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PASSENGER SERVICES Last modified on October 22, 2013

The last word - Erik Juul-Mortensen

Tax Free World Association (TFWA) president, Erik Juul-Mortensen, talks to Airport World about all things retail.

Factfile

Name: Erik Juul-Mortensen 

Job title: President, Tax Free World Association (TFWA) 

Nationality: Danish

Time in aviation industry: Over 30 years

Best known for: Founding member of TFWA 

Little known fact: I’m Norwegian, but was actually born in Sweden and educated in France.

What will the travel retail industry look like in 2030?

I believe that by 2030 the various geographic regions will have become more equal in development. Europe will have grown, but not at the same pace as others. The Americas will have grown considerably and not only South America, which we describe as a growth area today, but the US itself will have seen substantial growth. 

I believe that in Asia Pacific, China will continue to be important, and the same will apply to other countries and areas which are important today. Japan will be back on a healthy growth path. However, other countries such as Indonesia, Vietnam, and India will have grown to become major factors too.  

The Middle East will also continue to see successful growth, and I believe that by 2030 we will also see some of the huge potential in Africa materialising. All this will have been brought about by a continued growth in economies across the scale and a continued healthy growth in international travel.

What big – but realistic – changes would you ask governments to make to help travel retail?

To start accepting that the duty free and travel retail market in airports available to checked-in passengers with a boarding pass, is a unique market with its own demands and requirements different to those that apply in domestic markets. This can take many shapes from opening hours, display and merchandising to labelling requirements of products.   

What could airports do better in terms of helping travel retail operators more?

Airports are already increasingly providing support to travel retail operators. However, in order to maximise travel retail and thereby increasing the crucial contribution which non-aeronautical activities such as retail make to the airport’s income, it is vital that airports are open and flexible in their planning and that travel retail is included in airport planning at a very early stage to secure the best possible retail landscape with excellent flow of passengers. 

It is also vital that airports ‘deliver’ passengers smoothly, quickly and in a good mood after check-in and security, and with passengers not already stressed and anxious after a stressful and lengthy security screening process.  

A lot of passengers still only travel once or twice a year and the security screening process can at times be lengthy, frustrating and also stressful for passengers less used to the process. Such passengers will not necessarily be in a mood to shop, but will instead head straight for their departure gate.  

Earlier this year, you talked about forming a new Travel Retail World Council to lobby governments more effectively. How is this project progressing and what do you hope it will achieve?

The plans are progressing well and the TRWC is slowly taking shape. The plans have been discussed throughout the year with regional and national trade associations around the globe as well as with other industry stake holders and a lot of valuable input has been received. The format and structure of the Council are being adapted to reflect the input and the Council should hopefully be ready for launch at the upcoming annual TFWA World Exhibition & Conference in October in Cannes.   

The objective of the Council is, among others, for it to represent, protect and help build the global duty free and travel retail industry by providing appropriate support to all regional industry associations, and where required, be responsible for development and coordination of industry policies on specific issues so that the industry speaks with one voice. We would also hope that such a body could help enhance awareness, image and importance of the global industry. 

What can we expect from the TFWA World Exhibition in Cannes this October?

The 29th TFWA World Exhibition and Conference will provide an excellent forum for discussion, negotiation, product review and education among the many stakeholders in the global duty free and travel retail community. 

We expect, as always, a full house on the exhibition floor with around 10% of exhibitors being new to the trade show or returning after an absence. This element of novelty is very important as the brands exhibiting in Cannes reflect the dynamic nature of the business as a whole. Duty free and travel retail stores must not only keep up with contemporary trends but, indeed, anticipate them. Many of our exhibitors use this forum to launch new products and travel retail exclusives which keep the offer fresh and exciting for the traveller. 

Keynote speakers will include Lord Sebastian Coe; IAG CEO, Willie Walsh; and John Gerzema – a consultant, author and regular contributor to TED Events, a programme of conferences for thought-leaders under the slogan ‘ideas worth spreading’. 

How important do you think an airport’s retail/F&B offering is to its passenger satisfaction levels?

On arrival at an airport most people are tense about flight times, security and so on, and it is not until they get through the formalities and have a moment to relax airside that they can start to enjoy their trip. A good cup of coffee and a tasty sandwich or a meal will set them up for the rest of the day and help them to enjoy the whole experience. Air travel is exciting; it should be enjoyable too!

It is crucially important, therefore, that the F&B offer is of high quality and varied to suit the many customers who travel through our airports. My impression is that much of the food on offer in European and American airports is west-centric and does not cater to ethnic diversity so there is perhaps room for improvement there.

With regards to retail, besides making an enormous contribution to the coffers of the airport, it also makes a significant impact on the quality of the passenger’s experience. People love to browse in shops; they also love to purchase, but only when the product offer and the price are right. Given the mismatch between passenger footfall and purchasing trends in most airports, we clearly have work to do on converting more passengers into customers.  

We cannot trot out the same selection that they find on their local high street. Some brands are highly skilled at matching product lines to customers with special promotions, exclusives and products with a sense of place. Some retailers stage fabulous displays, are open to exciting promotions and work closely with brands to maximise retail potential. But overall, there is still much work to be done.

What does a retailer want from a good airport?

Retailers want landlords to provide high quality retail facilities with excellent location, layout, signage, lighting, climatic control and atmosphere at reasonable rents and of realistic contract contents and duration. 

In general, do you think airports do retail well?

Some airports do a fabulous job – and there are very many examples I could mention looking across the globe. We all have our favourites and I am sure you know them as well. Some have been showing a phenomenal development and others are developing more slowly.

How has the ‘one bag rule’ affected travel retail?

No matter how attractive the products on offer or how reasonable the prices, if the passenger will be, or believes he may be, charged for carrying his airport shopping onto the aircraft because it does not fit into his single piece of hand baggage, then he simply will not shop! 

Some airlines have instituted this one-bag rule already so the passenger is confused – will he or will he not be charged, will the purchase be confiscated or not, can he shop or not. It is this confusion as well as the actual hand baggage limit that is so damaging to the duty free and travel retail business.

 

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