THE GLOBAL TRAVEL RETAILER 2018 - Dufry
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THE GLOBAL
TRAVEL RETAILER
2018
DUFRY GROUP – A LEADING GLOBAL TRAVEL RETAILER DUFRY AG (SIX: DUFN; BM&FBOVESPA: DAGB33) IS A LEADING GLOBAL TRAVEL RETAILER OPERATING OVER 2,200 DUTY-FREE AND DUTY-PAID SHOPS IN AIRPORTS, CRUISE LINES, SEAPORTS, RAILWAY STATIONS AND DOWNTOWN TOURIST AREAS. DUFRY EMPLOYS OVER 29,000 (FTE) PEOPLE. THE COMPANY, HEADQUARTERED IN BASEL, SWITZERLAND, OPERATES IN 64 COUNTRIES ON ALL FIVE CONTINENTS.
FOCUS
STORY
MEMORABLE CUSTOMER
SHOPPING EXPERIENCE WITH
THE NEW GENERATION STORE:
read the focus story on the digital strategy on page 20 – 55.
3
4
CONTENT
1
WELCOME
Dufry today 8 – 9
Milestones 10 – 11
2
THE GLOBAL TRAVEL RETAILER
Dufry at a glance 14 – 15
Our strategy 16 – 25
3
WHY DUFRY?
Customers 28 – 31
Retail expertise 32 – 47
Channels 48 – 49
Airport authorities & landlords 50 – 51
Suppliers 52 – 53
Our people 54 – 55
Logistics 56
IT Solutions 57
4
LOOKING FORWARD
Global presence 61 – 62
Group Executive Committee 66 – 67
Community engagement 68– 73
Awards 74
5
1 WELCOME
Welcome
DUFRY TODAY
Present in
64
countries
50,000
Operates at over
390
locations
products
Our assortment
of reference items
from vendors globally
Over Over
32,000 2,200
employees shops
Representing over Dufry opens a new
70 different nationalities shop every week
8
Welcome
2.5 billion
Over
1,000 potential customers
suppliers
Over
20 %
market
share
in airport travel retail
Over
Turnover
437,000 m 2
multiplied
of commercial space
by 12 and
EBITDA by
20
since 2003
9
Welcome
MILESTONES
Dufry has more than 60 years of travel retail experience – just one of the factors that has contributed to
the company’s successful position today as leading travel retailer worldwide.
Dufry founded in 1865 The first duty-free Listed on the Swiss Acquisition of one of
in Basel, Switzerland shop at Le Bourget, Stock Exchange the main travel retail
Paris. Dufry was (DUFN) on the 6th operators in the Carib-
the second operator of December bean, based in Puerto
to ever open a Rico, with 23 shops in
duty- free store Puerto Rico and other
Caribbean locations
1865 1952 2005 2007
1948 2004 2006 2008
Introduction of the Advent International Acquisition of major Acquisition of 100 %
duty-free wholesale becomes the majority travel retail operators of Hudson Group (USA),
business shareholder. Dufry in Brazil. Listed on the only national
decides to focus its the stock exchange in newsstand brand in
core business on Sao Paulo (Brazil) and the industry
travel retail with the Luxembourg (BOVESPA;
vision of becoming a DUFB11)
truly global company
10Welcome
Merger of Dufry Ltd Acquisition of Regstaer Acquisition of Dufry renews an excep-
with Dufry South Group, the leading The Nuance Group tional amount of exist-
America Ltd. Acquisi- travel retail operator in Switzerland ing concession con-
tion of the Colombian in Russia, in a joint tracts and is included
Emeralds International venture in the Swiss Leader
brand, based in the Index, compiled of the
Caribbean 30 largest Swiss Cor-
porations listed on the
SIX Swiss Exchange.
2010 2012 2014 2016
2011 2013 2015
Acquisitions of retail Acquisition of 100 % Dufry acquired World
companies in Argentina, of the leading travel Duty Free. The acquisi-
Uruguay, Ecuador, retailer in Greece, Folli tion strengthens Dufry’s
Martinique and Armenia, Follie. Expansion in position in key European
including 24 duty-free Asia, with new stores markets such as Spain –
shops across 10 airports in China, South Korea,
Taiwan, Bali and
including the Mediterra-
nean region – and the UK;
2017
Sri Lanka North and Latin America Dufry introduces a new retail con-
as well as the Middle East cept the ‘New Generation Store’,
and Asia. featuring extensive and innovative
use of digital applications in order
to increase passenger communica-
tion and drive sales. New Genera-
tion Stores are already in operation
in Melbourne, Madrid, Cancun and
Zurich. Going forward, Dufry plans
to unveil several shops around the
world under this new concept.
112 THE LEADING TRAVEL RETAILER
The Global Travel Retailer
DUFRY
AT A GLANCE
TURNOVER GROSS PROFIT
IN MILLIONS OF CHF IN MILLIONS OF CHF MARGIN
8,800 5,000
8,400 4,900 71 %
4,800 70 %
7,800
4,500 69 %
7,200
4,200 68 %
6,600 3,900 67 %
6,000 3,600 66 %
5,400 3,300 65 %
3,000 64 %
4,800
2,700 63 %
4,200
2,400 62 %
3,600 2,100 61 %
3,000 1,800 60 %
2,400 1,500 59 %
1,200 58 %
1,800
900 57 %
1,200
600 56 %
600 300 55 %
0 0 54 %
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
EBITDA¹ NET EARNINGS
IN MILLIONS OF CHF IN MILLIONS OF CHF
1,060 220
1,020
200
960
900 180
840 160
780
140
720
660 120
600
100
540
480 80
420 60
360
40
300
240 20
180 0
120
- 20
60
0 - 40
2013 2014 2015 2016 2017 2013 2014 2015 2016 2017
¹ EBITDA before other operational result
14The Global Travel Retailer
NET SALES BY PRODUCT CATEGORY 2017
5 % OTHER
32 % PERFUMES
2 % LITERATURE & PUBLICATIONS
& COSMETICS
3 % ELECTRONICS
11 % TOBACCO
GOODS
14 % LUXURY
GOODS
NET SALES BY DIVISION 2017
22 % SOUTHERN
21 % NORTH EUROPE AND AFRICA
AMERICA
17 % FOOD,
16 % WINE CONFECTIONERY
& SPIRITS & CATERING
21 % LATIN
AMERICA
26 % UK, CENTRAL AND
EASTERN EUROPE
10 % ASIA, MIDDLE EAST
AND AUSTRALIA
NET SALES BY CHANNEL 2017 NET SALES BY MARKET SECTOR 2017
3 % CRUISE LINERS & SEAPORTS
3 % RAILWAY STATIONS & OTHER
3 % BORDER, DOWNTOWN 38 % DUTY-PAID
& HOTEL SHOPS
91 % AIRPORTS 62 % DUTY-FREE
15The Global Travel Retailer
OUR
STRATEGY
CREATING VALUE
THROUGH
PROFITABLE
GROWTH
Over the last decade, Dufry emerged from a small world of travel retail, while providing them with de-
player to the leading position in travel retail, an in- tailed product information – increasingly supported
dustry with a turnover of USD 64 billion in 2016. by the latest digital technology.
