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A cut above the average: Marking the opening in traditional style on Thursday were (l-r) WDFG Chairman Rafael Arias Salgado, Düsseldorf City Economic & Tourism Committee Chair Monika Lehmhaus, WDFG Germany chief Bettina Kühnrich, Düsseldorf Airport CEO Thomas Schnalke and WDFG CEO Eugenio Andrades |
GERMANY. World Duty Free Group (WDFG) celebrated its entry into the German market on Thursday, with the official opening of its striking new stores at Düsseldorf Airport under the Düsseldorf Duty Free name.
WDFG captured the business in June 2012 following a tender and began its ten-year deal in January 2013. Since then it has made a €10 million investment in refurbishing the operations with its new design and branding. The main 1,328sq m walk-through store in Terminal C (the principal long-haul terminal) was the focus of this week’s opening. The company operates six stores across the airport’s three terminals (four duty free plus two concept shops) in addition to a Sunglass Hut unit (with Luxottica) and a staff shop.
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How the departing traveller sees the striking store entrance in Terminal C as the come through security and passport control |
The WDFG stores, covering 4,666sq m in total, offer a range of shopping concepts based on the company’s knowledge of the German market, gained by its presence in Spanish tourist locations that are frequently visited by German travellers.
At the event, WDFG Chairman Rafael Arias Salgado noted that the timing was now right to inaugurate the stores after the investment across the three terminals, now that “they are in full swing”. He added that it was part of a €190 million store investment across the WDFG network.
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WDFG Chairman Rafael Arias Salgado: “Today, we want to highlight a very important aspect of our modern economy – and one on which we are proud to stand shoulder to shoulder with Düsseldorf Airport – innovation” |
He said: “We are very proud to operate here in the capital of one of the regions which drives Europe. Today, we want to highlight a very important aspect of our modern economy – and one on which we are proud to stand shoulder to shoulder with Düsseldorf Airport – innovation.
“Innovation is a constant mantra at WDFG and we are constantly analysing our own commercial practices and those at the forefront of retailing across the globe, in order to deliver an exciting in-store experience and exceptional service to our customers. And there is no doubt that our Düsseldorf Duty Free stores are a great example of this.”
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Thomas Schnalke: “We wanted to have much more than a rental agreement [with our duty free partner], we needed this to be about partnership” |
Düsseldorf Airport CEO Thomas Schnalke said: “In WDFG, we have found a strong partner in the travel retail sector with the expertise that helps bring a new impetus to our airport stores.
“Their skill and ability to tailor the retail offer allows us to adjust the range of products on offer, including regional specialties from the Düsseldorf area. The exclusive shopping environment of the stores and the selection of products are very welcome among our passengers. We are delighted to be the first German airport where WDFG, as one of the largest airport retailers, is operating.”
He later added: “”Düsseldorf Duty Free is all about serving the specific customer demands of travellers from the Rhein/Ruhr area and beyond. A good example is the amount of Killepitsch sold here, over 20,000 bottles a year. Being close to consumer demand is a major success factor for retail.
“And that was a key issue for our contract. We wanted to have much more than a rental agreement, we needed this to be about partnership. We can take pride in the first big result, this store in non-Schengen Pier C, which is our most important zone for duty free and with some of our most demanding consumers.”
Düsseldorf is Germany’s third-busiest airport, handling 21.8 million passengers in 2014. WDFG noted that it has worked in close partnership with the airport to create a “unique environment that offers an outstanding product choice, combined with personalised customer service”.
Touring the Terminal C store
A walk-through, the Terminal C store carries a strong emphasis on beauty (around half of the retailer’s sales at the airport), with heavy personalisation of the brands a key feature, as always with WDFG’s outlets. One side of the store is devoted almost entirely to fragrances & cosmetics, with cosmetics and skincare leading the offer as passengers enter from security.
