THE GLOBAL TRAVEL RETAILER 2019 - Dufry
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THE GLOBAL
TRAVEL RETAILER
2019
FOCUS
STORY
UNIQUE
SHOPPING
EXPERIENCES –
EXCLUSIVES,
LIMITED
EDITIONS, AND
NOVELTIES
Read the full focus story on the DUFRY exclusives and
limited editions on page 22 – 27
3
DUFRY GROUP – A LEADING GLOBAL TRAVEL RETAILER DUFRY AG (SIX: DUFN) IS A LEADING GLOBAL TRAVEL RETAILER OPERATING OVER 2,300 DUTY-FREE AND DUTY-PAID SHOPS IN AIRPORTS, CRUISE LINES, SEAPORTS, RAILWAY STATIONS AND DOWNTOWN TOURIST AREAS. DUFRY EMPLOYS OVER 36,000 PEOPLE. THE COMPANY, HEADQUARTERED IN BASEL, SWITZERLAND, OPERATES IN 65 COUNTRIES ON ALL SIX CONTINENTS. 4
CONTENT
1
WELCOME
Dufry today 8 – 9
Milestones 10 – 13
2
THE GLOBAL TRAVEL RETAILER
Dufry at a glance 16 – 17
Our strategy 18 – 27
3
WHY DUFRY?
Customers 30 – 33
Retail expertise 34 – 49
Channels 50 – 51
Airport authorities & landlords 52 – 53
Suppliers 54 – 55
Our people 56– 57
Logistics 58
IT Solutions 59
4
LOOKING FORWARD
Global presence 63 – 64
Global Executive Committee 68 – 69
Community engagement 70– 75
Awards 76
5
1 WELCOME
Welcome
DUFRY TODAY
Present in
65
countries
50,000
Operates at over
400
locations
products
Our assortment
of reference items
from vendors globally
Over Over
36,000 2,300
employees shops
Representing over Dufry opens a new
130 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
453,000 m 2
multiplied
of commercial space
by 13 and
EBITDA by 21
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 in Basel, The first duty-free shop at Listed on the Swiss Stock
Switzerland. Le Bourget, Paris. Dufry was Exchange (DUFN) on the 6th
the second operator to ever of December.
open a duty-free store.
1865 1952 2005
1948 2004
Introduction of the duty-free Advent International became
wholesale business. the majority shareholder.
Dufry decided to focus its core
business on travel retail
with the vision of becoming
a truly global company.
10Welcome
Acquisition of one of the main Merger of Dufry Ltd with Dufry
travel retail operators in the South America Ltd. Acquisition
Caribbean, based in Puerto of the Colombian Emeralds
Rico, with 23 shops in Puerto International brand, based in
Rico and other Caribbean the Caribbean.
locations.
2007 2010
2006 2008 2011
Acquisition of major travel Acquisition of 100 % of Hudson Acquisitions of retail companies
retail operators in Brazil. Listed Group (USA), the only national in Argentina, Uruguay, Ecuador,
on the stock exchange in Sao newsstand brand in the industry. Martinique and Armenia, includ-
Paulo (Brazil) and Luxembourg ing 24 duty-free shops across
(BOVESPA; DUFB11). 10 airports.
11Welcome
MILESTONES
Acquisition of Regstaer Group, the Acquisition of The Nuance Group
leading travel retail operator in Russia, in Switzerland.
in a joint venture.
2012 2014
2013 2015
Acquisition of 100 % of the leading travel Acquisition of World Duty Free. The
retailer in Greece, Folli Follie. Expansion in acquisition strengthens Dufry’s position in
Asia, with new stores in China, South Korea, key European markets such as Spain –
Taiwan, Bali and Sri Lanka. including the Mediterranean region – and
the UK; North and Latin America as well
as the Middle East and Asia.
12Welcome
Renewal of an exceptional amount of existing
concession contracts and is included in the
Swiss Leader Index, compiled of the 30 largest
2018
Swiss Corporations listed on the SIX Swiss
Exchange.
2016 Hudson Ltd. listed on the New York Stock
Exchange (NYSE) with its first trading day on
February 1, 2018.
2017
Implementation of a new retail concept the
“New Generation Store”, featuring extensive
and innovative use of digital applications in
order to increase passenger communication
and drive sales. plans to unveil several shops
around the world under this new concept.
132 1 THE WELCOME LEADING TRAVEL RETAILER
The Global Travel Retailer
DUFRY
AT A GLANCE
TURNOVER GROSS PROFIT
IN MILLIONS OF CHF MARGIN
9,000 62 %
8,400 61 %
7,800
60 %
7,200
59 %
6,600
58 %
6,000
5,400 57 %
4,800 56 %
4,200 55 %
3,600
54 %
3,000
53 %
2,400
52 %
1,800
1,200 51 %
600 50 %
0 49 %
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
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
2014 2015 2016 2017 2018 2014 2015 2016 2017 2018
¹ EBITDA before other operational result
16The Global Travel Retailer
NET SALES BY PRODUCT CATEGORY 2018
5 % OTHER
32 % PERFUMES
2 % LITERATURE & PUBLICATIONS & COSMETICS
2 % ELECTRONICS
12 % TOBACCO
GOODS
13 % LUXURY
GOODS
NET SALES BY DIVISION 2018
1 % DISTRIBUTION
CENTER
22 % SOUTHERN
22 % NORTH EUROPE AND AFRICA
AMERICA
18 % FOOD,
16 % WINE CONFECTIONERY
& SPIRITS & CATERING
19 % LATIN 23 % UK AND
AMERICA CENTRAL EUROPE
13 % EASTERN EUROPE, ASIA,
MIDDLE EAST AND AUSTRALIA
NET SALES BY CHANNEL 2018 NET SALES BY MARKET SECTOR 2018
4 % RAILWAY STATIONS & OTHER
3 % BORDER,
DOWNTOWN & HOTEL SHOPS 39 % DUTY-PAID
3 % CRUISE LINERS
& SEAPORTS
90 % AIRPORT 61 % DUTY-FREE
17The Global Travel Retailer
OUR
STRATEGY
GROW PROFITABLY
AND CREATE
LONG-TERM VALUE
It only took slightly more than a decade for Dufry to Equally important for Dufry is to offer travelers
emerge from a small company with CHF 950 million an unparalleled sense of place: This includes local
turnover to the leading player in travel retail, an product offerings, as customers increasingly want
industry with a turnover of USD 69 billion in 2018. Our to complete their travel experience by bringing home
leading position today with CHF 8.7 billion turnover memories, as well as internationally recognized
is the result of remarkably rapid expansion. Through brands that are well known and much liked. Our
a combination of organic growth and acquisitions, we shops combine the well-known assortment of global
have reached a market share of 13 % in travel retail. brands and products with a special local touch which
And when looking more specifically at airport retail, differentiates our shops worldwide, wherever they
which accounts for 90 % of our business, we increased may be – at airports, seaports, ships, railway stations
our share from 3 % in 2005 to over 20 % today. or borders – and irrespective of whether they are
duty-free or duty-paid. For a selection of our main
Focusing on customer experience and retail retail concepts please refer to pages 34 through 49
excellence generates value for all stakeholders of this report.
