ESTONIA. Tallink Group has taken key steps in boosting its fashion and accessories offer as it diversifies further from the traditional duty free categories such as liquor, tobacco and perfumes.
Store rebuilds on two of the short cruise and ferry company’s key ships for duty free and travel sales have substantially increased the space for the fashion segment.
On Tallink’s newest vessel Megastar, which serves the group’s busiest route Tallinn to Helsinki, the category has been almost doubled from 405sq m to 795sq m. On the Silja-branded Baltic Princess plying the Stockholm to Turku route – which has the highest spend per pax of any Tallink Group vessel – fashion and accessories now occupies 284sq m, up +47%.
The Moodie Davitt Report was the first media to see the unprecedented transformation undertaken by Tallink Group onboard both ships, just days after the launch of new stores. The revamp is designed to cater to what Tallink believes is an underserved need for fashion in the Baltic ferry market – and to forge its reputation as an expert in fashion retail.
Layout attracts greater footfall
The build-out on Baltic Princess comprises a large store called Fashion Street that essentially works as a long ‘walk-through’ retail space. Passengers must pass the zone via an adjacent corridor to get from one side of the deck to the other.
As a result of this new store set-up, Tallink has noticed a rise in passenger penetration – men in particular – thanks to the open-access nature of the space and the high visibility of certain brands. A large Tommy Hilfiger shop-in-shop for example – the first on the Baltic on this scale – anchors the space at one end and is divided into dedicated areas for men, women and kids.
“Sales have been growing above our expectations in the new fashion shop,” says Baltic Princess Shop Manager Klaide Roschler. “Men can find what they are looking for much more easily, especially brands like Tommy Hilfiger. Among youngsters, Superdry is really popular and also Vans, and we now have a wide assortment for both.”
Chinese tourists are regular travellers on Silja ships between Finland and Sweden and they are keen on brands from the Nordics. Ecco shoes from Denmark are their top buy, as well as Hilfiger clothing. “They trust the quality of the Ecco brand,” says Roschler. “There is a tiny shop in Helsinki selling Ecco, handbags and vitamins and Chinese people go there in large numbers.”
The brand was listed after Tallink noticed large numbers of Chinese coming on board with Ecco shoes. Mandarin-speaking store staff were also getting requests for the brand.
Chinese passengers still like to visit the shop in groups. “We used to have Lumene products [the Finnish beauty brand made with Arctic ingredients] in our main tax free shop downstairs but when the Chinese came in there were 20 people crowded in front of that shelf and nobody could pass. So we moved Luminae to the beauty store upstairs.”
UnionPay is also being expanded to as many till points as possible to avoid congestion. So goes the saying in reference to Chinese purchasing habits – “when one buys they all buy” – which can create a sudden bottleneck in the store flow.
Fashion Street’s extra space is largely thanks to the removal of a children’s playroom to another deck. This has allowed more fashion and accessories brands to spread out and offer some impactful presentations. Bag brands such as Coccinelle, Eternel, Furla and Guess have well-defined spaces.
Other brands with a strong presence include apparel from Solid and SoyaConcept, Zizzi and Camel Active while Geographical Norway luggage is selling well due to its accessible pricing. Children’s clothing is mostly sold in a separate shop.
Fashion on the crest of a wave
Tallink’s increase of the fashion category share in its onboard shops is no sudden move. A review of the business by a management consultancy a few years ago proposed the idea and it has taken off in a big way since 2014.
In 2015 fashion made up just over 30% of Tallink’s retail business [retail includes categories other than the traditional duty free staples of alcohol, tobacco, beauty and confectionery]. By 2016 this share had risen to 35%, and the expectation for this year – thanks to the fashion expansion – is for a 40% share.
Tallink Duty Free Director of Business Development Magnus Skjörshammer comments: “Let’s not forget that retail itself increased by over +10% last year and that’s quite something. Many years ago, fashion was not a significant category but we have dedicated a lot of time and effort to it and the results now speak for themselves.”
He adds: “In this region, the trend is less towards traditional duty free products, and more towards other categories. It’s been happening for some time. Our focus is now to add premium fashion brands as we widen the assortment from medium-positioned labels. For example, on Baltic Princess we hope to introduce Diesel and we will also be testing a new niche Danish apparel brand called Knowledge Cotton made from organic cotton on Megastar.”
The move to more premium lines is not surprising given the increasing numbers of Asian and other international (non-Nordic) passengers travelling in the Baltic region – but also greater interest from Finnish passengers.
“Last year we had around 500,000 Asian travellers and expect to see an increase of about +15% this year,” says Skjörshammer. “Their spending power is more than double the average onboard and their focus is strongly on Nordic brands.
“For our Nordic customers, a wide fashion assortment onboard is also favourable because many of them come from smaller rural towns that don’t have certain in-demand brands like Tommy Hilfiger.”
Megastar makeover
While Fashion Street on Baltic Princess makes a statement in its own right, the revamp on Megastar is on a greater scale, with the fashion space doubling.
A vast area of the top floor of the two-level shop has been devoted to fashion and accessories. Separate areas are now clearly marked out as Fashion, Accessories, Bags and Jewellery, while branding for popular labels like Vans, Ecco, Esprit and Levi’s is very prominent.
Among other labels on this floor are Armani Exchange, Ted Baker, Balmuir, Kipling and a kid’s selection including Sweden’s Lundmyr, Findlayson, Mayoral and a large selection of Moomin apparel from Martinex.
Women’s fashion has traditionally accounted for two-thirds of Tallink’s fashion sales but this is likely to change. Skjörshammer comments: “In the much-enlarged area on Megastar, many more of our brands now have men’s as well and women’s sections.” Guess, Solid, Superdry and Seidenskicker are among the brands with extensive men’s collections.
Fashion expertise
As well as an increasing share of Tallink’s €536.7 million revenue from shops and restaurants coming from the fashion and accessories category, the company, earlier this year, also acquired the rights to manage Esprit franchise stores in Estonia.
This business – currently consisting of three Esprit retail stores – reports into Tallink’s duty free division. As such the division stands to gain valuable knowledge about Estonian consumers’ fashion tastes, plus useful operational expertise in the category, which is prone to stock issues and quickly-changing trends.
Other fashion franchise deals have not been ruled out, and with a retail diversification agenda very much alive for the onboard business, the future for fashion and accessories is looking good. Tallink is quickly becoming the Baltic Sea’s fashion expert.
[All images © Kevin Rozario]
