeholders to show greater courage, focus on long-term viability, create a sustainable Trinity partnership, offer premium retail space, focus on travellers, intelligently leverage data, stimulate the travellers and leverage the strategic importance of airports to make the travel retail industry more sustainable in the long term.
“Travellers have their purse strings loose it is for us to come together to extract value from those purses and to put value into the ecosystem,” he added.
London Heathrow Airport Retail Director Fraser Brown then gave the airport’s perspective on the Trinity model.
Brown said Heathrow prides itself in having a strong relationship with its stakeholders and putting the passenger at the centre of its approach in order to ensure it does business and grows sustainably.
“We have moved a long way away from being a passive operator. We don’t see ourselves as rent collectors, it is our responsibility as airport operators to look after passengers and other members of the ecosystem; we consider them part of Team Heathrow,” he said.
It has been debated if the Trinity should be extended to be a quaternity to take account of airlines as a stakeholder. Brown argued that advertisers should also be a part of the partnership. “Where you get a brand, advertising associated with it, retailer and airport working together. When you utilise that, you get Team Heathrow,” he said.
Lal and Brown then took part in a panel session, which also featured Chen and Fleming, who were able to offer some retailer insight.
Unsurprisingly, the recent decision by DFS not to bid for liquor & tobacco concession at Singapore Changi Airport was discussed by the panel. Both Chen and Fleming’s companies considered bidding for the concession, but both chose not to.
When asked why they chose to ultimately not bid, they both said that it was not the right concession for their companies at this time.
This naturally led to a discussion on concession models and their sustainability. Fleming called for a model where retailers take a share of earnings. “There are many different airports with many different models and every airport – no matter how forward – has to be approached differently. But a share of the EBIT would be fair,” he said.
Brown added that, if airports are to expect a high minimum annual guarantee as rent, the onus is on the airport to deliver an exceptional consumer experience, which in turn can deliver high commercial revenues. He told delegates: “As an airport, you can’t expect high minimum annual guarantee if the airport doesn’t live up to that.”
Asked what influenced CDFG not to bid on the contract and whether it reflected a wider flaw in the airport tender model, Chen said that CDFG typically does not comment on single airport bids. He praised the “fantastic” Changi Airport but emphasised that CDFG has to be financially responsible in any offer.
“We always think that retailers, airports and brands have to be on the same table,” he commented. “It should be fair. It is not just for the airport to make money and for the retailer to lose money – we cannot do that. In China, for example, we have a lot of ways we can do the business.
“This is why at CDF[G] we have a new department called New Travel Retail, where we do ecommerce, pre-order and even now the downtown stores. So, in the future, all airport contracts should be fair. That’s why this time we did not attend the bidding – it doesn’t mean we won’t bid on the future in Singapore – I love Changi Airport. It’s one of the most beautiful airports in the world. But contracts must be fair.
“For a company such as CDFG we need to earn money to return to our shareholders,” Chen continued. “We don’t want to lose money for many, many years. Every company has a strategy. Why has CDFG grown so fast over recent years? Because every step and every action we have taken is in accordance with our strategy. We have to have a reason for everything we do.”
Chen also commented on the importance of Beijing’s new Daxing International Airport, where CDFG will officially inaugurate its stores on 18 November. He praised the spectacular new airport and said that CDFG is proud to open its new stores there. He emphasised the rapid growth in Chinese travellers worldwide and said that CDFG aims to be the prime shopping experience for the Chinese traveller – not just in China but also in overseas locations such as Cambodia where CDFG’s business is “very good”.
Asked about the impact of social turbulence in Hong Kong on business, Chen said that CDFG’s strong concession partnership with Lagardère Travel Retail at Hong Kong International Airport had actually helped limit the damage. Penetration and average transaction value had both risen in the first half of 2019, he added.
Chen said that CDFG will continue to focus on serving the Chinese passenger, with particular emphasis on their overseas travel and shopping habits. “Now the Chinese traveller is global and we have to remember that,” he commented. “Soon they will have all the big luxury brands available in China with localised offers, so they are looking for something else when they go overseas. We have expanded with good business in Cambodia and Macau, so we are focused on downtown opportunities.”
15.40 When the new-look KrisShop was launched earlier this year, its three stakeholders – Singapore Airlines, 3Sixty and SATS – said their aim was to “redefine travel retail”. That means an omnichannel approach, with the ecommerce platform based on the pivotal OM³ back end developed by AOE.