Through a combination of organic growth and acqui-
sitions, we have reached a market share of 13 % in Equally important for Dufry is to provide travelers with
travel retail. When looking more specifically at air- a singular sense of place. Our shops will combine the
port retail, which makes up more than 90 % of our well-known assortment of global brands and products
business, we increased our share from 3 % in 2005 to with a special local touch which differentiate our shops
currently over 20 %. worldwide, wherever they may be – at airports, sea-
ports, railway stations or borders – and irrespective
Our leading position is the result of a remarkably rapid of whether they are duty-free or duty-paid. A selec-
expansion. In the last ten years turnover grew on av- tion of our main retail concepts can be found from
erage by 19 % in constant currencies. Our strategy is page 30 through 46 of this report.
founded in our goal to best serve our clients. By de-
veloping and improving our services at shop level and
throughout the value chain, we aim to continuously im- We offer a
prove their shopping experience. One topic, on which
we are currently working particularly hard, is the dig- memorable
italization of our shops, which aims to make shopping
at our stores an experience to be remembered. shopping
Focus on customer experience and retail excellence experience.
generates value for all stakeholders
Dufry, and travel retail in general, are at the center of Demographics play a big role in our business and
three very important and distinct industries: retail, air- changes in customer profiles and preferences can oc-
port and consumer goods industries. Addressing the cur rapidly. For this reason Dufry sets high priority on
different requirements from this position is critical to consumer intelligence, both from internal operational
generate value for all our stakeholders. Nevertheless, information and through external research. We con-
our approach is simple: we focus on best servicing our stantly track customer behavior at our shops and use
customers. our market insights to continuously fine-tune our of-
fering and not only match but exceed the expectations
This clear focus ultimately creates a winning formula of our clients.
for all stakeholders: by providing customers with an
unrivalled shopping experience; by opening the doors To suppliers we offer the biggest access to the ever
for suppliers to a fast growing group of affluent cus- more attractive travel retail, through our more than
tomers; by fully exploring the commercial potential for 2,200 shops in over 390 locations in 64 countries. In
landlords; and ultimately by creating value for Dufry addition to the business that we can generate with the
shareholders. suppliers, our shops offer them an unrivalled world-
wide window display to promote their brands and
For our customers, we aim to create a memorable products to an affluent consumer segment.
shopping experience by constantly improving our
shops and developing our best-in-class retail formats, Dufry works closely with brands to offer customers
and by creating innovative promotions and marketing the right products at the best price, giving special at-
initiatives. Our team of sales representatives will re- tention to promotional campaigns and marketing ini-
ceive travelers with a big smile introducing them to the tiatives at our shops.
16The Global Travel Retailer
Landlords get the highest productivity of their retail tive helps to accurately evaluate opportunities, gives
areas, maximizing their revenues when working with us a clear understanding of the local market charac-
Dufry. We offer the full range of retail concepts which teristics and allows to closely collaborate with land-
are adapted and customized to the specific location. lords and other local business partners to effectively
Moreover, Dufry provides access to the most compre- develop new businesses.
hensive portfolio of global and local brands. In a nut-
shell, landlords benefit by optimizing their overall busi-
ness and by offering attractive commercial spaces to Diversification
their passengers.
is a key aspect
Geographic diversification to maximize
opportunities and mitigate risks of our strategy.
Dufry is today not only the market leader in travel re-
tail, but by far also the most diversified industry player, Moreover, being geographically diversified consider-
with operations in 64 countries, on all five continents. ably mitigates risks generated by external impacts in
Geographic diversification is of key importance to our single markets or regions. This diversification is best
strategy for a number of reasons: first, it is the best illustrated by the share any individual concession has
way to benefit from the ever growing number of trav- in the total Group. With the largest concession ac-
elers worldwide; second, as a global organization, we counting for about 7 % of our business, and with the
can efficiently develop new business opportunities; ten biggest ones representing less than 35 % of 2017
third, major global brands can offer their products via sales, Dufry has no significant exposure to single con-
a truly global travel retailer and fourth, it is a very ef- tracts.
fective approach to mitigate risks.
Profitable growth and focus on returns
Our global presence allows us to quickly and better At Dufry, we have a disciplined financial approach in
evaluate new projects nearly everywhere, capitalizing all our new projects, be it organic or acquisitions. We
on the expertise of our local teams. This local perspec- carefully analyze every project or significant invest-
GLOBAL PRESENCE
A full list of locations is available
on pages 60 and 61
17The Global Travel Retailer
ment with detailed projections and with a view on min- Despite the consolidation seen in travel retail over the
imum return requirements. This implies a careful as- last years, the industry remains relatively fragmented,
sessment of the original investment needed to build with the top 10 players controlling just over half of the
and set up the store as well as the cost structure and market and the remaining market being covered by
profitability of the business once it is operational. This small and medium sized operators. We expect to be able
culture of focusing on returns and cost control has al- to capitalize through M&A on such small and mid-sized
lowed us to grow our business profitably and to cap- opportunities that may arise in the future, with a focus
ture opportunities in many different markets. on Asia and the Middle East or bolt-on acquisitions that
complement our presence in existing markets.
Further to the steady increase in passenger numbers
over time and our financial discipline, we minimize Offering the best retail experience for international
business risks by implementing a highly variable cost and domestic travelers in multiple channels
structure. These defensive characteristics help to pro- Dufry currently generates about 62 % of its revenues
tect the business in case of downturns, which usually in duty-free and 38 % in duty-paid operations with both
are local, thus providing a solid and resilient profile. sectors continuing to offer substantial growth opportu-
nities. At Dufry, we traditionally have had a strong proj-
High free cash ect pipeline, which has allowed us to grow our retail
space in different channels of both sectors. On the duty-
flow generation. free side, the airport channel is expected to continue to
be the largest and fastest growing part of our business.