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Beauty is half of the retailer’s sales and the dominant category in the Terminal C store |
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A new Travel Exclusives area is a central feature within P&C |
Dedicated areas for brands such as MAC, Bobbi Brown and Smashbox have broadened the offer. And with an emphasis on service, the retailer also offers free beauty consultations through its 45 consultants who specialise in their individual brands.
Liquor & tobacco combined generate close to 30% of the business with food & confectionery and accessories and lifestyle goods making up the balance.
Liquor is home to a central feature of the store with its Tasting Bars, and carries a strong selection of regional wines and spirits (such as local drink Killepitsch, popular brand Jägermeister or Schmittmann gin) complementing the international ranges. Nearby, the retailer has made extensive use of its familiar “˜Contentainment’ concept, intended to combine innovative, experiential in-store events with digital marketing content to engage customer interest.
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Colours, materials and furniture lend a lounge feel to the cigar area |
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Fashion & accessories features brands such as Pandora and Swarovski |
Tobacco is housed in a far larger area than one often sees in European duty free stores, with personalised shelving for cigarettes and an elegant, if small, cigar area with an armchair and photos adorning the walls to add the feel of a vintage tobacco lounge. The use of wood and brick in this area is a classy detailed touch.
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Taste of Germany: The destination zone highlights regional wines and foods |
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A highlight of the food & confectionery area is the Taste of Germany zone (which also reaches into wines & spirits) with brands such as Niederegger, Reber and Ritter Sport alongside the global houses, with a neat touch in the “˜tablet’ design of the floor to ceiling display bays.
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The ‘cup cake’ lighting feature grabs the attention within confectionery |
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The tablet wall design is a neat touch in confectionery |
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Another strong design touch comes in the “˜cup cake’ style of the ceiling lights above the premium display nearby. The offer here is rounded out by local cheese, sausages and other regional foods. Food and drink combined represent the regional offer, with the souvenir zone close to the tills carrying only a limited range.
Fashion & accessories towards the back of the store features shop-in-shops for Pandora and Swarovski and watches and bags by Armani, Festina, Hugo Boss and Gucci. Landside (in Terminal B) there is also the first Sunglass Hut in Germany, opened in partnership with Luxottica. And in other terminals there is a Hugo Boss boutique, shop-in-shops for Etro and Montblanc (Terminal A) plus offers from Skagen, Fossil, Gucci and Hilfiger among others in B. A second landside shop in A features Hugo Boss and Armani Jeans.
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The Contentainment programme is a key feature of the retailer’s marketing drive, as always |
Local appeal
Crucially, said the retailer, it is aiming to cater to the demands of international travellers while also appealing to the more value-driven mentality of the core German passenger base. The heavy emphasis on price guarantees in Terminal C is one example – while the retailer said that this is even more apparent in the other piers, which cater to a larger proportion of local consumers. WDFG is now fine-tuning its marketing to encourage more German shoppers of the value of its deals and pricing.
Acknowledging the important of reinforcing the value message in encouraging German consumers to buy, WDFG International Operations Director Pedro Castro told The Moodie Report: “Our price promise is important. The local customer likes to see a promise and to see it honoured. That is important. You will see more value messages in A and B piers as these cater more to a core German audience than C, though it is prominent here too.”
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Communicating the value message will be key to luring the demanding German consumer; WDFG’s price promise is a key element in its in-store marketing |
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Marketing messages in Terminal C also feature in Turkish to inform one of the key spending nationalities of the offers |
Castro added: “When we replied to the invitation to tender three and a half years ago, we were encouraged by the airport’s focus on the technical and qualitative side; the keys were the emphasis on personalisation and local products. With the strong local passenger base and the growth in international flights, this was a big opportunity.
“We have done everything in collaboration with the airport, and they have been involved in every detail, from flooring to lighting to category presentations. They wanted to be sure we would deliver and we believe we have. This was a project to not only create a shop but a specifically Düsseldorf shop.”