At The Trinity Forum, KrisShop CEO Chris Pok joined AOE Founder & CEO Kian Gould to discuss the future of inflight – and why airlines have a crucial role to play in developing airport commercial revenues.
“The travel market is growing but changing significantly in distribution of sales by channel and region towards more digitally mature markets,” Gould noted. Passenger traffic is growing but spend per passenger is falling. “Compare this [travel spend] to what travellers are spending while on holiday,” he added.
Against this background, Gould said airlines represent the “world’s biggest untapped opportunity for travel retail”. This is because of the data they have and the way they can reach customers. An additional factor is their loyalty programmes.
“The global airline ecosystem has over US$50 billion in unused loyalty points that sit as liabilities on their balance sheets, representing a +70% upside to the entire global travel retail market,” said Gould. “Few have tapped into this potential.”
The time is, therefore, right to transition from a Trinity to a Quaternity, Gould concluded. “Without data there is no future in digital travel retail, and airlines have the data.”
KrisShop CEO Chris Pok then outlined his company’s vision – to be “the choice premium omnichannel retailer through service excellence and innovation. We need to be omnichannel to meet customer needs, and it is what they expect of us”.
Described as a sophisticated, simple and engaging shopping experience, Pok explained the KrisShop advantages, which include targeted visual banners and personalised recommendations. “We can also leverage the power of flexible payment and reward loyalty with instant miles earnings,” he said.
A key element of KrisShop is the pre-order service which features a variety of delivery options including in-seat collection and home delivery.
“The focus now is on delivering a personalised journey,” Pok explained. “Data allows us to create customised experiences.”
AOE’s Gould concluded that while digital won‘t replace physical travel retail, it is where future growth lies, and especially for airlines. “Embracing the omnichannel travel retail space is where we see the biggest potential,” he said.
AirAsia’s online marketplace OurShop is certainly one company embracing that potential. CEO Lalitha Sivanaser believes airlines and inflight retail should be “the complimenting piece” to the traditional Trinity of retailer, airport and brand.
She described the value of a digital airline. “We have the data and insights, the passengers, the marketing tools and the passenger touchpoints. Based on the data we are able to see what passengers do, watch, see and play, and propose personalised recommendations.”
OurShop has identified two target passenger types that would prefer to shop before they fly. The traveller with a family and business travellers who are “always in an ‘on the go’ mood and have limited time to shop around”.
The targeting seems to be working. “We have seen great success as we have given them the mindset of ‘buy before you fly’,” Sivanaser said. “So does it work? The answer is yes as we have a higher average basket size, and higher conversion rates and website traffic compared to the industry benchmark.”
14.40: From a unique airline, airport and retail perspective, delegates heard from His Excellency Akbar Al Baker, who is CEO of Qatar Airways Group, Secretary General of the Qatar National Tourism Council and CEO of several divisions of Qatar’s national airline, including Qatar Executive, Hamad International Airport, Qatar Aviation Services, Qatar Aircraft Catering Company, Qatar Distribution Company, Qatar Duty Free and Internal Media Services.
Opening his speech, Al Baker said: “I am delighted and honoured to welcome you to Doha for the very first Trinity Forum to be held in my country.”
Al Baker discussed the commercial model that sees airline, airport and retailer operate as the same company. “Our Trinity of airport, airline and retailer allows us to adopt a long-term approach and avoid a short-term cycle of tenders that discourages investment. We can focus on the customer journey and implement next-generation ideas and enhancements. I appreciate we are in an enviable position to pursue this strategy,” he told delegates.
Al Baker then moved on to the recently-announced expansion of Hamad International Airport, which will bring 160,000sq m of additional space to the airport. He said: “What we are trying to do is make the fantastic experience people have at the airport to be enhanced even more. We want Hamad International Airport to be a destination in itself; what we are going to provide… is an experience that is second to none.”
Hamad International Airport is set to have annual passenger traffic of over 40 million for the first time this year. Ultimately, soon after Qatar hosts the FIFA World Cup in 2022, the airport will have annual capacity for 70 million passengers. Interestingly, Al Baker added: “We don’t intend to compete with our neighbours on size, we intend to compete on quality… when we reach 70 million capacity, we will stop there because that is the size of hub that our country needs.”
In a Q&A session with The Moodie Davitt Report Founder & Chairman Martin Moodie, Al Baker discussed the ongoing blockade by a number of Qatar’s neighbouring countries, the in-house retail concession model and inflight retail.
