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On the rise: the FAWJ category holds great potential — and Gebr. Heinemann wants to lift it.

It is already a success story: despite challenging times, the Fashion, Accessories, Watches and Jewelry (FAWJ) category at Gebr. Heinemann has recorded double-digit annual growth rates over the past decade. And there is no end in sight to this development. Jan Richter, Director Purchasing FAWJ, explains: “We have successfully rolled out our expansion strategy for the FAWJ category in recent years. An important part of this is to position ourselves within a marketplace structure wherever possible. We are implementing our well-known retail formats, which range from core duty-free to multibrand concepts, often located in adjacent areas, to monobrand boutiques, through all segments from commercial to luxury. We have already successfully introduced this strategy at Istanbul and Sydney Airport, for example.”

Bringing Unforgettable Experiences to the Floor

One trend that Jan Richter recognizes in the core duty-free sector and for which he sees the FAWJ category as a strong driver is the shift toward premiumization. Consumers are no longer focusing exclusively on price advantages and availability but want an exciting and surprising assortment and unforgettable shopping experiences. One example of the successful combination of shopping and entertainment was the launch of the new and limited Hugo Boss Bottled Pacific scent, that went along with a cross-category promotion at Frankfurt Airport in May 2023. Travelers were able to experience the world around Boss Bottled Pacific as the perfume, Boss watches, Boss sunglasses, and Boss fashion items were presented together. Additionally, the travelers could enjoy Californian summer vibes by stepping on a surfboard and ride the waves with the help of virtual-reality glasses.

The desire for individual and unforgettable experiences is a trend that is here to stay — and one that creates space for new concepts. Donna Turner, Senior Purchasing Manager Watches and Jewelry at Heinemann Asia Pacific, says: “If we look at long-term shifts in the FAWJ category, experience has been something that the consumers valued more post-pandemic, and we see that reflected in brands' strategies. Especially luxury brands are investing in luxury hotels, food and beverages, sports events, and other collaborations to drive engagement. The product is almost a tangible memento from that experience. This is something that, long-term, we would like to recreate in an airport environment.”

“Total Looks”: a Tailored, Customer-Driven Approach

The Boss promotion was also in line with the emerging trend that travelers are focusing more on total looks instead of single items or categories. At Frankfurt Airport, the FAWJ space was significantly expanded at the end of 2022. With a focus on strengthening the commercial and premium segment, a ready-to-wear area and a large sunglasses area were added, both of which are performing very well. The concept offers a high degree of flexibility to respond to significant trends and curate themes that especially attract a younger target group. “Consumers want to combine products from many different brands, and we provide them with the ideal spaces for that. It is our task and our opportunity as a retailer to curate the range and develop tailored offers. Evidently, consumers are very receptive to the ‘everything under one roof' principle, which is one of our USPs as a retailer,” says Jan Richter.

The Boss cross-category promotion at Frankfurt Airport
Donna Turner, Senior Purchasing Manager Watches and Jewelry Heinemann Asia Pacific

Whatever the concept, it always has to be challenged and kept up-to-date. In the Asia Pacific region, the Heinemann team has done just that and clearly shifted to a more regionalized approach within the FAWJ category. Donna Turner explains: “In locations like Sydney and Kuala Lumpur, we have really tailored the concept to our passenger base. There's a great opportunity through the redevelopment of the FAWJ area at Sydney Airport international duty-free as well as the new shops in Sydney and Gold Coast Airport's domestic terminal to redefine the brand assortment and strategy for the local consumer, while still serving our traditional core demographics.”

Shop with a wide variety of sunglasses

Compounding the need for a comprehensive and evolving product range is the level of discernment among shoppers in Asia. Consumers know exactly what they want in terms of product, experience, and service level, which means brands are having to work harder to create a unique selling point. “It's very competitive in the region from a price and assortment perspective, as there is a significant amount of market saturation,” says Lan Anh Nguyen, Senior Purchasing Manager Fashion and Accessories at Heinemann Asia Pacific. “Customers compare more and have a stronger reliance on digital marketing.”

Heinemann shop showcasing sunglasses

The category footprint in the Asia Pacific region was further expanded with the domestic airport stores in Sydney and Gold Coast. Here also, the aim was to cater specifically to the passenger profile, with an emphasis on creating total looks to make shopping easier for the consumer. “We are featuring casual wear and athleisure in the domestic stores for the first time, aligned with the traffic and passenger mix. It's a department store look and feel, so we can be more consumer-centric, rather than only brand-focused,” says Lan Anh Nguyen.

Lan Anh Nguyen, Senior Purchasing Manager Fashion and Accessories Heinemann Asia Pacific

“Local brands have been extremely important, particularly in the new domestic airport stores where they are a big focus to create a sense of place and to meet the passenger profile. For instance, the fashion assortment in the domestic store at Gold Coast Airport is entirely local brands,” Lan Anh Nguyen adds. “We are also expanding our affordable luxury portfolio to align with how we see the trends are going. There is definitely a global shift where consumers are much savvier and more discerning about value, so we are doing a lot of work to build a portfolio that will be durable in the long-term.”

A More Circular Retail Model

Sustainability is another topic that is here to stay. “Worldwide, approximately 80 billion items of clothing are produced each year, which is enough to fill every wardrobe and of course also has an impact on the environment. We have to be very sensitive and responsible about this and implement concepts of circular and pre-owned fashion, accessories, watches, and jewelry. On the one hand, as a retailer and distributor, we naturally want to generate revenue, but at the same time, we see it as our responsibility to act sustainably,” says Jan Richter.

Irina Bezsonoff, Director of Commerce Heinemann Americas

Gebr. Heinemann is planning in the short-term to cover a significant part of the global FAWJ business with pre-owned items. “The pre-owned category holds particular significance in the American market,” said Irina Bezsonoff, Director of Commerce at Heinemann Americas. “We introduced a vintage luxury concept, now present across the Royal Caribbean fleet with a dedicated shop on Icon of the Seas. Setting the baseline in 2023, Heinemann Americas is prepared to grow in this category.” In the Americas, the FAWJ sector has experienced remarkable year-over-year growth, fueled by the three primary pillars of private label logo collections, fine watches, and pre-owned leather goods, the last two having a specific relevance for a circular retail model. Within the fine watches segment, pre-owned Rolex watches stand out as the category leader, achieving a remarkable growth since 2022. With the debut of two new Royal Caribbean ships, it is poised to develop by 40 percent on board Heinemann-operated ships in 2024 in comparison to the year 2023.

Looking Ahead

Against the backdrop of increasing competition and high consumer expectations, Gebr. Heinemann will continue to focus on the further expansion of the FAWJ category in the future, always keeping an eye on trends and developments to ensure that product and experience in-store are resilient enough to remain compelling in the long-term.

Looking at some of the exciting projects in the pipeline that will deliver new experiences to the travelers, there will be the next stages of development at Copenhagen Airport, the planned market entry into Saudi Arabia, and several activities within the cruise sector.

Photo of Jan Richter, Director Purchasing FAWJ

Consumers want to combine products from many different brands, and we provide them with the ideal spaces for that. It is our task and our opportunity as a retailer to curate the range and develop tailored offers.

The cross-category promotion at Frankfurt Airport around the launch of the Hugo Boss Bottled Pacific scent showed the successful combination of shop¬ping and entertainment — and spread Californian summer vibes.