World Duty Free Group inaugurates new walk-through store in Newcastle

Golden moment: Newcastle International Airport Chief Executive David Laws (right) and WDFG Director of Retail Operations UK Fred Creighton officially open the new store

UK. World Duty Free Group (WDFG) officially opened its spacious new walk-through store at Newcastle Airport today (1 July) today, the centrepiece of a £14 million redevelopment of the terminal.

The high-class 1,580sq m store (the previous shop was around 1,000sq m) was relocated and redesigned under the World Duty Free (previously Biza) name, with an investment from WDFG and brands combined at around £3.5 million.

The anchor duty free store has been relocated and redesigned with the World Duty Free fascia

WDFG Director of Retail Operations – UK Fred Creighton said: “We enjoyed working in close partnership with the airport team to create this superb walk through store, which began trading on 1 May. The new store brings many exciting new brands to Newcastle and takes the airport shopping experience to a whole new level.”

Newcastle Airport CEO David Laws said that WDFG had introduced the ‘wow factor’ to the airport with its new store.

“The fantastic new World Duty Free store epitomises the standards we’re aspiring to achieve as part of our terminal development works. The opening of World Duty Free is a key milestone in our terminal development project and brings us closer to completing the overall scheme in the next couple of months.

“The location of the store ensures we’re able to optimise the use of space in the Departure lounge as we look to introduce a number of new retail and catering stores, while enhancing the non-commercial provisions to reflect the changing demands of our customers. We’re absolutely sure our customers will enjoy this fantastic new shopping experience and the many new brands we’ve introduced within World Duty Free.”

Newcastle Airport Commercial Director Gill Caleary said: “World Duty Free opening here is a massive bonus. It’s the anchor store for the whole development and it’s now delivered a world-class experience. It is one of the best stores in their portfolio and one of the very best we’ve ever had at the airport. Customers appreciate it too: it’s better than what they see when they land at their destination and it means Newcastle now feels like a ‘proper’ international airport.”

The new store offers great visibility throughout and allows passengers to engage with the offer a short distance from the walkway

The additional space has enabled a more extensive product range to be introduced, most notably in the beauty, spirits and luxury categories.

The liquor area (126sq m in total) opens the store as it does at other WDFG walk-throughs, with a big emphasis on white spirits here during the summer holiday travel season through to September. This initial zone at the store front (which also houses regular tastings), although small, can deliver up to half of the liquor business in the summer months.

WDFG Category Manager Liquor Nigel Sandals said: “Our summer drinks campaign, which started last Tuesday, puts white spirits at the forefront of the liquor business, and within that we are seeing strong growth in vodka and gin, with Smirnoff the market leader.”

White spirits lead the sales mix in liquor during the summer months, with whiskies taking a greater share in winter; WDFG’s summer campaign helps drive vodka and gin sales, with Smirnoff a clear number one

With non-EU destinations a feature of the summer season, WDFG makes use of its ‘two for £26’ duty free campaign.

Crucially, the front of the store can be changed by season to allow for more of an emphasis on for example, brown spirits later in the year. Sampling too is adapted to particular passenger profiles and encourage travellers to dwell longer in the store.

“Duty free is important here, but increasingly there is the ‘available for all’ offer, including duty paid, that we have extended this year,” said Sandals. “In this area value is important: the message last year was -20% off the High Street in this category, this year it’s -30% off.”

Where possible, the retailer is encouraging people to trade up to brands such as Tanqueray or even premium blended Scotches in this zone. Among the strong performers recently are Snow Queen and Ciroc. Premium white spirits overall was up by +25% in sales year-on-year in June, reported WDFG.

The category too has been aided by the growth of gins. “Here we are promoting the best of British in what is a big growth category,” said Sandals.

Passengers then encounter Champagnes and wines, the former climbing by +24% year-on-year in June sales. “Champagne is very successful at Newcastle,” noted Sandals. “Depending on the time of year it can be 10% or even 15% of the liquor business.” Twin-packs are a key contributor, such as Moët & Chandon 2x75cl for £50, with further opportunities to trade people up. The prestige offer is also performing, said WDFG, with the £99 Dom Pérignon the best seller at the premium end. “With the new store we can devote more space to prestige, and even here there are great savings versus the domestic market, so we are encouraging trade-up.”

