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An Interview with Elisa Crotti
Elisa Crotti (Milan, 1999-2010) is executive vice president of business analysis and strategy at The Nuance Group, one of the world’s largest travel retailers, with tax-free and duty-free stores, specialty shops, and luxury boutiques in airports and other locations around the world.
It is Elisa’s job to help guide Nuance’s strategy in what is, essentially, an atypical retail environment. She is responsible, among other things, for market intelligence, business development, business planning, mergers and acquisitions, communication to shareholders, and special projects.
Travel retail, she says, is a world apart from traditional retail since it is a concession business. Success in her business, she explains, depends on excellence in retail operations, as well as relationship management with airports and with suppliers.
However, entry to new airports is often difficult due to limited available retail space. Space is locked up by contracts which have an average length of five to seven years. Moreover, public tender, despite being a common practice, is not an obligation. On the other side, Nuance has to constantly re-secure its business in order to renew or extend the contract beyond the expiration date. Therefore, a company like Nuance must build and sustain relationships with a multitude of landlords—airport authorities, municipalities, and the like.
“Even though we are effectively a retail business, a lot of what I deal with every day is business-to-business in nature, as much as business-to-consumer,” explained Elisa, who joined the company in January 2011.
She also has to deal with international time zones.
“Working across so many countries and continents, you have absolutely got to understand time zones,” she said. “That may sound simplistic, but in this job you’ve got to plan very well and you need to be flexible. Otherwise, somebody is going to suffer by having to take your call in the middle of the night.”
If used properly, she adds, time zones can work to your advantage—for instance, somebody in Europe sending a request to Australia does so at night; that request is worked on during the day in Australia; the response is sent back to Europe the following day, without much loss of productivity.
“If you are not disciplined in this regard, or if you fail to explain yourself well, you will waste a lot of time, and that same request might take two or three days more,” she said.
Also, Elisa has found that people who work in the industry tend to be in it long term. The tenure of many executives of top players in the industry is above ten years, and it’s not unusual, she says, to find people who have spent their entire working life in the industry.
“Even though I was lucky enough to gain experience in this industry during my time at BCG, I have to keep in mind that many of our customer-facing employees have been working here for a long time,” she said. “So, for instance, if I need to set a new policy, I like to follow up personally, work to gain and build respect, and find the right balance between being supportive and being forthright. That’s one reason I travel so much. I want to keep these relationships strong. I cannot do that over the phone from my office in Zurich.”
There are also issues of scale: in general, the size of an airport retail business tends to be more limited—in terms of footprint and sales—in comparison to a high street retailer. “A high street retailer can enter a market and gain mass. Our retailers don’t have that opportunity because their footprint is restricted,” she said.
Fluctuations in international currencies, too, must be considered.
“A customer might start a trip in one country, transfer through a second country, and terminate the journey in a third, with opportunities to make duty-free purchases in each,” explained Elisa. “A rise or fall in a local currency can leave a travel retailer at the mercy of competition from other vendors in other airports in other countries. This can significantly—and rapidly—impact sales; an impact not so immediately felt by a high street retailer.”
Despite these challenges, Nuance has worked to develop a sense of identity and culture, to leverage its business on an international scale while maintaining a local touch, to adapt to specific markets and customs.
“We have capable employees at the regional and country level addressing local issues while working within a set of well-established best practices and procedures, all supported by the head office in Zurich,” she said. “It is part of my role to reinforce and maintain these best practices.”
And, of course, the culture of travel itself has seen significant change in recent years.
“For sure, changes in regulation have had a big impact,” Elisa said. “Beyond restrictions on liquids and so on which have affected most of us on a personal level, new rules related to being allowed to travel with just one bag are really challenging the sales of duty-free merchandise.”
That said, other regulatory change has had a positive impact on the travel retail industry. Airline deregulation coupled with the privatization of airports, for instance, has resulted in the introduction of many new low-cost carriers, making travel, in Elisa’s words, “more democratic, something for everyone.”
The resulting growth in the number of travelers means airports are now looking for ways to build sales. “With commercial revenues becoming a more important part of their bottom line,” Elisa said, “airports are now dedicating more time, energy, resources, and investment to improving the overall retail experience of their passengers. As a result, travel retail sales are growing compared to standard, high street retail sales.”
Indeed, in the time she has worked at Nuance Elisa notes that the company has experienced steady growth. “I’m enjoying my job because I can see positive change," she said. "Also, it’s great to be part of a group of colleagues who are smart and challenging. That part feels very much like a continuation of my career at BCG—where I first had the chance to work in this industry, and where I learned a lot that is helpful to me today.
“My years as a consultant also gave me the opportunity to work for some of the manufactures who today are Nuance’s suppliers. My experience back then has given me a more rounded perspective on my work today.”
Indeed, her “BCG attitude,” she says, is proving very valuable in her current job, specifically, her attitude toward communication and problem solving. “In some companies there are breakdowns and stoppages perhaps because somebody doesn’t know how to communicate an idea or because employees are faced with a problem beyond their particular area of competence or influence.
“In my time at BCG, this type of breakdown simply did not exist,” she said. “As a principal, when I had an assignment to complete, I had to do so no matter what problems I ran into and no matter what I had to learn along the way to get the job done. BCG is where I learned to find ways not to stop.
“I’m grateful that BCG gave me the opportunity to work in this industry and to pursue my strong interest in both the travel and the retail sectors."