Customer Focus 2022 Activity

GRI Indicators covered in this section:
401-1, 404-3, 414-1, 416-1, 417-1, 417-2, 417-3, 418-1

 

SDGs covered in this section:
4.3, 4.4
5.1
8.1, 8.5, 8.8
10.3
12.8
16.3, 16.7, 16.10

Making Travelers Happy. This is the ambition outlined in Destination 2027, Dufry's new strategy as disclosed in September 2022. Putting the customer at the center of every decision we make, is what has taken Dufry to its leading position in the travel retail market. Our main mission is to meet and exceed customer expectations, which we achieve through the combination of sourcing unique product choices, providing attractive shopping environments and offering special shopping experiences. Our customers’ expectations however have evolved in recent years and have become even more sophisticated. The traditional pricevalue proposition has been enhanced with additional elements, as consumers today demand higher standards of sustainability from retailers. From privacy and data protection, to responsible marketing and communication practices, or product and supply chain stewardship, there are many elements in our offers that receive special attention from Dufry and enable us to be a more sustainable travel retailer and our customers to shop more considerately.

Creating the best shopping experience

Our corporate brand statement, WorldClass.WorldWide, reflects our ambition to create the best possible travel retail experience and shopping environments to capture the interest of travelers and to generate attractive buying opportunities. As one of the main pillars of our future growth, travel and shopping experience is based on three main elements: store design, product and service - both in-store and online.

When Dufry develops or refurbishes its stores, special attention is paid to creating a strong sense of place, thus linking the shopping environment to the individual country’s cultural heritage, where the stores are located. The powerful combination of state-of-the-art store designs with local motifs and references, alongside a carefully curated selection of local products sourced from local suppliers, results in unique shopping spaces that enable customers to experience a full cultural immersion in the destination with a true “sense of place”. Dufry cooperates closely with concession partners and brand suppliers on elements including store design, passenger flows and allocation of commercial space. With the same attention to detail, our shop design teams focus on the use of sustainable materials and follow the LEED recommendations (Leadership in Energy and Environmental Design) when designing our stores.

Industry recognition

This collaborative work results in improved passenger services, as well as more visibility and opportunities for brands. Testament to this collaboration is the remarkable example of Heathrow Airport in London, where Dufry operates a large proportion of the stores in all of Heathrow’s terminals. Awarded third place for Best Airport Shopping by Skytrax Awards in their 2022 edition, Heathrow has been in the top position for eleven consecutive years until 2020 (due to the COVID-19 pandemic, Skytrax temporarily suspended the Awards in 2021). This recognition is of special interest for Dufry, as the Skytrax Award survey gathers the opinion of over 13 million airport users, from 100 different nationalities, across more than 550 airports.

Delivering consistent outstanding customer service is Dufry´s main aspiration. No matter where our stores are located, the ultimate objective of Dufry´s Customer Retail Excellence program – an on-going training program for our sales staff – is to give our customers the best possible shopping experience. This program focuses on:

• Reinforcing customer service through ideal staffing levels according to store traffic and sales
• Providing employees with a clear focus and target for each shift
• Empowering teams through strong leadership
• Enhancing selling capabilities around our products, promotions and special lines / offers.

In supporting the program, 13 Academy Stores spread across the three main regions were rolled out globally. Located in Stockholm, Zurich, Athens, Madrid, Marrakesh, Jordan, Toronto, New York (Newark), Cancun, São Paulo, Buenos Aires (Ezeiza), Melbourne and Bali, these stores serve to test concepts and best practices, and function as a reference for stores in other airports and geographies.

Fulfilling new consumption habits

New customer behavior trends – observed in the dedicated surveys which are regularly conducted, as well as by analyzing social media channels with artificial intelligence – indicate three main requirements: availability of sustainable and wellbeing products, as well as an ongoing need for more contactless and reduced in-person interaction at the tills and more digital instore engagement. Further shifts in consumer behavior will happen in the future, and we keep monitoring the evolution to offer suitable solutions.

Looking into the future, and as presented in Destination 2027, with the collaboration of brand and concession partners, Dufry is working on launching a travel experience revolution. The related new value proposition is based on customized offerings for travelers, including elements of a holistic experience, new categories and exclusive products. This experience will be delivered both in physical “smart” stores, with a modular concept that allows us to customize the offering to different passengers, routes and nationalities, as well as through digital channels, with extensive digital engagement before and after travel, to enhance consideration and loyalty.

Sustainable product identification / Sustainable products

The choice by customers of more sustainable products when shopping is another trend seen in the last couple of years. According to research from the consultancy M1ndset, 84 % of travel retail and duty-free shoppers think a greater focus on sustainability by manufacturers has a positive impact on their perception of a brand, whilst 74 % feel that a greater focus on sustainability increases the likelihood of them purchasing products of a certain brand.