WDFG’s World of Whiskies concept makes its debut at Newcastle

Champagnes are proving a strong performer in the store, with twin-pack offers popular

Liquor also features a new World of Whiskies area, which showcases over 300 brands, including some exclusive to World of Whiskies.

This was trialled initially for a number of months before being adopted as a full shop-in-shop in the new walk-through, with WDFG merchandising by key Scotch whisky region (as opposed to by brand). It is nicely located within the main store along the walkway, encouraging engagement from travellers.

The Glenlivet and Glenmorangie are each up by double digits in sales this year, while there a zone for tactical sampling towards the front and a rare and vintage zone for top-end lines in the centre. “Last year with Diageo we took on 120 bottles of Brora from Diageo at £7,000 each, and Newcastle has sold two of those in the past year, so that underlines that there is a demand here for upscale product, if not at the same level at a Heathrow,” noted Sandals. “It is worth showcasing high-value whiskies which we couldn’t do before as we didn’t have the fixtures.”

“The growth across the business is coming from vodka and gin, but single malts are also growing ahead of the category,” said Sandals. “We are also adapting to the growing trend towards American whiskies by devoting space to those, and that will continue.”

A challenge is how to continue demonstrating value for money to passengers as more brands move to exclusive travel retail formats. “We have had to introduce a different kind of value message, talk about price-offs against our regular prices, talk about flavours and also use sampling. It’s a factor as we see many more brands introducing those exclusive offers.”

The UK’s new Tobacco Display Areas came into full force from April, but WDFG says it has managed to maintain last year’s sales levels

Adjacent to the liquor area is WDFG’s Contentainment space, which has been introduced for the first time into Newcastle. WDFG’s signature marketing concept, it features a multi-screen digital feature wall, blending new technology with product sampling and events. Daisy Dream fragrance is the current focus, with large numbers of passengers attracted by the chance to take part in activity near the screens – with sales staff on hand to encourage purchase linked to the campaigns.

Close by is the new Tobacco Display Area (a feature of all stores in the UK since April, where passengers cannot see the offer from outside), and despite new restrictive legislation this category continues to hold up, said Creighton.

“We introduced our first such display in Birmingham two years ago and sales dropped -40% at the start. But over the past two years we have managed to limit the downturn, and here we are ahead of budget and level with last year. Tobacco remains a vital part of the mix at our northern UK airports in particular.”

The added space has allowed many brands to express themselves fully, notably in P&C

Major focus on beauty
With cosmetics, skincare and fragrance more than half of store sales (around 58%), beauty commands the largest space allocation in the store. Many new brands have been introduced including Bare Minerals, Elemis, Rituals and Smashbox.

Category Manager Cosmetics Suzanne Rudkin said the new store (in which P&C accounts for the largest space by category, 487sq m) offered the opportunity to broaden the list of brands on offer and segment them into groups.

Early on, for example are “young, funky” brands such as Fake Bake tanning, L’Oréal Paris, Smashbox, Michael Kors (“one of the hottest brands around”, said WDFG) and OPI, with Urban Decay to come – Newcastle will be only its second opening with WDFG.

“These brands are very fast moving and offer colour and theatre to the customer as they come into the store,” said Rudkin. Close by other young brands include Benefit – one of WDFG’s fastest growing brands and now in improved space – and Bare Minerals, making its Newcastle debut here. A new make-up event area is also proving popular with consumers and brands alike, with the opportunity for the passenger to have a treatment. “This is a nice stop point where women can have their eyes or lips done as they come through. It rotates by brand each month and is already in high demand among those brands.”

The pillars in the store have been turned into features, housing either new brands, summer campaigns or to promote the -40% value offer. “These messages drive penetration in this area, which is key,” said Rudkin.

Bare Minerals is new to Newcastle while Benefit has gained improved space

Rituals joins the Newcastle Airport portfolio, with Molton Brown gaining from added space

The international classic brands enjoy superb space in the centre of the store, among them Estée Lauder, Givenchy, Chanel (the number one brand in beauty), Clarins, Clinique, YSL, Lancôme and Dior. “We have been able to allow the brands to create their own worlds here, with a boutique feel in each case. It’s a very strong brand presence, with stunning shop-fits that you would only see in the most upmarket department stores,” noted Rudkin.

Make-up and skincare are leading sales growth today with double-digit growth year-to-date, said WDFG. “We needed to add more skincare to adapt to the passenger and shopper profile and importantly we had the space to do it here,” added Rudkin. Cosmetics sales are up by +16.9% and skincare is up by +14.8% year-on-year.

