Interview: Shilla’s Beauty&You concept gives Hong Kong International Airport a facelift

HONG KONG. In a landmark coup last April, South Korean retailer The Shilla Duty Free won the combined beauty and fashion accessories contract for Hong Kong International Airport (HKIA).

As the first travel retailer to manage the beauty category at Incheon International Singapore Changi and Hong Kong International airports simultaneously, The Shilla Duty Free has emerged as a major multi-national force in travel retail beauty,

The opening in Hong Kong marks another milestone in Shilla’s global strategy: the debut of its Beauty&You concept which the company heralds as a ‘new vision for experiential retail’.

Shilla Travel Retail Hong Kong Managing Director Alice Woo, at the helm of Shilla’s Hong Kong expansion, is charged with overseeing operations and driving new business.

Poised for success: Shilla Travel Retail Hong Kong Managing Director Alice Woo

The new venture is in a safe pair of hands with Woo, who has over 22 years of travel retail experience specialising in luxury retail. She also brings keen insight into changing consumer patterns – an essential skill for travel retail and its ever-evolving consumer base.

Woo’s CV includes stints at DFS Group (North Asia, Hawaii, North America), Nuance Watson (Hong Kong, Macau and China) and Christian Dior Couture (Hawaii). She has previously worked on new store openings and renovation projects in airport and downtown retail locations spanning the world from Hong Kong, China, Macau, Japan, South Korea and Taiwan to Honolulu, San Francisco and Los Angeles.

As part of her Managing Director role for Shilla Travel Retail, Woo is also spearheading a range of projects and analysis on consumer trends, store design and digital innovations.

Oh, and she speaks six languages.

The Moodie Davitt Report’s Clare Austin recently spoke to Woo to find out why now is the time to break the traditional model of airport beauty shopping and why having an online presence is key to the future of travel retail.

Alice Woo: “Whether it is online or offline, retailers will be challenged to develop a deeper and more lasting connection through an experiential element”

The Moodie Davitt Report: Having won the duty free perfumes and cosmetics concessions for Incheon, HKIA and Changi, Shilla is fast becoming ‘Asia’s airport retail beauty giant’. What is HKIA’s role in this?

Alice Woo: Winning the perfume & cosmetics (P&C) and fashion & accessories concessions at HKIA gives Shilla the advantage of being less than five hours away from half of the world’s population, and the opportunity to serve more than 70 million passengers per year with connections to more than 200 destinations. We are delighted to contribute our part to this dynamic airport and are excited by the opportunities which future developments will create over the coming decade.

“Winning the perfume & cosmetics and fashion & accessories concessions at HKIA gives Shilla the advantage of being less than five hours away from half of the world’s population”

Our success in securing these concessions also represents a new milestone for The Shilla Duty Free’s global expansion, elevating the brand from a local market leader to a true global player. With the new HKIA operations, Shilla has become the only retailer offering a holistic beauty shopping experience in Asia’s three major hub airports. The HKIA concession also highlights the company’s success in the region and signifies a new era of global operations for the company.

The arrival hall at HKIA is a gateway to an exciting new chapter in the global expansion of Shilla Duty Free

The Shilla Beauty Loft at Singapore Changi Airport pushed the boundaries in terms of beauty in travel retail. How will the new Hong Kong operationi set itself apart – both from the former DFS offer and other Shilla and Asian airport and downtown duty free offers?

We feel that our unique approach with The Shilla Duty Free at HKIA will redefine and reinvent the travel retail experience for the perfumes, cosmetics, fashion and accessories categories. This unique approach offers an immersive environment which elevates the element of discovery and interactivity for our consumers. Our aim is to address the needs of travellers first hand through the concept of Beauty&You, which focuses directly on the consumer.

The overall beauty experience cannot be delivered without a thorough understanding of our customers. HKIA is an important hub for duty free shopping and the perfect platform to reach the ever-growing Chinese consumer market, a segment that contributes a major proportion of the airport’s retail sales.

With over three decades of catering to Chinese travellers, and the company’s extensive understanding of the overall market, Shilla is well-equipped and perfectly positioned to serve this target group, giving us a strong advantage over other travel retailers.

Can you tell us more about the Beauty&You concept which Shilla has debuted at HKIA. How is it being received?

The word ‘Beauty’ in Beauty&You represents our core skincare, cosmetics and perfume offer but also the notion that beauty is not only related to skincare and cosmetics products: it has broader, far-reaching associations with fashion and accessories.

