By: Heidi Van Roon, Founder & President, the SPARK Group of Companies

Customers are shopping luxury brands. Full stop! For that reason, the priority for empowering brands needs to remain at the forefront of every idea that moves retail forward. Brands deserve centre stage to deliver customer excitement. The Purple Cow approach, borrowed from Seth Godin’s book, is a good reminder that only the remarkable is memorable.

The airport, retailer, brand and customer relationship is highly regulated, highly fragmented and highly interdependent. Strong fundamentals have charted an enviable growth trend over the years and Travel Retail has emerged as a darling among retail channels. Yet it is highly vulnerable.

Brand empowerment is the opportunity that will unlock the current stalemate in the brand and retailer relationship. This, of course, is likely difficult news for the retailer. Airports have come to depend on non-aeronautical revenues, and with over US$ 43 billion in capital projects underway in key NAM airports, there is a vested interest on the part of government, airport authorities, airlines and retailers to make this relationship thrive. JFK T4, for example, is adding 500,000 sq ft. of retail space. This market is organic and will always move. The blip on the screen caused by the COVID-19 pandemic is a red hot signal to leapfrog to where the market will be tomorrow.
Brands are heavily invested and have been tremendously successful at building the reputation of the luxury retail industry across all channels – whether domestic, online or travel. Ongoing R & D, innovation, creativity, product development, marketing, branding, logistics, technology, shop floor installations, product training and site visits are just some of the ways in which brands support their multi-faceted retail success.
The future of luxury retail will depend on better empowering brands during the customer journey – and beyond – in a bespoke way. Sales and branding deserve to be optimised. Every opportunity to connect better with the customer deserves ongoing review, enhancement and development – fast! This industry was never meant for those who rest on their laurels. The current industry pause is an unprecedented window of opportunity for some seismic upgrades. And, among those, more latitude for brands to do what needs to be done.
COVID-19 present brands with a great opportunity to break through current barriers
1. Experientially. The most important advantage of bricks and mortar retail is the power of the human connection. Luxury retail customers with VIP mindsets value authentic and bespoke brand experiences. Brands absolutely must have a say on who will personalise the brand ethos in the one-on-one ceremony with the customer. The retail sales role has evolved into a desirable and rewarding career choice for service-minded business builders. Customer lifetime loyalty is supported through this intentional sense of purpose, authenticity and professionalism.
2. Commercially. Staffing optimisation is just an incremental cost that will ensure optimal revenue potential. Covering counters across all peak hours will add 20% – 50% to daily sales outcomes. ”If you build it, they will come – and if you staff it, they will connect”. After all, we are in retail and it is the most obvious detail to have staff work when the stores are open.
3. Technologically. The disruptor of disruptors will be an omni-channel sales approach and the equaliser of power will be shared or duplicated customer data. Comparable to the benefits of leased space in a department store, brands will benefit from a direct digital integration with the customer.
Through AI and an omni-channel sales approach, brands can engage with their globalised customer before, during and after a store visit – anytime and anywhere in the world.
AI and omni-channel are becoming increasingly powerful tools
For example, the idea of capturing the itinerary and offering VIP privileges at airports on the return flight will empower brands to appreciate and encourage repeat shoppers. Return flights can become highly predictable appointments for building the global lifetime value of a customer. Retailers only stand to benefit as brands drive the relationship worldwide and across all channels. What if being physically present in a duty free zone makes it possible to order from the retailer’s duty free fulfilment centre? The purchase receipt arrives by email and can be claimed at point of entry as products to arrive later. The shop floor display is, therefore, not only for selling – it is also for showcasing out-of-stock items which can be ordered online and shipped directly. The sales expert finally receives commission earnings – even if stock is not in the shop.
4. Operationally towards a win-win-win for the staff, brand, retailer and customer:
a)  Wage splits: brands that split wages with retailers need to evaluate the trade-off for doing so and renegotiate the terms if the retailer is holding back on optimising headcount or not agreeing to fill a vacancy. Done right, brands that support labour wages 100% stand to make the highest ROI on the cost of labour – simply because there is no barrier to scheduling every possible revenue hour, and to scaling the headcount as needed. Brands that pay 100% of labour costs can easily outperform the department trend by virtue of being in the driver’s seat for who works and when.
