Have you enjoyed your first two years as CEO for Europe and is it possible to pick out some highlights?
I’m enjoying it a lot to be honest! Nuance is a truly global company with a fantastic team with a real passion for retail. Added to that, my role allows me to connect with airport executives from many countries. How can you not enjoy it?
In terms of highlights, it has been a busy few years, but I believe we have achieved a lot, particularly with our new approach to store design. The new strategy is based on the findings of our own exhaustive consumer research and tapping into the extensive knowledge of our brand partners, which has allowed us to clearly identify what shoppers want and desire in terms of products and the overall retail experience.
We firmly believe that this level of detail and understanding has led to the creation of an innovative and exciting retail environment, where every future Nuance store will have its own character and unique twist, whilst setting a new benchmark in terms of quality, innovation and service. This is now being brought to life in our most recent developments at Antalya and Zurich.
What goals did you set when you joined and how do you think you have fared in terms of achieving them?
My first objective was to learn. Second to better understand what airport partners and consumers expected from us, and third, to deliver improvements and make Nuance even stronger in what we do. I believe, together with my team, we are moving in the right direction.
How would you describe your leadership style?
I would describe myself as mostly democratic, with a hint of autocratic! I like to listen, share objectives and create the right conditions to funnel positive energy towards common goals, and when we do make a decision, I expect everybody to get behind it 100% and run in the same direction.
What is your business development strategy?
Expansion requires a solid base, so for the last two years we have focused our efforts on consolidation. We devoted a lot of energy to getting a better understanding of evolving customer needs – both consumers and airports – as well as on enhancing the category management approach with key suppliers. We’ve also looked at our internal processes and organisation to ensure we are better equipped to satisfy those needs. Now, thanks also to renewed shareholder commitment, we are more ready than ever to push forward with our plans for sustainable expansion.
When and where did Nuance open its first airport outlet?
Nuance opened its first airport outlet in Zurich some fifty years ago! Today, in Europe alone, we currently operate over 230 stores in 40 airport locations.
How many of these locations/outlets have been added in Europe this year?
We are investing around €16 million on refurbishing or developing more than 7,500sqm of retail space across the portfolio. To date, we have opened a new Sound and Vision at Hamburg, added five more stores at Toulouse-Blagnac Airport and significantly grown our Swiss operations. In Zurich, for example, we have opened a new Swarovski store, launched the world’s first airport Lindt concept and introduced Switzerland’s first Arrivals duty free shops. We have also opened an arrivals shop at Geneva Airport. Another key development for us has been the launch of our new European duty free concepts at Antalya Terminal 1, where we also refurbished an arrival shop and developed five specialty stores as well.
Surely the last thing people want to do after a long flight home is go shopping in an Arrivals duty free store before they leave the airport?
This is a good point. With regards to Arrivals duty free, it’s true to say that unless it’s located in a country with significant taxes and duties, it will never reach the same sales level as Departures duty free. However, in a world where there’s a growing demand for convenience and where travellers would gladly avoid carrying products on board, Arrivals duty free can certainly deliver additional sales. This is what Nuance and our airport partners in Geneva and Zurich expected, and it is happening.
Can you tell our readers a little more about the interactive technology you have introduced at Antalya Airport?
The new store features an array of innovative interactive elements that have never been experienced in an airport retail environment. The new technology serves the dual purpose of being both informative and entertaining. New eye-catching ‘Boutique’ concepts have been developed for fragrance, cognac, whisky, cigars and chocolate that incorporate the latest touch-screen technology, encouraging more interaction and introducing an element of fun into the shopping experience. In an increasingly tech-savvy world, we feel this approach hits the right note with our customers of all ages.
At the touch of screen customers are able to discover more about the history of whisky, choose a chocolate from a particular region or find out more about the latest offers and new products. Similarly, within the ‘Fragrance Boutique’, customers can use the ‘Fragrance Wheel’ to discover and choose an item based on their specific scents, or use the touch-screen tablet to give product suggestions and information.
Is it possible to say how successful it has proved to date in terms of customer reaction and sales?
Feedback so far has been positive. Our daily observation is that people do interact with these tools, and if they don’t our sales staff or airport colleagues do! We are working more and more with our supplier partners to keep this alive and add new content on a regular basis.
Response from stores sales staff has also been favourable not least because they are now finding it easier to contain the passenger in his journey through the shop. Additionally, and crucially, Nuance has experienced a firm increase in spend-per-passenger since opening the new store, with increases in spend-per-passenger of between 10% and 15% compared to levels sold at the previous store. We have a number of different elements that are encouraging us to further develop this format across airports.
Does this type of innovation make Nuance an industry pioneer?
