‘SYD’ – a new way of thinking about duty free retailing says Christian Strang – 07/03/07

Christian Strang: “The change of brand comes at a time of fundamental change in the duty free industry in Australia and across the world”

AUSTRALIA. Last week’s launch of “˜SYD’, the new name for duty free and tax free, is far more than just the introduction of a new travel retail brand, according to The Nuance Group Australia and New Zealand CEO Christian Strang.

In a deeply significant speech given at the brand’s launch (held at Sydney’s Taronga Zoo last Monday), Strang said: “In essence, the new brand is a symbol of a new way of thinking about tax and duty free retailing. It is the culmination of a huge amount of effort and challenging new thinking in an industry that has risked stagnation as a result of some serious external challenges.”

Bidding a fond farewell to the Downtown Duty Free brand which SYD will replace, Strang noted: “Since 1991 Downtown Duty Free has grown into a globally recognised icon of Australia. Since 1991, celebrities, sporting heroes, politicians, some villains and many millions of customers have carried the famous bag overseas and back home again.

“On one memorable occasion in 1999 John Eales, captain of the Wallabies [rugby team] returned to Australia and proudly produced the newly won World Cup from a Downtown Duty Free bag.”

Importantly, he added: “For Australian consumers Downtown is duty free. It’s a trusted brand with broad recognition and its distinctive bags are carried with Australian pride across the globe.”

And therefore”¦ the big question. “So why change?”

Strang answered his own question. “At one level, it’s simple: Our [Nuance’s] future is a duty and tax free offer based around airports, not in city centres, not downtown. At another level it is more complex: The change of brand comes at a time of fundamental change in the duty free industry in Australia and across the world.

“Duty Free is more and more airport-centric and its contribution and growth are a fundamental part of the privatised airport economic model like never before. And at the same time our industry is entering this new era which is characterised by new levels of security required in the air transport world.

“The restrictions on the carriage of Liquids, Aerosols and Gels (LAGs) currently being implemented by countries across the world in response to terrorist threats will add a layer of doubt and confusion to the duty free shopping experience like never before.”

Left-to-right at ‘SYD’s’ launch: Bob Withers, Stepbec; Mark Stubbings, Allens Arthur Robinson; Jonathan Stent-Torriani, Vice Chairman The Nuance Group Australia & New Zealand; Bob McFadyen, General Manager of Retail & Commercial Development, Sydney Airport Corporation

In words that should be noted by every airport, every concessionaire and every travel retail commentator around the globe Strang noted: “What was a carefree, happy, indulgent shopping experience is now inextricably linked with terrorist threats, security screening and safety issues.”

While SYD was conceived before the UK terror alert of last August which sparked the subsequent aviation security crisis, Strang said the new brand is well-positioned to communicate a positive message about the convenience of duty free shopping at airports.

“And that is very important,” he noted. “Out of the restrictions also come opportunities which we must harness carefully.”

These include “˜Ready for Collection; shopping (pre-order and pick-up on return to Australia) and Arrivals shopping. “[These are] important ways in which to bypass the inconvenience of not only carrying product, but also risking confiscation of valuable purchases.”

Strang commented: “The scale of these confiscations is significant; there is a growing “˜Duty Free Mountain’ of confiscations in Europe. As that mountain grows, so will the resentment.”

He continued: “So while we’re showcasing a new brand that will roll out across Sydney’s stores between March and August this year, we are also heralding a new era in how we serve travelling customers, how we operate as a dynamic 21st century retailer and how we take duty free shopping in the region to the next level, how we go from being world class to being world best.”

But Strang didn’t stop there. He said all industry stakeholders had to work to improve the customer offer and the value proposition of tourism shopping and duty free in Australia

He put that challenge into context by sharing some key numbers arising out of recent research.

* “Among those who have travelled internationally in the last three years, 48% agree that duty free shopping in Australian airports is excellent value, on the face of it not a bad result – BUT only 18% strongly agree with this.”

* “30% believe that overseas duty free shopping is better value and you only have to watch the bags coming through Sydney airport from overseas to understand how that impacts us.”

* “Significantly only 13% of travellers strongly agree that Australian duty free is better value than overseas.”

He concluded: “We have to give greater value to our customers to re-establish a potent duty free proposition with customers. So when I talk about moving from being world class to world best it means that many of us”¦ must work together to give customers an outstanding experience.”

Strang said Nuance would proactively play its part in providing world class shopping on arrival and departure from Sydney. “Nothing will give us more pleasure than seeing the new SYD bag promoting Sydney not just at Sydney Airport but in every corner of the world.”

He talked about “a customer-led goal” for the new brand. “Our business goal is simple, to grow profitably by serving more customers, more often, more effectively and that is also the goal of the SYD brand.

“We believe the way to do that is by meeting the functional and emotional needs of our customers so that they always come back and become advocates of SYD to their friends and family.”

MY NAME IS SYD

“Let me introduce SYD properly,” Strang explained. “Sydney can lay claim to being the world’s favourite city. Just look around you tonight and it’s easy to see why. Consistently Sydney tops surveys of “˜best cities to live in’ and “˜city I would most like to visit’. Our shops are the first and last part of an international visitor’s experience of Sydney – a vital part of brand Sydney and brand Australia.