In addition, we do see additional potential by further de-
The combination of Dufry’s solid profitability and the veloping the cruise ship business, duty-free border shops
low capital intensity results in high levels of cash gen- and downtown duty-free in selected markets.
eration, particularly for a retailer. With the current size
of the Group and the full implementation of our
new business operating model, we expect to further Passenger growth
improve our cash flow generation capability. Going
forward we will use the cash generated to return it to is a key driver
shareholders as well as to do small or mid-sized ac-
quisitions. in travel retail.
Dufry’s growth path going forward The duty-paid sector has a considerable development
Dufry has achieved an impressive 19 % CAGR turnover potential in airports as well, since the expected growth
growth in the past ten years (on constant exchange of domestic passengers is similar to the one for inter-
rates), to which organic growth contributed 4 % and national travelers. Furthermore, this sector is even
acquisitions 15 %. more fragmented than duty-free, thus offering attrac-
tive new expansion opportunities.
While acquisitions added most to our growth in the
past, we expect organic growth to play a more impor- One of our main initiatives is the international roll-out
tant role going forward. Supported by the growth of of our successful duty-paid retail concepts, Hudson
passenger numbers – the most important driver of our and Dufry Shopping, which have been implemented in
business – we will focus on driving sales through the im- selected markets and which have the potential to be
plementation of best-in-class shop concepts and new deployed further. Hudson is a well-established conve-
digital technologies which will be complemented with nience store concept that has been very successful in
the proven marketing and promotion activities that we North America in the past 30 years and which we have
have used and fine-tuned over the years. Furthermore, deployed in 15 countries so far since 2009. Dufry
we expect to grow through additional retail space, be it Shopping is a duty-paid concept that offers a high
through expanding in existing locations or by winning quality assortment of international brands in an exclu-
new concessions in further airports or new businesses. sive setting, similar to a duty-free travel retail store,
but targeted to domestic passengers. In 2014 we ran
18The Global Travel Retailer
a pilot of Dufry Shopping in Brazil where we achieved To maximize the attraction to enter our stores we want
strong first results and was quickly expanded to other to create additional value by providing a superior cus-
7 locations in the country. The newest and first Dufry tomer experience and a more efficient business. Thus
Shopping store outside Brazil was opened in 2017 at the use of digital and online technology will change our
Las Vegas McCarran International Airport. Based on business in three major areas: how we communicate
the positive results achieved so far, we are convinced with our customers, how we sell products and how we
that this concept can also be successful in other mar- organize our processes and the value chain.
kets globally.
Our strategy is supported by strong and resilient Digitalization
industry fundamentals
Travel retail is a fast growing industry driven by ongoing offers us new
growth in number of passengers.
possibilities
Global passenger numbers are currently expected to
grow by at least 6 %, per annum, which translates into and opportunities.
a potential of over 500 million new customers for the
industry. This intrinsic growth perspective is a unique In detail this means that we will firstly be increasing
advantage of travel retail compared to any other lo- personalized communication with customers at home,
cation-based retail channel. Industry specialists ex- during their whole journey, and in particular when they
pect this trend to continue, thus providing a resilient are in the proximity of our shops. Secondly, we will dig-
driver for travel retail going forward. The growth po- italize the shops to increase the conversion rate and
tential is further increased by the development of in- to simplify in-store processes, such as product con-
novative commercial concepts with landlords and sulting, payments, individual promotions etc. Thirdly,
brands alike. Dufry’s ambition is to deliver excellence we will further improve customer services and individ-
in execution while driving change in the way the travel ualize product offers for specific customer profiles.
retail industry operates. We believe that being market See also the Focus Story on our digital strategy on the
leader also means to be at the forefront of this devel- following pages.
opment.
Seizing the opportunities of digitalization LONG-TERM PASSENGER FORECAST
As in many other industries, digitalization will change IN BILLIONS OF PASSENGERS
the way business is done in travel retail. At Dufry, we
are excited about the new possibilities and opportuni- 24
ties that new technologies offer. Therefore digitaliza-
tion is and will be a key element in our strategy going 20
forward.
16
For Dufry, digital technology represents a tool to sup-
port and evolve a strong business model to the next
12
level to continuously improve our offer to the captive
audience we have in travel retail. As customers come
to our stores, while they are waiting to board the plane, 8
train, ship or are enjoying their stay in a casino or ho-
tel environment, they also enjoy strolling through the 4
shops. Therefore sales are generated by impulse deci-
sions and immediate needs, which to a very high ex-
0
tent protect travel retail from direct competition by
2017 2021 2026 2031 2036 2040
online platforms.
Source: ACI 2017 / World Airport Traffic Forecast 2017 – 2040.
19The Global Travel Retailer
In 2017, Dufry opened
the first three New Gen-
eration stores in Madrid
(Spain), Melbourne
(Australia) and Cancun
FOCUS (Mexico), followed by
Zurich (Switzerland) in
STORY
early 2018. The new gen-
eration store interacts
with the passengers
travelling through air-
ports according to their
profiles during the day
and communicates with
them in their respective
language, while offering
them their favorite
brands and promotions.
MEMORABLE
CUSTOMER
SHOPPING
EXPERIENCE
WITH THE
NEW GENERA-
TION STORE
20The Global Travel Retailer
21The Global Travel Retailer
FOCUS
STORY
NEW
GENERATION
STORES
THE ULTIMATE
EXPERIENCE
USING DIGITAL TECHNOLOGY
TO ENGAGE WITH CUSTOMERS
The newest trends in customer be-
havior and shopping habits show
that today’s customers want to en-
joy memorable shopping experi-
ences which increasingly must pro-
vide a sense of individuality and
tailor-made offers.
Staying
connected
with
customers.
