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WDF looks to local liquor in Helsinki

Travel retailer World Duty Free (WDF) has unveiled a string of new tax and duty free stores at Helsinki Airport, with a strong sense of place running through the liquor offer.

Elena Stenholm, Finavia VP Commercial; Eugenio Andrades, WDF CEO; Ville Haapasaari, Finavia Airport Director; and Fred Creighton, COO, UK & Northern Europe, WDF, declare the T2 non-Schengen store officially open

WDF, now part of the Dufry Group, won the contract to operate several stores in Helsinki in late 2013. It is the busiest airport in Finland, and has become a significant transfer hub for flights between Europe and Asia.

Finavia, the airport operator, is currently undergoing a major expansion project which will see annual passenger numbers increase from almost 16 million in 2014 to a capacity of 20 million by 2020.

The Spirits Business was in Helsinki to see WDF officially open its 11 new stores yesterday (10 December), spanning Terminal 1, Terminal 2 Schengen and Terminal 2 Non Schengen. The openings bring the total number of WDF-operated stores at the airport to 12.

Of the 11 retail spaces, the three main walkthrough tax and duty free stores offer spirits, wine and beer.

Liquor is the third biggest category in terms of floor space, accounting for a total of 406sqm out of a total gross area of 2,519sqm, behind beauty (799sqm) and confectionery and food (448sqm).

The strong sense of place reflects both the diverse passenger mix at Helsinki, and local dark market legislation which makes it illegal to sample alcohol in store.

Thinking Finland for local liquor

The Terminal 1 store (total gross area: 283sqm) caters to the predominantly short haul, non-domestic European passengers (domestic passengers, accounting for around 18% of traffic, are prohibited from purchasing at all in the stores).

WDF’s ‘Thinking…’ sense of place concept, in this instance, ‘Thinking Finland’, is delivered through the wide variety of local liquor brands.

“Five of the [total] top 10 skus are local Finnish products – for local passengers but also people picking up a local product,” said Michael Gaffney, store manager. There is a “heavy presence” of local brands in the liquor category, including Finlandia and Koskenkorva vodkas, Helsinki Dry Gin and Teerenpeli single malt whisky.

“For next year, something we’re going to explore more is ‘sensory’,” Gaffney continued, citing Absolut activations in Russia which used scent to “attract people to the product”.

The sense of place continued in the Terminal 2 Schengen store, although the retail offer had significantly shifted to reflect the wider European passenger profile.

“We’ve started to work with ‘Contentainment’ (WDF’s experiential retail concept) especially with liquor and the sampling issue,” Gaffney explained. The retailer has already started tailoring its content to target individual flights, for example, showing special messages for Norwegian Air passengers.

The liquor offer is largely price-driven: “Given the local market and price perception – or otherwise – in Finland, we’re focused on value,” he explains. Liquor is positioned 20% lower than local market pricing.

In both the T1 store and T2 Schengen, white spirits make up the “vast majority” of liquor sales, with a major focus on gin and vodka.

The prevalence of fractional sizes – 50cl and 33cl – is noticeable. “We looked at the volume sales of half-litre sizes and wondered if we were forcing people to spend less. But they’re very strict on allowances and people like to split it,” said Gaffney. He cites 33cl Jägermeister and Underberg formats as star performers in the liqueur category.

According to the team, the interest in fractional formats even extends as far as gifting, despite 1-litre presentations tending to offer better value.

An Asian influence

The product mix changes again in the Terminal 2 non-Schengen store, where the vast majority of passengers are long haul. This is where Helsinki’s status as a growing hub airport is most apparent. 70% of passengers are in transit, with 19 Asia routes now in operation, including five to cities in China.

Such is the purchasing power of Chinese travellers that although they only account for 5% of total passengers, they make up 30% of spend in the T2 non-Schengen store.

In terms of liquor, Cognac is the number one category in the shop, with Finnish vodka second.

Signage is entirely in English and Mandarin, and in addition to the main store area, an in-store Connoisseurs Collection space features a number of high-end liquor products, including a €15,000 bottle from the Dalmore Constellation collection.

“We’ve shifted focus to Cognac,” said Gaffney, on the more Asian-centric offer in the store. “There is a huge focus on VS and VSOP,” which reflects the ongoing decline in XO variants in China and the Far East.

He added: “We want to come down from that ‘uber’ level – although they do well – and go after that €200 to €450 bracket.”

The offer in WDF’s Glasgow and Vancouver stores are citied as examples to follow in terms of product mix.

There are “no real challenges” in terms of securing products only available in limited allocation, with Gaffney adding that there is now “a lot more interest from brand partners” now the new stores are up and running.

In addition to the three main stores, WDF has also opened a 89sqm ‘Express’ retail space adjacent to Finnair’s First and Business lounges with a “small range of the main categories” including single malt and Cognac.

The geography factor

Other WDF stores now open at Helsinki include a multi-brand luxury store, a Ralph Lauren Polo space and a Lauder beauty shop in T2 Schengen; and a stand-alone MaxMara boutique, a multi-brand luxury store, an Burberry shop, and a Chocolatique concept in T2 non-Schengen.

“We were delighted to win the opportunity to operate at Helsinki Aurport,” said Eugenio Andrades, WDFG CEO.

“With its unique geographic location – the shortest route between Europe and Asia – the airport serves as the main European gateway to Asia, with an impressive 17 direct destinations to Asia in 2016.

“We have worked closely with our partners at Finavia to create the very best stores and offer passengers an inspiring choice of premium brands, exclusive products and local specialities.”

Ville Haapasaari, Finavia airport director, added: “We have been upgrading the commercial service selection at Helsinki Airport extensively during the past couple of years. Having a global operator such as World Duty Free as part of our service is a great thing for us.

“We hope that we can provide our passengers not only what they are looking for, but new experiences and positive surprises as well.”

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