Creating coherent and consistent campaigns across physical and digital platforms and embracing more consumer touchpoints and sales channels can present big opportunities for the sunglasses category in travel retail. That’s according to Luxottica Group Global Channels Director Alessandro Pozzi.
As reported
, Pozzi has been at Luxottica since 2013, taking over his current role as Global Channels Director in November last year.
As well as considering the category as a whole, Pozzi outlines Luxottica’s multifaceted approach to travel retail, highlighting new opportunities for expansion as well as the importance of travel retail-exclusive products.
His comments also appear in edited format in The Moodie Davitt Report Category Insight, a special title dedicated to luxury goods which appears at TFWA World Exhibition next week.
The Moodie Davitt Report: In your view, how has digitalisation and the rise of e-commerce changed the mindset of the travelling consumer and how does it affect the business of selling luxury goods in travel retail?
Alessandro Pozzi: I think the power of digitalisation cannot be overstated, not only in terms of online retail and e-commerce but also in terms of how consumers engage with brands, research purchases and plan travel; all of these affect travel retail.
The domestic markets and our brand teams have embraced these channels in impressive fashion and this has definitely helped to create consumer demand across all channels, including travel retail. If we are to promote travel retail as the expert channel for sunglasses, then it’s vital that we leverage on digital.
Category Insight: Luxury Goods Our Category Insight report on fashion & accessories will accompany a special edition of The Moodie Davitt Report Print Edition, out next week at TFWA World Exhibition & Conference in Cannes. We speak to leading luxury brands about the strengths, opportunities and future of the category. We consider the effects of digitalisation and the rise of e-commerce on travel retail, and the necessity for constant innovation in the face of a well-travelled and well-informed consumer. The Print Edition will be available from press racks at the Cannes event, and will appear in digital format in coming days. |
Omnichannel is the future for the sunglasses category. We need to focus our efforts beyond the physical retail domain. Our interactions with consumers start before they travel, and this communication needs to be coherent and consistent across all physical and digital platforms.
For example, during our Prada Cinéma sunglasses collection campaign with DFS earlier this year, we ran a comprehensive omnichannel campaign. We featured the frames prominently on DFS’ online platforms – including their website and e-newsletter – and also ran an influencer campaign with Jennifer Tse. The famous Hong Kong actress communicated the launch to her large social media fanbase via Instagram and WeChat.
Our stand at the TFWA World Exhibition (Riviera Village, RG6+8) will also create a very digital experience, including augmented reality features. It’s reflective of where we want to take the in-store experience in travel retail.
We’re also embracing digital to step into the hotels and resorts environment, since we feel our brands could fit perfectly well into the more luxury and sunny locations. In a trial we are currently running, we are selling our sunglasses though Handy. The leader in integrated mobile devices inside hotel rooms, Handy offers services to guests that extend beyond the hotel. Guests can buy from a selection of our products during their stay and sunglasses are delivered directly to their hotel room promptly. Could the same happen from an airline business class lounge, for example?
Digitalisation is also revolutionising training. Luxottica continues to invest in digital training tools and we really have some best-in-class resources at the disposal of our dedicated travel retail training team. So far in 2018, we have upgraded over 1,400 sales staff worldwide through this platform. That’s +130% versus 2017.
How do you think the category’s offer, marketing and store environments at airports will need to evolve to encourage greater conversion and grow sales in future?
AP: Multi-formatting solutions are essential to the category’s evolution and for greater penetration and conversion. With multi-formatting, we are seeking to create multiple, differentiated physical touchpoints within the airport domain. This can span from sunglasses departments in main duty free stores and pop-up-stores to speciality standalone sunglasses stores, such as Sunglass Hut, the world’s biggest global sunglasses retail brand.
We now have around 250 Sunglass Hut stores in airports worldwide, covering every continent. Around 25% of these stores are operated in partnership with travel retailers such as Dufry and Lagardère Travel Retail. My Sunglass Hut colleagues will be present at the TFWA World Exhibition in a dedicated area at our stand.
We’re also seeing the sunglasses category being increasingly presented and marketed as a true ‘core category’ by retailers. It is encouraging to see the category come into its own, gaining additional visibility and the ability to secure sought-after high-profile promotion placements, which had previously been reserved for brands from other more-established categories.
Supply chain innovation is also essential for sales growth, and to this end we invest in operational efficiency initiatives like our STARS solution to support travel retailers. STARS is a 360-degree model developed to better service our wholesale customers and increase sell-out.
Having headed up the global STARS team prior to moving to my current role, I have first-hand experience of the capabilities, benefits and added-value that the model can bring to our key partners globally. The impact on sales growth is immediate and very tangible. It just goes to show that category optimisation is partly about focusing on the basics and doing them brilliantly well.