To best fulfill these dynamic and Dufry makes use of
several tools to enhance
fast-changing requirements and to the shopping experience
ultimately drive sales, Dufry is accel- inside and beyond the
erating the use of digital technolo- stores, including our
gies in three ways: by increasing the reserve and collect
service, and our loyalty
number of communication touch- program RED by Dufry.
points to stay connected with cus-
tomers during the whole span of
their trip; through the digitalization guage, offers and promotions to In this context Dufry already
of the shops to improve the flexibil- match the passenger profiles ac- opened four new generation stores
ity & targeting of communications to cording to the flight schedules and so far (Madrid, Melbourne, Cancun,
customers; and finally, by increasing the peak arrival / departure times of Zurich), all of them featuring an ex-
online services for customers such specific nationalities and airlines. By tensive use of digital technology
as Reserve & Collect and the loyalty addressing three core principles – to communicate with the changing
program RED by Dufry. communication, entertainment and nationalities and customer pro-
emotion – we can elevate the in- files traveling during the day by
New Generation Store – store experience in our new gener- engaging all five of senses – express-
featuring individualized in-store ation stores by delivering exciting, ing how the brand looks, sounds,
communication engaging and appealing communi- smells, feels and even tastes.
To communicate flexibly and to cations. At the same time, we pro-
adapt our marketing to specific na- vide brand partners with an unri-
tionality groups at airports is a key valled opportunity to feature their
success factor to attract custom- brands in a very unique immersive
ers to the stores. With the use of concept in an exclusive environ-
the digital signage technology, in- ment involving digital messaging
store communication can be varied and display, promotional activities
throughout the day to match lan- and event possibilities.
22The Global Travel Retailer
Dufry’s new generation
store elevates the shop-
Staff digitalization as well as travel retail exclusives and
ping experience to a
A sales tablet has been developed best sellers. Last-but-not-least cus- whole new level as the
for use by our in-store specialists tomers are even invited to decide shop dynamically adapts
to help guide customers directly to when to pick up their selection on to customers through
its digital elements. At
the products they want to buy. Pro- departure, or if available, upon re- the same time it offers
viding an enhanced customer ser- turn in the arrival shops. The Dufry more possibilities for
vice on the shop floor, the tablet corporate website www.dufry.com/ suppliers to advertise
their brands.
offers detailed information on our shopping leads the customer di-
assortment in a range of languages. rectly to the individual Reserve &
With the information at the finger- Collect shop homepages where the
tips of both sales person and cus- service is available and offers addi-
tomer, it provides a new tool to tional information. Reserve & Collect
interact with the customer and a is currently available in 47 locations.
real opportunity for up-selling and
cross-selling.
Reserve & Collect Services
around the globe
Dufry has considerably expanded
the number of shops offering Re-
serve & Collect services globally.
Customers can explore individual
store offerings and plan their pur-
chases at leisure by reserving their
favorite products while they are still
at home. Apart from saving time
when being at the airport, they can
benefit from our promotions, learn
about key store events, new launches
23The Global Travel Retailer
47 Reserve & Collect is currently
available in 47 locations.
RED by Dufry – unique
customer benefits
Dufry’s loyalty program is tailored
to travelers and offers our custom-
ers attractive benefits such as free
parking, lounge access and fast
track privilege just to name a few.
With the dedicated RED by Dufry
app, customers will receive individ-
ualized offers and promotions
when they are at the airport, allow-
ing them to benefit from special of-
fers and travel related services
such as flight times and allowance
updates for all countries world-
wide. RED by Dufry has its own ded-
icated website www.redbydufry.
com/benefits/ which offers de-
tailed information on our loyalty
Sales representative making use of digital tools to enhance customer service.
program and the amazing customer
benefits it includes.
Magic mirror CONTINUOUS DEVELOPMENT
Individualized Magic mirror is an interactive fit-
ting-room mirror that acts as a per-
As technology development moves
at such a fast pace, we are always
marketing sonal stylist, suggesting matching
accessories to go with the items of
looking for the next technology step
or trend that we can utilize in-store
and clothing being tried on by the shop-
per. This is used for a range of prod-
to engage and entice our customers
to actively shop. We work with mul-
promotions. ucts from shirts or ties to watches,
sunglasses and even make-up.
tiple technology agencies to ensure
we are able to take advantage of
global technology trends, thus stay-
FURTHER ENHANCING Assistant hologram ing at the forefront of innovation.
CUSTOMER EXPERIENCE The digital assistant hologram is a
Dufry has already a long track-re- “virtual assistant”, which can inter-
cord on enhancing customer expe- act with travelers in different lan-
rience with contentainment initia- guages and reinforces the stores’
tives and shop events to make marketing communications via
airport shopping a unique experi- video content that highlights spe-
ence. Among the most successful cific promotional items.
ones we would like to highlight two
examples:
24The Global Travel Retailer
One element of Dufry’s
digitalization strategy
is to use digital technol-
ogy in order to enhance
service levels inside
the stores. Sales repre-
sentatives equipped
with tablets are able to
provide detailed infor-
mation about our prod-
uct offering.
DUFRY’S DIGI-
TALIZATION
STRATEGY WILL
MOVE TRAVEL-
LERS SHOPPING
EXPERIENCE TO
ANOTHER LEVEL
253 WHY DUFRY?
Why Dufry CUSTOMERS BEST PRODUCTS AND EXCLUSIVE SERVICES Next level shopping experience – New Generation We understand the needs of travelers and therefore Store we make sure that our personnel is well trained and Dufry’s goal to provide customers with a unique shop- can give our customers the best service when they are ping experience has reached a new level with the open- at our shops. ing of the first new generation stores in Madrid, Mel- bourne, Cancun and Zurich. Customers can experience a completely new shop design, which changes its ap- We understand pearance several times during the day. The display is done in different languages and changing brands to the needs best fit the customer profile present at the airport at any given time of the day. of travelers. Much more than just retail In connection with the launch of the new generation Our aspiration at Dufry is higher than just selling prod- stores, our employees are supported by digital tablets ucts. Our well trained and motivated sales represen- to provide customers with extensive product informa- tatives will help you navigate through a large variety tion in several languages and in the near future also to of prestigious brands to find the right product for you. offer payment service without need to go to the tills. 28
Why Dufry
Pre-order at home – collect at the airport True global return guarantee
To provide convenience is a priority for Dufry: this is Dufry is the only global travel retailer in the industry
why we want to help our customers well beyond our to offer a true global return guarantee. No matter
shops. Even before they start their trip, travelers can if you purchased something in Melbourne, Bali, St.
pre-order products through the internet and collect Petersburg, Barcelona, São Paulo, Las Vegas or else-
them conveniently at the airport. Our “reserve-&-col- where in any of our shops in the world: if there is
lect” service is already available in 47 locations around a problem with any product that you purchased at a
the world. New locations are constantly added – the Dufry store, we will replace, refund or exchange your
full list is available on our website under: product within 30 days. Dufry’s customer service rep-
www.dufry.com/en/shopping/reserve-collect-service resentatives, who can be reached in several languages
by phone, email or chat, attended over 169,000 cus-
We want to help tomers from 141 countries in 2017. Dufry’s customer
services team and policies guarantee full customer
our customers satisfaction. That service is another example of living
our commitment to an outstanding customer experi-
well beyond ence day-by-day.
our shops.
