Travel retailer Gebr. Heinemann is opening up a new sales option in European airports as it seeks to diversify its business which is heavily skewed to duty-free shopping.
Earlier this month the Hamburg-based company opened the first iteration outside Germany of a retail concept that includes food and beverage (F&B) through a joint venture called smartseller. The store in Ljubljana Airport, Slovenia is just the start of a wider push into other smaller gateways in Europe.
A spokesperson at Heinemann told me: “Smartseller is currently talking to a handful of regional airports across Europe that could be candidates for this—locations with roughly 1-1.5 million passengers annually. If and when the concept can be implemented depends on various factors such as existing contracts at these airports and their duration, the passenger profile and, of course, the progress of Covid recovery across Europe.”
Despite these variables, the joint venture—launched early last year between Heinemann and Casualfood, an established owner-run specialist in food-to-go outlets—gives Heinemann the chance to offer smaller airports a one-stop solution that includes F&B. This retail segment has shown its resilience—versus regular shopping outlets—during the pandemic.
The value of F&B
Australia’s The Mercurius Group, says that F&B typically has the highest penetration of any travel retail format, sometimes more than 50%. “While F&B lags duty-free and luxury fashion in average transaction values, it more than makes up for this in higher penetration,” said CEO Ivo Favotto.
F&B can also become increasingly important at smaller gateways where regular shopping options may be limited and where passengers shop at the airport to avoid buying food and drink on their flights. It has therefore become a target for Heinemann.
French rival Lagardère Travel Retail, which has been expanding its luxury footprint in Chinese airports, derived more than one fifth of its €1.7 billion revenue in 2020 from F&B, and it is considered a cornerstone of its travel retail operation.
The Smartseller space at Ljubljana integrates duty-free, F&B, and convenience products in an airside walk-through area covering 10,800 square feet. Most of it opened this month—the rest is scheduled for April 2022. The brand name of the store is ‘all yours’ and the central element of the logo is a pebble, which is meant to convey a fluid customer journey.
While Smartseller has launched other integrated solutions on a smaller scale at regional airports in Münster/Osnabrück and Leipzig in Germany, the Ljubljana store is the first to be marketed under an umbrella customer-facing fascia.
A mini department store
Smartseller managing director Karl Niendorf, who was formerly MD at Heinemann Italia, said in a statement: “All yours melts the barriers between duty-free, F&B and convenience shops allowing passengers to move about as they wish. The concept evolves retail spaces from formerly rigid, category-centred assortments into four needs-oriented zones.
These zones are flagged by pebbles with names which serve as fixed points of orientation in the store: Your Location (for local products), Your Studio (a place to linger), Your Spa (a well-being area) and Your Bistro (offering F&B). Surrounding these four core areas, is the rest of the retail offer. It effectively boils down to a mini-department store for small airports. “The airport of the future must be understood as a holistic marketplace,” pointed out Niendorf.
At Ljubljana Airport, run by Fraport Slovenija, Smartseller took over from existing Heinemann duty-free and Casualfood operations. Babett Stapel, chief commercial officer at Fraport Slovenija describes the “intertwined” retail and F&B offer as “one of the highlights” of the new terminal at the airport.
There is also a practical aspect to this in that the airport operator only has to deal with a sole contractual partner for retail: a bonus for smaller gateways that have had to cut staff during the pandemic.
Heinemann—unique among its European peers such as Dufry and Lagardère Travel Retail in being a family-run, non-listed company—has been active in exploring other avenues of business in the past year. Other projects include a digital innovation hub called Gharage and expansion into the Asian downtown duty-free market. The company is managed by fourth generation cousins Claus and Gunnar Heinemann and fifth generation CEO Max Heinemann, the son of Gunnar Heinemann.