Over the years, Nuance has been responsible for many firsts in the travel retail industry, with a strong emphasis on delivering a superior customer experience. The state-of-the art retail concepts we unveiled at Antalya Airport is testament to our commitment to setting the standard for airport retail across Europe, whilst continuing to raise the bar for our industry too. Having said this, there’s also a lot of great things that our competitors do, so we are in no way complacent.
In what other areas do you believe Nuance has shown leadership?
I believe we are quite strong in ensuring flexibility, local adaptation, including sense of place, and innovation. We are not afraid to accommodate our airport partners’ needs, although it is always important to consider the end consumer.
What next for Nuance in terms of new concepts or outlet openings over the next 6 to 12 months?
We are working on new gate shop format and a number of speciality retail formats mainly in the accessories and sunglasses categories. In the meantime, together with Lindt we have developed and recently opened a new mono-brand store in Zurich. In December, we also unveil our new duty free stores at Zurich, which encompass more than 2,600sqm of retail space on both levels of the airside central concourse. Expect to see further development of our boutique concepts, along with the use of interactive technology as well as a few other new elements too!
Which of your offerings enjoys the best footfall and penetration levels?
Certainly, the core category duty free store offers the highest penetration and this is expected to continue, but we are also investing and developing our specialty offer, which is an important component of the European business. With further openings planned this year and in 2012, we are confident Nuance will continue to flourish.
Is it possible to say what your biggest selling/most popular items are at airports?
We cannot supply exact figures, unfortunately, but some of our most popular brands by category are Hugo Boss, Chanel, D&G, Paco Rabanne, CK Cosmetics, Botherm lait corporal and Lauder ANR (fragrances; Marlboro, Winston, Camel, Kent, Lambert & Butler (tobacco; Johnny Walker red, Ballantines, Chivas, Smirnoff, Gordons, Bombay, Absolut, Bacardi (liquor; and Lindt Neapolitans and Toblerone (food).
Are traditionally big spending Chinese, Japanese and American passengers your biggest customers?
In Europe this is definitely the case in terms of spend-per-passenger, although in total sales, they still have some way to go. The exception is our operation at Antalya in Turkey, where Russian customers generate the highest sales.
What do you consider good customer service?
We take customer service very seriously because it is absolutely the key to everything. As a retailer, this is and should be what drives us to innovate and do better. For me, there are a number of factors that are central to offering not just good, but superior customer service. These include creating a great shopping environment; ensuring you have the right product range as well as the right price-point; and value for money. This has to be underpinned by knowledgeable and motivated team members who can deliver consistently great service to our customers.
How is the company’s commitment to good customer service reflected in terms of staff training?
This is something we also take extremely seriously, and support our team members with a range of tools and resources designed to help them realise their full potential.
With regards to ensuring good customer service, we have developed a number of specific programmes such as our highly effective ‘best selling’ training programme, which enhances selling capabilities for operational team members. Over the past three years, over 2,000 frontline sales staff in Europe have completed this three-day training programme. This means that our sales teams are fully equipped to respond to the changing demands of our dynamic business.
But training is not enough; we have also put checks and balances in place through our global ‘mystery shopping’ programme, now in its sixth year, which further helps us maintain superior levels of service across our business.
How do you ensure that you hold on to good staff?
Like any manager, I always wonder if we do enough to hold on to good staff, though we are fortunate to enjoy in many operations a below-industry turnover. It is true to say a great business is founded on great people. Attracting, developing and retaining talent is vital to our long-term growth, so it is crucial that we continue to support and invest in our biggest asset – our team members.
Is Nuance making the most of the revenue earning potential of the Internet?
The Internet is a double-edged sword really, as consumers tend to browse and compare prices, and we all know that airport retail is not the cheapest channel due to the huge investments airport have to make in developing their infrastructure. However, I believe that this is something we have to embrace, as long as we do it well. For this reason, I envisage tighter co-operation with airport partners to ensure that a specific model can be jointly developed that incorporates a degree of flexibility in pricing. This is something that we are actively discussing with some of our airport partners.
Isn’t it almost impossible to fail as an airport retailer as airports have a captive audience and are open 365 days of the year?
They may be a captive audience, but that doesn’t necessarily offer a passport to success. There are a number of complexities to consider, such as managing the airport’s service and financial expectations, which requires specific competences to survive in this industry. To those without strong airport retail competencies who believe it is impossible to fail I would say…come and win the next tender!
How has the global economic recession and the LAGs rules impacted on duty free sales at airports?
In Europe, we haven’t yet reached pre-recession levels, though traffic is growing steadily. In our business model, a slight decrease in sales has a strong impact on the bottom line.
So far, 2011 seems to be going well despite a number of open challenges, and for us, in Europe, currency fluctuations continue to play an increasingly important role with strengthening currencies such as the Swiss franc impacting significantly on customer behaviour in this important market. We are actively working to face these challenges, through the intensification of our commercial efforts and seeking a more co-operative approach with our trinity partners (airport and suppliers).