Among highlights, Castro noted the 27 “very different and defined promotional areas” in the Pier C store (both airport and retailer cited the requirement to go further with their marketing, notably to locals); he noted the introduction of the retailer’s dynamic Contentainment programme; the bespoke design of the Tasting Bar (involving local architects as well as WDFG’s in-house team); the Taste of Germany zone plus the vast beauty area.
Overall Castro said that the new consumer experience reflected “our way of doing things”. He noted: “The World Duty Free focus is around experience, service and technology. That is what we are known for and we have invested a lot in all of these areas.
“The next steps are to go further with our customer service, with the UK as our benchmark, to make our frequent customers happy and understand them better, and work together with the airport to deliver on that promise of a better experience.”
Importantly, the Düsseldorf operation will be managed through the UK alongside WDFG’s new Helsinki business, amid a restructure of regional responsibilities. UK Retail Operations Director Fred Creighton will oversee the northern European business unit, with Pedro Castro continuing to manage other international operations.
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Bettina Kühnrich, who heads WDFG’s German operation, noted the points of difference with other World Duty Free stores, and the Sense of Place |
Different and distinct
Bettina Kühnrich, who heads WDFG’s German operation, told The Moodie Report: “What is impressive is that this is not simply a copy, it is different from other World Duty Free stores and has a sense of this region.
“Also important is the level of detail in the design, which helps convey the mood of each category. That includes the flooring, the lighting, the brand personalisation of course, but also elements such as the “˜tablet’ design of confectionery display or the background materials and designs on the walls. Duty free has changed: customers expect something special today.”
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The retailer has 27 promotional points in its Terminal C store |
Düsseldorf Airport Head of Retail Ilse Ruffer said that the partnership was delivering to date. She told The Moodie Report: “We started thinking about the future around 18 months before the tender and we knew we wanted something different to other European airports. We wanted to strike a balance between presenting the airport as a unique place and the strong personalisation that the brands could offer, and World Duty Free brought us that. Düsseldorf Duty Free is not only different to other duty free stores, it’s different within the WDFG portfolio as well.
“It was a huge decision for us to go away from Heinemann after 25 years. We have great respect for them. That was a decision that involved all airport stakeholders, not only management, so important is duty free to us. It’s the major element in our commercial business.”
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The new-look Terminal A stores (above) mirror the localised branding elsewhere at the airport, and include an emphasis on fashion with Hugo Boss, Montblanc and Etro among the prominent brands (below) |
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The airport takes a firm hands-on approach to its commercial management, added Ruffer, with close involvement in the detail of the design, layout and offer. “This is very much more than a rental agreement for space. We see it really as a partnership. We started taking a new approach to our concessions before duty free when we created management agreements for food & beverage. It was about the airport playing the part of a stakeholder. We know our own space better than anyone so we feel that our input matters.
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WDFG and Luxottica last year opened Germany’s first Sunglass Hut store in Terminal B (which serves Air Berlin); the unit has proved a major success to date, say the partners |
“For example, Pier A [home to Lufthansa] is not a walk-through like Pier C. That was a joint decision based on the high proportion of local business travellers, who don’t want to be engaged in the same way and want to access the stores only if they need something.
“And we know that managing this business is not always easy. We know we need to play with the local market and give those travellers what they are used to. If that means MAC, then we have to have MAC. We knew we needed more brand consultancies and treatments within beauty, and these WDFG has delivered.
“And we believe we can build the business by creating the right mood, atmosphere and offer. The in-store delivery is key. Yes, it’s important to have digital, pre-order and those other areas, but the store execution and communication with the travellers is all-important. There, the challenge for us continuously is to balance Sense of Place and international on one hand, and orientation and atmosphere and personalisation on the other.
“We have created the base: now we need to do more on the marketing and category side.”
More comment and reaction will appear soon, plus video of the new store.
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World Duty Free Group’s familiar butterfly imagery adorns the airport walls, through this installation created by artist Olimpia Velasco |