“So our brand is deliberately very Sydney, and internationally recognizable as being so. The visual identity of SYD has a body language that is travel, that is shopping and that is distinctive to Sydney through its baggage label style and through the use of the barcode. The golden yellow colour refers to Sydney’s golden sands and (mostly) sunny climate.

“Importantly the colour is a carefully researched strong signal of the contemporary retail nature of our offer and its intrinsic value.”

SYD’s customer proposition is simple, said Strang – “Access to the best value on the brands you want, delivered the way you want.”

“He added: “Everything we do will communicate and reinforce this proposition, from our signage to our staff, from uniforms to our retail services.

“We’ll deliver this proposition with the personality that Sydneysiders and Australians are known and loved for the world over,” he said. “SYD is about delivering service in a friendly, engaging and authentic way.”

For all customers, SYD will provide great value under a wide variety of definitions, Strang noted. “Value doesn’t always equal lowest price but we will be world price leaders on selected items.”

Commenting on design elements, he pointed out: “Store design is founded on the brand principles of clarity and simplicity but with an engaging edge. Design must carefully balance the need for brand and product integrity and the need to acknowledge a growing need for convenience and speed.

“We will focus on providing guided choice and we will focus on providing services and timesaving convenience. We believe that if we save the customers’ time, the customer will spend their time with us.”

More images from SYD’s birth: (Left) Jonathan Stent-Torriani, Vice Chairman The Nuance Group Australia & New Zealand; The Hon. Nick Greiner, Chairman The Nuance Group Australia & New Zealand; Dr Alan Kallir, CEO Insight Partners (Right) Jim Fader, Buying and Merchandising Director The Nuance Group Australia & New Zealand; Chris Murphy, Darrell Lea; Chris Hammond, Buyer The Nuance Group
(Left) Andrew Wand Procter & Gamble, Corrine Wilks Uniform Model, Kevin Reid Procter & Gamble (Right) Grant Woods General Manager Airport Operations, Sydney Airport, Russell Balding, CEO Sydney Airport, Greg Benstead The Nuance Group Director Sydney Airport Operations, Christian Strang, CEO The Nuance Group Australia & New Zealand, Rod Gilmour General Manager Corporate Affairs & HR Sydney Airport

Strang insisted that SYD does not only exist in the stores. “Just as we pioneered walkthrough stores, arrivals shopping and pre-orders so we will redefine the convenience of airport tax and duty free shopping,” he promised.

But there’s more in (and out of) store, he promised. Here are some highlights:

– Pre-order will be overhauled and improved so that it is an “end-to-end collection service” and is communicated in customer-friendly language

– “Expect to see an internet presence by the middle of this year unlike anything the travel retail industry has seen.” [Note: Downtown Duty Free was runner-up to Cathay Pacific Airways in the first-ever Travel Retail Website of the Year Awards run by The Moodie Report last year]

– “Both at airports and off-airports we’ll be introducing interactive kiosks that make it more convenient to shop before and during your travels.”

Strang said that customer service remains imperative to Nuance’s business and is central to the SYD experience. A new uniform, modelled on the launch evening, is designed as “deliberately professional and distinctive” so that the company’s people are easy to recognize in-store.

He added: “Our global “˜Best Selling’ programme will continue to be a significant investment in service throughout our business. We are creating a sales and service ethos and approach that will be unique within retail and will further elevate the shopping experience for our customers

“Our mantra at all levels is to serve more customers, more often and more effectively.”

He concluded a momentous speech by adding: “We have a clear strategy in place, with detailed actions behind it. Our goal is crystal clear and achieving it has beneficial outcomes for our customers, our suppliers and our airports

“Look out for further improvements as part of our Best Selling programme, eye-catching store improvements, new approaches to merchandising and customer communication, an overhaul of our supply chain and improved information and communication between us and all of you.”

He added: “Improvement and innovation are at the heart of our aspirations. We have the opportunity of a new eight-year concession at Sydney Airport which cannot be squandered. Winning the new concession in the face of strong international competition was the first step in an aggressive programme of improvement and innovation.

“The Nuance team has full licence to innovate, is the best qualified to innovate and will not be held back. Our aspirations are sky high, our plans aggressive but robust. In this industry as in many others, standing still means that you are going backwards.

“One place that is certainly neither standing still nor going backwards is Sydney Airport. It has plans to go places and the dynamic team at Sydney Airport led by [CEO] Russell Balding and his team have challenged us to come along for the journey, it is a challenge we relish.”

MORE STORIES ON THE SYDNEY DUTY FREE CONTRACT

Nuance says welcome to “˜SYD’ as new tax and duty free brand is launched in Australia – 28/02/07

Nuance reveals ambitious plans for flagship Sydney Airport operation – 17/01/07

Nuance is confirmed as Sydney winner – 22/09/06

Sydney Airport duty free retention worth €135 million or 12% of turnover to Nuance – 23/07/06

Nuance set to retain Sydney duty free contract after being named preferred bidder – 20/07/06