Starboard Cruise Services has brought in an omni-platform merchandising guru to help make the onboard retail offers of its client cruise ships as memorable and relevant as possible. Patrick Gates explains how to TMI’s Lois Pasternak.Patrick Gates, who joined Starboard Cruise Services as SVP, Chief Merchandising Officer this past October to lead the strategic vision for merchandising, planning and distribution, exemplifies the new direction that the cruise industry’s premier onboard retailer is embarking upon. Focus on the offer, the environment, the value and most of all, the guest, and make it as memorable and relevant as possible.
Starboard, an LVMH Moët Hennessy Louis Vuitton company within the Selective Retailing division, has “a new organizational structure to better support our new company vision,” explained Robin Rosenbaum-Andras, SVP of Marketing, who was tabbed by President & CEO Beth Neumann in August after a long tenure at sister company Onboard Media. “Starboard’s leadership team is a melding of old and new. The company’s new executive appointments complement the strong foundation Starboard is known for — its great people on board and strong logistics and distribution capabilities.”
Key new hires are David Goubert, SVP of Luxury Cruise Retail managing Celebrity, Crystal, Pullmantur, Royal Caribbean and Silversea partnerships and the company’s Asia office and Martin Pereyra-Rozas, new SVP, Carnival Corp. Retail who also leads the Starboard Italy office. Goubert joins from a distinguished career with Louis Vuitton and Pereyra-Rozas from extensive global experience with Nestlé and Moët Hennessy. The newly created position of VP Guest Experience Transformation is filled by Chloe Lloyd-Jones who has also joined from Moët Hennessy.
Gates, who comes from what he calls an “omni-platform retail background,” brings an eclectic set of experiences to the new role, from buying positions at high-end stores Neiman-Marcus and Barney’s New York, to senior positions at the then fledgling QVC and Home Shopping Networks.“So these were the businesses that I was closest to. Now that I’ve been at Starboard four months, I see how similar it is: every day there’s a cruise, every day you build new passengers — the same as with television. If you don’t get your product to your warehouse before your show, you miss your show. And you’re always competing for airtime so I think the pace is very similar,” he tells TMI.
Gates also spent a lot of time in e-commerce and digital, creating many of the foundations of the channel that we see today.
“We went all the way from traditional e-commerce, building the original shopping environments for AOL and all of their group of companies, and then Time Warner when we merged. Then we rolled out our e-commerce platform for CNN and Instyle Magazine, Time Inc.,” he says.
“What’s interesting are the parallels now in the travel retail industry,” he continues. “Buy online, pick up at the airport, or buy on an airplane, ship to your house so you don’t have to carry it. Those ideas are very interesting to me here as well.”
Along his way, Gates worked with some of the legendary retail gurus of the past 20 years—from Barry Diller and Diane von Furstenberg to Allen Questrom and Terry Lundgren, visionaries and great merchants, he says.
“When I look at the environments that I worked in, it was always about the guest, it was about the customer, it was about retail theater, it was always about creating an amazing experience. When you walked into Neiman’s or Barney’s, we were very, very focused on the type of service you received, the quality of product, the innovation, the uniqueness. This was how we were all schooled by Allen and Terry. You owned the assortments and when you carried a brand, you believed in that brand. You made sure the customer understood that it was important to your mix.”
Selling on cruise ships is much like selling on Home Shopping Network or QVC, says Gates.“Both have to compete with land-based or brick-and-mortar based environments so they always have to have unique offerings, and great price value. It’s not always about luxury because luxury…I wouldn’t say it’s easy, but with luxury you’re dealing with brands that already have the DNA.”
The key here, he says, is creating special environments, using the best sales people, giving great value and having a story behind the brand.
“At Starboard, we start with the guest. We’re not just trying to sell a product. You’re having a vacation, and you are creating memories—memories from where you are going, from the experience onboard, from a location you’ve never been to. Our goal is to make purchasing about creating a memory as opposed to just buying a product.
“So how do you make a memory? You connect to the guest, you create an environment that they feel is innovative and also ties to the experience of the brand that they are looking at. You use highly qualified associates who understand the brand and its story, can tell the story, and in that way, ultimately, connects the guest with the product. And we do this with all the categories of products that we carry –from jewelry to apparel, even to Johnnie Walker.
“We hold a tasting, we host a seminar onboard, we teach people how to mix drinks. You can’t do that in an airport typically, you just don’t have the time,” he says.
Gates praises Starboard for the success it has achieved bringing quality brands onboard over the years, from super luxury like Cartier and Bulgari to more mid-tier brands like a Michael Kors.
