Candy and Snack TODAY November/December 2013 : Page 66

BUYER PERSPECTIVE Michael Maslen explains how empathy, an eye for detail and savvy merchandising are guaranteeing millions of travelers stay fueled and entertained. Keeping Pace With Travelers M ichael M aslen knows that sooner or later, air, rail and bus commuters are going to stop in one of the company’s 770 newsstands, food and beverage units, specialty retail stores and duty-free shops for a snack, gift or other sundries. and for every consumer, his team has one chance to turn that person into a repeat customer with premium-quality service at top speed. Maslen, vice-president of sales, knows that’s possible: The retailer accomplishes it hundreds of thousands of times daily in 70 train and bus stations and airports coast to coast. The hudson Group, of which hudson news and hudson shops are a part, is a major candy and snack retailer in north america, with 440 newsstands in the U.s. and 30 in canada — hudson acquired competitor w h smith, Plc’s north american units in 2003. The company also claims to be the largest independent wholesaler of books and periodicals in the U.s. Further, hudson news has been named top news and gift retailer in the U.s. five years in a row by Airport Revenue News and Inside Flyer . “air travel is stressful. we want people to CONTINUED ON PAGE 68 66 Candy & Snack TODA Y N o v e m b e r / D e c e m b e r 2 01 3 w w w . c a n d y a n d s n a ck t o d a y. c o m