What is the biggest opportunity for your category in travel retail today?
AP: To execute the development of Luxottica Travel Retail, we have designed a new strategic three-year plan, which we are calling the ‘TRAVELevation’ programme.
TRAVELevation sets out a clear roadmap for the future, defining what we want to maintain and evolve to further enrich our success story in the industry. The programme encompasses product, communication, visibility, human assets and technology. The plan has received the full support of our top management.
The key opportunities that we are targeting with TRAVELevation are:
White spaces
From 2018 onwards, we’re going to expand our horizons and pay attention to other high-potential channels. There are plenty of white-space opportunities to drive growth and it’s always about targeting the travelling global shopper. Airlines, cruiselines, hotel resorts and online all have strong growth potential for sunglasses in a travel retail context.
“It could be argued that the cruise retail environment is even more favourable than airport retail, with less challenges to dwell time and a more relaxed, happy consumer.”
For example, we have revolutionised the positioning of sunglasses in inflight retail, using a full and dedicated concept page of Ray-Ban that you can currently find in several airlines, such as Lufthansa, Emirates and EasyJet. The personalised, bespoke travel visuals are very impactful. This, and the whole new category positioning, generated a strong incremental increase in sales depending on the airline.
Cruiselines present a fascinating opportunity. The market is increasing, with an estimated 27 million+ passengers per year and amazing new cruise ships under construction. Key nationalities such as the Chinese are starting to embrace this type of leisure holiday and the retail environment is getting better and better.
It could be argued that the cruise retail environment is even more favourable than airport retail, with less challenges to dwell time and a more relaxed, happy consumer. Luxottica is currently working with cruise retail operators to implement new projects to expand the category in this channel, involving and exciting the passengers even outside the pure retail area. For example, we are exploring pop-up corners around the pool area, with sunglasses fully integrated into the onboard entertainment.
We’re also stepping into the hotels and resorts environment, since we think our brands could fit in perfectly in the more luxury and sunny locations. On top of the trial with Handy mentioned above, we are currently dealing with other potential partners in this industry. We expect to introduce our brands in top locations during the next months.
“We have thousands of new SKUs per year. Which other category can bring this level of product newness?”
Exclusives
On a product level, we are renewing our focus on travel retail exclusives and novelties, made especially for the travel retail channel or even for specific travel retailers.
Earlier this year, the Oakley Targetline travel retail exclusive, enhanced with technical innovation to maximise sports performance, was appealing to discerning global shoppers; those looking for something different and superior. In addition, the exclusive was supported by a bespoke communication campaign featuring prominent US golfer Bubba Watson.
Over the summer, we have launched the Ray-Ban for Scuderia Ferrari collection in selected travel retail stores worldwide. Over 3,000 Ray-Ban Ferrari frames were ordered, and Luxottica Travel Retail Division is supporting this launch right now with an airport “GP Tour”. We are activating the launch at specific airport locations to follow the Formula 1 Grand Prix circuit.
So far, we have run events at London Gatwick, Stansted and Luton with Dufry to mark the British Grand Prix; Vienna Airport with Heinemann during the Austrian Grand Prix; and with Dufry at Milan Linate during the Italian Grand Prix at the legendary Monza circuit. We will also be working with Dufry to enhance the visibility of the Ray-Ban Ferrari collection in Mexico and Brazil later in the racing calendar.
This month, we have partnered with DFS on the worldwide exclusive launch of two new models from the Ray-Ban Marshal sunglasses collection. The launch, which is the first of its kind for DFS in the lifestyle sunglasses segment, is supported by dedicated in-store promotions taking place over a six-month period throughout key DFS locations. In addition, a comprehensive social media campaign developed between Luxottica and DFS sees the two frames featured prominently on DFS’ social media channels.
These are just a couple of examples from an incredibly dynamic and active launch cycle that characterises the sunglasses category. We have thousands of new SKUs per year in three launch periods yearly. It’s great for travel retail, because our brands are constantly bringing newness to the stores. Which other category can bring this level of product newness?
Retailer partnerships and category management
Partnerships have also been a focus. In Asia, Luxottica has been working very closely with King Power Thailand on a major category management project. By combining shopping data with Luxottica’s experience and category expertise, we were able to identify opportunities to rework several of King Power’s sunglasses areas at the King Power Srivaree downtown complex and Suvarnabhumi Airport.
As a direct result of these changes, there has been very significant growth, not just for Luxottica’s brands but also the total sunglasses category.
In the Americas, we partnered with Duty Free Americas (DFA) to develop a new stand-alone Sunglasses boutique at Punta Cana International Airport’s Terminal A in Dominican Republic, the first stand-alone space for the sunglasses category operated by DFA. Based on the most recent performance, this new store is trending towards becoming DFA Group’s best-performing space for our category.
