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“We’re absolutely thrilled by the quality of what’s been proposed and the creativity involved“ |
Glyn Williams General Manager Retail Sydney Airport |
AUSTRALIA. Life-changing periods don’t get much bigger – or better – than the past two months for Glyn Williams. Ten weeks ago, he and his wife celebrated the birth of their first child, a baby girl, and on 6 May he took up the role of General Manager Retail at Sydney Airport, replacing Andrew Gardiner.
Speaking to The Moodie Report during the recent TFWA Asia Pacific exhibition in Singapore, Williams can’t hide his enthusiasm about both events. On a business level he reckons the new role represents one of the most exciting jobs in retail.
His extensive experience makes him well-placed to offer such a perspective. Williams was previously Head of Retail at DEXUS Property Group and Regional General Manager NSW/WA at Westfield Group. He has also been a Director of the Shopping Centre Council of Australia for the past three years.
“This is like my dream role,” he says. “My two big loves have been retail, plus travel – airports, airlines and travel. Now I get to do all of it at once so it’s wonderful.”
Williams enters the travel retail sector at a crucial time for Sydney Airport. As reported, in February the airport company called for Expressions of Interest in its duty free tender (also see sidebar), attracting 11 responses from some of the industry’s biggest names. Long-time incumbent The Nuance Group’s contract expires in February 2015 so the clock on what seems certain to be a highly competitive bid – especially given that the Request for Proposals (RFP) allows the possibility of multiple operators and non-compliant proposals – is ticking. Certainly a decision will need to be made by September at the latest.
So what’s the latest? “We certainly haven’t closed the tender process but we have done a series of reviews with each of the potential tenderers,” Williams replies. “We’re absolutely thrilled by the quality of what’s been proposed and the creativity involved so we’re all looking forward to having the tenders come in for us to review in a more formal way.
“This process is also giving us the opportunity to reflect on other areas of the business,” he continues. “We’re looking at how we can review certain aspects of other retail in the terminal itself alongside what’s happening with the duty free component. While we can’t be more open at this stage, there’s a chance after so many years to look at everything and ask how we can do this a bit differently.”
When he assumed the role, Williams noted: “Sydney Airport has a fantastic retail business with enormous growth potential and a high-quality customer profile. Research shows that we have a 25% share of the A$1.4 billion (US$1.29 billion) Sydney travel retail market. I look forward to leading the Sydney Airport Retail team as we work to deliver a world-class airport experience.”
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Glyn Williams pictured in the main Departures retail zone at Sydney Airport: “We should be seen as one of the premium retail destinations in Australia” |
Nothing that’s happened since has remotely changed his views. Williams is delighted with both the volume and quality of interest in the duty free opportunity. “It’s not just the level, it’s the excitement they’re showing and their absolute commitment,” he says. “The excitement of actually entering a very new market and having the opportunity to look at Sydney, which is a major international gateway destination zone, has been tremendous. All those retailers who have been involved have been fantastic in this process.”
Williams feels passionately that the airport must reflect Sydney’s status as one of the world’s most iconic cities. And he believes that, in turn, offers considerable benefits to retailers and brands. “We should be seen as one of the premium retail destinations in Australia,” he says. “To be a market leader therefore you need to be introducing products or brands that become unique in this environment or are only available in a couple of other locations within Australia.
“From a retailer’s point of view, if you are positioning yourself in such an environment you’re also talking about a major billboard statement; and for a brand it’s a way to market to the international community. And clearly it’s not just to Australians, you have an opportunity to market your brand on an international scale, not just domestic.”
Given that his retail experience, though considerable, has been mainly on a local level, what insight does Williams have into an international business such as travel retail? Plenty, especially at a consumer level, is the answer. “I’ve actually been to 119 countries,” he says with a chuckle, “so I’ve seen a multitude of airports over a number of years. I’ve therefore watched the progress of a number of airports so it’s been wonderful to finally implement some ideas I’ve had for many years and I look forward to discussing those with the team here as we progress.
“In terms of overseas airports there have been some fantastic developments in that time. The industry itself keeps changing and it’s exciting to be party to that. So I have a degree of familiarity with certain aspects of what I’ve been doing in recent weeks but also there’s the added excitement of the airport being a truly international business rather than one that’s primarily domestic.”