Seasonal brands and travel exclusives (the latter 12% of beauty sales across the WDFG network) also form an important element, as do new launches. The big launch seasons are March and September, with highlights this year the release of Michael Kors for men and Gucci Bamboo, among others.

Seasonal and themed zones offer stop points for passengers in beauty, while there is careful segmentation of the offer between fragrances, cosmetics and skincare

Fragrances, which close off the vast P&C department, now have a much improved showcase with increased wall bay units and event spaces to enable brand partners to stage activations and promotional activities.

“The many wall bays we have space for really help personalise the environment here,” said Rudkin. “The offer is very clear with much more linear space and many more SKUs in the range for some brands.”

This complements some lifestyle P&C brands such as L’Occitane, Elemis (new to WDFG at Newcastle), Molton Brown and Rituals (also new) that WDFG expects to be strong performers.

“We are thrilled with how the store looks now, and the brands have been very supportive,” said Rudkin.

Shining a light on sunglasses
Luxury (14% of sales from 123sq m of space) houses an extended sunglasses area with a space increase of +71% and a total of 1,200 facings. Some 35 sunglasses brands are represented and new introductions include Chloe, Miu Miu, Versace, DKNY, CK, Polo, Lacoste, Carrera, Nike and Marc by Marc Jacobs. The sunglasses business has surged by +64% year-on-year in 2015.

The sunglasses range (Ray-Ban is the best seller) has been beefed up to 35 brands and 1,200 facings, an increase that has helped generate a +64% sales uplift this year

Watches, another growing category, features new brands to Newcastle such as Hugo Boss, Skagen, Diesel, Guess, Superdry (coming soon) and Michael Kors. There are three bags brands: Radley, DKNY and Ted Baker.

Store Manager Paul Carlin said: “We have taken advantage of these categories with an extended range, with sunglasses a real stand-out feature. Like the other categories it helps us drive the customer experience to a new level.”

Customer service, said WDFG, has been enhanced with the addition of a new queueing system, separated from the merchandised areas nearby but featuring impulse purchase opportunity. Fred Creighton said: “95% of passengers are served within one minute and that is key. Our new till point area will be rolled out across our estate.”

The smart new luxury area houses bags, watches & jewellery; although beauty and liquor dominate, luxury accounts for around 14% of the business

Fred Creighton said later: “This is one of our best-in-class walk-throughs. In the previous store we didn’t manage the flow, and we had two entrances and two exits which meant some passengers missed the offer. We had primary and secondary walkways, whereas here we have a single walkway and a path through that is clear. The walkways are within easy reach of all of the categories, just a few feet away. Even within other walkways you can still generate double-digit growth with an approach of this type and we are looking at introducing it elsewhere.”

“We’ve tried to create hotspots around the store allowing the brands to create promotional showcases. And here we have the advantage that it’s only five minutes to any gate so people are happy to browse and enjoy the environment. It’s a more intimate store than many others with a high level of engagement and interaction than you’ll see in most duty free stores. It’s very much part of the WDF family in style, quality, people and brands.”

Souvenirs and confectionery round out the store as passengers approach the tills

Importantly he added: “This is a store for the future too. If you look at Heathrow T5, we are remodelling it now but only after seven years so it has stood the test of time. This store will do so too, even if passenger numbers double, as the airport hopes they will. So it’s good for today and it’s good for the future too.”

Also speaking to The Moodie Report at the event, Laws said: “Our partners have really got behind our vision and have been tremendous. World Duty Free has added the ‘wow factor’ to this airport. Fred Creighton told me he would build us a store we could be proud of and that is exactly what he and his team have done. The passenger reaction since opening has been amazing; many have said it’s as good if not better than anywhere else in the UK.

“We want to be the airport of choice for this region, but to achieve that our customer service has to be exemplary. That means creating facilities that will put our customers in a good mood to shop. Our business partners have backed us in that and understood what Newcastle Airport means for the north-east region. As a regional airport with under 5 million passengers we have punched above our weight and the new commercial offer means we will continue to do so.”

*We’ll feature more reaction and comment from WDFG and Newcastle Airport in The Moodie Report e-Zine, out on Thursday, as well as in The Moodie Report’s forthcoming July/August Print Edition.

WDFG’s engaging Contentainment programme comes to the UK’s north-east

The Newcastle Airport and WDFG teams mark the inauguration on 1 July