1

Serving international shoppers during the holiday season4th December 2018

2Agenda

1 Vinod Paul, Head of Business Intelligence and Insights• Sales seasonality• Key nationalities• Monthly arrivals

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3 Q&A Session

Said Chaarawi, Head of Retail Sales Development• How to prepare your international CRM• Building lasting relationships• Serving Chinese, Arab, Russian and American shoppers

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Seasonal InsightsVinod Paul, Head of Business Intelligence and Insights

4Sales Seasonality: Total

1.9%

1.6%

1.9% 1.9%

2.1%

2.5%

2.0%

2.6%

1.8%

2.0%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

Wk 1 Wk 4 Wk 7 Wk 10 Wk 13 Wk 16 Wk 19 Wk 22 Wk 25 Wk 28 Wk 31 Wk 34 Wk 37 Wk 40 Wk 43 Wk 46 Wk 49 Wk 52

SiS

Mix

%

ChristmasEasterRU New Year

China New Year

Golden Week

Eid al-Fitr

Eid al-Adha

Dragon Boat

Festival

USA Independence

day

Diwali

5Top 5 Nationalities: Christmas vs Full Year Sales Mix

Xmas Sales Mix

CHN 20%

RUS 8%

USA 7%

UAE 4%

HKG 4%

‘The Rest’ 56%

Full year Sales Mix

CHN 29%

USA 8%

RUS 7%

HKG 5%

KOR 4%

‘The Rest’ 48%

6Sales Seasonality: Chinese Tourists

1.5%

1.7% 1.6%

2.2%2.3%

2.4%

1.7%

3.7%

1.8%

1.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Wk 1 Wk 4 Wk 7 Wk 10 Wk 13 Wk 16 Wk 19 Wk 22 Wk 25 Wk 28 Wk 31 Wk 34 Wk 37 Wk 40 Wk 43 Wk 46 Wk 49 Wk 52

SiS

Mix

%

ChristmasEasterRU New Year

China New Year

Golden Week

Eid al-Fitr

Eid al-Adha

Dragon Boat

Festival

USA Independence

day

Diwali

7Sales Seasonality: Russian Tourists

3.4%

1.7%1.5%

1.6%

1.8%

2.6%

1.9%

2.2%

1.6%

1.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Wk 1 Wk 4 Wk 7 Wk 10 Wk 13 Wk 16 Wk 19 Wk 22 Wk 25 Wk 28 Wk 31 Wk 34 Wk 37 Wk 40 Wk 43 Wk 46 Wk 49 Wk 52

SiS

MiX

%

ChristmasEasterRU New Year

China New Year

Golden Week

Eid al-Fitr

Eid al-Adha

Dragon Boat

Festival

USA Independence

day

Diwali

8Sales Seasonality: USA Tourists

1.4%

1.2%

1.9%

2.4%

2.8%

3.4%

2.2%

2.5%

1.9%

2.2%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

Wk 1 Wk 4 Wk 7 Wk 10 Wk 13 Wk 16 Wk 19 Wk 22 Wk 25 Wk 28 Wk 31 Wk 34 Wk 37 Wk 40 Wk 43 Wk 46 Wk 49 Wk 52

SiS

Mix

%

ChristmasEasterRU New Year

China New Year

Golden Week

Eid al-Fitr

Eid al-Adha

Dragon Boat

Festival

USA Independence

day

Diwali

9Sales Seasonality: Middle East tourists

1.9%

2.3%2.1%

0.5%0.6%

2.0%

4.5%

1.4%

1.1%

2.4%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

Wk 1 Wk 4 Wk 7 Wk 10 Wk 13 Wk 16 Wk 19 Wk 22 Wk 25 Wk 28 Wk 31 Wk 34 Wk 37 Wk 40 Wk 43 Wk 46 Wk 49 Wk 52

SiS

Mix

%

ChristmasEasterRU New Year

China New Year

Golden Week

Eid al-Fitr

Eid al-Adha

Dragon Boat

Festival

USA Independence

day

Diwali

10Monthly Shopping Growth: Europe

Y-Y Sales Growth

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2017 2018

11Monthly Arrivals & Shopping Growth: Europe

Sales vs Arrivals Growth: Total

-1.4%-0.1%

-2.9%

-14.3%-11.5%

-7.7%

-3.4%

12.4%

3.4% 3.8%1.9%

-2.7%

10.3%

20.7%

13.1%

6.5%

16.4%

1.0%

5.6%

-5.1% -5.5% -5.6% -6.6%

-15.8%

-3.1%

-18.3%-15.9%

-12.3%

-0.1%

-7.1%

-2.8%-4.4%

-1.5%

0.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

Sales vs Arrivals Growth: Total Growth Gap Sales Arrivals

Spend performance lower than arrivals mainly due to the reverse of

the strong 2015 RMB position

Spend performance stronger than arrivals driven mainly by USD strength / EUR weakness

