Dufry tailors its airport expertise to onboard cruise sales

Dufry operates the retail concession onboard the Norwegian Joy.

Dufry Cruise Services, the giant retailer’s former Flagship division that was renamed in 2018, has grown significantly over the past few years – from handling the retail concessions onboard only 9 ships in 2012, to working with 32 ships as of 2018.

From its beginnings working with Norwegian Cruise Line, Dufry Cruise Services now operates the concessions onboard select ships with Holland America, Carnival, Cunard and P&O UK and Pullmantur.

Dufry sees the cruise channel offering interesting potential ahead, says Rene Riedi, Divisional Chief Executive Officer Central and South America, who oversees the cruise operations as part of his mandate.

“The cruise channel is now a strategic focus for the future,” says Riedi, adding that the company reorganized and enhanced the division after the company was awarded ships as a result of participating in an earlier conducted tender.

“Over the last few years we have seen a complete change of landscape with new players coming into the channel. Cruise products are much more diverse and I think the quality has grown, as well. We are seeing good products coming out like Celebrity Edge and the MSC Seaside. These are great ships and interesting concepts,” he comments.

Riedi says that cruise retail is a challenging channel but he welcomes it.

“Dufry has taken the decision to invest resources into this channel. As a result, we have made changes in the way we work with the ships and our organization structure. We have defined a whole strategy for the channel. We are excited. It is very different than what we do on shore—it is much more complex than what we do in any airport, but very interesting,” he notes.

For one thing, logistics are critical to keep the ships supplied: “This requires different skills than what we normally need onshore. We have only a small window where you can deliver – this is a challenge.”

Itinerary is also a crucial fact and can regularly change, he adds. In addition, each cruise line carries a different profile of passenger so it is a challenge.

“We need to be aware of what the guests want and tailor make our assortment and offer to accommodate them,” he says.

On the other hand, Dufry believes it can bring more of the expertise and experience that it developed working with airports and other channels to the ships, especially to the newer and larger ship contracts it has won, where it has more of a say in the onboard store designs. These new ships have been designed much more with commercial in mind.

“Look at the Norwegian Joy that launched in 2017 in Asia, where we designed the retail space. We can see a huge difference. Then came the Norwegian Bliss, NCL’s latest addition. Beginning in April 2018, we sell all product categories including fine jewelry in 750 sq. meters of retail space.

“Generally, and if the ship’s master design permits, we like to design open spaces similar to those of walk-through stores in airports,” he says.

“In our airport stores we have open spaces without walls and doors, so that passengers walk through with the offer on the left and right. I think we can take a lot from this concept to ships as well. In older ships you had the offer hidden away from the main walk-through, behind walls and behind glass doors. The idea is to create more open spaces so today we bring the offer to the guests. And we bring the guests right to the retail offer. We can develop this into the design of the ship,” says Riedi.

Dufy is also looking to introduce more technology into the design.

“We are also seeing the opportunity for more digitalization onboard ships, similar to what we have in airports. For instance, the digitalization of the store itself or the digitalization of the staff, with instore staff carrying tablets, and other aids that allow them to give better services to the guests,” he says.

The cruise channel continues to offer a huge opportunity for the future, a vision shared by all players in the channel, says Riedi.

“We are seeing a wider range of ships appealing to a broader range of guests. Virgin will be touching a completely new market audience. I think we are going to be seeing cruise lines covering more segments than we have ever seen before. Everyone will be able to find a cruise product that suits them, and we plan to be there to accommodate their retail needs.”