The ‘You’ in our brand represents our consumers, their individuality and the idea of a tailored offer for them. Beauty&You invites our customers to go well beyond their expectations of airport retail beauty and fashion, providing them with a chance to mix and match unusual product combinations. Essentially, we’re giving them a mix that is ‘all about you’.

It is still early days but we have confidence in our sales growth and are currently working closely with our teams to refine our services and product range ahead of the official opening [planned for summer 2018 – Ed].

Your career has taken you across the world – what are the defining characteristics of Hong Kong as a travel retail hub?

Hong Kong is a highly dynamic, complex and diverse market. HKIA, as a major international airport, is also the primary gateway for tapping into the China market. The airport handled more than 70 million passengers last year. It is connected to over 220 destinations, including over 50 in Mainland China, through around 1,000 daily flights by more than 100 airlines.

It is also the multimodal centre of connectivity linking Hong Kong to Pearl River Delta cities and towns, placing Hong Kong on the map for many types of travellers e.g. business, leisure and transit. Recent figures projected by the Hong Kong Tourism Board estimate that over 60 million tourists will visit the city in 2018. The robust travel market makes our city one of the strongest travel retail hubs in the world.

HKIA has a very diverse (in nationality and profile) passenger and shopper mix (especially compared to Incheon). How do you decide on the right mix of products as well as targeting the shopping experience to capture customers that could range from the say digitally-savvy, cash-poor to wealthy shoppers looking for luxury and personal service?

We have taken an approach to create a merchandise assortment that offers a broad spectrum of brands and categories. This of course includes the ‘must-haves’ but also a variety of lesser-known and emerging brands that we’re introducing at HKIA for the first time. While developing our product and brand strategy, we carefully considered the profiles of our shoppers and what motivates them to spend.

Recognising that their purchasing habits may differ in a travel retail setting due to its unique environment and time constraints, we have included different product ranges across all price levels with offerings in multiple formats so that customers have the freedom to select according to their preferences.

“Beauty&You invites our customers to go well beyond their expectations of airport retail beauty and fashion, providing them with a chance to mix and match unusual product combinations. Essentially, we’re giving them a mix that is ‘all about you’”

Within the beauty category, we have introduced a strong mix of both Korean and Japanese brands ranging from mid to premium price points, in addition to beauty devices and accessories. For the fashion category, our focus has been on accessories, including watches, sunglasses, leathergoods, belts, scarves, ties and writing instruments.

The store is set out to include zones such as New Generation, showcasing the best of Korean and Japanese brands, and Elements, an area dedicated to male shoppers. Can you tell us more about those offers?

New Generation is a dedicated zone for brands which are targeted to a younger profile. Although there is an emphasis on Korean and Japanese brands we have also selected products from other countries that fit the concept.

Elements is a multi-category immersive concept where men’s fashion accessories are incorporated with select grooming products. This will include premium offerings of well-known labels, as well as an interesting array of brands that are new to HKIA. We look forward to sharing more information with you when our concept stores come to life in a few months.

Pioneering spirit: The North Satellite Concourse store at HKIA is the first to feature the new Beauty&You branding

What overriding emotion do you want to provoke in your customers?

The Beauty&You concept breaks the traditional model for travel retail. We are presenting a new approach to airport store design with a layout that encourages customer flow and interactivity. Ultimately, we want to create a fresh and welcoming environment that shoppers want to spend more time in.

The store features Curated Zones, themed around trends and offering perfume, cosmetics and fashion together. Do you think this bespoke, tailored approach is more in tune with the way people shop these days? Are heavily-branded, big-name counters set to lose ground?

Brand partners will continue to be the backbone of our operations and form the foundation of our merchandising strategy, so to some extent brand showcases will still be a feature within our stores. That said, the new outlets will allow our brands new opportunities in terms of joining activities and promotions under the Beauty&You concept.

There will be a strong complementarity between perfume & cosmetics and fashion & accessories products curated together. The way we will present the items under a specific theme will further enhance each product’s unique features, and ultimately bring more value to the overall customer experience.

The whole of the retail footprint in Shilla HKIA Beauty&You will be transformed in phases to roll out the new identity. Can you talk us through the different stages?