Keeping Pace With Travelers

Michael Maslen explains how empathy, an eye for detail and savvy merchandising are guaranteeing millions of travelers stay fueled and entertained.<br /> <br /> Michael Maslen knows that sooner or later, air, rail and bus commuters are going to stop in one of the company’s 770 newsstands, food and beverage units, specialty retail stores and dutyfree shops for a snack, gift or other sundries. and for every consumer, his team has one chance to turn that person into a repeat customer with premium-quality service at top speed.<br /> <br /> Maslen, vice-president of sales, knows that’s possible: The retailer accomplishes it hundreds of thousands of times daily in 70 train and bus stations and airports coast to coast. The hudson Group, of which hudson news and hudson shops are a part, is a major candy and snack retailer in north america, with 440 newsstands in the U.s. and 30 in canada — hudson acquired competitor w h smith, Plc’s north american units in 2003. The company also claims to be the largest independent wholesaler of books and periodicals in the U.s. Further, hudson news has been named top news and gift retailer in the U.s. five years in a row by Airport Revenue News and Inside Flyer.<br /> <br /> “air travel is stressful. we want people to stop and linger, and our staff has been trained to treat them in a relaxed, friendly way,” Maslen explains. “We have always listened to what our shoppers want and need, and we work hard to provide it.”<br /> <br /> Keeping his finger on the pulse of traveling shoppers is a critical part of Maslen’s job. As with most retailers, the Hudson Group routinely tracks consumer demographics and buying habits at the registers and through surveys, but it also uses the data to shape its branding strategies, such as the 2012 launch of Hudson branded outlets alongside its flagship concept, Hudson News.<br /> <br /> MULTIPLE CONCEPTS TO BETTER SERVE<br /> While Hudson News is a traditional newsstand with candy, snacks, periodicals, cards and souvenirs, the Hudson concept is geared toward contemporary consumers, with clean sight lines, color-coded, whimsical signage, grab-and-go foods, healthful snacks, open coolers of beverages, high-end headphones and travel essentials. The two brands aim to address the travel needs of the Hudson Group’s core demographic: 60 percent male, between the ages of 23 and 55 and affluent.<br /> <br /> Maslen reports the years of research invested in developing the Hudson News/Hudson branding strategy have paid off: Penetration rates for the new Hudson stores are “huge,” and stores converted from the Hudson News concept to Hudson report growth surpassing 25 percent.<br /> <br /> A major challenge facing the retailer is that no two stores are the same size or configuration. Stores average 750 square feet, but can vary from 200- to 300-square-foot units to 3,000- to 3,700-square-foot spaces, sometimes in the same airport.<br /> <br /> “A lot of what we are able to sell is dictated by the infrastructure and footprint of the space. With no two stores being the same size, traditional planograms don’t apply. We work with an authorization list and back into the product mix based on the size of the store,” Maslen explains. Regardless of the size and configuration, candy and snack sets wrap around the multi-station checkout counter located front and center in every unit.<br /> <br /> He says: “Our snack set is based on several factors, the most important being whether the store is located before or beyond the airport security screening area and which airlines and destinations are served in the particular terminal. The ring in our stores varies dramatically by the type of flights, and also by the commuter destinations in the bus and rail terminals.”<br /> <br /> MIX, PROMOTIONS ARE KEY DRIVERS<br /> Maslen reports the top sellers are Peanut M&M’s, Kind Almond and Coconut nutrition bars and Lay’s potato chips. The top-selling peg bag item is Peanut M&M’s. In addition to national brands, the stores stock and feature regional specialties, such as Ghirardelli Chocolate Co. items on the west coast and pralines in the south. “People expect that when they go to New Jersey, they’ll be able to buy salt water taffy,” he explains. “You have to make it available to them.”<br /> <br /> In addition, Maslen points out: “We look to enhance our product mix for international travelers, whether it’s Cadbury chocolate for European consumers or Meiji for Asian shoppers, and we have special promotional offers for international travelers in our duty-free Dufry stores and duty-paid Hudson shops. Currently, we’re running a ‘buy two, get one free’ promotion with Mondelez on Toblerone Gold 300-gram Mini Bags, as well as a ‘buy five, get one free’ program with Hawaiian Host on chocolate-covered macadamia nuts.”<br /> <br /> The rebranding afforded a chance to reassess the candy counter in both formats, he says. “It gave us another opportunity to encourage consumers to look at the candy counter by adding healthier snacks, such as nutrition bars,” he explains, adding: “A core initiative is to find a way to bring other categories outside confection to our center island cash wrap.”<br /> <br /> Hudson stores stock fresh fruit, hummus, vitamin water and “a vast number of smaller SKUs,” driven by airlines’ decision to charge for, or eliminate altogether, meal service on flights.<br /> <br /> Product mix is reviewed annually by a team consisting of Maslen, Executive Vice-President of Sales and Marketing Hope Remoundos, and Ann-Marie Santi and Sara Hinckley, Maslen’s counterparts who manage the magazine, newspaper and book categories. Their final selection is presented to the general managers at the Hudson Group’s annual trade show, but discussions with candy and snack manufacturers are held quarterly or semiannually.<br /> <br /> Maslen draws on his past experience and long-term relationships with brokers and c-store distributers to select lines and brands best suited to the needs and expectations of consumers. Core-Mark International, Eby-Brown Co., LLC, and Resnick Distributors provide the primary product mix for U.S. units and Maslen supplements the assortment through specialty wholesalers such as Jetway Snacks, LLC and Go Snacks, Inc.<br /> <br /> Hudson News’s Canadian units are sourced through Core-Mark International and O.H. Armstrong, Ltd.<br /> <br /> Specialty programs are a challenge, Maslen says, because manufacturer minimums preclude bringing those products in through the traditional network. However, he says: “If the sales opportunity is strong enough, we collectively work with our distribution network and the manufacturer to bring the products to retail.”<br /> <br /> Hudson and Hudson News stores offer gifts with purchase, featured items, daily two-for-one promotions and discounts for multiple purchases of designated items as well as participation in local and national programs. According to Maslen, consumers have responded very well. “Our general managers are entrepreneurial, and we encourage that,” he says. “We want people who can assess what consumers want and act on it.”<br /> <br /> A recent success for the retailer is the universal floorstand program in the Hudson News stores. The initiative pairs magazines with products advertised in them and displays them together with a promotional discount for a combined purchase. “We have experienced a unit sales lift of more than 95 percent on joint promotions such as the one we ran for belVita breakfast biscuits and Women’s Day,” Maslen reports. “We’ve also used this type of promotional vehicle to bring new products to market, as we did with Rickland Orchards’ yogurt bites.”<br /> <br /> ADDRESSING THE NUANCES OF TRAVEL RETAIL<br /> Responsible for product selection, distribution and marketing agreements with manufacturers, wholesale distribution agreements for all of the company’s North American retail venues and interpreting and communicating planograms to field operations, Maslen also is at the logistical center of the North American network of stores, and that presents challenges unknown to most other retailers.<br /> <br /> For example, Maslen notes, airports have restrictions about when stock can be replenished and maintenance tasks performed. His solution is to restock stores between 8 pm and 2 am. “We also continuously feed the top-selling SKUs with back stock from on-site storage. You’ll never see a Hudson or Hudson News that’s out of anything,” he says.<br /> <br /> Another unique challenge is when weather or other situations disrupt airport operations. According to Maslen, managers are empowered to keep their stores open to meet the needs of delayed or stranded travelers, and employees remain on duty until the issue is resolved. “That’s one of the reasons airports like us. Our slogan is that we’re ‘The Traveler’s Best Friend,’ and that really is how we are,” he says.<br /> <br /> BUILDING BEST-IN-CLASS SERVICE<br /> In a business focused on fast, efficient customer service for stressed travelers, employee selection is a crucial issue. The Hudson Group has 5,000 employees in North America, representing almost one-third of its 17,500 employees worldwide as a wholly owned subsidiary of the Swiss travel retailer Dufry AG, challenging human resource managers and general managers to identify candidates committed to delivering excellence.<br /> <br /> The Hudson Group takes an unusual approach to hiring. Maslen explains: “Our human resources team looks less at a candidate’s experience than for a specific type of personality. The goal is to hire for the job and train the person in operational skills, and that actually improves the turnover rate.<br /> <br /> “Speed and efficiency at the register are important. Our people are well trained to read human behavior. They know who needs to catch a plane or train and who has time to fill,” he says. “For example, at our stand in Grand Central Station, our cashiers have change already in their hands for commuters who are running to catch a train and can’t wait to be rung up.”<br /> <br /> Stores are designed to expedite shoppers’ transit, but the Hudson Group requires that every store always look as it did the day it opened. With a small footprint dominated by wide aisles to accommodate travelers with briefcases, luggage and strollers, impulse displays are made of the polycarbonate Lexan, which can withstand wear and tear better than acrylic fixtures. In addition, the stores are equipped to perform routine maintenance and spot repairs as needed.<br /> <br /> Within the past 10 years, Maslen’s strategies have grown revenues for the Hudson News/Hudson business unit from $230 million to an estimated $950 million.<br /> <br /> “At the airports, we have to re-bid regularly. Our stores’ presence is not guaranteed, and we have to compete to be in the terminal by being good tenants and maintaining a clean record,” Maslen explains. “We work very hard to protect our investment and deliver consistently great service.”

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