Now he is looking to develop a more “opening-tier” selection, in the $100 and below range.
“How do we really elevate those assortments? At Neiman’s or Barney’s we would create a private label product that could sit next to a designer product and we would be as proud of that product as though it were a designer product.”
This is the vison Gates says he wants to bring to categories such as costume jewelry, apparel, accessories and watches.
“This is the value component, and one way to create value is to elevate the environments in which we sell the merchandise. We have a lot of brand shop-in-shops, but how do we also make our own label or accessible luxury products feel the same way?” he asks.
In addition to reflows, renovations and upgrades to the selling space, Gates is aiming for exclusivity in the offer.
“We have many of our own product lines, but we are also finding brands that are not very heavily distributed or brands that used to have wonderful catalog presentation. We are reinventing them, and bringing them into our mix.”
These brands will only be available through the ships served by Starboard, and not sold in port. They will also provide great value, explains Gates.
“These will be brands that you recognize and say, ‘Oh, I love this brand!’ and they will be pretty much exclusive to us.”
Tailoring the global offer
Gates is particularly sensitive to the tastes of the various consumers Starboard caters to, and sources accordingly.
“We sell everything from M&Ms to fine Swiss time pieces, on ships that sail the Caribbean, the Baltics, Alaska, Australia and Asia. We are really a global retailer.”
While a good percentage of Starboard’s brands are global, Gates stresses that he must be aware of the nuances that exist in particular itineraries when selecting merchandise.
“Look at Asia, which we see as a huge growth area, for example. There’s an enormous trend in Korean products. Consumers from the People’s Republic of China perceive Korean products to be very high quality. Korean products are aspirational with Korean soap opera stars and rock stars endorsing products and they resonate very, very well with the PRC cruisers. We sell a lot of Korean beauty brands, also electronics, which are growth businesses for us.
“No matter what the itinerary, there are always indigenous categories and products that enhance our assortments and give us success,” he notes.
Starboard is also continuing to devote significant attention on merchandising and point-of-sale activities. Gates notes that promotions are mostly executed in partnership with the cruise partners and can be very focused. Nevertheless, Starboard is upgrading the promotional assortments and presenting them in more thematic ways.
“We want to make sure that even promotional items are something that passengers love and when we create an event, we theme it: Like ‘Lockets by the Sea,’ or ‘Charm School,’ or even a ‘Sip and Sparkle.’ We have collateral, we do fashion shows, we have shopping shows and we now have the shopping television where we have representatives that are almost like QVC hosts, with experts talking about new products. There’s a new competency that we’re seeing.”
Trunk shows have been particularly successful, says Gates.
“A trunk show is a great concept for a cruise. You can bring on products that typically wouldn’t be available in ship stores on a day-to-day basis. And the sky’s the limit. You can bring in categories with indigenous, local flavor. You can bring on very special pieces.”
While most trunk shows to date have predominantly been for jewelry, Gates sees a growing appeal for apparel and other designer items. Collectibles and limited editions are also proving to be extremely popular.
For luxury watch brand Hublot, Starboard brought a master watch-maker onboard with his bench and his tools, creating special watches.
“It was a phenomenal success. Watch-making is such a special trade and one that most people never get to see,” said Gates.
Invicta watches have also staged some incredibly popular events onboard the ships handled by Starboard.
“Innovation is innovation, especially with brands that people know. Invicta came up with these innovative collectable watches just for us. They take the length of the ship, and they create only that many watches. They gear the watch with the name of the ship and number it. If the ship is 1200 feet, they make 1200 watches, that is all. Then they have a special event that involves the captain. It’s great. It creates a memory, you get one of only a limited number, and it’s all about the ship.
“Tag Heuer also did a very memorable activity with us for Carnival and Royal Caribbean, placing a very tastefully done Carnival Funnel or the Royal Caribbean Crown and Anchor in gold on the face of the watch. It looked like one of the numerals.”
Memory –creating experiences like these, as well as products that tell a personal story, like the Pandora charms or the Alex and Ani bangles, bode well for the future, says Gates.
Supplying the fleet
As the onboard retailer to a fleet of about 100 ships across the globe, Starboard is especially concerned with keeping those ships filled with merchandise, a challenge Gates says he is particularly excited about.
“We are very focused on the ability to improve our supply chain, to make sure we are getting product to ships efficiently, utilizing global distribution capabilities through drop ship or local fulfillment centers. We are shortening the lead time to get products onto ships and making sure we have the right product for the right ship for the right guest.
“Because that’s also part of my world besides the merchandising. It is a wonderful challenge. You can’t sell it if it’s not there. And there’s no other business like it.”