How to boost sales by attracting tourists?

The first Detsky Mir (DM) store with the area of 54.5 thousand sq. m. was built in 1957 as the largest shopping center in Europe for teenagers and schoolchildren. The place instantly became a part of the national culture, one of the symbols of a large country.

The historical shop on Lubyanka was the calling card of Moscow and attracted people from all corners of the vast USSR for a long time.

The building was transferred to the new owner in 2009, who opened the store after reconstruction in 2015 under the new sign: “Centralny Detsky Magazine na Lubyanka” or CDM.

The Detsky Mir chain itself opened the doors of the new flagship store in 2014 at Vozdvizhenka street, 10, on the site of the former Voentorg.

The central and large-scale (6.5+ thousand sq. m.) location of Voentorg, its unique concept and the need to compete with already non-native store on Lubyanka affected the level of investment and operating expenses. It was necessary to rapidly increase sales in order to cover unprecedented costs.

We formulated an absolute task – to find a source of conditionally infinite traffic (an idea comparable in complexity to the invention of “perpetuum mobile” or, translated from Latin, “eternal movement”). Why not? The boundaries of the troubleshooter's capabilities are limited only by the size of the unsolvable problem and his imagination – no one can put a bridle on thoughts.

1. An idea:

1. make the store a must-visit place
2. increase sales due to tourist traffic
3. consider Voentorg as an experimental trading platform
4. implement the approach in other countries during DM's global expansion
5. project the experience gained onto a number of stores in the Russian regions in the future.

According to the World Tourism Organization, Russia was visited annually by 20 million tourists who stayed in the country for 4-5 days, buying souvenirs worth $100. The approximate amount spent by foreigners on gifts fluctuated within the range of $2 billion per year.

The idea was to create preconditions for the aggressive growth of the new store and to increase the popularity of the Detsky Mir brand in the eyes of foreigners, which was relevant in the run-up to the company's planned IPO on the London Stock Exchange (LSE).

2. Project stages:

1. First:

Attracting four key operators of the Moscow sightseeing market in the sphere of:

• double-decker bus tours
• helicopter air tours
• walking tours in the center
• river cruises.

2. Second:

• distribution of advertising booklets and leaflets in Moscow hotels
• introduction of SKU from a new product category – “Souvenirs”.

The market of memorable gifts reflects many spheres, sides and features in other countries. Souvenirs contain local symbols, color and canons: the pyramids in Cairo, Big Ben in London, the Eiffel Tower in Paris, the Burj Khalifa in Dubai, the Statue of Liberty in New York.

The souvenirs with Indian and cowboy attributes are in demand in the USA, everything connected with samurai – in Japan, pharaohs sell well in Egypt. Tourists do not miss the chance to purchase media with information about the country - calendars, photographs, postcards.

3. Third:

• connecting tourism sector partners from the Russian regions: St. Petersburg, Kazan, Nizhny Novgorod.

4. Fourth:

• scaling the project to other countries, primarily to Kazakhstan and Belarus.

3. Key partners in the field of sightseeing tourism in Moscow

1. ”City Sightseeing”

Operator of the first transport and tourist company in Russia, working on the principle of «Hop On Hop Off» in Moscow, St. Petersburg, Kazan and Nizhny Novgorod.

Represents the format of sightseeing tours on red double-decker buses with an open top. The fleet in Moscow consisted of 14 double-deckers at the end of 2014.

Tourist traffic for 2013-2014 exceeded 250’000 people. The buses were equipped with an audio guide system, reproducing the text of the tour in 8 languages.

The company conducted tours of Moscow on three routes, two of which were in the immediate vicinity of the DM-Voentorg store.

2. “Radisson”, “Mosturflot”, “Teplokhod”.

They were engaged in tourism activities and the organization of river cruises, the companies operated 55 vessels. Tourist traffic per year - 1'000'000+ people.

The vessels used an audio guide system broadcasting of the trip text in five languages. The most popular were journeys around the historical center of the Moscow River.

Some piers were the place of mandatory stops for the “City Sightseeing” buses – the company was also the operator of the motor ships of the same brand.

3. “Moscow free tour”

According to customer reviews on TripAdvisor.com, it’s the #1 tourist company in Moscow in the field of walking group tours for foreigners and Russian-speaking tourists.

4. “HeliExpress”

It was established in September 2008 to conduct helicopter tours, transport passengers and baggage in the Central Federal District of the Russian Federation.

Founders:

• UTair Airlines OJSC – the largest helicopter operator (one of the four largest global airlines), operating a fleet of 200+ helicopters of all classes
• Russian Helicopter Systems CJSC – makes flights, technical operations and leases aircraft for aviation work.

“City Sightseeing” planned to launch the red tourist helicopters under its own brand in Moscow in the spring of 2015 to conduct regular air trips within the Garden Ring. It was assumed that such an excursion would cost 7-8 thousand rubles, and the flight duration would not exceed an hour.