Dufry, and travel retail in general, is at the center of
three very important and distinct industries: retail,
travel locations and consumer goods. Addressing the Providing
different requirements of our stakeholders and align-
ing their respective interests is critical in order to memorable
generate value for all. Our approach can be summa-
rized in a simple way: we focus on offering the best experiences.
services to our customers.
Demographics play a big role in our business and
This clear focus ultimately creates a winning formula changes in customer profiles and preferences can
for all stakeholders: to customers, by providing an occur rapidly. For this reason, Dufry sets high priority
unrivalled shopping experience, to suppliers, by show- on consumer intelligence, extrapolated from internal
casing their brands to a fast-growing group of affluent operational information and through external research.
customers, to landlords, by fully exploring the com- We constantly track customer behavior at our shops
mercial potential of a travel location and to share- and use our market insights to continuously fine-tune
holders, by creating value through generating cash our offering and not only match but exceed the expec-
and profits. tations of our clients.
For our customers, we aim to create memorable shop- To suppliers we offer access to the largest footprint in
ping experiences by constantly improving our shops the ever more attractive travel retail channel, through
and developing best-in-class retail formats, and by our more than 2,300 shops in over 400 locations in
implementing innovative cross-channel marketing 65 countries. Our shops offer suppliers an unrivalled
initiatives. Our team of sales representatives will worldwide window display to promote their brands and
always receive travelers with their biggest smile, intro- products to an affluent consumer segment.
ducing them to the world of travel retail and providing
them with detailed product information – increasingly Dufry works closely with brands to offer customers
supported by digital technology. a unique product selection at the best price, giving
special attention to novelties, exclusives and limited
editions, which make the channel even more attractive.
Please find out more in the Focus Story on page 22.
18The Global Travel Retailer
Landlords get the highest productivity from their Our global presence allows us to quickly and better
retail areas, maximizing their revenues when working evaluate new projects almost anywhere, capitalizing
with Dufry. We offer a full range of retail concepts on the expertise of our local teams. This local perspec-
which are adapted and customized to the specific tive helps us to accurately evaluate opportunities,
location. Moreover, Dufry provides access to the most gives us a clear understanding of the local market
comprehensive portfolio of global and local brands. In characteristics and allows us to closely collaborate
a nutshell, landlords benefit by optimizing their overall with landlords and other local business partners to
business and by offering attractive commercial spaces effectively develop new businesses.
to their passengers.
Geographic diversification to maximize Diversification
opportunities and mitigate risks
Dufry is today not only the market leader in travel retail, remains a key aspect
but also by far the most diversified player in the industry
with operations in 65 countries on all six continents. of our strategy.
Geographic diversification is of key importance to our
strategy for a number of reasons: first, it is the best way Moreover, being geographically diversified consider-
to benefit from the ever growing number of travelers ably mitigates risks generated by external impacts in
worldwide; second, as a global organization, we can single markets or regions. This diversification is best
efficiently develop new business opportunities any- illustrated by the share of individual concessions in the
where; third, major global brands can offer their prod- Group. With the largest concession accounting for
ucts via a truly global travel retailer and fourth, it is around 7 % of our business, and with the ten biggest
a very effective approach to mitigating risks. representing less than 35 % of 2018 sales, Dufry has
limited its exposure to single contracts. Ultimately,
GLOBAL PRESENCE
A full list of locations is available
on pages 61 and 62.
19The Global Travel Retailer
geographic diversification is key to offering our brand At Dufry, we traditionally have a sizeable project pipe-
partners a fine-meshed network of locations and shops, line, allowing us to grow our retail space in different
which allows them direct engagement with a growing channels, regions and sectors.
number of customers through a window display in any
given mature or emerging market. Despite the consolidation seen in travel retail over the
last years, the industry remains relatively fragmented,
Financial discipline focusing on returns with the top 10 players controlling just over half of the
At Dufry, we have a disciplined financial approach to market and the remaining market being covered by
all our projects, be they organic or acquisitions. We small and medium sized operators. We expect to be able
carefully analyze every project or significant invest- to capitalize on M&A with small and mid-sized opportu-
ment with detailed projections and with a focus on nities that may arise, with a focus on Asia and the Middle
minimum return requirements. This includes a careful East, or with bolt-on acquisitions that complement our
assessment of the initial investment needed to build presence in existing markets.
and set up the store as well as the cost structure, prof-
itability and cash flow generation of the business once Offering the best retail experience for international
it is operational. This culture of giving importance to and domestic travelers in multiple channels
returns and cost control has allowed us to grow our Dufry currently generates about 61 % of its revenues
business profitably and capture opportunities in many in duty-free and 39 % in duty-paid operations with
different markets. both sectors continuing to offer substantial growth
opportunities.
