The man who ran Lunn Poly when he claimed it redefined high street retailing claims the move in travel retail towards controlled distribution of in-house product limits choice and risks driving customers away.
Addressing the latest ITT Odyssey Supper last week, Ian Smith, All Leisure Group chief executive, recounted the 25 years he spent at the Thomson-owned agency chain, 10 of which were at the helm as managing director.
He said the brand introduced merchandising to travel for the first time and relied on discounting and volume to establish itself as one of the most profitable travel companies, double the size of its nearest rival Thomas Cook and more profitable than many of the tour operators it sold.
Although he admitted the Lunn Poly approach wasn’t the most popular in the industry, with its TV advertising slogan ‘The Get Away’ particularly contentious, he said it always delivered what it promised to its tour operator partners.
And Smith had this warning for Thomson, which eventually subsumed the Lunn Poly brand under Thomson shortly after he left in 1999:
“I would suggest it’s no longer the powerhouse it was. The strategy has changed. When I was at the helm we had a strategy which was whatever the customer wants we would sell it. Whereas the strategy now is all about selling Thomson and the difference that makes is the mass you can get through your door. If you don’t give the customer choice they will go elsewhere; it’s as simple and as fundamental as that.”
Smith, who joined Lunn Poly in 1974 as a trainee manager, said one of the things he was most proud of from his time at the helm was the year in the early 90s when it opened 165 stores, all in hand-picked locations where it thought it could make “substantial profits”.
“We took it upon ourselves to conceive a strategy to become the biggest retail travel chain in the land. We moved from being a travel agent to a travel retailer and we started to follow normal high street principles.
“We introduced merchandising so the brochures were racked according to the volume of business you would generate in the same way as the supermarkets do. We started to contact suppliers professionally in a very thorough and efficient way.
“We focused absolutely on the customer and we focused everything around our staff as well to make sure we were able to give a very effective level of customer advice.”
Smith recalled most competitors scoffed at this supermarket-style of strategy which was pinned on discounting and promoting heavily on television to drive volume. This created what he described as the “the purchase circle” allowing Lunn Poly to demand higher commissions.
Smith said this also saw Lunn Poly capture up to 20% of the market in certain regions. “We spent a lot of money on leases in order to be in prime high street locations. We weren’t the most popular travel company in the land but at the end of the day we were successful. The motto that we went by was if we tell a tour operator that we will deliver something in terms of business we delivered it. Despite the fact that a lot of the tour operators, because we were owned by Thomson, disliked the fact we had such a sizeable chunk of their business we were so dominant and so productive that they had no option other than to let us look after their business.
“We basically changed the face of travel retailing. Lots of other people copied us but the basic model we see out today in terms of how travel shops present themselves…did not exist up until the mid 80s. Travel agency was very much in the stone age.”
At its height Lunn Poly had one and a half million customers, 800 stores £1.4 billon turnover and £25 million profit.
“What we did in effect was move the balance of power in the industry from he tour operator to the retailer much as you have seen when you look at supermarkets,” said Smith.