b)  Labour unions: de-certify labour unions in locations where brand objectives are barricaded by an outdated collective agreement, and consider a 100% vendor-paid staffing model. Modernised labour environments are the new union of today’s workplaces. Staff can be better supported when brands are empowered to shape culture around better ROI, better employment for staff, better power for brands and retailers and better ability to manage performance and drive the business.
c)  An enriched HR model that elevates the retail sales profession as a rewarding career path will demonstrate respectful employment and tenure. Great employment starts with recruiting excellence and yields long term benefits for everyone. Market wages, benefits and equitable advancement opportunities create buy-in and support tenure. The labour climate and shop culture must match the customer demographic.
Dubai International: an excellent example of an enriched HR model
d)  PPP – the magic mix of product, price and promotion cannot be overstated. Brands may attract a customer back through loyalty programmes, but it is the right PPP that will convert the promotional investment into value. The more brands can differentiate the TR PPP from domestic retail, the more motivated the customer will be to explore the benefits of TR. The exclusivity aspect of TR shopping plays to the demographic. VIP’s like to shop products that are hard to get in places that are hard to get to. TR is a most exclusive channel where even time constraints add to the exclusivity. The most visible and tangible expression of the Purple Cow branding concept is all about the exciting moment and the lasting memory. Brands need much more latitude on SKU assortments, such as newness and TR exclusives.
5) Integration. Brands need to integrate the local, online and TR channels to function as complementary channels – as opposed to competing channels. This will prove to be a paradigm shift, since the local channel is often at odds with TR. If a customer can experience a complementary collaboration, then each channel wins. Brands need to support the narrative for staff to navigate the channel comparisons. The brand wins if a product is purchased in store and if the staff explain how to replenish by ordering online. The customer expects consistent brand expertise in the airport at 0200 hrs, in the same way that they do in the local market at 1400 hrs or even on their mobile at 0700 hrs !
6) Exploiting airport white space. Dealing directly with airports for pop-ups, themed events and entertainment is a concept for customers to enjoy the brand without any expectations. While stock and POS can be challenging without involving the retailer, brands can create showcase moments to establish dwell time. The focus is not to shop, but just to hang out and catch the vibes, get inspired and connect with the brand in the store later or shop online at the gate.
7) Transparency. To manage the retail partnership well, brands need consistent and accurate access to sales/stock information/orders/shipments in transit. Autocratic systems breed power imbalance and TR has an opportunity to facilitate leadership in this area.
8) Accessibility. Brands deserve shop floor access, dedicated badging and escort supports need to swing the doors wide open for brands to visit their business space.
9) Brand collaborations and recourse. The voice of many is more powerful than the voice of one. Similarly, an accountability platform could gather brand requests and hold the retailer more accountable at times when many brands are asking for the same supports, or where themes emerge that improve outcomes.
10). Action Plans 1 – 9 above. Enter Phase 2.
Simply put, the desire is to better serve the customer with the recommendation to assign more power to the brand. It is essential to build a future that is more equitable, efficient and adaptable. Now is the time to invest in the future, because we know planes are flying again and we know that tourism will return. Every healthy green shoot deserves to thrive and soon we will see the day when we can collectively say: ”we are back on track”!

About the Author

Heidi Van Roon M.B.A. CPHR  SHRM-SCP
As Founder and President of the SPARK Group of Companies Heidi gives voice and leadership to Sales and HR excellence for Travel Retail.  Her no-nonsense approach has proven savvy, effective and genuine. In light of the current industry crisis she sees an urgency for leaders to rally around what is good and what is right for the future of travel retail.

Heidi combines an analytical, practical and caring approach that is focused on connecting customers with brands that they love and in a way that digital can’t.

“We are in a season to change what we can no longer accept.  The market has shifted and there really is no other choice than to boldly adapt.  It is time for courage, for honesty, for collaboration and for accountability” .

SPARK has been named North America’s most professional and highest performing sales team by some of the most prominent brands. Heidi’s leadership style is founded on well informed context, courageous and creative collaborations, savvy programs, and genuine heart.

Peter Marshall

Founder: Arts
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