As part of our financial risk management, we minimize
business risks by implementing a highly variable cost On the duty-free side, the airport channel is expected
structure. These defensive characteristics help to pro- to continue to be the largest and fastest growing part
tect the business in case of downturns, which usually of our business. We see additional potential in further
are local, thus providing a solid and resilient profile. developing the cruise ship business, duty-free border
shops and downtown duty-free in selected markets.
Resilient cash
Passenger growth
flow generation.
is a key driver
The combination of Dufry’s solid profitability and low
capital intensity results in a strong cash generation. in travel retail.
With the current size of the Group and the full imple-
mentation of our business operating model, we expect The duty-paid sector has considerable development
to further improve our cash generation capacity. potential in airports as well, since the expected growth
of domestic passengers is similar to the one for inter-
Dufry’s growth path going forward national travelers. Furthermore, this sector is even
Supported by the growth of passenger numbers – the more fragmented than duty-free, thus offering attrac-
most important driver of our business – organic growth tive new expansion opportunities.
will continue to be an important driver of Dufry’s devel-
opment going forward and we will focus on driving sales We continue to actively foster the expansion of our
through the implementation of best-in-class shop con- successful duty-paid retail concepts, Hudson and
cepts and new digital technologies, which will be com- Dufry Shopping, which have already been implemented
plemented with proven marketing and promotion activ- in several markets and which have the potential to be
ities that we have used and fine-tuned over the years. deployed further. Hudson is a well-established conve-
Furthermore, we expect to grow through additional nience store concept that has been very successful
retail space, be it through expanding in existing locations in North America over the past 30 years and that we
or by winning new contracts in airports where we don’t have deployed in 17 countries so far since 2009. Dufry
currently operate or in other channels. Shopping is a duty-paid concept that offers a high
quality assortment of international brands in an exclu-
sive setting, similar to a duty-free travel retail store,
but that targets domestic passengers.
20The Global Travel Retailer
We originally piloted Dufry Shopping in Brazil in 2014, To attract customers to our stores we want to provide
expanding to 7 locations across the country and the a superior customer experience; and in addition create
immediate success has led us to a strategic decision further value through a more efficient business. Thus
to roll out this concept into other countries. The first the use of digital and online technology is changing our
Dufry Shopping store outside Brazil was opened in business in three major areas: how we communicate
2017 at Las Vegas McCarran International Airport. with our customers, how we sell products, and how we
Based on the positive results with 8 Dufry Shopping organize our processes internally and in the value chain.
locations in 2 countries so far, we are convinced that
this concept can be successfully rolled out to other
markets globally. Capitalizing
Our strategy is supported by strong and resilient on digital
industry fundamentals
Travel retail is a fast growing industry driven by ongoing opportunities.
growth in traveler numbers. The increased demand from
passengers to travel is the reason why this attractive Specifically, this means that we will be further increasing
retail channel keeps growing and displays different personalized communication with customers at home,
dynamics to high street retail. during their whole journey, and in particular when they
are at the airport close to our shops. We are also digi-
Global passenger numbers are currently expected talizing the shops to increase conversion rates and to
to grow by at least 5 % per annum, which translates simplify in-store processes, such as product consulta-
to a potential of over 400 million new customers for tions, payments, individual promotions etc. Lastly, we
the industry every year. Industry specialists expect will further improve customer service and individualize
this trend to continue, thus providing a resilient driver product offers for specific customer profiles.
for travel retail going forward. The growth potential
is further increased by the development of innovative
commercial concepts with landlords and brands.
Dufry’s ambition is to deliver excellence in execution
while driving change in the way travel retail operates.
We believe that being the market leader also means
being at the forefront of this development. LONG-TERM PASSENGER FORECAST
IN BILLIONS OF PASSENGERS
Seizing the opportunities digitalization brings
As in the case with many other industries, digitalization
24
is changing the way business is done in travel retail. At
Dufry, we are excited about the possibilities and oppor-
tunities that new technologies offer. Therefore, digita- 20
lization is a key element in our strategy going forward.
16
For Dufry, digital technologies are tools, which support
and evolve a strong business model to the next level, to
continuously improve our offer to the travelers we wel- 12
come in our shops. As customers come to our stores,
while they are waiting to board their plane or train, or
8
while they enjoy their stay on a cruise liner, in a casino
or hotel, they enjoy strolling through the attractive
retail spaces and take away memorable shopping expe- 4
riences. Sales are often generated by impulse decisions
and/or immediate needs, which protect travel retail
0
from the direct competition of online platforms.
2018 2022 2027 2032 2037 2040
Source: ACI 2018 / World Airport Traffic Forecast 2018 – 2040.
21The Global Travel Retailer FOCUS STORY UNIQUE SHOPPING EXPERIENCES – EXCLUSIVES, LIMITED EDITIONS, AND NOVELTIES 22
IN THE PAST TWO YEARS DUFRY HAS
STRONGLY ENGAGED WITH BRANDS TO
CREATE DUFRY EXCLUSIVE PRODUCTS,
LIMITED EDITIONS AND LAUNCH NOVELTIES
THROUGH ITS GLOBAL NETWORK OF
TRAVEL RETAIL SHOPS. BRANDS INCREASINGLY
RECOGNIZE THE POWER OF THESE
STRATEGIC MARKETING PARTNERSHIPS
AND THE UNIQUE OPPORTUNITY
TO POSITION THEIR PRODUCTS
TO AN AFFLUENT AUDIENCE
WHILE OFFERING THEM
MEMORABLE
EXPERIENCES
THROUGH
THE TRAVEL
RETAIL
CHANNEL.