In 2021, Dufry implemented a Sustainable Product Identification System, highlighting those products that are aligned with customers' personal values and which fulfill defined sustainability criteria. The signage created for the purpose is simple and easy to understand and has been designed to highlight and create customer awareness of the various sustainability criteria associated with Dufry´s selection of products. In 2022, this initiative has been extended to additional locations and products, which now includes 675 products from 20 global suppliers across all Dufry´s core product categories and is implemented in 167 shops across 126 locations globally.

Supplier Code of Conduct

Dufry neither produces any goods nor sells any whitelabel products; except for a pilot private-label assortment, including for example, destination products introduced in the second half of 2022. As a pure retailer, all products available on our shelves are produced by third party companies. As explained in the Trusted Partner section of this ESG report, Dufry expects all of its suppliers to comply with the law, stipulated contract conditions and international best practices in respect of human rights, the environment, health and safety and labor standards. To ensure this, Dufry regularly updates its Supplier Code of Conduct, which stipulates the provisions required to be a supplier to Dufry. As an additional step, since 2018 Dufry proactively approaches its main product suppliers to secure their agreement with and / or acknowledgement of the Supplier Code of Conduct, and hence ensure the provisions included are accepted, following a 3-year cycle for reassessment.

In 2022, we have further increased the reach of our supplier certification process by adding additional providers from all main product categories – from 117 by the end of 2021 to 152. These suppliers represent 59 % (2021: 52 %) of the Group´s procurement budget (COGS). As of December 31, 2022, suppliers accounting for 52% of Dufry's overall procurement budget had accepted or acknowledged the Supplier Code of Conduct (2021: 45 %). On top of monitoring suppliers to ensure compliance with the principles established in Dufry's Supplier Code of Conduct, the company will continue to reach out to additional suppliers going forward.

Responsible marketing

Dufry’s responsibility goes beyond the products sold and includes its marketing practices (see Customer section of the Annual Report). Traditionally, Dufry has played an active role in the main travel retail associations and in the self-regulation of marketing practices, especially for the sale of alcohol. Dufry has contributed to the development of the Duty Free World Council´s (DFWC) Self-Regulatory Code of Conduct for the Sale of Alcohol Products in Duty Free & Travel Retail – called Responsible Retailer of Alcohol Products. This Code of Conduct, which complements existing codes and guidelines followed by individual alcohol manufacturing companies and other bodies, is widely accepted by most travel retailers worldwide and was signed and implemented by Dufry in 2017.

Responsible Retailer Accreditation

The DFWC’s Code of Conduct provides a unique standard for promoting responsible retailing of alcohol products in the duty-free and travel retail channels, establishing clear guidelines for commercial communications, sales of products in the travel retail and duty-free environments and for product sampling and tasting at the point of sale. The Code of Conduct is publicly available from the DFWC website.

In 2021, we took an additional step forward to obtain the DFWC Responsible Retailer accreditation. This accreditation is granted after members of our staff involved in the sale of alcohol products – both at store and office levels – have been trained on the abovementioned code through a DFWC developed training module. By the end of 2022, over 2,300 of our employees had obtained that certification. This important training is incorporated into Dufry´s training catalogue and the company continues to train all other employees who are involved in the sale of alcohol.

Further progress in several areas

Understanding our responsibility, we have made significant progress in:

• Ensuring that products on Dufry shelves adhere to the product safety principles stipulated in the Dufry Supplier Code of Conduct
• Responsible marketing communications, both instore and through our pre- and post-sale points of contact with customers, as well as in product warranties and refund policies
• Data protection and security of customer and company information
• Regularly gathering customer feedback, concerns and suggestions through our own field research and interviews conducted either online or across 50 major airports where Dufry operates, as well as through the Customer Service department, which offers direct email or telephone access to the company.

Customer service engagement

In 2022, Dufry´s global customer service team answered 154,242 inquiries (compared to 80,025 in 2021). Out of all these customer contacts, 24,222 were customer complaints, 80,426 were information requests, 34,180 were services requests, 343 were compliments and 196 were suggestions. The remaining 14,872 queries are related to contacts received that do not refer to Dufry or that the customer does not respond to. The increase in the number of contacts is related, among other factors, to the recovery of traffic volumes across all locations and to a higher number of users of Red By Dufry services (the Group's loyalty program) and the Reserve & Collect pre-order service.

The main causes of complaints were as follows:

• Product damage
• Red By Dufry missing points
• Confiscation of products
• Billing overcharge
• Error in card transaction

Case resolution time was, on average, less than 13 days.