29Why Dufry
100
RED by Dufry
Dufry loyalty program RED
by Dufry is already available
in 100 locations.
suppliers when using the space we make available in
RED by Dufry goes beyond the typical loyalty program. our stores for advertising and promotions. When it
It works primarily through a mobile application and be- comes to product labeling, we request our suppliers
sides the traditional earning of points the program of- to comply with the regulations of all the locations
fers exclusive advantages such as discounts at Dufry where such product is going to be sold. Given that
stores and airport benefits. Additionally, members of our stores operate in an environment where we serve
the program are identified once they are at the airport many nationalities speaking different languages ev-
through the “RED by Dufry” app and will receive noti- ery day, we are proactively engaged with our indus-
fications on promotions and offers tailored to their try trade associations in finding an off the label so-
preferences. The RED by Dufry program is already live lution.
in close to 100 locations and is continuously expanded
to further locations worldwide. A full list of the loca-
tions, where RED by Dufry is implemented can be Dufry commits to
found here: www.redbydufry.com/benefits
comply with
RED by Dufry is all regulations
already available on advertising
in close to and marketing.
100 locations. Customer Privacy
Management and protection of customers’ private
Dufry’s excellence confirmed by important awards data in those processes that involve handling of client
In 2017, Dufry’s customer focus and retail excellence information is an area of importance for Dufry. As a
has been recognized by different industry partners requirement of customs authorities and for contrac-
again. A complete list of the 2017 awards is displayed tual reasons, the customer’s boarding pass is scanned
on our website www.dufry.com/en/company/our-awards with each duty-free sale transaction to check the pas-
senger’s destination. The information is scanned on a
Customer satisfaction & safety no-name basis and limited to identify nationality and
Customer satisfaction and safety is our first priority. final destination.
As a fundamental first step we ensure that all products
strictly comply with applicable legislation and health
and safety requirements. Dufry complies with legal re- Customer data
quirements at every location we operate and takes a
proactive approach working with governments and reg- protection
ulators to clarify any concerns. In this context, Dufry,
through active membership of the industry’s trade as- is important
sociations, has helped shaping relevant and robust
Codes of Conduct for the travel retail industry (e.g. UK for Dufry.
Code of Conduct on disruptive passengers; UK Code
of Conduct on VAT; ETRC Code of Conduct on Sale of Additionally, in some countries, the company offers
Alcohol; DFWC Code of Conduct on Sale of Alcohol). Reserve & Collect and RED by Dufry services, for
which additional personal information from custom-
Customer Communications ers is requested. In order to protect and ensure that
In its advertising and marketing initiatives, Dufry any customer data is handled correctly, Dufry has a
shows the same responsible stance that it shows in number of systems and security processes in place,
all its other activities. We commit to comply with all including a robust IT security system, a data protec-
regulations and rules in all our advertisements and tion and CCTV policy, specific trainings for employees
published communications in the countries where we dealing with personal information as well as internal
operate. We also expect the same behavior from our procedures which follow relevant laws and regula-
30Why Dufry
390 Dufry operates
390 locations
in 64 countries
worldwide.
tions. In the case of the above mentioned Reserve &
Collect and RED by Dufry services, the company ap-
plies high security standards to safeguard and protect
personal data and to ensure compliance with the dif-
ferent legal frameworks.
Moreover, the Group also undertakes internal Data
Protection Audits and intrusion tests, while quarterly
meetings are held to discuss and improve the protec-
tion of customers’ personal data. For any customer,
employee or third party who wishes to report a griev-
ance or who has questions regarding Dufry’s data pri-
vacy, there is a specific email address to contact the
company and inquiries are coordinated by the Inter-
nal Audit, Loss Prevention and ERM department.
31Why Dufry
RETAIL EXPERTISE
CUSTOMER-FOCUSED ACROSS THE OPERATIONS Dufry’s duty-free and duty-paid operations are ex-
tremely diverse, with over 2,200 stores located across
Throughout the world, Dufry tailors its retail environ- airports, cruise lines and ferries, railway stations, city
ments and sales channels to meet customer needs, centres, airlines (in-flight) and on-line.
reflecting passenger profiles and volumes while incor-
porating a true flavour of local culture and history. Departure shops
With a base of more than 2.5 billion potential inter- Ranging from 30 m2 to 3,000 m2, our departure shops
national and domestic customers worldwide, we aim can be located in the airside or landside and offer
to capture each customer’s full potential by working duty-free and duty-paid goods targeting a passenger
with airport authorities and other partners to develop base of international and local shoppers. In each loca-
customised retail concepts and exciting commercial tion, the product assortment, shop floor plan, promo-
areas. tions, pricing policies and operations are differenti-
ated depending on the respective customer profiles
and spending patterns. In response to our customers’
Over habits in departure shops, we have implemented “walk-
2,200
through” stores – a specific design where the entire
passenger flow goes directly through the shop – in
more than thirty locations.
stores
32Why Dufry
Arrival stores
Arrival stores offer consumers a convenient way of
shopping upon arrival at their destination without
needing to carry items throughout their whole jour-
ney. These stores are highly valued by local travellers
returning home enabling them to shop before leaving
the airport and to avoid carrying extra weight during
their flight. Located both airside and landside, the
stores offer duty paid or duty free goods and, as with
our departure stores, product assortment and layout
are determined by customer profiles and spending
habits.
33GENERAL
TRAVEL
RETAIL
SHOPS
The general travel retail shop concept is
the most common concept at airports,
as it carries a large selection of different
items and covers the full range of product
categories, such as perfumes & cosmetics,
food & confectionery, wines & spirits,
watches & jewelry, fashion & leather,
tobacco goods, souvenirs, electronics
and other accessories.
