Travel retail has irrevocably changed due the ongoing coronavirus global health pandemic. We chat with Craig Johnson, Vice President of Marketing for Pernod Ricard Global Travel Retail on what travel retail looks like in the “New Normal”.
The inaugural Moodie Davitt Virtual Travel Retail Expo took place last month, a pioneering virtual trade show and symposium that explored issues surrounding travel retail especially during an unprecedented time brought about by a global health pandemic.
Among the various online tracks during the five-day event was a panel discussion that drove insightful conversations around digitalisation and the importance of consumer-centric data and insights amidst the pandemic. Topics covered included new innovations relating to the retail experience, global media, point-to-point and e-commerce strategies, as well as opportunities within the travel retail channel.
During the panel discourse, Craig Johnson, Vice President of Marketing for Pernod Ricard Global Travel Retail tackled issues such as the digitalisation of travel retail, and examined the best ways to keep travellers engaged in and excited for the ‘New Normal’. Johnson also took the opportunity to introduce new brand developments for Pernod Ricard, and unveiled innovative new travel touchpoints for its various brands, like the new Martell merchandising wall-bay.
We at Spirited Singapore (virtually) pulled Johnson aside on the sidelines of the Moodie Davitt Virtual Travel Retail Expo for a more in-depth chat on Pernod Ricard’s perspective of travel retail in the “New Normal”.
Spirited Singapore: From the Pernod Ricard perspective, how has the worldwide coronavirus pandemic affected the global economy and global travel?
Johnson: The pandemic has had a profound effect on the global economy, and of course the global travel industry. We’ve experienced challenges we never could have expected, however from this, we’ve also discovered new opportunities. It’s clear that to succeed in this ‘new normal’, we’ll need to move forward with a keen understanding of how the consumer landscape is evolving in real time, focusing on changes in consumer behaviour as they arise with the development of the pandemic.
People’s desire to travel is high – our Strategy & Insights teams have been tracking consumer behaviour through social listening. They found that there about 3.4 million posts about travel every month, so there are clear signs of latent demand for travel.
With global travel utterly decimated, what does that mean for global travel retail? How can travel retailers navigate current challenges, and prepare themselves from similar future shake ups?
The pandemic has revealed fundamental changes we’ll see across travel retail moving forward. At Pernod Ricard GTR, we’ve seen trends that were already a focus of ours accelerate dramatically, taking just days or weeks to develop as opposed to month or years. For example, we’ve seen the channel’s fast-paced digitalization, with retailers quickly expanding or launching their e-commerce platforms. Consumers have had to embrace online shopping as a result of the pandemic, and we are confident this will positively feed in Duty Free.
Now, it is our collective mission to inform them of e-commerce services such as Click & Collect and this is why our Travel Trail strategy remains essential. It consists in targeting consumers along their journey with tailored messaging, from booking to final destination. We need to reach them early on in their trip, before they arrive at the airport. Of course, our job doesn’t end once they’ve arrived. Retailers and brands need to give consumers an elevated and safe instore experience, and I greatly believe digital can help us achieve this. We’ve been working on instore innovations leveraging touchless technology and motion sensor screens, which will enable consumers to continue enjoying our products in a safe and exciting way.
While we can’t know for sure what the future holds, it’s important that our strategy focuses on the long-term livelihood of the channel and implementing changes that support a bright and profitable future. Supporting and promoting digital omni-channel shopping for example, will be one key way in which we can reach travellers more directly and earlier on in their Travel Trail journeys.
“At Pernod Ricard, we’ve taken this break in normal proceedings as an opportunity to reimagine the future of of retail within the channel.”
– Craig Johnson, VP Marketing of Pernod Ricard Global Travel Retail
How can spirit brands like Chivas Regal and Martell traverse new demands from consumers in the light of the current ancillary yet diametrically opposing trends in practical consumerism and revenge spending?
It’s important for us to remember that many of the consumer trends we’re seeing at the moment are changing and developing quickly, mirroring the developments of the pandemic. From the global research our in-house data and insights team has pulled over the past few months, we’ve seen that value-driven purchases are taking precedence over luxury purchases. However, we know this will change in the long-term once markets have stabilised. We’re confident that by creatively utilising opportunities that have come to light with the pandemic, we’ll be able meet the demands of consumers, reaching them in new and innovative ways.
In this sense, the upcoming offerings we have for Martell and Chivas both speak to these trends. The end of year limited edition of Martell Cordon Bleu, exclusive to duty free, will be released in a few weeks. Chivas Regal is also introducing the Chivas Extra 13 range, with its selective cask finishes. Travel Retail is an important channel and we want to continue exciting our retail partners and consumers alike, so the Chivas Extra 13 Year Old Rum Cask will be a GTR exclusive as well.
Digitalisation has been a buzz word that has been around for many years, yet many brands in the spirits world have been slow on the uptake. What digital innovation has Pernod Ricard adopted, and could you provide some examples that have been recently applied by Pernod Ricard brands?
Digitalisation is a trend we’ve seen grow exponentially since the pandemic began, but we’ve had digital development plans in our pipeline for a long while. We will soon be introducing the Martell Perfect Door, a new GTR-specific innovation aimed to enhance the in-person experiences of travellers. A digital touchpoint wall feature, the Perfect Door will activate by motion sensors as travellers approach and provide access into the world of Martell via product details and brand heritage. All the information can be initiated by touchless technology, which is asso critical for the health and safety of travellers.
In conjunction with the Perfect Door, we’re also exploring the concept of a robot bartender in an effort to safely reintroduce tastings. Our data and insights show that nearly 40% of travellers would understandably be less willing to sample products in Duty Free in the current climate. A robot bartender would be a world first in Duty Free and would offer a safe and hygienic way to deliver samples to travellers.
What other digital trends do you see spirits brands possibly adopting – blockchain, artificial intelligence, business automation etc – in the coming years? Do you have any examples of how that may be relevant to travel retail?
We anticipate digital trends will continue to develop in line with what keeps consumers feeling safest. We also anticipate these trends will surface in a variety of ways as omnichannel communication increases. Travel retailers will need to overcome barriers to ensure ease of purchasing, and ironing out these barriers, such as ease of use of online platforms, and ease of collection and delivery, will mean the adoption of a wide variety of digital technologies.
What are the toughest challenges and biggest opportunities you see for travel retailers in pushing digital innovation?
The pandemic has led consumers to embrace e-commerce in a way we’ve never seen before. Now, it will be up to travel retailers to work on clear communication strategies that will undoubtably involve a myriad of digital platforms. Successfully educating consumers on what’s available within travel retail, such as the option to click & collect, will help form new consumer behaviours and drive purchasing trends moving forward. As we’ve already seen with tastings, where we find challenges, we also find opportunities. Retailers will have to be prepared to be bold, and experiment with never seen before innovations. By keeping an open conversation going across the sector, we hope that individual brand learnings will inform cross-sector growth.
Where do you see travel retail in 5 years? 10 years?
While there’s no doubt the channel faces challenges ahead, we believe in the power of travel and the global desire we all share to explore and discover new places. There is no question that the future is digital, and if we think in the long-term, which includes bigger picture plans such as sustainability, there’s no doubt the channel will flourish again, hopefully even stronger than before.