Beste Ermaner at PMI GTR discusses the impact of AI and the company’s smoke-free ambition in a GTR Magazine exclusive

Traveler behavior has fundamentally shifted. According to PMI, experience now drives duty free shopping decisions, with approximately 80% of consumers citing it as their primary reason to visit and purchase. This surpasses the traditional price advantage that once dominated the channel.

This behavioral change has elevated travel retail’s strategic importance for PMI Global Travel Retail (GTR) as it pursues its smoke-free transformation. The channel’s global footprint spanning 166 markets and seven trade channels creates direct access to a vast base of legal-age nicotine users. There are 2.2 billion international travelers worldwide, of which 360 million are legal-age nicotine users.

Beste Ermaner, VP of PMI GTR says, “The scale is big. We have a truly global footprint. Hence, we have the opportunity to reach the legal-age nicotine users in order to accelerate PMI’s smoke-free transformation at a global scale.”

Standalone markets

Each of the company’s seven trade channels behaves like a standalone market, creating a multifaceted business environment. This complexity necessitates that PMI GTR navigates diverse regulatory environments and cultural contexts across its geographic reach but also offers opportunities.

The channel advantages extend beyond its scale. Airports offer minimum two-hour consumer dwell times, creating opportunities for meaningful interaction that domestic retail cannot replicate. Larger retail spaces in travel retail also enable immersive experiences for PMI’s products.

“What matters most is to use that time in the best possible way to deliver memorable experiences to adult nicotine users, to provide right information about our products in the most relevant way,” Ermaner says.

AI: a strategic imperative

PMI GTR has positioned AI as a strategic imperative rather than an experimental trend, focusing on identifying pain points across the travel retail value chain and deploying solutions to address specific challenges.

“AI is not a trend or a hype,” states Ermaner. “Especially for travel retail, and for PMI in general, it’s a strategic imperative. Our North Star though here is to leverage AI not for the sake of leveraging but really to identify our pain points across the whole value chain of travel retail and bring in the respective solutions through AI to address those specific pain points.”

The applications span a full range from initiatives focused on productivity and efficiency to those focused on elevating the consumer experience. The shift toward experience-driven shopping has made AI particularly valuable in creating personalized engagement strategies.

“Experience is critical in our world, especially recently, since the pandemic we’ve seen a huge shift in terms of the driving reason for adult consumers to visit a duty free shop or to purchase in a duty free shop,” Ermaner says. “Experience has become the number one driver compared to price advantage in the past.”

Experience manifests across PMI GTR operations in several ways. The company focuses on exceptional multi-category portfolio presentation, as well as best-in-class physical design of retail spaces. It also prioritizes direct engagement with adult consumers with the aim to elevate quality interaction.  

New technology enables PMI GTR to connect with adult nicotine users and more effectively inform them about its smoke-free products including IQOS (the number one heated tobacco brand globally), ZYN (the number one nicotine pouch brand globally) and VEEV (the company’s premium e-vapor proposition).

Smoke-free ambition

PMI is targeting an ambitious smoke-free company transformation by 2030, with 41% of the company’s total net revenues already derived from smoke-free products.

“We have a very bold ambition at PMI,” Ermaner says. “We are aiming to become a smoke-free company. Our objective is to have two-thirds of our total net revenues come from smoke-free products by 2030. But I’m proud and happy to say that it is within reach.”

Currently, 41 million legal-age nicotine users are consuming PMI’s smoke-free products, including 32 million IQOS users. The company describes this as a major success, with impressive progress – “more than two-thirds of them have completely switched and stopped smoking.”

“Our mission is clear,” Ermaner says. “PMI has disrupted its business to develop, scientifically substantiate, and responsibly commercialize smoke-free products that are less harmful than smoking, with the aim of completely replacing cigarettes as quickly as possible.”

Travel retail plays a critical role in this transformation because of its global reach and scale, and because the channel can showcase the multi-category portfolio of smoke-free products to legal-age nicotine users.

Addressing misconceptions

Ermaner emphasizes the need to correct widespread misperceptions about nicotine. The association between nicotine and smoking-related harm stems from its historical delivery method through cigarette combustion.

“Historically, nicotine was delivered through lighting up a cigarette, and that’s why the harm related to smoking is associated with nicotine in the minds of many people,” Ermaner adds. “But this is incorrect.”

“Nicotine is addictive, is not risk-free but it’s certainly not what causes smoking-related diseases. The real problem is the burning of a cigarette, which releases thousands of chemicals, hundreds of which are known to be harmful,” according to Ermaner. PMI’s smoke-free products including IQOS, ZYN and VEEV eliminate this harm by not burning tobacco.