On the blockade, Al Baker defiantly said: “It has made us a winner. It has made us a self-sustaining economy; the airport has returned to pre-blockade growth and it has shown to the world that a country – no matter how small – can stand up to big nations.”
Al Baker said the in-house retail concession model was a “win-win for everybody”. However, he added that different operating models would be right for different airports. “Every airport has a different operating model, but how we operate today is the model we would like to continue for the foreseeable future,” he said.
Finally, he discussed Qatar Airways’ recent decision to drop inflight retail. “We are creating additional space that can be used to enhance the comfort and the passenger experience. We are working on a website where you will be able to order duty free, which can be delivered at the arriving airport or Hamad International Airport, so you don’t have to go through the duty free catalogue,” he said.
14.20 Airports Council International (ACI) World Director General Angela Gittens assessed the Trinity’s role in a phygital world, looking at the development of new revenue streams to gain a competitive advantage.
She began by presenting an overview of global air traffic trends and growth using data from ACI’s Annual World Airport Traffic Dataset and Report 2019. In 2018, passenger traffic grew +6.4% to 8.8 billion. International traffic remained the main driver of growth, especially in Africa, Europe and Asia Pacific.
But in most regions, year-to-date passenger growth to June is down this year compared to the same period in 2018, as a global slowdown takes hold.
Gittens then looked at ACI’s forecast for world airport traffic growth to 2040. Global traffic is expected to double in size in 2037 from where it was in 2006. The organisation predicts there will be an equal split of traffic between advanced and emerging economies in 2024, with the emerging-to-advanced ratio forecasted at 1.4 in 2040 (meaning there will be 1.4 times as many passengers from emerging economies than advanced ones).
Non-aeronautical revenue now accounts for 33.2% of total airport revenue, she noted. But to achieve its growth potential, the right steps will have to be taken. There are many current and emerging disruptors, she noted, but it is possible to embrace them and “make them work for you” as an additional revenue stream.
Her presentation then looked at how airports have become digitalised in recent times, with phygital being a natural by-product of this transformation. “Phygital may just mean a more personalised, individual experience,” she said. “The challenge is to safeguard and develop the airport environment to stay in line with customer expectations.”
Gittens concluded her presentation by introducing a new approach taken by ACI to passenger profiling, with research on different passenger personas as part of its ASQ suite of solutions. Does passenger satisfaction increase airport non-aeronautical revenue? Gittens answered that question with a resounding ‘yes’, based on an ACI research report that showed a +1% increase in customer satisfaction resulted in a +1.5% increase in non-aeronautical spending.
“I encourage you to immerse yourself in this year’s theme, get creative, and find solutions that are one step ahead,” she said.
13.50: The Moodie Davitt Report Founder & Chairman Martin Moodie and President & Editorial Director Dermot Davitt opened formalities with an assessment of the current health of the Trinity partnership.
Davitt thanked event partners, ACI and ACI Asia Pacific, as well as this year’s generous co-hosts Hamad International Airport, Qatar Airways and Qatar Duty Free.
“Most of you have entered Qatar over recent days through Hamad International Airport and noted its efficiency, its grandeur and its Sense of Place. You will also have noted that the airport is all dressed up [in Trinity theming]. What a welcome. When you depart you will note all those characteristics again, but you will also see more of its art, its architecture, its efficiency, its shopping, its dining, its stunning business lounges, its diverse facilities – everything from a squash court to a swimming pool – and its enduring sense of Arabic and Qatari hospitality,” Moodie added.
He continued: “Airports are extraordinary places, not just as physical infrastructure but for what they represent. I describe them often as crossroads of humanity. A crossroads that does not recognise colour, creed nor cultural barriers nor political differences. They are hubs not just of transportation but of emotion. I ask you what more joyous and spontaneous expression of love is there than the airport arrivals hall? They are expressions of place – via art, via food, via design, via products, via advertising, via the people that work in them and travel through them. Increasingly they are also centres of commerce on a grand scale.”
Moodie talked about how airports thrive when they put the three Ps – platform, population and proposition – together. However, he said there is a constant need for a fourth P: partnership. He asked delegates: “Since I introduced the term way back in 2003, the term Trinity has come to be synonymous with partnership. But how often is that concept of partnership truly delivered?”