These shops are typically located in central
areas with high passenger flow, mostly
in airports, but also in seaports and other
locations. Both departure and arrival
areas can be fitted with this shop concept.
As of December 31, 2017, Dufry operated
over 700 shops under the General Travel
Retail concept. In the duty-free segment,
these shops can be recognized by the
several retail brands in our portfolio,
including Dufry, Nuance, World Duty Free,
and Hellenic Duty Free among others.
In 2017 Dufry opened its first three New
Generation stores in Madrid (Spain),
Melbourne (Australia) and Cancun (Mexico);
followed by one in Zurich (Switzerland)
in early 2018. The new generation store
is an innovative evolution of the general
travel retail shop as it increases the level
of communication with the consumer,
by making use of cutting edge digital tech-
nology. Learn more about Dufry’s new
generation store in our Focus Story on
page 20.
3435
DUFRY
SHOPPING
Dufry shopping was created with the inten-
tion to offer domestic passengers a
similar shopping experience in a duty-paid
environment as the one offered to inter-
national travelers in a classic duty-free
shop. Thus, this new retail concept is a
general travel retail shop for domestic
passengers, which offers a core category
assortment comparable to a duty-free shop.
At our Dufry Shopping stores, domestic
passengers are presented with the same
retail excellence they normally find in in-
ternational terminals, with a great variety
of products from the most prestigious
brands combined with the best customer
service. There are a number of countries
where domestic travelers account for
the majority of passengers, particularly in
large countries such as China, the United
States and Brazil, thus offering additional
potential to internationalize this concept.
The concept was first introduced in Brazil,
in 2014 and was quickly expanded to other
7 locations in the country. In 2017 the con-
cept debuted in the United States, with
the opening of a Dufry Shopping at Las
Vegas McCarran International Airport.
3637
BRAND
BOUTIQUES
Brand boutiques enhance the traveler’s
retail experience and allow the creation
of an exciting shopping mall environment.
Dufry is a partner of choice for global
brands to showcase their products in
singular retail spaces and to mirror their
high street image; e.g. Burberry, Bally,
Bvlgary, Carolina Herrera, Chopard,
Coach, Desigual, Dunhill, Emporio Armani,
Ermenegildo Zegna, Etro, GAP, Hermès,
Hugo Boss, Kiehl’s, Lacoste, L’Occitane,
MAC, Marc O’Polo, MCM, Michael Kors,
Montblanc, Pandora, Paul & Shark, Pinko,
Polo Ralph Lauren, Salvatore Ferragamo,
Shang Hai Tang, Shang Xia, Superdry,
Swarovski, Thomas Pink, Tommy Hilfiger,
Tumi, Versace or Victoria’s Secret. As of
December 31, 2017, Dufry operated over
150 Brand Boutiques. Dufry represents
the world’s most prestigious luxury brands.
See the full list of brands on page 53.
To best meet each location’s traveler pro-
file, we design these shops as standalone
boutiques or integrate them as a shop-
in-shop in our general travel retail stores.
Brand boutiques exist in both duty-free
and duty-paid areas.
3839
CONVENIENCE
STORES
Our Convenience Stores offer a wide as-
sortment of products ranging from soft
drinks, confectionery, packaged food,
travel accessories, electronics, personal
items or souvenirs, to publications such
as newspapers, magazines and books.
Within this concept, we have different
retail brands, which are used according
to the profile of the passengers in a given
location. Hudson is our most important
brand in this universe with an outstanding
recognition from passengers. As “The
Traveler’s Best Friend”, our goal at Hudson
is to provide passengers with anything
they may need during their journey.
Hudson is a very flexible concept for
Dufry, which is successfully operated
at airports in both international and
domestic areas, as well as in other chan-
nels such as railway stations and other
transit locations. Hudson shops are cap-
tive and comprehensive through whim-
sical, color-coded signage to attract
customers’ attention to our four distinct
selling areas: Media, Marketplace, Essen-
tials and Destination.
North America is home of most of our
convenience stores, with over 500 shops;
while over 150 convenience stores are
operated outside North America.
4041
SPECIALIZED
SHOPS
Specialized stores and theme stores are
shop concepts that offer products from
a variety of different brands belonging
to one specific product category or which
convey a sense of place. We use this con-
cept often for products such as watches
& jewelry, sunglasses, spirits, food or
destination merchandise and in locations
where we see a strong potential for a shop
to carry a broad product range relating
to only one specific theme. As of Decem-
ber 31, 2017, Dufry operated over 650 shops
under the Specialized Shops / Theme
Stores concept.
Examples of the shop concepts names in-
clude “Colombian Emeralds International”,
a dedicated watches & jewelry format
used in the Caribbean market; “Dufry
Do Brasil” for local Brazilian goods; “Kids
Works” with its wide selection of toys,
dolls, games, books and apparel for chil-
dren; or “Tech on the Go” focusing on
the needs of the tech-oriented traveler
offering electronics and accessories.
Further examples are “Sun Catcher” for
sunglasses; “World of Whiskies” for a
selection of finest single malt or blend
whiskies; “Master of Time” for luxury
watches and jewelries; “Sound & Vision”
for multi-brand electronics; “Temptation
& Timebox” for fashion watches and
accessories as well as “Travel Star” for lug-
gage and travel aid products and
finally “Atelier”, a women’s leather acces-
sories store.
These shops can be located in airports,
seaports, on-board cruise liners, as well
as in hotels or downtown locations.
