GERMANY. “We wanted duty free to embrace a strong sense of the ‘local spirit’, which is very important to us. We want to engage the customer with local and run campaigns that are more regionalised too. Heinemann was a good fit for this.”

So says Düsseldorf Airport Head of Commercial Operations Pia Klauck, talking to The Moodie Davitt Report about the recent decision to name Gebr. Heinemann as duty free & travel retail partner from January 2023.

“As an airport with excellent connections and close to the city, we have a very special relationship with our region and with Düsseldorf,” adds Klauck. “We are particularly pleased that Gebr. Heinemann has picked up on this concept in its product range and shop design. The passenger can fill up on the vital atmosphere of the state capital of North Rhine-Westphalia on the last few metres to the plane and carry it into the world. This is how the local connects with the global.”

The appointment bridges a ten-year gap since Gebr. Heinemann last managed the duty free stores, with Dufry capturing the concession in 2012. Now the Hamburg-based family-owned retailer returns, having previously operated at Düsseldorf for 20 years.

For the airport company, the three cornerstones in making the appointment were the local approach, alongside sustainability and flexibility.

Klauck says: “After Covid we really wanted to be ready with a new concept and Heinemann provided us with a lot of answers. We know they have good connections to the big brands and can manage the categories but we also wanted to promote that regional aspect. We know our own customer well and we believe Heinemann can help us talk to that customer even more effectively.”

She adds: “We also want to work closer together on data, on marketing, and to feature a lot of flexibility in the store. We all realise that we need to be faster in changing product ranges and brands, and Heinemann was looking in a similar direction to us. They came with answers before we even asked the questions. It was clear to us that they shared our approach to the customer.”

Gebr. Heinemann pledges a strong focus on Sense of Place and sustainability under the new duty free contract

In a world where supply chain represents a big challenge, Heinemann’s logistics expertise was another advantage.

“Heinemann proved during the pandemic and also to us during this process that they are quick to make decisions, they are hands-on and will find a solution,” says Klauck.

“We also had to define our roles. Where should the airport be involved? Where does it not need to be involved? We came to conclusions that we are each happy with, led by the view that we have an expert involved, one that can guide us on market trends and how to approach this business. We have a lot of trust in Heinemann as the expert and an open partnership where everything is out on the table.”

One item leading the agenda for the new partner will be how to maximise spend from the core base of outbound travellers from the region.

“We expect a greater focus on our duty paid customers. We have a lot of Schengen passengers that are willing to spend and we need to address their needs better than ever before. That is probably the biggest change in emphasis.”

Further design impressions of the new Heinemann stores at Düsseldorf Airport, which begin trading in January 2023

Beyond this, 4,000sq m of space across four main stores means the core categories that drive income and profitability will remain to the fore. “We are going to focus more on the core business and then, where possible, find solutions for the other categories,” says Klauck.

Gebr. Heinemann will also align its consumer digital platforms with those of the airport as each seeks to engage more with the traveller pre-travel.

Klauck says: “We want to benefit from Heinemann’s insights and their customer base through loyalty programme Heinemann & Me. We are looking forward to bundling offers and services across lounges, parking, F&B, and Heinemann can be a big part of that with the duty free element.”

Making the most of consumer tech

In other recent tender news, Lagardère Travel Retail won the contract for four consumer technology stores at Düsseldorf Airport from Spring 2022. The retailer is gradually introducing its Tech2Go concept, featuring tech accessories and gadgets, in cooperation with product partner Schäfer Electronics. The first units have opened with more to come from mid-August in Pier C and in the landside area.

Lagardère Travel Retail and Schäfer Electronics showed a good understanding of the needs of the regular traveller, says the airport company (Photos above and below: Andreas Wiese)

The opportunity arose when previous consumer technology partner Kirchner was forced to exit the business during the COVID-19 crisis.

Klauck says: “We thought that this would be a very difficult tender in what is a challenging category. As it turned out, there was a lot of interest and companies came with new concepts. We had a good competition in the end.

“Lagardère Travel Retail and their partner won out. Schäfer knew the business and the customer well. We have nicely designed shops but also here, as in duty free, we wanted local spirit, whether through gadgets or entertainment in the store. From the beginning they were able to address the customer in the right way, using entertainment, flexible spaces and ideas. That comes with knowing that we have frequent travellers and that we need to address them every single time with something new.

“We were also impressed that they were able to stock their stores and begin trading almost immediately despite the impact of the pandemic.”