BVLGARI JUST
FOR DUFRY
This high-class ladies’ back-
pack by Bvlgari is exclusive
in a multiple sense. It has
been created specially for
Dufry, it’s a very limited
edition and it is sold only
at World Duty Free’s London
Heathrow T5 shops. The
backpack has been designed
for millennials and is tai-
lored to match the taste
of British, Chinese and
Middle Eastern
customers
in particular.
23The Global Travel Retailer
FOCUS
JOHNNIE LIKES
STORY
TO WALK
UNIQUE
WITH DUFRY
SHOPPING
EXPERIENCES –
EXCLUSIVES,
LIMITED
EDITIONS, AND
NOVELTIES
An exclusive black label triple cask
Johnnie Walker edition for Dufry
finished in three different casks
that previously held: Bourbon,
Caribbean pot still rum and Scotch
whisky. The Triple Cask Black Label
blend is distributed globally, is
made for the younger generation,
and features notes of sweet vanilla
and ginger aromas.
CHOCOLATE FREY
RETURNS TO TRAVEL RETAIL
AS DUFRY EXCLUSIVE
Switzerland’s No. 1 chocolate manufacturer and iconic brand
returns to the travel retail channel with a tempting product
assortment including the “Frey Mahony 400 g Orange”,
which will be marketed exclusively in Dufry shops in EMEA,
Asia and the Americas as of the first quarter 2019.
24TORRES 15 – A BRANDY
NOVELTY & EXCLUSIVE
FOR THE FIRST YEAR
TOBLERONE TINY – CRUNCHY
ALMOND AS LIMITED AND
DUFRY-EXCLUSIVE EDITIONS
Toblerone Tiny Crunchy Almond – one of the brand’s most success-
ful flavors is now available in a new light blue and golden bag sold
only at airports and containing 34 single wrapped snack-size pieces.
On top of this – a Dufry exclusive edition – the brand has produced
the Tiny Mix – Crunchy Almond, a 225 g pack with a unique assort-
ment of this range.
A NEW JOY
BY DIOR
Joy is an excellent example
how perfume brands
develop new fragrances
to approach new consumer
segments and profiles
by complementing their
Torres 15 is a tribute to Miguel Torres Carbó, who range with innovations.
rebuilt the winery after it had been destroyed in the This new Eau de Parfum,
Spanish civil war. The packing features unique buildings illuminated by the vibrant
in Barcelona and targets an international audience. smile of flowers and citrus
Its incomparable character makes this brandy very fruits, was one of the
versatile, to be enjoyed in many ways including with key novelties at Dufry
ice, diluted with water, with soft drinks or in cocktails. stores in 2018.
25The Global Travel Retailer
30 %
Depending on the category, up to 30 % of Dufry’s
sales come from promotions, novelties, Dufry and
Travel Retail exclusives, and special editions.
Boosting the attractiveness tween a 10-year-old whisky and the top
of Travel Retail range bottle aged 18 years. Launching
The newest trends in customer behavior a seasonal flavor to tempt chocolate
and shopping habits show that today’s connoisseurs or introducing a premium
customers want to enjoy memorable limited edition series to enter high price
shopping experiences that must increas- levels. Or attracting the attention of
ingly provide a sense of individuality style-savvy shoppers with a unique back-
and exclusivity and tailor-made offers. pack from an iconic brand, for the ulti-
Exclusive products, Limited Editions and mate fashion accessory. This is the real-
Novelties and the related experiences are ity of several brand partners’ creativity,
exactly the drivers that brands of all cat- already successfully displayed and avail-
egories can use to best fulfill this wish, able in Dufry’s duty-free shops.
while fostering the attractiveness of
travel retail as an aspirational shopping
environment. There is no better place Our ultimate
then travel retail and airport environ-
ments to engage with affluent custom- goal is to create
ers and help them experience a brand’s
“spirit” in an attractive atmosphere. By memorable
developing products sold only in travel
retail – or increasingly exclusively in Du- experiences.
fry shops – we can create that
sense of uniqueness and individ- Multichannel experiences through
uality, which increases brand activations and story-telling
value and drives sales. And it is The combination of physical stores and
ultimately a great way to avoid digital channels including social media
comparisons with online or high- or other digital content platforms – such
street offers. as the new Forum by Dufry – forum.shop-
dutyfree.com – create the perfect multi-
Each brand follows its own channel experience for all the senses.
strategy to drive sales Forum by Dufry features contributions
One size fits all would be the from bloggers and influencers, inspires
wrong approach. That is why with real customer experiences and tells
Dufry gathers market feedback brand stories, to attract travelers to
and presents the brands with in- the shop floor and enable them to “see
dividual opportunities on how to and share the experience” in person. The
improve product and brand po- aligned multichannel approach is the best
sitioning. Creating a limited edi- way to attract travelers to the shop floor
tion to drive sales in the summer and engage with them – to ultimately
months, or filling a price gap be- drive sales.
26The Global Travel Retailer
Limited edition
experimental wine
JEAN LEON CF-15
IS A 100 % CABERNET
FRANC ARTISAN
AND CERTIFIED
ORGANIC WINE
WITH LIMITED
PRODUCTION.
THE GRAPES COME
FROM OLD VINES
PLANTED IN 1974
AT AN ELEVATION
OF 260 METERS,
ARE MANUALLY
HARVESTED AND
CARRY THE ORIGIN
LABEL “DO PENEDÈS”.
DUE TO ITS LIMITED
AVAILABILITY THE
WINE IS SOLD IN
DUFRY SHOPS IN THE
SPANISH AIRPORT
STORES INCLUDING
THE ISLAND
DESTINATIONS.