In the coming months, Beauty&You will phase in the new branding and upgrade the stores. The first (of six) shops located in the North Satellite Concourse is already completed and has been operating since the beginning of February. With the new concept, we are creating an open and easy-to-shop environment that focuses on the need to bring beauty and fashion areas together, creating a seamless atmosphere.

Our merchandise and store design will reshape the traditional travel retail model, which today is heavily brand-driven. To reflect how our customers shop, our store design strategy features a blend of branded counters, non-branded areas and the inclusion of engagement zones where we plan to integrate categories and brands under a single umbrella. These thematic zones can engage both shoppers and non-shoppers to browse and test specially curated products specific to each theme.

The two stores located in the East Hall (North and South) together have the largest retail space of all our outlets inside HKIA. For these two stores, emphasis is placed on showcasing our trendiest beauty and fashion selections within the ‘Curated Zone’ concept. With the understanding that many shoppers may visit the East Hall shops as well as other outlets nearer to their departure gate, we have intentionally created differentiated offers and feature points for each retail location.

Together the two stores located in the East Hall North (above) and South (below) command the largest retail space of all the Beauty&You outlets at HKIA

There will be over 200 beauty brands by the time of the grand opening later this year. Will there be any surprises in those 200?

Of the 200 brands across the six outlets, quite a few will be new to HKIA. Our merchandising objective is to deliver a balanced and inspiring product assortment, presented in an engaging way to deliver a memorable customer experience and to attract new customers while maximising spend in stores. New brands we’ve already introduced include: The History of Whoo (a luxury Korean skincare brand), Didier Dubot (jewellery) and Alexander McQueen.

Integrated digital technology plays a key role in the stores. What kind of experiences does this offer the customer and is it aimed at a particular demographic?

Digital technology throughout the stores is merged beautifully with the actual physical store to create an interactive, engaging experience for customers. A combination of virtual technology and the physical environment creates a three-dimensional shopping space. From augmented reality experiences to testing out new looks and colours, to large format on-trend films on interactive screens, our aim is to inspire and engage customers at every turn with a sense of theatre.

“As travel retailers, there are immense opportunities in expanding our services to online channels. Travel retail companies not only need to consider digitalisation in-store but also how the online experience can complement the offline”

We will bring our crowd-pleasing Magic Mirror technology from Korea to Beauty&You. This technology can be used to trial and encourage sales of cosmetics and fashion items. Customers can apply the make-up products virtually or preview how fashion items look on them.

While younger customers will naturally be drawn to these digital experiences, we think these interactive elements present a new way of shopping and a unique experience which will increase foot traffic and time spent in our stores for all demographic groups.

Alongside the physical store, The Shilla Duty Free, in collaboration with HKIA, is also offering customers an online store where they can buy Beauty&You products in advance to be picked up before or after their flight. What’s the approach here?

With the proliferation of e-commerce and digital shopping platforms, purchasing goods online has become extremely popular in Asia, especially for Chinese consumers. We are now in the digital era where Millennials are attuned to researching beauty products online and sharing their experiences via social media. This has become part of their shopping habit. As travel retailers, there are immense opportunities in expanding our services to online channels.

In the case of our collaboration with HKIA, customers can purchase goods ahead of their travel agenda, with the option of either collecting the products upon departure or arrival, or receiving them in the comfort of their own homes through HKIA’s home delivery programme: another value-added service for busy travellers.

It’s very early days but how is business to date? Any surprises?

Indeed, it is still very early days and we are on a sharp learning curve. We are running temporary stores currently and looking forward to the grand opening later this year. I would say that the year has definitely started positively, and we’re very confident about the future outlook for our Hong Kong operations. We are putting all our efforts into ensuring the transition period is as smooth as possible.

What are the plans for the grand opening, scheduled for this summer?

The completion of the new Beauty&You stores will tie-in with our grand opening this summer. We are currently in the process of planning something exciting for the official opening which we will be happy to share details of very soon.

Breaking down the barriers: Woo said a combination of virtual technology and the physical environment creates a three-dimensional shopping space

How important do you think experiences and personalisation are for travel retail?

Travel retail is extremely competitive, which is why personalisation is key when it comes to targeting customers. As an airport travel retailer, we benchmark the other airports’ performances against the Hong Kong operations. Travellers, especially those who travel for business, usually visit more than one location apart from Hong Kong. They may also visit the downtown duty free stores, which usually offer more space, brands and innovative sales programmes.