On the evolution of the tech offer, she adds: “Of course you need to have the big brands Apple, Hyundai, Samsung and so on, but you need alternatives too and here the partners are doing a good job of widening choice. They have their own Tech2Go merchandise and are will add more. You can still make this category a success with a mixed approach of big brands, your own brands and local appeal.”

More widely, how did the airport work with its partners through the pandemic?

“We didn’t take a one size fits all approach,” says Klauck. “We looked at every partner individually, and asked how they were looking today, how they were working pre-Covid and whether they have problems they might just be pushing into the future? We took a look at who or what stands behind each company and asked, do they just have a cash problem now and is this a sustainable business otherwise?

“We talked a lot to the partners and we found solutions for each, whether it was a rent reduction or a deferral or lowering guaranteed rent or working it another way. What will work for a larger player that has cash is not what will work for the small café owner, the Turkish speciality outlet or the flower seller. And apart from Kirchner we still have all of our partners so I think we went the right way about it.”

In food & beverage, another key category, Düsseldorf Airport has a wide choice spanning multiple partners and concepts.

Food & beverage carries broad appeal across menu styles and restaurant formats

“We are renewing and updating many concepts today with our major partners, which include Marché, Autogrill, SSP and casualfood alongside some smaller local players.

“Marché already opened two new concepts and Autogrill will follow end of this year. We can see how much all of them have been thinking about the future, about sustainability, about what will work for the new consumer. There is a lot of competition in the F&B market and you need to stand out.”

Klauck notes that relatively new trends such as vegan cuisine need to be incorporated into restaurants that are not just vegan but offer a range of concepts. “It’s not just the vegan who eats vegan food these days.”

The key is to ensure the offer carries wide appeal not just in menu terms but also in format.

“We are not a big airport so we have to adjust our space to be as inclusive as we can, adapting to the needs of as many customers as possible. We ask this a lot of our partners. How do we reflect the needs of those who want to sit down, those who want fast service, those who want personal service, those that want digital only, those that are going on longer flights that don’t have inflight service? And all without using plastic so we can make those offers sustainable.

“We have many full-service restaurants and they work well still, as people can have the security that they will be served on time. But you need to be digital, offer the ability to pay fast, still have a person to talk to but not have to rely only on that person.

“We see that area of digital ordering more via our partners, and it reflects a greater trust in society in Germany about paying using digital as people do in their everyday lives.”

The new consumer prizes speed and convenience above all else, ads Klauck, and here airports and their partners must adapt.

“The customer wants you to be fast and to have the item on-site and available. That’s a challenge right now. People are used to having an order placed on Amazon with next-day delivery. But there is a benefit to that old shopping feel of being able to touch, taste, smell. We are seeing that people will take the time but they will not understand if the product is not on-site.

“For airports, how do you make sure to have everything always available? We want to be able to say we have the new Jack Daniel’s, the new Dior and the contact and trial that promotes. But they don’t want to stand in a queue, or wait to pay. They want to do it now.”

The airport company is also assessing how it can open up new categories to travellers, even with its limited space.

“Some brands are needed, and by that you can even also mean a fragrance or a t-shirt. Then there are others that could do well with showcasing or pop-ups, not necessarily essentials but products or services that are aided by showrooming and promoting.

“Because we are not the biggest airport we can adopt a more flexible approach, looking at base rent, fees, new contracts with different lengths of time. I think more airports are willing to try out new things. We certainly are. We are open to new ideas from our partners; they just need to come and tell us about it.

“The customer doesn’t see those boundaries between stakeholders, we don’t see them any more and now we want our partners to react. It’s not easy as you are still renting out space and that brings complexity if you want collaboration between partners, but those should be issues we can overcome. If you have seasonal products, why not rent it for winter items half the year and summer products in the other half? We are promoting this idea but it also takes courage from our partners.”

Back on track: The Summer season is in full swing

The airport company is upbeat about the prospects for business through the rest of 2022, but acknowledges that uncertainty persists.

Klauck says: “We expect to reach around 70% of 2019 traffic though in some periods we have more than pre-pandemic numbers coming through. It’s quite peaky right now and will stay like that across the Summer. We are keen to understand what will happen in Winter, but we are aware that everyone needs to make their money now.

“Ukraine-Russia is obviously an issue. We never relied on these travellers so much though Russians did spend a lot in duty free. We do rely on the Germans going to Mallorca so those are far more important to our business.

“What we do know is that people just want to get away to new experiences and new adventures. They are still travelling despite the well-publicised problems over travel, obstacles to travel, airline cancellations, security processes and so on. We are cautious about the future but that desire to travel gives us reason to be optimistic.”

*This article first appeared in The Moodie Davitt eZine. Click here for access.

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