273 WHY DUFRY?
Why Dufry CUSTOMERS RETAILING AT ITS BEST Research on consumer trends around the world shows Retail at its best that customers nowadays are looking for experiences Our aspiration is higher than just selling products. Our rather than just “buying a product”. To best accommo- well trained and motivated sales representatives will date this changing behavior and to meet our customers’ help you navigate through a large variety of prestigious expectations, Dufry is investing in different initiatives brands to find the right product for you and to provide to take airport and travel retail shopping to the next you with the best service when visiting our shops. level. Engage with customers through Personally new generation stores In our strive to provide customers with a unique shop- engaging with ping experience, our new generation store is the cor- nerstone of our latest approach to retail. With the first customers. 6 shops opened in Madrid, Melbourne, Cancun T3 and T4, Zurich as well as in Heathrow T3, our customers can We welcome customers of more than 150 nationalities experience a shopping environment which changes its to our shops every day and our wide assortment can appearance several times during the day. Displays exceed 50,000 items in any given location. For this appear in different languages and show the brands reason, providing our customers the right product that best fit the customer profile present at the airport information in different languages is a considerable at any given time of the day. challenge. Therefore, we have started to equip our 30
Why Dufry
shop staff with tablet computers so that they can pro- members of the program will become identifiable
vide customers with extensive product information in through the app’s beacon technology once they are at
several languages. Going forward, we plan to also offer the airport and will receive personalized notifications
payment services through the tablets without the need on promotions and offers tailored to their prefer-
to go to the tills. ences. This allows Dufry to increase conversion of
travelers into customers and to attract them to the
Pre-order at home, collect at the airport shops. RED by Dufry is already live in 200 locations in
To provide convenience is another priority for Dufry, 40 countries and is continuously expanded to further
this is why we want to engage with our customers well operations worldwide. A full list of the locations where
beyond our shops. Even before they start their trip, RED by Dufry is implemented can be found here:
travelers can pre-order products through the internet www.redbydufry.com
and collect them conveniently once at the airport. Our
“Reserve & Collect” service is already available in 153
locations in 39 countries around the world. New loca- Constantly
tions are constantly added – the full list is available on
our website under: www.shopdutyfree.com enhancing
RED by Dufry customer
RED by Dufry is structured as a loyalty program but it
takes the idea one step further. RED works primarily service.
through a mobile application (app) and via the tradi-
tional earning of points the program offers exclusive Forum – Connecting the digital dots
advantages such as discounts at Dufry stores and Forum is the new Dufry social media platform launched
specific airport benefits. Additionally, going forward in 2018 that provides stories from bloggers and influ-
31Why Dufry
400 Dufry operates
in over 400 locations
in 65 countries
worldwide.
encers, as well as background information from brands of Conduct on Sale of Alcohol, DFWC Code of Con-
and Dufry in an exclusive and glamorous environment. duct on Sale of Alcohol).
Moreover, Forum by Dufry connects with our other
digital initiatives such as RED by Dufry and Reserve & Customer Communications
Collect and serves as a vehicle to connect with our In its advertising and marketing initiatives, Dufry
potential customers when they are planning their jour- shows the same responsible stance that it shows in all
ney or even before. Forum is designed to support the its other activities. We commit to comply with all reg-
inclination to shop with us, to change customer per- ulations and rules in all our advertisements and pub-
ception, and position Dufry shops as the place to find lished communications in the countries where we
the latest trends and launches for the main categories operate. We also expect the same behavior from our
– visit Forum by Dufry at: suppliers when using the space that we make available
https://forum.shopdutyfree.com/en in our stores for advertising and promotions. When it
comes to product labeling, we request our suppliers
Dufry’s focus on customer orientation to comply with the regulations of all the locations
Our understanding of customer orientation goes beyond where the product is going to be sold. Given that our
the pure fulfilment of expectations and requests we stores operate in an environment where we serve
receive in our shops. A satisfied customer for us is many nationalities speaking different languages every
a customer that can also trust us when it comes to day, we are proactively engaged with our industry
guarantees, data security, privacy, product safety and trade associations to find off-the-label solutions.
other aspects of our interaction with our customers.
True global return guarantee Dufry commits to
Dufry is the only global travel retailer in the industry to
offer a true global return guarantee. No matter if you comply with all adver-
purchased something in Melbourne, Bali, St. Peters-
burg, Barcelona, São Paulo, Las Vegas or elsewhere in tising and marketing
any of our shops in the world: if there is a problem with
any product that you purchased at a Dufry store, we regulations.
will replace, refund or exchange your product within
60 days of purchase. Dufry’s customer service repre- Customer Privacy
sentatives, who can be reached in several languages by Management and protection of customers’ private
phone, email or online chat, attended around 164,000 data in the processes that involve the handling of client
customers from 152 countries in 2018. Dufry’s customer information is an area of importance for Dufry. As
service team and policies guarantee full customer a requirement of customs authorities, airport author-
satisfaction. That service is another example of our ities and for contractual reasons, the customer’s
commitment to an outstanding customer experience personal data is collected, processed and retained in
day-by-day. accordance with the privacy statement listed on the
Dufry website or in the retail locations.
Customer satisfaction & safety
Customer satisfaction and safety is our first priority. Additionally, in some countries, the company offers
As a fundamental first step we ensure that all prod- Reserve & Collect and RED by Dufry services, for
ucts strictly comply with applicable legislation and which additional personal information from customers
health and safety requirements. Dufry complies with is needed to provide the with requested services such
legal requirements at every location we operate and as newsletters and marketing & advertising materials.
take a proactive approach, working with governments In order to protect and ensure that customer data is
and regulators to clarify any concerns. In this con- handled correctly, Dufry has a number of systems and
text, Dufry, through active membership of the indus- security processes in place, including a robust IT
try’s trade associations, has helped shape relevant security system, a data protection policy and specific
and robust Codes of Conduct for the travel retail training for employees dealing with personal informa-
industry (e. g. UK Code of Conduct on disruptive tion, as well as internal procedures and policies which
passengers, UK Code of Conduct on VAT, ETRC Code follow relevant laws and regulations.
32Why Dufry
200 Dufry’s loyalty program RED
by Dufry is already available
in 200 locations.