4. Analysis of the partnership efficiency using the example of the City Sightseeing bus tours

1. The structure of tourist traffic of bus tours was composed of Muscovites, guests from the Russian regions and foreigners in equal proportions (33.33% each).
2. The following probable goals of tourists were considered:

• gifts for themselves and relatives
• local souvenirs as a keepsake.

3. The DM-Voentorg store could offer the following:

1. children's goods (relevant for Muscovites / guests from the regions / foreigners from a number of countries)

2. “souvenirs“ - most SKU groups combine the features of a gift and a memorable item:

• national toys: Cheburashka, Matryoshka, Tumbler doll
• keychains, magnets, pens, fans with the Russian symbols
• models of Soviet and Russian cars
• a set of blanks for painting Matryoshka dolls
• chess, backgammon with symbols
• toy pillows, bolsters
• national costumes
• modern felt boots
• gift wrap
• balalaikas
• budyonovkas.

The concept of store positioning for tourists could be as follows:

• a modern children's shopping and leisure center with a unique concept that has no analogues in the world
• the best product offer in Moscow - gifts for children and souvenirs
• a combination of Soviet heritage and advanced trends
• a children’s “treasury” of secrets and desires.

3. convenient location of the shop in the center of Moscow (two bus stops were located within a radius of 25-40 meters from DM-Voentorg):

3. Tools for influencing tourists:

1. placing the DM logo and the address of DM-Voentorg on the bus route map
2. including advertising information in brochures distributed by the partner in buses
3. offering a discount on purchases at DM with tickets from the tour partner and vice versa
4. distributing advertising brochures about DM-Voentorg in double-deckers (through stewards)
5. including an advertising track about the store in the partner's audio guides.

A number of options were rejected after discussion:

• organizing a stop in the immediate vicinity of DM-Voentorg - this would require approval from the State Traffic Safety Inspectorate and Mosgortrans
• installing plasma TVs in buses and showing videos about the store with audio guides
• opening a DM history museum on the territory of the DM-Voentorg store (30 m2).

It was assumed that the museum would introduce visitors to the historical development of the largest Russian retailer in the children's goods market. It was proposed to fill the museum collection in the following way:

• find the ways to provide assistance from the Department of Culture of the Moscow Government
• launch a campaign to collect historical exhibits from the population and DM employees
• use the exhibits from the museum located in the DM office
• order replicas of especially valuable exhibits
• create expositions and installations.

Among the museum analogues considered were:

• Children's Museum in the CDM on Lubyanka - the opening was planned for the end of 2014
• The Museum of the State Academic Puppet Theater named after S. V. Obraztsov
• Toy museums - in Sergiev Posad and in St. Petersburg
• National Museum of Childhood in London (England)
• Museum of Childhood in Edinburgh (Scotland)
• Singapore Toy Museum.

4. Strengthening the project effect with paid options

Distribution of advertising booklets in hotels using the company “Interbroshura”:

According to the assumptions:

1. Coverage of 70+ Moscow hotels of 3, 4 and 5 stars
2. Daily traffic – 100’000 people, including:

• 50% - foreigners
• 50% - guests from the Russian regions, CIS countries (visitors of conferences and business meetings).

Cost of the service – 70’000 rubles a month.

Partnership with small tourist bureaus was discussed to attract tourists for a commission of 5% of purchases.

5. Conditions for attracting partners to the project using the example of City Sightseeing:

1. a joint promotion providing for mutual discounts for tourists based on City Sightseeing tickets and receipts from Detsky Mir
2. placing advertising information about the partner on the territory of DM-Voentorg
3. inserting advertising booklets of the partner into purchases of Detsky Mir clients
4. announcing the partnership in the Detsky Mir newspaper.

6. Partnership development.

It would be relevant to develop partnerships with tour operators in other countries with the expansion of the global presence of Detsky Mir (offline and online).

“City Sightseeing” is the world’s largest network of city sightseeing double-decker buses. It operates in 110+ cities, 35 countries, 6 continents, serving a flow of 14 million people per year:

• Australia, Belgium, Great Britain, Hungary, Germany, Greece, Georgia, Denmark, Ireland, Iceland, Spain, Italy, Canada, Cyprus, Colombia, Luxembourg, Malta, Holland, Norway, the UAE, Panama, Peru, Poland, Portugal, Russia, Singapore, the USA, Finland, France, the Czech Republic, Sweden, Estonia, South Africa.
• double-deckers travel around the main attractions in each city, which are described in a synchronized audio recording in several languages.
• buses have intersecting routes in large cities.

Video about "City Sightseeing": https://www.youtube.com/watch?v=L04gc9JqK3o

5. Conclusions
   1. Partnership with four leaders of the sightseeing market would cover up to 80% of Moscow tourists.
   2. Attracting the hotels and small excursion bureaus would enhance the effect of the project.
   3. Implementation of the idea would not require material financial investments.
   4. Evaluation of the project's effectiveness would be possible at any stage.