Customer privacy and data protection

Dufry is committed to safeguarding the privacy of its customers and their personal information. Dufry has implemented the necessary management and Cyber Security systems to treat any customer’s personal information as confidential. This also includes securely storing personal information – such as for example name, surname, email address or loyalty card number – to prevent unauthorized access to it, along with ensuring that such personal information is only collected, used and otherwise processed for legitimate business purposes in accordance with applicable laws, the Privacy Notice and Dufry's Code of Conduct.

Dufry offers two website applications that collect some personal information from customers – the Reserve & Collect service and its loyalty program called Red By Dufry. These customer engagement channels have experienced a significant increase in registered users. Some personal information and preferences of these customers are collected during the registration process, so that Dufry can provide more personalized communication and in-store experience.

Online transactions

While Dufry is undergoing a digital transformation of its business and embracing digital technology across multiple customer touchpoints, the company still doesn’t handle online transactions that include payment for duty-free goods – exceptions are being made for some locations, where respective customs regulations allow for this kind of service. The above-mentioned Reserve & Collect service only allows customers to reserve products and collect them at their preferred airport location at the time the customer flies. Normally however, it is not until customers collect the products and show their boarding passes as required, that the payment is processed. This is due to customs regulations that only permit Dufry to sell duty-free products at the airport location itself.

Data protection structure and audits

Dufry’s Group Data Protection Policy sets out strict requirements for the processing of personal data of customers, business partners, employees and other third parties whose personal information Dufry may have access to. It meets the requirements of the European General Data Protection Regulation (GDPR) and globally ensures compliance with the principles of national and international data protection laws in force all over the world. The policy sets a globally applicable data protection governance and regulates roles and responsibilities among our Group companies. Dufry has a Global Data Protection Coordinator (Global DPC) who reports to the Chief Compliance Officer. The data protection organization relies on a decentralized structure, with local data protection coordinators (Local DPCs) in the relevant countries. The Local DPCs bear the responsibility for data protection matters within their scope of operations.

Our employees, as well as third-parties who provide services on Dufry’s behalf, are required by policy and process, as well as by contract, if applicable, to treat customer information with care and confidentiality. Our processes are designed to preclude unnecessary access to confidential information and Dufry has administrative, technical and physical safeguards that reflect this obligation. Dufry regularly reviews and enhances related procedures and policies.

The Group also undertakes internal Data Protection Audits and intrusion tests on a regular basis, while periodic meetings are held to discuss and improve the protection of customers’ personal data. Anyone wishing to report a grievance or ask a question regarding Dufry’s data privacy policy, or to access, delete, correct or transfer their personal information, can address such data subject requests to privacy@dufry.com.

In 2022, Dufry did not receive or register any incident regarding a breach of customer privacy.

Cyber Security

Dufry is continuously monitoring, reviewing and upgrading its processes to protect its business from potential cyber security threats that ultimately could end with theft of data. At a global level, Dufry has a Global IT Security Team that is responsible for keeping IT threats away from Dufry’s business, understanding emerging threats and investing in the necessary technology to mitigate potential new risks.

In this regard, Dufry has a number of systems and security processes in place, including a robust IT security system and a number of internal policies and procedures complying with applicable laws and regulations. This is all included in the company’s Global Information Security Policy, which is aligned with the international security frameworks ISO 27000 and the National Institute of Standards and Technology (NIST).

Dufry performs regular tests of its systems and takes several measures to improve cyber security, prevent malware infections and avoid data breaches. Amongst others, Dufry:

• Encrypts customer, payment and any sensitive data and limits access to it
• Keeps software up-to-date by installing updates and security patches
• Secures point of sale (POS) devices and applications
• Performs regular vulnerability testing to identify weaknesses
• Monitors all activity in Dufry’s systems and data for any anomalous activity and indications of threats
• Uses (and promotes amongst its employees) secure passwords and two-factor authentication
• Runs antivirus software continuously, periodically scanning systems for malicious files
• Has introduced advanced Malware protection
• Has PCI certifications in place in most of the countries where it operates
• Has established a global security monitoring and protection system overseeing Dufry’s cloud services.

Security Awareness Program

As part of the Security Awareness Program, Dufry conducts regular internal communications campaigns and both mandatory and optional training for all employees regardless of function and location. The content of this communication and training program includes relevant and individual steps towards achieving a secure IT environment, including:

• PCI DSS Awareness
• Secure Remote Working
• Phishing & Ransomware
• Password Safety
• Privacy and Data Protection
• Social Engineering
• Global Information Security Policies
• Global Policy of Acceptable Use of Technology
• Data Leak Prevention

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