During 2018 Dufry completed a number of processes data and to ensure compliance with the different legal
to conclude the alignment of our operations in accor- frameworks.
dance to the EU General Data Protection Regulation
(GDPR). Specifically, this work involved expanded Moreover, the Group also undertakes internal Data
documentation and information requirements, privacy Protection Audits and intrusion tests, while quarterly
impact assessments and the right of individuals (mainly meetings are held to discuss and improve the protec-
customers, employees, partners and suppliers) to tion of customers’ personal data. For any customer,
request access to, or to correct, delete, object to pro- employee or third party who wishes to report a griev-
cessing of their own personal data and to request data ance or who has questions regarding Dufry’s data
portability. All of this was completed ahead of the privacy, there is a specific email address to contact
GDPR implementation deadline of May 2018. the company, and inquiries are coordinated by the
Internal Audit, Loss Prevention and ERM department.
Customer data Dufry’s expertise recognized by the industry
protection is In 2018, Dufry’s customer focus and retail excellence
has been recognized by different industry partners
important to Dufry. again. A complete list of the 2018 awards is displayed
on our website:
www.dufry.com/en/company/our-awards
In the case of the above-mentioned Reserve & Collect
and RED by Dufry services, the company applies high
security standards to safeguard and protect personal
33Why Dufry
RETAIL EXPERTISE
CUSTOMER-FOCUSED ACROSS THE OPERATIONS Departure shops
Ranging from 10 m2 to 3,000 m2, our departure shops
Throughout the world, Dufry tailors its retail environ- can be located in the airside or landside and offer
ments and sales channels to meet customer needs, duty-free and duty-paid goods targeting a passenger
reflecting passenger profiles and volumes while incor- base of international and local shoppers. In each loca-
porating a true flavour of local culture and history. tion, the product assortment, shop floor plan, promo-
With a base of more than 2.5 billion potential inter- tions, pricing policies and operations are differenti-
national and domestic customers worldwide, we aim ated depending on the respective customer profiles
to capture each customer’s full potential by working and spending patterns. In response to our customers’
with airport authorities and other partners to develop habits in departure shops, we have implemented “walk-
customised retail concepts and exciting commercial through” stores – a specific design where the entire
areas. In this context our latest concept is the New passenger flow goes directly through the shop – which
Generation Store, which considerably improves cus- emphasize sales and spend per passenger.
tomer engagement through an extensive use of digital
technology. It allows to change languages and market-
ing content several times during the day, in order to Over
2,300
best match the passenger profile present in the shops
at any time of the day.
Dufry’s duty-free and duty-paid operations are ex-
tremely diverse, with over 2,300 stores located across
airports, cruise lines and ferries, railway stations,
downtown, airlines (in-flight) and on-line.
stores
34Why Dufry
Arrival stores
Arrival stores offer consumers a convenient way of
shopping upon arrival at their destination without the
need to carry items throughout their whole journey.
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 can 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.
35GENERAL
TRAVEL
RETAIL
SHOPS
The general travel retail shop concept is
the most commonly used at airports. It
carries a large assortment and covers the
full range of product categories, such as
perfumes & cosmetics, food & confectionery,
wines & spirits, watches & jewelry, fashion
& leather, tobacco goods, souvenirs, elec-
tronics and others.
General travel retail shops are typically
located in central areas with high passen-
ger flow, mostly in airports, but can also
be implemented in seaports and other
locations. In airports, both departure and
arrival areas can be fitted with this shop
concept. As of December 31, 2018, Dufry
operated over 800 as general travel retail
shops. In the duty-free segment, these
shops can be identified as carrying the
name of several retail brands in our port-
folio, 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 in 2018 by one in Zurich
(Switzerland), a second one in Cancun and
one in Heathrow T3 (UK). The new genera-
tion store is an innovative evolution of the
general travel retail shop as it increases
the level of communication with the con-
sumer, by making use of digital technology.
3637
DUFRY
SHOPPING
Dufry shopping offers domestic passen-
gers a similar shopping experience in a
duty-paid environment to the one offered
to international travelers in a classic
duty-free shop, with a wide assortment
of different product categories and a
brand positioning that is similar to that
of the duty-free stores. In this context,
Dufry Shopping fulfills more a convenience
aspect as there are a number of countries
where domestic travelers account for
the majority of passengers, specifically in
large countries such as China, the United
States and Brazil, where this concept can
offer additional potential.
The concept was first introduced in Brazil,
in 2014 and was quickly expanded to 7 other
locations in the country. In 2017, we de-
buted the concept in the United States, with
the opening of a Dufry Shopping store at
Las Vegas McCarran International Airport.
3839
BRAND
BOUTIQUES
Brand boutiques enhance the traveler’s
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
dedicated retail spaces and to mirror
their high street image. To best meet each
location’s traveler profile, 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 and
as of December 31, 2018, Dufry operated
over 140 brand boutiques, among which
are included: Armani, Burberry, Bally,
Bottega Veneta, Bvlgari, Cartier, Clarins,
Chloe, Coach, Ermenegildo Zegna, Etro,
Gucci, Hermès, Hugo Boss, Jimmy Choo,
Jo Malone, Lacoste, LaPrairie, Lindt,
L’Occitane, Longchamp, MAC, Mango,
MaxMara, MCM, Michael Kors, Montblanc,
Omega, Polo Ralph Lauren, Salvatore
Ferragamo, Swatch, Swarovski, Tory Burch,
Tumi, Victorinox, Victoria’s Secret and
others. See also selection of brands on
page 55.
4041
CONVENIENCE
STORES
Our convenience stores offer a wide as-
sortment that passengers may want or
need when traveling. The range includes
soft drinks, confectionery, packaged food,
travel accessories, electronics, personal
items, souvenirs, newspapers, magazines
and books.
Within this concept, we are using different
brands according to the passenger profile
and the location. “Hudson” is our most im-
portant brand in the convenience segment
with a strong recognition from and highly
valued by passengers. As “The Traveler’s
Best Friend”, our goal with Hudson is
to provide passengers with anything they
may need during their journey.
