Benny & the jets

South Florida CEO, Sept, 2002 by J.P. Faber

"Take Isabella Rossellini," says Garner. "They [Lancaster, the makers of Manifesto perfume] were spending tens of millions of dollars promoting her, and we wanted to ride on that." The result: a catalogue insert featuring Rossellini's beaming image selling the fragrance. The same was true for the new J. Lo Glo perfume by Lancaster.

Indeed, beyond the psychology of product brand, shape and size, it is the catalogues which are the company's best sales tools.

They are crafted not just for each airline, but for different routes of a given airline. Catalogues for the trans-Pacific flights of Northwest and Continental, for example, are different than the catalogues for their European or Latin American routes.

"Asians like to read about products, more than Americans," says Garner. "So we make the catalogues for that audience text heavy, with small pictures. We also pack route specific. So, in this case [Asian routes] we go lighter on cigarettes and fragrances, but bigger on cognac and cosmetics."

With catalogues geared toward specific audiences, the product strategy which DFASS has developed is one of fewer items carried in greater quantity. "More depth of stock has really allowed us to accelerate sales," says Klepach. "We now typically carry about 85 items, down from 140 to 150. By comparison, Virgin [Airlines] was at one point carrying 202 items. They would run out of the more popular ones." Not DFASS, however, not if Klepach can help it.

"We design the catalogues, we produce the catalogues, we train the flight attendants, and we use the information [from them] to find out what our top sellers are," says Klepach. "We're very front line in marketing. We have a captured audience for 9 hours, or more, and we want to make the most of it."

Pushing the Envelope

It is that idea of the captured audience that is currently fueling Klepach's imagination. It's what will take his company to a whole new level, along with helping it survive -- and thrive -- in a Western Hemisphere that will eventually lose many of the trade barriers that made duty-free products such attractive items to buy.

Klepach, in fact, no longer sees himself in the business of duty-free sales, per se. Rather, he increasingly sees himself in the business of "travel retail," which simply means cashing in on the tendency of travelers to buy specialty luxury products and gifts.

Part of how Klepach wants to position himself is through airport shops, duty-free or not. He has created a new division to roll out as many as 15 shops at various US airports this year, especially in the "post-security" areas where passengers will have idle time. "You've got the passengers checking in a couple of hours early, and once they get past security you have them captured. Sometimes people buy out of boredom," says Klepach.

The shift from air to ground, and from duty-free to travel retail, has already taken place in European airports, subsequent to the formation of the European Union.

"The term 'travel retail' really defines the concept better [than duty free]," notes Lois R. Pasternak, the editor and publisher of Travel Markets Insider magazine. "That's what happened in Europe, when duties were eliminated. Once the concept of duty free was no longer in effect, it was a matter of figuring out who would run the shops at the airports."