“During these two days we will hear of thrilling examples where it has been, but we’ll also hear observations about how and why it sometimes falls short. It’s a discussion and a debate that must continue. Let’s plot a positive path forward for a business sector that is superbly placed to benefit tremendously from the growth in air traffic for decades to come but only if it addresses the health of its own ecosystem,” he concluded.
12.00: A fascinating and informative city tour of Doha took place this morning ahead of the start of The Trinity Forum conference. First stop was the Katara cultural village near to the St Regis hotel, a place for artists and musicians to gather, and for locals and visitors to enjoy the entertainment and stunning views.
It was then onto the artificial island of The Pearl off the coast of Doha’s West Bay business district – where tomorrow’s Gala Dinner will take place at the Marsa Malaz Kempinski.
The tour continued along Al Corniche Street – the largest in Doha – before reaching the National Museum of Qatar, where delegates enjoyed the sumptuous desert sand rose-inspired architecture.
Other fascinating sights during the tour included the Souq Waqif market and the Museum of Islamic Art. The tour concluded with a photo stop to take in the spectacular Doha skyline.
10.15: A data workshop from Airports Council International (ACI) and Moodie Analytics looked at the best way to sustainably approach anticipated air traffic growth in the coming years.
ACI World Airport Business Analytics Head Patrick Lucas presented ACI’s research showing forecasted CAGR of 4.2% for global passenger traffic over the next five years.
He added that in coming years, the balance of global passenger traffic will shift further to the east, with Asia Pacific set to make up 46.2% of annual passenger traffic by 2040, a notable jump from the 35.5% it currently occupies. Similarly, traffic in Europe is expected to drop from 26.5% to 19.2%.
There are two myths governing airport revenues, Lucas argued. Firstly, most airports do not generate net profits and a positive return on invested capital; 66% of airports globally operate at a net loss, he said. This is because airports with fewer than 1 million passengers flying from them every year (80% of global airports) have substantially higher costs per passenger than larger airports. As a result, 93% of airports with fewer than 1 million passengers per year make a loss.
Secondly, Lucas said that the percentage share of non-aeronautical revenue for airports has not in fact grown over time relative to aeronautical revenue; on an annualised basis from 2005 to 2017, non-aeronautical revenue (+4.9%) was lower than aeronautical (+5.7%).
ACI World ASQ Director Dimitri Coll said that airports cannot work in silo to achieve maximum customer satisfaction. The onus is on all stakeholders to create positive emotional states, he added.
Airport branding recognition shapes how customers feel at all stages of the journey through the airport. “This is why we need to understand our customer for every touchpoint of the journey,” Coll said.
Coll presented research that shows the positive impact of customer satisfaction on retail revenues. ACI’s research shows that a +1% increase in retail space increases retail revenue by +0.2%, while airports that increase customer satisfaction by +1% increase retail revenues by +1.5%.
Coll and Lucas concluded that a customer-centric airport experience achieved through airport employees was the key to delivering sustainable retail revenue growth.
TUESDAY 29 OCTOBER
19.00: At the end of a rewarding day of golf, prizes were given for a selection of the day’s top performers.
17.00: The Trinity Golf Forum wasn’t just for seasoned experts. A Learn Golf Clinic taught beginners the basics of the game too.
16.00:
12.45: Events kicked off today with The Trinity Forum Golf Day, courtesy of Qatar Duty Free, at the magnificent Education City Course. The social events continue tomorrow morning when delegates can take a city tour before formal proceedings get underway. 
08.00: Hamad International Airport has put on an extraordinary scene-setting welcome for delegates arriving from all around the world for The Trinity Forum 2019.
Hamad International, along with Qatar Airways and Qatar Duty Free a co-host of the prestigious annual airport commercial revenues conference, has installed an impressive array of Trinity-themed promotional signage.
Platinum Partners for the event include Diageo Global Travel; Dufry; L’Oréal Travel Retail; Mars Wrigley International Travel Retail; Pernod Ricard Global Travel Retail; and Mondelēz International, which is also Innovation Partner and champion of the Trinity Challenge.
Silver partners include Rituals and Victorinox and the App partner is Smart Alliance.
Additional partners include Boparan Restaurant Group, Cabin Zero, CAPI, Godiva, Grab, Happy Socks, Lacoste, Leonidas, Loacker, Long Haul Spa, Mercedes-Benz Parfums, Nestlé International Travel Retail, Tous and Travel Food Services.