Hudson is a successful, very flexible con-
cept operated at airports within interna-
tional and domestic areas, as well as in
other channels such as railway stations
and other transit locations. Hudson shops
are carefully designed and facilitate
orientation through whimsical, color-coded
signage to attract customers’ attention
to four distinct selling areas: Media,
Marketplace, Essentials and Destination.
North America is home to most of our
convenience stores, with almost 550 shops.
In addition, we operate 135 convenience
stores outside North America.
4243
SPECIALIZED
SHOPS
Specialized shops 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, electronics, spirits,
food, destination products, and in locations
where we see potential for a shop to carry
a broad product range relating to one
specific theme. As of December 31, 2018,
Dufry operated over 670 shops under the
Specialized Shops / Theme Stores concept.
Examples of the shop concept names in-
clude “Colombian Emeralds International”;
a dedicated watches & jewelry format used
in the Caribbean market, “Do Brasil” for
local Brazilian goods, “Kids Works” with its
wide selection of toys, dolls, games, books
and apparel for children and “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” and
“Tequileria” for a selection of finest single
malt or blend whiskies and tequilas,
“Master of Time” for luxury watches and
jewelries, “Temptation” and “Timebox” for
fashion watches and accessories, “Sound &
Vision” for multi-brand electronics, “Travel
Star” for luggage and travel aid products
and finally “Atelier”, a women’s leather
accessories store.
These shops can be located in airports,
seaports, on-board cruise liners, as well
as in hotels or downtown locations.
4445
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
reflect the category name of the products sold, on
other occasions fantasy names are used to position
the individual formats. Some of our most common
formats are presented on the coming pages and are
typically 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 emphasis
of this category is placed on luxury, exceptional ser-
vice, convenience and premium quality. Furthermore,
value for money remains an essential component of
our offer in line with customer expectations and the
heritage of duty-free retailing.
We offer a wide range of fragrances from leading
brands including luxury and super premium fragrances,
contemporary classics, lifestyle & sport fragrances,
famous faces, funky fragrances and a selection for
children. The category is represented by the most
powerful brands, such as Chanel, Christian Dior, Estée
Lauder, Guerlain, Givenchy, Lancôme, Clarins, Jo Whiskey Boutique
Malone, YSL, Paco Rabanne and many more. Liquor is also one of the most important categories in
travel retail, playing an important role in satisfying
Fragrance Boutique and Beauty Collection consumer needs and engaging them in the retail envi-
Fragrance Boutique is a store concept containing ronment. In our Whiskey boutiques we offer customers
multiple perfume brands, while Beauty Collection the best selection of products and brands across the
focusses on premium skincare, cosmetic and fragrance sub-categories – Malt Whisky, Deluxe, Whisky Blends
brands. and Irish Whiskey.
Health & Wellness
Health & Wellness is dedicated to health and wellbeing.
It offers a wide range of beauty products, bee prod-
ucts, ginseng, nutrition, personal wellness vitamins
and products especially for mother to be and children.
Local Fine Food
More and more consumers are looking for high quality
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.
46Why Dufry
World of Wine Boutique
We apply a clear segmentation to our wine offer to Boutique stands for exclusiveness, glamour and
help demystify the category and make wine shopping sophistication. It is a small to medium specialist store,
a pleasure for customers. Our World of Wine boutiques where customers can find a unique selection of mini-
are easy to navigate, with wines first divided into red mum three or more mid to high-end fashion brands
and white, and then by respective old world and new within the same retail area. The Boutique logo com-
world countries. Each segment is presented by differ- bined with a directory showing the available brands
ent regions or grapes and includes wines at a good makes it an exceptional shop concept.
range of prices. The stores offer some of the best-
known brands from countries across the world includ- Attitude
ing France, Italy, Spain, Australia, New Zealand, South Attitude is a multi-brand fashion shop concept adapt-
America and South Africa. ing the idea of an industrial environment combined
with urban street inspired art. The shop design is a mix
Atelier of raw materials that are complimented with bold
Atelier is our multi-brand women’s leather accessories colors which create together an exciting visual expe-
store focused on premium brands, with a strong pres- rience for the young attitude shopper.
ence in international markets. The store concept is
inspired by an artisan’s workshop, reflecting the Sun Catcher and Sunglasses Boutique
intrinsic, timeless value of leather accessories for Sun Catcher and Sunglasses Boutique are our store
travelers. Atelier offers a range of upmarket brands concepts for eyewear. Whereas Sun Catcher focus
including Furla, Lancel, Longchamp, Marc by Marc is on fashion, Sunglasses Boutique offers premium
Jacobs, MCM, Michael Kors, Roeckl, See by Chloe and luxury. Both store brands deliver performance in one
many more. engaging and cohesive concept. They set out to ele-
vate the entire eyewear category, and reflect our
unique philosophy of putting the consumer shopping
experience at the heart of our thinking.
47Why 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 combination
of products, visual merchandising, store design and
in-store entertainment. Temptation & Timebox offer
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, present-
ing 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. Master of Time’s
portfolio of luxury and premium brands includes
Breitling, Bulgari, Carrera y Carrera, Damiani, Dior, Sound & Vision Enriching Life hosts a rich portfolio
Gucci, Montblanc, Omega, Roberto Coin and many of high-end international electronics brands. In addi-
more. tion to Apple, Blackberry, Braun, Canon, Casio, Disney,
and Fujifilm, choices include Hasselblad, HTC, JVC,
Travel Star Lamborghini, Leica, LG, Microsoft, Monster Head-
Our luggage and travel aids, multi-brand concept store, phones, Nikon, Nintendo, Olympus, Osim, Panasonic,
Travel Star has been conceived with the traveler in Philips, RIO Beauty, Samsung, Sony, Toshiba and many
mind. It is the number one destination for luggage and more.
travel goods, combining innovation, design and perfor-
mance. Travel Star goes beyond selling luggage: it Tech on the Go focusses on the needs of the tech-
ensures reliability and efficiency for travelers for years oriented travelers offering them electronics and
to come by providing high quality products from trusted accessories.
brands that guarantee excellent after-sales care.
