Airport-based chain TravelPharm has sat tight at Auckland Airport for 10 years, but as of December 1, it’s opened an airside flagship store which signals big plans for the future.
Having started out as a single kiosk at Auckland Airport turning over $1 million per year in 2007, New Zealand-owned company TravelPharm has now grown into a $37 million operation boasting 180 staff and 10 stores across Auckland, Queenstown and Christchurch airports, plus the Queenstown CBD. It also has an affiliation with Casio and runs the G-Factory wristwatch stores at Auckland and Queenstown airports.
Yoon Song, founder and managing director, says the flagship that’s replaced his previous airside Auckland Airport store is a “huge upgrade”. It’s significantly bigger, and the Indesign interior features design elements aimed at creating a store that reference the natural beauty that New Zealand is famous for.
Wood finishing, artificial plants and a curved, organic design aesthetic all work towards a retail experience that feels nature-inspired.
Song is very conscious of the company’s representative role towards its international customers: “The airport, especially the departure side, is the last chance to experience or have a good memory of New Zealand, so we try to present that.”
TravelPharm general manager Hashveen Prasad says his core customers look for a “clean, green image of New Zealand” so the products stocked are a reflection of this.
At the same time as TravelPharm’s new flagship has opened, the company is also launching a new retail concept – Beecology. This is a premium honey specialty store aimed at leveraging the growing popularity of high-end New Zealand honey, and will open in April 2018. A TravelPharm-owned speciality honey store in Queenstown will also be rebranded as a Beecology outlet, with five more Beecology stores planned.
Prasad says TravelPharm’s core customers are Chinese travelers. Auckland Airport’s foot traffic is 80 percent Caucasian and 20 percent Asian, but according to Song, TravelPharm’s sales are 40 percent Caucasian and 60 percent Asian. TravelPharm was the first retailer at Auckland Airport to offer WeChat mobile payments, and now has Union Pay and Ali Pay too.
Successfully pivoting to target Asian shoppers requires a deep understanding of the market, Song says. Instead of targeting every shopper from the diverse Asian market, he recommends that retailers seeking to sell to Asian consumers take the time to identify a segment of the Asian market that suits their offering.
TravelPharm targets Asian business travelers because these shoppers are conscious of their health and beauty standards and willing to pay top dollar for what New Zealand can offer, Song says. The average spend per customer at TravelPharm is currently $500.
Song says scientifically proven items from New Zealand manufacturers are important to these shoppers.
“When it comes to Asian retail, they’re very fussy about the traceability, the reports.”
The company has maintained close relationships with its suppliers which has allowed it to work with them to create exclusive products tailored for TravelPharm’s market. One such product is Go Healthy Go Lung Health Plus, created to help combat the effects of smoking and pollution in places such as China.
TravelPharm now offers 20 ranges of exclusive health and beauty products, with Song hoping to have a further 20 on-shelf within the next year. Retail sales at the airport means solving customers’ problems and really understanding what they want, Song says.
Song, who is currently based in his native Korea, intends to take a New Zealand-themed retail offering across Asia while also expanding TravelPharm in New Zealand. His newest project is five New Zealand concept stores promoting Kiwi products in a showroom-like space, from which shoppers in Korea, Japan or China order their goods over the internet. The products ship directly from a New Zealand warehouse to the customer.
“We believe that is the future of retail, so we’re testing the market,” Song says.
His goal is to open 1,000 of these New Zealand concept stores by 2021: “Like an infection, this will spread quickly.”
Song’s vision is all about promoting New Zealand internationally through retail stores: “Whatever we do, we want to present the best of New Zealand. We are the ambassador of great New Zealand products.”