INTERNATIONAL. Brand owners in the wines category remain broadly – if cautiously – upbeat about the outlook for the sector in travel retail, despite the damage to the channel brought by Covid-19. The need for heightened digital engagement with travellers, fresh in-store experiences and product differentiation are among the themes they raised in a snapshot of market opinion for a special edition of Category Insight Premium Spirits & Wines, which appears with The Moodie Davitt Magazine in coming days.
For this review, we asked brand owners how the category will have to adjust to a new consumer mindset and behaviour, and about the dynamics that will drive the recovery.
Treasury Wine Estates General Manager, Global Travel Retail & On Premise Simon Carter said: “Gifting will continue to be a major trigger to drive the purchase of wine in duty free environments. However we have noticed that more consumers are also buying for self-consumption. This is linked to a greater desire to indulge and self-reward after extended periods of restriction and lockdown.
“One of our priorities is to deliver immersive experiences to inspire and ensure relevance of our brands and products. We research to understand the latest trends and behaviours and we work closely with our strategic partners to bring these insights to life through experiences we can execute effectively across duty free and travel retail.”
Distell Global Travel Retail Managing Director Luke Maga said: “In the short term, consumers will almost definitely need to spend more time planning trips and costs will be higher so we will see an increase in bigger, bucket-list trips and less weekend getaways.
“In terms of how this affects travel retail, I believe there will be an increase in purchases of luxury products/brands and those at the lower, more affordable end of the scale. As a consequence, mid-range brands might find it challenging.”
Enhanced commitment to using digital tools to engage the potential wine shopper before they travel, as well as in the store, will play a big part in conversion levels in future, said suppliers.
Champagne Lanson Head of Travel Retail Edouard De Boissieu commented: “Consumers are increasingly demanding more from their travelling experiences than just arriving at an airport and browsing in a store. Whether that is more ways to discover, price compare, order and collect or to be entertained via digital, interactive activations or promotions, global travel retail has to react and fast.
“In the new normal, we have to work harder to make purchasing easier and more attractive. If we cannot compete on price with other online retailers, then we have to be more exclusive and unique in terms of product offer and experience – with digital playing an increasingly important role.”
Accolade Wines Senior Regional Manager EMEA Jeff Bond said: “It’s important that we help [consumers] to take advantage of great offers without needing to physically set foot into a store, if that is what the consumer requires. Addressing this at Accolade, we have expanded our digital footprint and how we engage passengers virtually.
“In-store, the use of digital messaging on products, such as QR codes to give more brand information, is a positive step towards greater consumer engagement. This is an initiative we will use more in the future based on the great results we have achieved in domestic markets throughout the pandemic.
“The pandemic has also prompted people to be more environmentally-aware. As an industry, we need to continue to look for ways to reduce our environmental impact through offering sustainable products and packaging to meet the needs of our travellers.”
Arterra Wines Vice President Exports and Travel Retail Randy Dufour noted: “The consumer was already digitally savvy, but is now even more so, and the quick speed at which they can purchase – and have delivered to their choice of location is a game changer. Immediate access to information and competitive purchase points will force the industry to be more aligned, and more nimble, but also a more interesting and diverse offer.
“Travellers by nature are explorers and they will want to try new things and experiences, and how do we as brand owners and retailers (and airports) work together to create that environment of exploration and excitement? It has been said before but there has to be an adjustment in the entire financial model because the current model is not working and brand owners (having gone the last 15+ months without duty free sales), have learned to live without that business and will be more cautious in how they proceed. The old system will not suffice.”
VCT Group of Wineries Asia Head of Global Travel Retail Thomas Leclercq said: “Countries in Asia have seen record numbers of new consumers shifting to online buying and we expect part of this to continue in the future, resulting in an even more informed consumer. Coupled with the fact that some travellers indicate they would spend less time in airports as travel resumes, this will certainly have an impact on the need for retailers to boost their omnichannel strategy.
“More importantly consumers will expect digital options from travel retailers too, and we are ready to help share our best practices on how to maximise the efficiency of the digital shelf or on how to engage with the consumer prior to travel, by communicating the right information at the right time. Brand owners as well as retailers will have to think of creative ways to engage with consumers, mostly on their own devices.”
As a different world of travel emerges, those working in the sector will need to think afresh about their relationships and what will drive spend, say suppliers.
Diverse Flavours Managing Director Anthony Budd said: “ A lot will depend on the relationships between suppliers, retailers, airport authorities, and the other channels – and on their combined thinking on what shape the post-Covid duty free landscape will look like. No doubt it will be shaped based on the 80:20 rule so these top players need to start communicating very clearly now if they are not already doing so.”
Barton & Guestier–Patriarche–Listel Sales & Marketing Director Philippe Marion said: “We need true, great stories to tell to the consumer, plus sustainable production methods. The traveller might be less [travelling for] business and more for tourism with different buying power and different product expectations.”
*More comment and opinion features in Category Insight Premium Spirits & Wines, which will publish in coming days alongside the June edition of The Moodie Davitt Magazine.
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