The growing digital toolbox available to duty free retailers has the power to transform the effectiveness of liquor promotions in the years ahead, writes Joe Bates.
Step back in time two decades the typical duty free liquor retailer relied on a tried-and-trusted box of promotional tools, whether it be straightforward price discounts, gifts-with-purchase, liquid- to-lips sampling or more involved prize draws and competitions. Today, these promotional mechanics remain available to retailers but a growing array of digital options are possible too, from interactive digital touch screens and LCD video walls to personalized AI brand ambassadors and Virtual Reality (VR) headsets.
It’s a brave new world and a potentially complicated one for older generations to grapple with but vital to master if duty free retail wants to remain relevant. “Using digital tools in travel retail stores is extremely important for retailers and brand owners to interact with legal age Gen Z shoppers,” argues Tim Young, a former Brown-Forman GTR executive and now managing director of Young Spirit Consulting. “This consumer group expects to see and use digital technology and, if used correctly, it makes their shopping experience more interesting and easier.
“Digital tools are very helpful to educate shoppers on brands often giving them a more immersive experience than a person in the store can provide,” he continues. “Moreover, if there is a sharing element to the activity such as an opportunity to send a video message or picture to a friend, the instore experience can be amplified beyond simply what is seen instore. For brand owners and retailers, the sharing of instore experiences on social media channels is very powerful.”
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Americas playing digital catch-up
In many ways, the Americas are lagging behind other travel retail markets in their adoption of digital promotional tools and the digital retail innovations despite the U.S. and Brazil having the first and third- highest number of domestic e-commerce sites globally, according to a recent report by Markinblog. While online pre-order and loyalty member apps have become commonplace in the Americas travel retail space in recent years, other regions are experimenting with more advanced digital services.
By way of example, South Korean operator Lotte Duty Free unveiled an online liquor store last year, offering 1,200 products and targeting local Korean travelers. Lotte also installed a cocktail- serving robot bartender in its new Lotte Duty Free Wines & Spirits at Singapore Changi Terminal 2. Similarly, back in 2022, Taiwan’s EverRich Duty Free made headlines by releasing a limited-edition Year of the Tiger Kaoliang baijiu as a non-fungible token (NFT), a unique digital artwork that doubled as a certificate of ownership for the purchaser, on the NFT platform OpenSea.
In fairness, many Americas-based operators are realising they need to step up their digital game. “Digital technology while important remains a smaller part of our business,” acknowledges Chris Foster, owner of Ontario-based border operator Queenston-Lewis Duty Free. “We continue to offer digital signage throughout the store. Several suppliers continue to explore digital options within display fixture designs. We will be exploring more digital options throughout the year and will look to partner with key suppliers in getting the duty free messaging out.”
Keith Gildea, Diageo Global Travel Head of Americas, adds: “It can be argued that the Americas’ consumer is less inclined to some digital elements of marketing and sales pre-travel in comparison with say some Asia/Pacific consumers. E-commerce is not there.
“However, in one regard it is similar,” he continues. “Traveling consumers in the Americas are consuming digital content daily and this is why we have to show up pre-flight, during transit and beyond for our travel retail offer.
“The omnichannel approach is something which we believe demands the highest standards and consideration in marketing and which presents a digital opportunity over and above screen ad space which is evolving in every region.”
The benefits of an omnichannel approach
Omnichannel activations which effectively broaden promotions beyond the physical confines of the store to include the pre-flight booking stage, in-airport advertising locations, airline, airport and retailer websites and social media platforms are undoubtedly growing in popularity in the Americas. A fine example was last September’s month-long Jägermeister ‘The Secret is You’ campaign pop-up which ran at New York JFK Terminal 4 in partnership with DFS Group and airport advertising company Clear Channel Outdoor.
Large Clear Channel Outdoor screens and video walls throughout the terminal directed passengers to the 90 square-meter pop-up situated next to the DFS Wines & Spirits store. Consumers were then offered an ice-cold shot of Jägermeister and could pose in front of a camera, choosing from a range of animated artistic backgrounds, including one with New York City landmarks, to relive some of the best nights out.
The fun images were then shared on the pop-up’s giant screen, in Jägermeister’s online Ice Cold Gallery and on social media. The travelers were emailed the final image as a poster which could then be shared on various social media platforms. “Digital and consumer-centric activations will remain a key cornerstone of all our high-profile promotions as we strive to connect, engage and excite travelers by bringing the Jägermeister brand to life,” insists Mast Jägermeister vice-president global travel retail Tobias Witte.
AI and personalized recommendations
AI technology has experienced a period of explosive growth over the past few years, fueling both excitement and concerns. The global race to harness AI’s power is already well underway, with its influence already rippling across various sectors, including travel retail. In the realm of promotions, AI is proving very adept at creating personalized recommendations for travelers.