4243
Why Dufry A VARIETY OF SPECIALIZED SHOP FORMATS In order to capture the traveler’s full attention and to transmit an impression of competence, specialized shops can come in many different formats and under a variety of individual names. While in some cases they almost reflect the category name of the products sold, in other occasions fantasy names are used to position the individual formats. Some of our most common for- mats are presented on the coming pages and are typ- ically used in several locations across the globe. Perfume & Cosmetics Perfume & Cosmetics is one of the largest and most important categories in travel retail. The key empha- sis of this category is placed on luxury, super service, convenience and premium quality. Furthermore, value for money remains an essential component of our of- fer in line with customer expectations and the heritage of duty-free retailing. We offer a wide range of fragrances from leading brands to meet every need. Our range includes luxury and super premium fragrances, contemporary clas- sics, lifestyle & sport fragrances, famous faces, funky fragrances and a selection for children. The Perfume & Cosmetics category is represented by the most powerful brands, such as Chanel, Christian Dior, Estée Lauder, Guerlain, Givenchy, Lancôme, Shiseido, SKII, YSL and many more. Local Fine Food More and more consumers are looking for high qual- ity local food products, either for gifting or personal consumption. Our Local Fine Food concept is divided into sweet and savory sections, offering a wide choice of high quality products from local and regional pro- ducers. Whiskey Boutique Liquor is also one of the most important categories in travel retail, playing an important role in satisfying consumer needs and engaging them in the retail envi- ronment. In our Whiskey boutiques we offer custom- ers the best selection of products and brands across the sub-categories – Malt Whisky, Deluxe, Whisky Blends and Irish Whiskey. World of Wine We apply a clear segmentation to our wine offer to help demystify the category and make wine shopping a pleasure for customers. Our World of Wine bou- 44
Why Dufry
tiques are easy to navigate, with wines first divided into where customers can find a unique selection of mini-
red and white, and then by respective old world and mum three or more mid to high-end fashion brands
new world countries. Each segment is presented by within the same retail area. The Boutique logo com-
different regions or grapes and includes wines at a bined with a directory showing the available brands
good range of prices. The stores offer some of the makes it an exceptional shop concept.
best-known brands from countries across the world
including France, Italy, Spain, Australia, New Zealand, Attitude
South America and South Africa. Recently, Dufry has Attitude is a multi-brand fashion shop concept adapt-
also succeeded in establishing exclusive cooperation ing the idea of an industrial environment combined
with renowned wineries, in order to offer Dufry-exclu- with urban street inspired art. The shop design is a mix
sive selections to its customers. of raw materials that are complimented with bold col-
ors which create together an exciting visual experi-
Atelier ence for the young attitude shopper.
Atelier is our multi-brand women’s leather accessories
store focused on premium brands, with a strong pres- Sun Catcher and Sunglasses Boutique
ence in international markets. The store concept is Sun Catcher and Sunglasses Boutique are our store
inspired by an artisan’s workshop, reflecting the intrin- concepts for eyewear. Whereas Sun Catcher focus is
sic, timeless value of leather accessories for travelers. on fashion, Sunglasses Boutique offers premium lux-
Atelier offers a range of upmarket brands including ury. Both store brands deliver performance in one en-
Furla, Lancel, Longchamp, Marc by Marc Jacobs, MCM, gaging and cohesive concept. They set out to elevate
Michael Kors, Roeckl, See by Chloe and many more. the entire eyewear category, and reflect our unique
philosophy of putting the consumer shopping experi-
Boutique ence at the heart of our thinking.
Boutique stands for exclusiveness, glamour and so-
phistication. It is a small to medium specialist store,
45Why Dufry
Temptation & Timebox
Temptation & Timebox are one of the most experien-
tial retail concept stores in the fashion watch and
accessories category, offering an exciting combina-
tion of products, visual merchandising, store design
and in-store entertainment. Temptation & Timebox of-
fer a range of brands including DKNY, Fossil, Michael
Kors, Pandora, Swarovski, Thomas Sabo and many
more.
Master of Time
Master of Time is our latest and most luxurious
multi-brand concept store for watches and jewelry,
presenting the best international brands from the
luxury and premium segments. The assortment
covers timeless iconic styles, best sellers and the
latest innovations from each brand. The brands are
grouped according to product segment and brand
adjacency, from luxury to premium watches and
jewelry. Sound & Vision Enriching Life hosts a rich portfolio
of high-end international electronics brands. In addi-
Master of Time’s portfolio of luxury and premium tion to Apple, Blackberry, Braun, Canon, Casio, Disney,
brands includes Breitling, Bulgari, Carrera y Carrera, and Fujifilm, choices include Hasselblad, HTC, JVC,
Damiani, Dior, Gucci, Montblanc, Omega, Roberto Coin Lamborghini, Leica, LG, Microsoft, Monster Headphones,
and many more. Nikon, Nintendo, Olympus, Osim, Panasonic, Philips,
RIO Beauty, Samsung, Sony, Toshiba and many more.
Travel Star
Our luggage and travel aids, multi-brand concept Tech on the Go focusses on the needs of the tech-
store, Travel Star has been conceived with the traveler oriented travelers offering them electronics and
in mind. It is the number one destination for luggage accessories.
and travel goods, combining innovation, design and
performance. Travel Star goes beyond selling luggage: Providing a sense of place
it ensures reliability and efficiency for travelers for
years to come by providing high quality products from Thinking...
trusted brands that guarantee excellent after-sales An example for this shop type is ‘Thinking España’.
care. Travel Star offers a range of brands including The ‘Thinking’ logo adds the country and it is a shop
Eastpak, Longchamp, PackEasy, Rimowa, Samsonite, concept which conveys a strong sense of place and
Tumi and Victorinox. intends to let customers reviving memories through
a shopping experience with a typically local product
Sound & Vision and Tech on the Go offer at the airport by reminding that it is the last
Sound & Vision Enriching Life is our multi-brand elec- chance to get souvenirs and food from local brands
tronics store which can be found at Hong Kong Inter- and producers before leaving the country.
national Airport. The store offers shoppers the widest
possible variety of state-of-the-art technologies and The Spirit of ...
emphasizes experiential shopping across different Examples for this shop type are ‘Spirit of Kazakhstan’
zones such as cameras & camcorders, mobile phones, or ‘Spirit of Arabia’. The ‘Spirit of’ logo adds the
notebooks, games and accessories. Committed to “en- country and is a shop concept which is a native duty-
riching life”, the store also offers interactive spaces free concept store. The main idea is to offer our
including an “Apple Leisure Station” where customers customers the sense of belonging, through a simple
can experience the brand’s most popular products souvenir and food store that inherits the local
first hand. essence.
46Why Dufry
47Why Dufry
CHANNELS
To achieve full potential in every market, Dufry oper- Cruise liners and ferries
ates different channels and develops specialized con- In addition to 19 ferries in Greece, Dufry operates on
cepts which are tailored to engage consumers in any board seventeen cruise liners world-wide, where we
travel environment. have a ‘captive audience’ of consumers for 7 – 14 days.
