Kering aims to leverage travel retail opportunity as Gucci launch leads next wave of investment

Kering Eyewear aims to maximise its impact in travel retail by leveraging some of the world’s biggest luxury brands, investing in exclusive content and products, and building new kinds of partnerships in the channel. The latest stage of that drive is a Gucci sales campaign, including a limited-edition travel retail product line, developed especially for Chinese New Year and rolled out across selected airports.

Recently appointed Kering Eyewear Head of Travel Retail Pietro Scognamiglio, speaking to The Moodie Davitt Report from his Hong Kong office, outlines the critical role of the channel.

“Travel retail is becoming more and more important strategically for the group,” he says. “Our strategy is to target the traveller and that is a different client to the one visiting the domestic market boutiques or optical retailers. We need to match our products and campaigns with the dynamic characteristics of travel retail.”

The importance of the channel has come into sharp focus since September 2014 when Kering announced it would be taking its eyewear business back in-house.

Previously nine out of 11 Kering Eyewear brands were being managed through licence agreements. Kering’s partnership with its major partner, Safilo, included eyewear licences for such lustrous names as Gucci, Bottega Veneta, Saint Laurent and Alexander McQueen. Kering is now completing the transition from Safilo across its travel retail accounts worldwide.

As we reported previously (in an interview with Global Head of Centralized Channels Omar Hagi), the biggest buzz around the announcement involved Gucci eyewear, with Kering and Safilo agreeing to terminate the brand’s licence agreement two years in advance, by the end of 2016.

Fresh investment in Gucci eyewear is being backed up by a major Chinese New Year campaign with leading Asian travel retailers, and the roll-out of a limited edition. Among the launch partners are DFS Group, Sunrise Duty Free at Shanghai and Beijing airports, Ever Rich Duty Free in Taiwan and King Power International Group in Thailand.

Scognamiglio says: “Our strategy is to develop our brands in this channel and Gucci is a master brand of course. It is what we call a ‘category killer’.

“It’s a big responsibility. We know that Gucci has always performed well but we are now setting new qualitative as well as quantitative goals in travel retail, and the Chinese New Year campaign is one of the tools that we want to activate.

“This is a peak season in Asia in particular with the biggest migration of people worldwide. We see vast PRC traffic in the travel retail business and every airport and retailer is trying to influence this consumer using their own language.

“Because we are now starting to manage Gucci distribution it was the right moment to bring something different. We developed a concept with the brand, one that is in line with the boutique windows that you see across the region. It will be new but recognisably shares the Gucci brand values from down the years. We are focused on aligning with those values, through the design by [Creative Director] Alessandro Michele.

“We not only offer customised visibility in the store, with HPPs in the major airports, but also a dedicated product only for travel locations. That has been developed for the Chinese New Year season, and is a first for eyewear we believe, with just 5,000 pieces.”

On the choice of partners and locations, Scognamiglio says: “It needs to be shown in airports that are premium, which match the brand values. On top, we want a strong presence that allows us to explain the concept to people. You cannot just develop it; you must communicate it to the consumer. These partners help us do that.”

Crucially, he notes how the campaign places travel retail strategically and centrally for the company. He says: “This is a unique, complex environment with short times for shopping and brand exposure. Eyewear is even more complicated with multi-brand environments, so the competition is very tough in what are small spaces, with multiple brands fighting for turnover. So having a campaign and product just for this channel is a big step forward.”

It will be backed by further investment too. “This is just the first of many campaigns that we are planning to support the brands, including in travel retail. The consumer needs to see that we are taking a big step forward, and that has as a target the goal of increasing our market share,” says Scognamiglio.

As noted above, Gucci isn’t the sole story; the Kering eyewear portfolio also includes other big luxury names.

Scognamiglio says: “We know the power of Gucci but let’s not forget the amazing results that we had with Bottega Veneta at DFS stores in 2016 [in a major campaign that featured bespoke products, advertising and in-store execution – Ed]. This was a masterpiece of a campaign. It was a first for Kering to premiere a collection with one retailer on this scale. It also helped us test many ways to approach customers in the stores but also how to leverage the retailer’s digital focus and the CRM website tools they have. We would like to leverage what we learned in future.”

Among other brands, Saint Laurent has been “outperforming expectations”, as have Stella Macartney and Alexander McQueen. “These have surprised and delighted us and that has been down to support from the retailers, who allowed us great space and visibility.”

Kering Eyewear’s travel retail drive has been led by its strong Asian presence, but other regions are set to follow.

Scognamiglio says: “Asia travel retail has excellent space dedicated to fashion & luxury including eyewear. We have the chance in this region to exploit new opportunities and to test new HPPs, even more than we have done in the past. We can experiment with new ways to deliver the values of our brands and to approach the consumer.

“But we also want to extend best practice from Asia to the Americas and Europe, leveraging the weight of Gucci and other brands. Other regions may not have the same ability to implement activities as Asia does but we want to test what is possible in the environment.

“And let’s not forget that we don’t only have a luxury division. We also have brands such as Puma. This has taken a segment of eyewear that has not been leveraged very well in the past, around sporting eyewear. In Latin America it’s one of the top brands, notably in the south of the region.

“We know that all our brands can perform if they are given the right focus, the right products and the right level of support from the retailers.”

So what does Kering Eyewear want to see from potential partners to lay the right platform for its brands to grow?

“I’d like to see airports realise that the category is one of the fastest growing and that the potential is still a long way from being achieved. While beauty has led the way in the past in terms of space and wonderful display, now it’s time for eyewear to show what it can do to engage the consumer in innovative ways.

“Much can be done to bring in best practice and to bridge the gap with the biggest categories. We know that travel retail is a key platform in the go-to-market plans of the major luxury companies. It’s no longer a secondary channel but a priority channel in terms of turnover but also for visibility. And it’s amazing what you see the different companies trying to test to attract this valuable consumer.

“We must work more on a Trinity basis between airports, retailer and brand to engage the customer on a 360-degree basis. We need better display and better engagement not only in stores but also before they travel, so they are aware of the opportunity in advance. The industry needs to understand that eyewear is a strategic category and has a unique potential to trigger shopping. And it also gives the consumer entry to luxury at an accessible price point.”