Oettinger Davidoff’s travel retail business continues to buck the downward trend of the wider tobacco category, with its investment in the channel paying off.
The business grew by +13% year-to-date to late September, maintaining the momentum of four straight previous years of double-digit increases, as Davidoff Cigars continues to gain market share.
Its plan to drive from “product to brand to experience” is the central focus of its expansion.
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“We are not only seeing growth through new activities,” says Oettinger Davidoff President & CEO Hans-Kristian Hoejsgaard, “we see healthy organic and same-store growth.”
Creating new experiences for the travelling shopper is a core tenet of the approach today, with Davidoff building its own stores, lounges and walk-in humidors amid a big multi-year retail investment programme.
“We want people to relate to the brand through experiences,” says Hoejsgaard.
“We ask ourselves what more we can do in each location to bring the experience alive. That includes showing the craft through our cigar rollers, it can include multi-sensory activities that allow you to smell, touch and feel the products.”
“What we want from partners is the willingness to engage with us in such projects and a long-term commitment. Not all retailers take this approach but more and more of them do. We need a rethink of the model towards ‘theatre per square metre’ and not only sales per square metre.”
By region, Europe remains the stronghold for the Davidoff travel retail business, but Middle East and Asia, and increasingly Africa too, are becoming priorities for development.
The convergence of shopping from online to offline is “changing everything” today, he said at the event. “We cannot distinguish between channels, or worry about which channel is dominant; it is all one [omnichannel].
That is especially the case with the Chinese: over 90% of brands are on WeChat and Weibo, yet airport retail is almost absent.
“For the millennials what is important is not only being connected but about self-discovery; that means stepping inside the brand for an experience.”
(Source: Moodie Davitt Report)