Annual Review 2011 - The Nuance Group

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The Nuance Group Annual Review 2011 Our operations Europe Andrea Belardini CEO The Nuance Group Europe Locations Shops 41 209 Sales area (square metres) Team members 36,065 2,029 “ Travel retail has reached a level of competitiveness never experienced before – both from within the industry and from alternative channels. Here in Europe, we are witnessing saturation, so have taken wide-ranging steps to ensure we continue to deliver an excellent customer experience in this challenging environment. This has translated into converting effective customer understanding into innovative store concepts, using dynamic marketing initiatives and extending great service. This ensures our stores continue to attract, engage and inspire travellers.” Europe lies at the very heart of The Nuance Group’s business. Not only is it where we started our retail operation over 50 years ago, it is also where we operate some of our most dynamic and groundbreaking outlets today. As an industry, we have certainly faced a number of challenges over the past two years, but with challenge has come opportunity. We are pioneering a brand new approach to travel retailing in Europe, using a new ‘roadmap’ designed to make our business stronger and improve the satisfaction of our business partners, suppliers and – of course – travelling customers. The roadmap is based on seven key pillars that range from customer understanding, category management and pricing to promotions, marketing and communications. All are central to our philosophy of creating state-of-the-art passenger experiences with a retail offer that optimises consumer spend, whilst delivering value to our airport partners. A key output has been the creation of a new duty free store blueprint, featuring a series of new innovative Boutique concepts and Speciality stores, driven by extensive consumer research and deep customer understanding. Over the past year, we have invested more than CHF 17 million in refurbishing or developing almost 10,000 square metres of retail space across our European portfolio, putting our customers back at the very heart of the retail experience. In 2011, we responded to the challenging retail environment by developing and launching a number of pioneering innovations using interactive technology in-store – a global industry first. We believe that this groundbreaking approach gives us a clear competitive advantage in today’s testing market and ensures we continue to lead the field in developing exciting store concepts that appeal to today’s increasingly technologyaware consumer. The new 1,000 square metres walk-through store at Antalya Airport’s T1 is a perfect example of this in action. Launched in May, our new European Boutique concepts incorporate touch-screen technology to help inform and entertain travellers. This feature has successfully encouraged more customer interaction and ultimately played a key part in driving more business in what is already one of our most profitable locations. Following the extension of our contract at Zurich Airport in 2010, we completed a number of significant developments at our Swiss hub. This included the historic opening of the first Swiss Arrivals Duty Free Stores – we opened simultaneously at Geneva too – as well as adding new concepts for Lindt, Swarovski and Bally/Burberry. In early December, we also debuted two next-generation walk-through stores at Zurich, marking a huge step forward in shop layout. Situated directly beyond the new centralised security control, over 2,000 square metres of floor space is now dedicated to duty free shopping on both levels of the concourse. We have also opened two new Gate Shops, allowing passengers to make tax free purchases until shortly before take-off. Elsewhere, we opened a range of core and specialty shops at Toulouse-Blagnac Airport, launched a Sound & Vision shop at Hamburg and also boosted our presence in Portugal, with the opening of a new walk-through duty free store at Lisbon in early 2012. Operations at Zurich Airport +50 years 22
The Nuance Group Annual Review 2011 Specialty is a growing and key component in our overall retail offer, and in 2011 we developed and rolled out a number of new processes to help improve both buying practices and the customer experience. We focused on strengthening brand presence of key growth categories such as sunglasses, leather goods, luxury fashion and accessories, and developed exciting new store concepts to showcase these products including the world’s first Lindt concept store and our own Sun Catcher eyewear store, both at Zurich. New concepts for Ralph Lauren, Ermenegildo Zegna, Salvatore Ferragamo and Montblanc will all feature in the further expansion at Lisbon in 2012. In total, we have opened or refurbished in excess of 20 stores in Zurich, Geneva, Toulouse, Hamburg and Antalya over the past 12 months. The first half of 2012 will see another 15 new or refurbished stores at Lisbon, Zurich, Antalya and other European locations. We tailor promotional activity and strategies to the needs of our different target markets, and in many of our stores have set aside highly visible zones for bespoke activities. This approach lends itself to specific themes, such as new products or seasonal events, as well as offering an enhanced store experience such as tasting. For example, we introduced dedicated tasting areas at Antalya and Zurich this year, and these will be rolled out to other locations in 2012. Co-operation and partnership have again been key themes of the year. We put several initiatives in place to help drive sales in the increasingly challenging European market, including our ‘Find it Cheaper’ campaign, which saw us reduce the prices of over 100 best selling products in our Swiss stores. We also reinforced our commitment to value through our local ‘Best Price Guarantee’, which applies to liquor, tobacco, perfume and cosmetics products. No store, no matter how good its strategy or location, will flourish without good people. We take customer service and our people very seriously, constantly investing in training initiatives and equipping our team with a full range of tools and resources to enable them to provide the best, most knowledgeable service possible. In 2011, we refreshed and refocused our highly effective Best Selling training programme which enhances the selling capabilities of our operational team members and now includes a greater focus on customer understanding and service. Our continued commitment and investment in these initiatives, among many others, enables new and established team members to further improve their sales skills and continue to offer outstanding service to our customers. Increase in retail space +18% Australia Derek Larsen CEO The Nuance Group Australia Locations Shops 6 24 Sales area (square metres) Team members 17,424 1,044 23 “ Building strong relationships with our airport and supplier partners is pivotal to our success. We’re working hard to ensure we continue to offer travellers an exciting retail experience across our Australian operation that combines the very best of international brands and quality Australian products delivered in an environment of operational excellence.” The Nuance Group has enjoyed a 20-year presence in Australia, where we operate tax and duty free stores at all four international airport gateways, as well as a consular outlet in Canberra. We are the country’s biggest airport retailer, in terms of turnover and retail space, and are firmly committed to building on our market-leading position in this key region. This year, 5.5 million customers purchased items at our Australian stores, driven in part by an 18% increase in retail space gained by the opening of our biggest duty free store at Sydney Airport in 2010 and also our spacious walk-through First Tax Free & Duty Free shop at Melbourne Airport. We responded to consumer demand and targeted identified passenger segments by successfully adding specialty and electronics concepts to our portfolio, including a TAG Heuer shop-in-shop and Australia’s first ever Apple airport store, complementing our ‘World of...’ core concepts. These initiatives, Financial statements Review of 2011 Overview
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Annual Review 2011 - The Nuance Group

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