Travel Star offers a range of brands including Eastpak, PROVIDING A SENSE OF PLACE
Longchamp, PackEasy, Rimowa, Samsonite, Tumi and
Victorinox. Thinking...
An example for this shop type is “Thinking España”. The
Sound & Vision and Tech on the Go “Thinking” logo adds the country and it is a shop
Sound & Vision Enriching Life is our multi-brand elec- concept which conveys a strong sense of place and
tronics store which can be found at Hong Kong Inter- intends to let customers reviving memories through
national Airport. The store offers shoppers the widest a shopping experience with a typically local product
possible variety of state-of-the-art technologies and offer at the airport by reminding that it is the last
emphasizes experiential shopping across different chance to get souvenirs and food from local brands
zones such as cameras & camcorders, mobile phones, and producers before leaving the country.
notebooks, games and accessories. Committed to
“enriching life”, the store also offers interactive spaces The Spirit of...
including an “Apple Leisure Station” where customers Examples for this shop type are “Spirit of Kazakhstan”
can experience the brand’s most popular products or “Spirit of Arabia”. The “Spirit of” logo adds the
first hand. country and is a shop concept which is a native duty-
free concept store. The main idea is to offer our cus-
tomers the sense of belonging, through a simple sou-
venir- and food store that inherits the local essence.
48Why Dufry
49Why Dufry
CHANNELS
To achieve full potential in each market, Dufry operates Cruise liners and ferries
different channels and develops specialized concepts In addition to 23 ferries in Greece, Dufry operates on
which are tailored to engage consumers in any travel board 32 cruise liners world-wide, where we have a
environment. “captive audience” of consumers for 7 – 14 days. There-
fore, the aim for this particular channel is to create
Airports shops that enhance the shopping experience and
The most important channel for Dufry is by far the air- encourage passenger relationships that continue for
port business, which has always been the traditional the duration of the whole journey. In 2018, Dufry added
channel for travel retail. Airports offer a whole array 16 cruises to the existing portfolio with a total com-
of possible concepts and formats which Dufry covers mercial space over 4,000 m2. Dufry operates on the
with its dedicated shop designs. Be it landside or air- Norwegian Joy with nine shops covering a retail space
side, be it duty-free or duty-paid, general retail shops of 1,950 m2. The Joy is the first Norwegian cruise liner
or sophisticated brand boutiques, Dufry offers airport which has been built specifically for the Chinese trav-
authorities comprehensive support options and to elers. Across the cruise liners – which cover routes
successfully develop retail spaces and on how to max- from the USA to the Caribbean, Alaska, Europe and
imize sales and revenues. Asia as well as China roundtrips – Dufry operates
a total commercial space of over 13,000 m2, ranging
Border shops from 80 m2 to close to 2,000 m2 per vessel. These
Dufry operates border shops targeting customers, stores offer duty-free sales on cruise ship-branded
who live within a certain distance of a country border souvenirs, spirits, tobacco, perfumes & cosmetics,
or travel across countries. The border shops typically food, jewelry & watches, from leading brands across
offer price advantages generated either by market the world. In 2018, Dufry signed a new long-term con-
price, tax or currency fluctuation differences for cession contract with P&O Ferries to operate shops
a variety of product categories. We currently operate under the World Duty Free brand on board 15 vessels,
a number of shops in several Greek border cities and which serve several routes across the Channel, the
we actively working on further developing this chan- North Sea and the Irish Sea. The transfer of the oper-
nel in Latin American and Asian countries. ations with a total of 19 shops across a retail space of
3,600 m2 will be phased from April to May 2019.
50Why Dufry
2018 Plaza by Dufry, a shopping mall store of around
1,150 m2, was opened in the Malaysia Genting High-
lands Casino, an integrated resort located in the Titi-
wangsa Mountains, northeast of Kuala Lumpur. We
also operate retail outlets at all Center Parcs resorts
in the UK. In downtown, hotels and resorts we currently
operate more than 91 shops, 26 of which are in hotels
located in popular tourist destinations. We see down-
Railway and underground stations town, hotels and resorts as a worthwhile alternative
Dufry operates convenience stores and newsstands channel and are looking forward to expanding our
in several intercity railway stations, including Milan, presence in these areas.
Hong Kong, New York and Washington DC, offering
newspapers, magazines, books, confectionery and a In-flight services
large range of tobacco products. In early 2018, a new Dufry offers in-flight sales on board Air Arabia and
World Duty Free shop started operations in the Euro- TAP Portugal. Developed in collaboration with the air-
star departures terminal at Kings Cross St. Pancras lines and taking into account the destination, the in-
International railway station and the Dufry duty-free flight catalogue enables passengers to buy duty-free
stores in the new state-of-the-art West Kowloon MTR items during the flight, including perfumes and cos-
station serving the high-speed rail, which connects metics, spirits, gifts, watches and other items from the
Hong Kong with mainland China, opened at the same most renowned international brands. We offer a wide
time as the station’s opening in September 2018. selection of product assortments and, in cooperation
with the airline are responsible, for confirming all of
Downtown, hotels and resorts the commercial terms as well as negotiating listing
Our business has expanded to retail outlets downtown fees and marketing contributions.
and in hotels, casinos and resorts, allowing us to engage
the traveling consumer beyond the airport environ- Diplomatic shops
ment. Hotels include the Venetian & Palazzo Hotels in These shops specialize in providing embassies and dip-
Las Vegas, where three shops covering a total of lomatic missions with products at duty-free prices.
2,400 m2 provide a luxury shopping environment. In They are currently operated in Ghana and Australia.
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