In order to stand out, our airport outlets need to stay competitive by offering timely, incentivised shopping experiences to capture consumers’ attention during the limited time they are inside the airport. It all comes down to retailer logic and awareness: you must know your environment and be aware of your customer’s exposure in order to tailor the best retail solution to stand out from the crowd.

How do you keep travel retail relevant in the face of ever-changing technology and customer sophistication?

New technology has increasingly become one of the main tools to attract customers in travel retail. With consumers becoming more sophisticated and more educated about brands, the travel retail sector needs to adapt and respond by embracing the changes. Taking advantage of increasing customer interactions occurring on digital platforms, as well as our travel retail experience, accumulated through our operations at Incheon and Singapore, we are confident that we will exceed our customers’ expectations.

In addition, our motivation to constantly improve the travel retail model means various types of audits will be in place to further research customers’ purchasing habits. From this we will form a database which we will leverage throughout our operations at HKIA.

“We are now in the digital era where Millennials are attuned to researching beauty products online and sharing their experiences via social media. This has become part of their shopping habit. As travel retailers, there are immense opportunities in expanding our services to online channels”

You also lead various projects and analysis on consumer trends, store design and innovation. What is the next big thing for travel retail?

Travel retail will continue to focus on how the customer experience can be improved. Travellers have a short period of time within the airport and our outlets. Whether it is online or offline, retailers will be challenged to develop a deeper and more lasting connection through an experiential element, in order to turn every transaction into a unique journey in its own right.

Airport Authority Hong Kong said that it was impressed by Shilla’s bid in terms of innovation, its focus on social and digital marketing, celebrity (hallyu) marketing and strong consumer engagement. Can you tell us more about how these proposals will play out?

Through social and digital marketing, we aim to create a new one-of-a-kind shopping journey by building stronger connections with customers even before they step into our store. We hope to have an online presence that will stay at the forefront of customers’ minds, starting from the point where they begin planning and researching their travel plans. Through a constant stream of exciting in-store activities, we will also be offering much more than competitive prices and deals for our customers.

One of The Shilla’s main priorities is to offer shoppers the opportunity to experience the luxurious lifestyle that is synonymous with the Shilla brand. With Hotel Shilla’s industry-leading hospitality experience, we aim to provide a service that is second to none. Our customer-centric strategies engage our customers and put them first, and we believe that this will allow us to deliver exemplary shopping and service experiences with strong commercial outcomes.

Better together: The Beauty&You concept blends beauty and fashion shopping in “seamless” themed zones

What does your specific role involve and what is the main challenge within that role?

I am responsible for overseeing the operations in Hong Kong as well as leading a number of projects analysing consumer trends and exploring store design and digital innovations to support the growth of The Shilla Duty Free Hong Kong. One of the key challenges will be leading Shilla in establishing closer ties with travellers and customers and strengthening the mutually beneficial relationships with other key stakeholders, including the Airport Authority and our brand partners.

“With Hotel Shilla’s industry-leading hospitality experience, we aim to provide a service that is second to none”

Your career has spanned strategic planning, market execution, project management, merchandising and retail operations, renovation projects and managing airport and downtown retail locations. Now you are responsible for overseeing operations and driving new business. Is there a specific part of the job you enjoy most? 

My pride and satisfaction comes from being able to provide the ultimate shopping experience for all travellers and customers who enter our stores. It gives me great joy to see that they are fully satisfied with their purchases. Like any retail environment, one of the biggest challenges we come up against is the ever-changing behaviour of our consumers. In our case, the passengers.

In order to cater to their needs and demands we need to continuously monitor their buying habits and anticipate changing preferences whilst also having an awareness of general trends in the travel sector across the region and internationally that may have an impact on consumer patterns.

Drawing on your years of experience working in the travel retail industry, is there a single thing which you think could improve the travel retail beauty sector?

From my experience, the travel retail beauty sector needs to cope with the ever-changing industry and consumer patterns. The whole beauty sector needs to respond and evolve into a new reality and create niches for differentiation, targeting distinct customer segments. In order to achieve this, we need to reach concurrence amongst all the parties involved to drive real improvement.

What do you see as the future of beauty in travel retail?

Personally, I feel that digital is the future for beauty in travel retail. Travel retail companies not only need to consider digitalisation in-store but also how the online experience can complement the offline to create increased brand visibility and online presence, ultimately leading to greater footfall in-store.

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