A prime example of this trend is Diageo’s AI-backed ‘What’s Your Whisky’ tool which was developed to help unlock Scotch for those who might not have tried it before, might be reluctant to consider it or wonder how to dip their toe in the water of such a complex, possibly intimidating category. “This flavor-based question tool we can use on e-commerce platforms, host on websites or indeed offer in-person airside via screens and tablets,” explains Diageo Global Travel’s Gildea.
He adds that the ‘What’s Your Whisky’ is already being used with Diageo’s retail partners in the Americas, including at Attenza Duty Free in Panama, with Aer Rianta International at Montreal airport; Avolta at Toronto airport, and with border store operator UETA.
Similar technology was used by Bacardi Global Travel Retail (GTR) last October at Miami airport in partnership with Duty Free Americas in an ambitious Bacardi Rum Tales activation. This promotion sought to tempt travelers to trade up to more premium Bacardi-owned rums such as artisanal Venezuelan rum Santa Teresa 1796, Caribbean blended rum Pyrat and Facundo, an ultra-premium Puerto Rican rum sourced from the private reserves of the Bacardi family.
The activation featured a digital Rum Selector platform which travelers could access by scanning a QR code in-store with their smartphones. They could then take an interactive quiz asking them questions about their interests, lifestyle and flavor preferences to guide them to a recommended rum choice. Highlighting the omnichannel nature of the campaign, travelers were also encouraged to try the Rum Selector via a targeted digital marketing campaign that engaged with them before they traveled.
Don’t forget the human touch
In the rush to embrace digitally driven promotions, there are downsides and dangers, of course. Costs can be high and operators and their brand partners have to be transparent about their data collection practices and protect customer privacy, for instance. Technology should be intuitive and user-friendly, regardless of the customer’s tech-savviness. It should also be robust in the high-footfall environment of airport retail.
“The big downside to technology is when it stops working or isn’t working properly,” argues Young. “I have been in many stores when screens are blank and this clearly does not look good. Also, digital tools must work hand in hand with people. In my experience, it is not enough to have a sophisticated touch screen in a store and expect shoppers to use it. Instore staff are needed to help guide shoppers and encourage them to use the technology.”
Similarly, passionate and knowledgeable human sales staff remain vital. “Digital certainly has its place, but so do traditional methods of marketing,” insists John McDonnell, managing director international at Tito’s Handmade Vodka, which recently installed an in-store digital screen at Honolulu airport which proved successful. “In this increasingly high-tech world, it’s important not to lose focus on the importance of high touch, that personal interaction with real people.”
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What will the future bring?
Looking to the future, it’s clear the advent of AI is only going to increase the speed of digitization within travel retail, affecting every area of the business, including promotional activations. Against this backdrop, Fiona Harkin, foresight director of leading international trends consultancy The Future Laboratory argues travel retail need not be a laggard but could emerge as an excellent testing ground for what she labels “EQ-Commerce”.
“This is seeing innovative retailers experiment with technology to create intelligent, empathic commerce journeys – where every touchpoint is a learning opportunity, and AI is catering for customers’ idiosyncratic needs and wants at scale,” she explains.
“In an age when brand loyalty is dwindling, brands and retailers are creating new opportunities for engagement, destinations for hyper-personalized, bespoke and omniscient relationships with their customers. This means offering Discovery Commerce using dynamic, real- time personalized shopping feeds that are incredibly accurate at deciphering what a person is looking for.”
She argues that NFTs and virtual stores shouldn’t be one-off gimmicks for travel retailers but opportunities to forge long-lasting relationships with customers. As for spirit brands, she urges them to invest in data partners so that digital marketing can become personalized and to put more emphasis on strengthening customer loyalty. “Ensure every customer is a collector and every promotion is an opportunity for AI to leverage learnings on core customer values.”
Harkin’s detailed future vision is, of course, a world away from the simple price-off discounts and sampling opportunities of the analogue era but travel retailers of all ages need to understand that times have changed. If properly implemented and utilized, digital technologies can have a transformative effect, increasing sales, retaining customers and building brand equity.
Edrington Global Travel Retail partnered with International Shoppes to open an immersive pop-up at JFK Terminal 1 featuring the newly launched global travel retail exclusive The Macallan Colour Collection.
The nearly 800 sq ft. JFK Terminal 1 Macallan Pop Up Space which opened in September 2023 is fully personalized to create a memorable encounter of The Macallan brand and Colour Collection. It remained open through the end of March 2024.
QR codes are featured throughout the store and bring to life an augmented-reality experience to educate customers on the unique messages of the collection and the various whisky notes.
The Pop Up features an interactive customer engagement tool “Discover Your Expression” which assists customers to find the appropriate age-statement suited to their individual preference.
“We are committed to offering the best products and exceptional customer service to our traveling clientele and digital plays a pivotal role in assisting on that. We consistently partner with our vendors to explore new and exciting ways to engage customers on a journey of exploration and discovery,” says Scott Halpern, International Shoppes co-CEO.