USD weakened versus 2H16/1H17 with spend performing lower than arrivals

12Destination Arrivals Growth: EuropeDec-17Dec-18

TOTAL GBR FIN+10.4% +1.7% +9.7% +2.7% +19.1% +8.5%

DEU+8.4% -0.6%

AUT+4.7% +7.5%

+4.3%

ESP FRA ITA+6.9% +5.4% +15.4% -3.0% +10.5%

13Source Market Arrivals Growth: Europe

Dec-17Dec-18

Saudi Arabia Qatar UAE India Thailand

+9.5%USA Japan

Brazil Taiwan

-8.1%

Australia

Russia China Hong Kong South Korea

+43.5%-11.7%

+31.5%+15.4%

+29.9%+5.0%-6.7% +2.0%

+5.4%+6.5%+50.0% +24.2%

+7.7%

+3.4%

+14.6%

+20.8%

+3.8%

+14.7%

Kuwait

+9.3% +8.2% +12.5% +6.1%

+18.9%

+16.0%

+14.7% -5.1%

-7.0%

+7.5%

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Sales to international shoppersSaid Chaarawi, Head of Retail Sales Development

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• Every retailer in Europe naturally focuses on local shoppers during the holiday season

• This is extremely important as European customers are trend setters

• However, it is equally important to make sure that tourists who will visit European destinations this year are also well catered for

• This will ensure that your store maximises the benefit from the significant purchasing power of international shoppers.

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The holiday season in Europe, in particular, has a special emotional appeal for tourists from all

over the world.

17As with every shopping season, preparation is everything

• Talk to your retail teams about the opportunity

• Tourists in general have high expectations of the festive atmosphere in Europe

• This is an ideal opportunity for building lasting relationships with international shoppers

• Salespeople should aim to enhance international shoppers’ holidays

• Consider contacting previous international shoppers to gather information

• Prepare your CRM data capture forms

• Tourists, in general, may think that retail prices in December in Europe are higher than the rest of the year… so make sure to present the price the right way.

18Presenting Price the Right Way

How much is this?

Retail Price

Price after VAT

Savings

19Chinese Shoppers

• Chinese love the European lifestyle and the holiday season in Europe provides another great reason for them to visit and enjoy different destinations in the continent.

• Often, Chinese customers stay longer than other nationalities. This allows them to benefit from the sales season in January and buy plenty of presents to be given during the Chinese New Year (5th February 2019).

• Christmas celebrations are especially popular among Chinese youth who exchange presents on Christmas day and tend to shop in-store rather than online during this period. China Daily reports that “Christmas Eve is the biggest in-store shopping day of the year.

20Middle East Shoppers

• Although the majority of Middle East shoppers are Muslims, there are millions of Christians from Egypt, Lebanon, Morocco and other countries who celebrate Christmas, and many of them choose to spend the holiday season with their families in Europe

• Middle East shoppers from GCC countries can have impressive purchasing power, and are drawn to the glamour of European cities during this season. Typically, they prefer to spend New Year’s Eve in Europe

• They can be impulsive buyers and don’t plan their shopping list. They tend to buy what they fancy while browsing the stores in major markets.

21Russian Shoppers

• Russian Orthodox Christmas is on 7th January 2019, so Russian customers shop up until the day before

• A big tradition in Russia is to give lavish presents during Christmas for children and loved ones, and to shop for expensive clothing to be worn during New Year’s Eve

• Russian shoppers like to buy in sets so always present the look, not the product.

22American Shoppers

• American shoppers can be your most positive and upbeat customers during this season. They expect friendliness from salespeople and a happy, seasonal atmosphere in the store

• They tend to start their shopping for Christmas earlier than other nationalities, in line with Black Friday which coincides a day after Thanksgiving in the USA. Anticipate American shoppers visiting your store from mid-November onwards.

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Q&A

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thank you