The last duty free tender (won by Nuance ahead of white-hot competition from DFS, Aelia/Newslink; JR/Duty Free; HMSHost/Aldeasa, Lotte and Dufry) was eight years ago and in that time, Williams points out, retail has moved on enormously – a “natural evolution” as he puts it.
That dynamic has reflected itself strongly in tender discussions so far, he says. “What’s so exciting is the creativity shown by the [likely] tenderers and the fact that this is elevating all of them as well as elevating our business to a completely different level.”
Williams wants to spend more time familiarising himself with the job (and the duty free tender) before making too many public pronouncements. But despite his understandable reticence, his enthusiasm and knowledge comes through strongly. Asked about his philosophy to retail and to business, he replies: “The first thing is being absolutely passionate about the [airport] business itself and also being passionate about the retail.
“It’s about being highly creative, but more importantly not being prepared to stand still. Once you’ve completed something, it’s about working out what the next improvement could be. The overarching element though is keeping it simple and having fun. I think the more complex people make delivery on certain things then the greater the chance of difficulties. We have a great opportunity to deliver something we believe is going to meet consumer needs and expectations.”
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“The Chinese were the eighth-biggest inbound traffic group and now they’re the second – and will overtake the New Zealanders in coming years“ |
Glyn Williams General Manager Retail Sydney Airport |
The rising influence of Chinese shoppers
Sydney has a diverse passenger profile, led of course by Australians and New Zealanders, and now including a booming Chinese component – critical from a duty free perspective. Recent figures show that China is now the second-largest passenger nationality to visit the New South Wales capital. Over the past three years, Chinese passengers at Sydney Airport have shown an average annual growth rate of +14% and now represent around 6% of the total (and, we estimate, around 16% of duty free sales). It’s a rich opportunity, Williams says, and all about getting the retail mix right.
“The Chinese growth here has been such that they were the eighth-biggest inbound traffic group and now they’re the second – and will overtake the New Zealanders in coming years,” Williams replies. “For people coming from that region, there are a lot of similarities in terms of brand expectations. Sometimes they may be for products that are uniquely desirable to consumers from Mainland China and we’ll try to meet some of those needs. But ultimately there’s a lot of crossover between what Europeans, Americans, Japanese, Koreans and others all desire. So it’s a matter of trying to achieve that balance.
“Where we do need to focus is on talking about some uniqueness in terms of the value proposition – especially for food users and see how we can get that right.”
As the interview draws to an end, I ask about Glyn Williams the man. The Welsh name comes from his father, who came from a small town outside Cardiff, largely explaining Williams’ love of rugby union. He thinks Australia has a good chance of recapturing the Rugby World Cup, to be held in the UK next year. So who would he support in the maybe not totally unlikely event of a Wales-Australia final? “It will always be Australia first,” he laughs.
And what about those 119 countries; how did such a tally come about? “It started as most things do with a discussion in a bar with a friend,” he replies. “We decided to undertake a bet and so from there it was the first to travel to 100 countries. He got there first and because I don’t really like losing, I totally ignored him and changed it from 100 to 150, so I’m on my way to that now.”
His friend’s count now stands at 125, but given Williams’ determination to ensure the Sydney Airport offer is every bit as good as those anywhere in the world, it’s a fair bet he won’t be stranded on 119 for long.
A tantalising tender opportunity
Earlier this year Sydney Airport revealed to The Moodie Report that its duty free tender would include two optional bids (one now understood to be for luxury stores and a second described as a “visionary” bid). It is understood that the contract duration will be six-and-a-half years.
Critically, the bid structure allows for one or more operators to trade at the airport via both compliant and non-compliant proposals, a factor that will further stimulate expected strong interest in the tender. Besides the incumbent Nuance, LS travel retail and Heinemann Asia Pacific are all certain candidates, while both Korean travel retail giants, Lotte Duty Free (which bid last time around) and The Shilla Duty Free have confirmed that they are going hard for the contract.
World Duty Free Group is another likely to have shown interest, along with Aer Rianta International and JR/Duty Free (the incumbent at Auckland Airport across the Tasman Sea). Several others are known to have expressed interest.
It is understood Sydney Airport believes that sales can be increased substantially via increased space (believed to be almost +60% under an alternative premises proposal), a refined mix, and rising traffic, especially the Chinese.
We will bring you more details soon on the Sydney bid structure and its mix of compliant and alternative proposals that surely make it one of the most intriguing tender contests of recent times.
