This article is the latest in our popular new series in association with Tito’s Handmade Vodka, which examines travel retail and airport sector ‘disruptors’ – focusing on companies and individuals challenging established models through innovation.
INTERNATIONAL. “We call it the Amazon of the duty free channel.” A bold statement from Chief Project Officer Alex Gusarov on Mydutyfree, a new proposition which pools together the duty free offer from various retailers at different airports in one convenient place.
“On Amazon you can find goods from anywhere in the world. We have built a global duty free marketplace for operators and shoppers, giving retailers the opportunity to get online,” he says.
Customers virtually surf duty free shops, pre-order items and then collect them at Mydutyfree pick-up points at the airport from which they are flying. Additionally, a ‘shared basket’ tool allows people who are not travelling to easily order goods from those who are, Gusarov notes.
As an overall concept, Mydutyfree neatly taps into current customer trends for a speedy, convenient digital offer. But it also addresses some of the deficiencies of the duty free shopping experience, says Chief Executive Officer Katerina Furtak.
The idea for the company came about when Furtak and Gusarov were trying to find information online about which products were being sold at airports they were visiting – but the pair were met with a wall of silence. Their frustration ultimately led to them to co-found Mydutyfree.
“Like us, people generally want to find the best deal, so they search online,” says Furtak. Consumers want to feel like smart shoppers who have found the best prices. “And when we travel we want to find out whether it’s better to buy on arrival, at departure or in the city. For travellers it’s very convenient to have everything available in one place, like Amazon.”
This is particularly true for younger people, she notes. “They want to be able to switch very quickly to different locations and have access to a wide range of products. That’s why I think this concept will work very well – we have already seen great interest from airports, duty free operators and brands.”
Importantly, Mydutyfree is also able to track personal data, collect feedback, and create statistics on shopping behaviour, including data on top searches and top-ordered products. This offers multiple benefits. Retailers can target customers with specific products and offers, while the system provides individual recommendations and predictions. Other features of the marketplace include a chat-bot system for communicating with customers.
“We can inform duty free operators on the products customers are looking for at their locations,” expands Gusarov. “There is some very insightful information available. For instance, people might be trying to find a particular fragrance. They might go to the product page, but they don’t put it in their cart. Why? Perhaps the price is too high, or maybe something else is wrong. The operator can analyse the date and try introducing special offers or reducing the price.”
He believes travellers are more likely to engage with a single marketplace rather than visit websites of individual businesses. Gusarov declares that while some duty free operators have built their own e-commerce solution they have gained less traction in a longer period of time than Mydutyfree has in almost two years (the company launched in December 2015). “Customers simply register, select their location and enter their flight information. They then find the goods they want and place them in their cart – that’s all,” explains Gusarov.
“Duty free operators have access to a special admin system where they can find the list of orders. They can see which products they need to collect and send to the pick-up point.
“It takes operators just one week to integrate with Mydutyfree, which requires very little work. We just need to integrate with their ERP [enterprise resource planning] system and direct the actual availability of goods in the store and actual prices.”
Mydutyfree currently serves ten international airports and six border shops in key locations in Ukraine, Russia, Belarus and Azerbaijan. The website receives 1,000,000 views per month and has 25,000 active users and app installs. Some 3,000 new users are joining every month, according to Gusarov. The website currently offers around 10,000 SKUs– 1,500 orders are placed every month with an average receipt of €100.
Mydutyfree also runs exclusive partnership programmes with the likes of Mastercard, TUI and Radisson. “They provide information about our services to their customers, which helps us reach new clientele,” he explains. “In return, we give them the opportunity to offer their customers extra bonuses or discounts in the duty free shops.”
Another key feature that distinguishes Mydutyfree is its customer review service. While the ordering component of the system is comparable to Amazon, Gusarov likens the feedback system to another Internet giant – TripAdvisor.
“We ask for feedback from our customers on things like what they might want to change in the service. If they have had issues in particular areas we are able to flag this to our partners. Data is ‘new age gold’. Everyone is interested in this kind of information.”
Now is the time for further international expansion, says Gusarov. The company is specifically targeting the Middle East, Asia and Africa – with the goal of connecting 60 shops worldwide by 2020. These will include airports, diplomatic shops, border stores and seaports.
Mydutyfree has set a turnover target of €4 million in 2018, and Gusarov says the company is actively seeking new partners. These could include heavyweights such as TAV, Airbnb, Expedia, Booking.com, Uber and Ctrip, he reveals.
Mydutyfree has lofty ambitions for expansion and penetration into new markets. The company has learned from digital powerhouses like Amazon and TripAdvisor to create a new and disruptive proposition for travel retail. Time will tell if it can survive and thrive in a world of travel-related e-commerce that is becoming more competitive by the day.