Therefore, we aim for this particular channel to create
Airports shops that enhance the shopping experience and en-
The most important channel for Dufry is by far the air- courage passenger relationships that continue for the
port business, which has always been the traditional duration of the whole journey. In 2017 Dufry has
location for travel retail. Airports offer a whole array started operations on the Norwegian Joy with nine
of possible concepts and formats which Dufry covers shops covering a retail space of 1,950 m2. The Joy is
with dedicated shop designs. Be it landside or airside, the first Norwegian cruise liner which has been built
be it duty-free or duty-paid, general retail shops or specifically for the Chinese travelers. Across the
sophisticated brand boutiques, Dufry offers airport cruise liners – which cover routes from the USA to
authorities comprehensive support to successfully the Caribbean, Alaska, Europe and Asia as well as
develop retail space and on how to maximize sales and China roundtrips – Dufry operates a total commercial
revenues. space of over 9,000 m2, ranging from 140 m2 to close
to 2,000 m2 per store. These stores offer duty-free
Border shops sales on cruise ship-branded souvenirs, spirits, tobacco,
Dufry operates border shops typically targeting cus- perfumes & cosmetics, food, jewelry & watches, from
tomers, who live within a certain distance of a coun- leading brands across the world.
try border or travel across countries. The border
shops typically offer price advantages generated ei- Railway and underground stations
ther by market price, tax or currency fluctuation dif- Dufry operates convenience stores and newsstands
ferences for a variety of product categories. We cur- in several intercity railway stations in Milan as well as
rently operate a number of shops in several Greek in New York and Washington DC, offering newspapers,
cities and we see further potential for this channel in magazines, books, confectionery and a large range of
Latin American and Asian countries. tobacco products. The latest contract win relates to
the new MTR railway station in Hong Kong in early 2018,
48Why Dufry
We see downtown, hotels and resorts as a worthwhile
alternative channel and are looking forward to ex-
panding our presence in these areas.
In-flight services
Dufry offers its in-flight sales on board Air Arabia and
TAP Portugal. Developed in collaboration with the air-
lines and taking into account the destination, the in-
which includes arrival and departure duty-fee stores flight catalogue enables passengers to buy duty-free
offering a core category assortment to the over items during the flight, including perfumes and cos-
100,000 travelers using the station every day. metics, spirits, gifts, watches and other items from the
most renowned international brands. We offer a wide
Downtown, hotels and resorts selection of product assortments and are responsible,
Our business has expanded to retail outlets downtown in cooperation with the airline, for confirming all com-
and in hotels, casinos and resorts, allowing us to en- mercial terms as well as negotiating listing fees and
gage the traveling consumer beyond the airport envi- marketing contribution.
ronment. Our hotels include the Venetian & Palazzo
Hotel in Las Vegas, where two shops covering a total Diplomatic shops
of 2,300 m2 provide a luxury shopping environment. These shops specialize in providing embassies and dip-
We also operate retail outlets at all Center Parcs re- lomatic corporations with products at duty-free
sorts in the UK. In city centers, we currently operate prices. They are currently operated in Ghana, Switzer-
more than 92 shops, 28 of which are in hotels located land and Australia.
in popular tourist destinations.
49Why Dufry
AIRPORT
AUTHORITIES &
LANDLORDS
BENEFITTING FROM
HOLISTIC SHOP &
DESIGN CONCEPTS
Dufry is the partner of choice for airport operators ports of Milan, Madrid, Athens, Phnom Penh, Siem
and other landlords. We strive to create most value for Reap, São Paulo, Brasília, London Heathrow or Zurich
landlords and Dufry alike, through our ability to deliver are a few examples on how Dufry and landlords can
best-in-class retail concepts and our deep under- work together on the structuring of passenger flows,
standing of our customers. The trust of our landlords improving appearance of commercial space and ex-
has allowed Dufry to become the leader in travel re- panding retail offering to considerably increase sales.
tail, currently operating over 2,200 shops in 64 coun-
tries accommodated in airports, seaports, railway sta-
tions, downtown areas, border crossings, cruise liners, First New
hotels and other locations.
Generation
Offering landlords the largest industry experience
Dufry shares a common goal with the facility owners, Stores opened.
which is to maximize returns on the available space and
to create an innovative and attractive shopping expe- Dufry’s New Generation Store – now open
rience for the traveler. Dufry’s extensive expertise in Dufry has recently outlined its new generation store
all regional aspects, its retail know-how and its world- concept, which makes extensive use of the digital
wide presence are core competitive advantages, as is technology to increase the communication with pas-
its comprehensive range of attractive retail concepts sengers at the airport. The digital route allows Dufry
and shop formats to satisfy any need of a landlord in to approach potential customers in an even more per-
both duty-free and duty-paid environments. And in or- sonalized way than ever before. The use of digital tech-
der to understand the latest trends in consumer be- nology allows in-store communication to flexibly adapt
havior, Dufry regularly does detailed consumer re- during the day to the changing nationalities and thus
search. increase the communication impact. The sense of
place of our shop designs, an important aspect for
Partnerships equally benefit travel retailers landlords, is also secured in the new concept, as the
and facility owners format provides for a high degree of customization.
The partnership between facility owners and retailers Dufry knows how to perfectly match these require-
is one of the most critical aspects in travel retail. Our ments with efficient retail concepts to best serve trav-
years of experience in the business show that the elers’ needs and to generate value for landlords and
closer both parties work together and align their com- Dufry alike. First New Generation Stores have already
mon goals, the higher is the value generated. By join- been opened in Madrid, Melbourne, Cancun and Zurich.
ing forces, we can create more attractive and inviting
commercial spaces that maximize travelers’ spend, Successful contract extensions
from the passengers’ arrival at the airport until their secure future business
boarding. In 2017, Dufry renewed a number of existing conces-
sion contracts, some of them well before the previous
Dufry has a long-lasting tradition in working together expiry date, and extending the remaining average life-
with landlords of larger and smaller airports in emerg- time of its portfolio, which is now 8 years. Approxi-
ing and developed markets. We provide landlords with mately 13 % of our sales are based on contracts with a
our expertise on how to best develop retail space and remaining life-time of one to two years; 32 % have a re-
how to maximize revenues, independently from the size maining duration of three to five years; another 29 %
of a given project. Recent examples of refurbishments have between six and nine years left to run, and the
and expansions of our shops confirm the value of co- last 26 % have e remaining duration of ten years or
ordinated strategies. Projects developed at the air- more. On average, Dufry renews every year existing
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