Tara Prab­hakar

Here’s the next part of Tara Prab­hakar’s take on the sixth sense of re­tail. Read on.

Point of Purchase - - CONTENTS -

The last few weeks have been hec­tic and spent in ho­tels and air­ports. As a re­sult the topic that’s top of mind is dwell time – the time spent wait­ing while trav­el­ing. Dwell time is the gold­mine that all air­port re­tail is tar­get­ing. But first, let us look at some sta­tis­tics on the busi­ness of do­mes­tic air travel in In­dia. Do­mes­tic air travel in In­dia has shown steady dou­ble-digit growth for 16 con­sec­u­tive months till Dec 2011 (when it recorded an 8% growth). In­dia’s do­mes­tic pas­sen­ger num­bers in­creased 16.6% to 60.7 mil­lion pas­sen­gers in 2011, av­er­ag­ing out at 5.1 mil­lion pas­sen­gers per month. LCC (Low Cost Car­ri­ers) held 50% of the mar­ket in Dec 2011 and their pen­e­tra­tion has al­most dou­bled over the last five years. These num­bers mean that do­mes­tic air travel is grow­ing ex­po­nen­tially and will continue so till 2020 (de­spite ris­ing air travel prices). This also means that more new fly­ers are added ev­ery year and will continue so (given the poor road and rail in­fra­struc­ture in the coun­try and the ris­ing mi­gra­tion for em­ploy­ment). This presents a po­ten­tially au­di­ence for re­tail­ers but the of­fer­ing at the do­mes­tic air­ports leaves a lot to be de­sired. No doubt air­port com­merce is grow­ing but it is still not cap­i­tal­iz­ing on the huge po­ten­tial on dis­play. A re­cent sur­vey of pas­sen­gers at the Delhi air­port re­vealed that only 50% of them had spent money at the air­port! I be­lieve that this is be­cause the method be­hind de­sign­ing the re­tail mix at a do­mes­tic air­port needs a relook. In­ter­na­tional air­ports can be in­flu­enced by Changi or other suc­cess­ful mod­els but for the do­mes­tic air­ports we need to de­velop a cus­tom­ized model; one that is de­signed for the pe­cu­liar­i­ties of In­dian avi­a­tion. While de­sign­ing re­tail op­tions to tar­get dwell time at air­ports it is use­ful to un­der­stand, de­bate and be in­spired by the fol­low­ing frame­work: Look be­yond the stan­dard pro­fil­ing pa­ram­e­ters (age, dis­pos­able in­come or oc­cu­pa­tion) - these pa­ram­e­ters can help de­sign a re­tail mix that gen­er­ates the max­i­mum rev­enue per square foot in do­mes­tic air­ports. Ex­pe­ri­ence is about travel his­tory – has the per­son flown be­fore, how of­ten, and when last. This has an im­pact on how much time the trav­eler spends at the air­port (novices pre­fer to bud­get time con­ser­va­tively and spend more time at the air­port), com­fort with nav­i­ga­tion around the air­port (aware­ness of the avail­able ser­vices and con­fi­dence to move around the air­port as op­posed to con­gre­gat­ing in front of de­par­ture screens or board­ing gates) and a pref­er­ence for brows­ing over buy­ing (un­less it is a fa­mil­iar or func­tional need such as F&B, mag­a­zines, ap­parel brands). Pur­pose of travel is not just busi­ness or leisure; there are finer nu­ances in both busi­ness and leisure. When there is an ur­gency driv­ing travel, the mind­set and re­sult­ing be­hav­ior at the air­port is very dif­fer­ent. The hours at the air­port in this case can be­come idle time spent wait­ing for the next step to­wards the travel goal and there is no at­tempt to browse or shop proac­tively. Spend­ing is fo­cused on goal-ori­ented ac­tiv­i­ties. For ex­am­ple, spend­ing at a res­tau­rant to get a quiet space to con­duct a phone call or meet­ing or ac­cess to a charg­ing point. Group pro­file is about pro­fil­ing the travel group – col­leagues, cou­ples, fam­i­lies (with elders / kids / women), size of the group, gen­der ra­tio in the group (men to women). This im­pacts how the in­di­vid­ual be­haves at the air­port and can be the sub­ject of sev­eral col­umns. For ex­am­ple, you can still see signs of tribal be­hav­ior when groups travel to­gether – herd­ing the flock, hunt­ing, guard­ing… This is the men­tal­ity that I urge my re­tail clients to un­der­stand and ser­vice via the mer­chan­dise they de­cide to stock, how they price and pro­mote it and where they lo­cate it at the air­port. Grat­i­fi­ca­tion is the fi­nal el­e­ment in this mix and has tremen­dous influence on how peo­ple spend their time and money at air­ports. An in­di­vid­ual or a group chooses to in­dulge in an ac­tiv­ity or a pur­chase for purely util­i­tar­ian rea­sons (such as buy­ing a bot­tle of wa­ter / medicines) or with a cer­tain emo­tional pay-off in mind. This could range from stim­u­la­tion to re­lax­ation to af­fil­i­a­tion to self-ex­pres­sion. The grat­i­fi­ca­tion sought could change on ev­ery trip or if the dwell time is long enough, it could even change dur­ing the trip. Grat­i­fi­ca­tions could dif­fer in man­i­fes­ta­tion by life-stage and pur­pose of the trip. For ex­am­ple, what is re­lax­ing when you are trav­el­ing on busi­ness or with fam­ily or alone is not the same.

When de­sign­ing the re­tail mix at the air­port, it is use­ful to see if all dom­i­nant grat­i­fi­ca­tions are catered to or whether cer­tain grat­i­fi­ca­tions are be­ing over­ser­viced. A ca­sual look at any of the do­mes­tic air­ports would re­veal that over-ser­vic­ing is the norm to­day. Over­ser­vic­ing typ­i­cally means more choice to the shop­per but fewer re­turns to the re­tail­ers. Look­ing at the un­met grat­i­fi­ca­tions help al­lo­cate re­tail space ef­fi­ciently and im­prove con­ver­sions for each out­let. This frame­work im­bues air­port re­tail de­sign with a na­tive in­tel­li­gence – de­sign­ing for the Who, What and Why of travel. Fol­low­ing this ap­proach, we would not have book stores in Ban­ga­lore and Pune air­ports sell the same mer­chan­dise. We would have more non-English con­tent in both air­ports (Kan­nada, Tamil and Malay­alam in Ban­ga­lore and Marathi, Hindi and Malay­alam in Pune). We would have a Café Cof­fee Day or Barista clos­ing off a small area in their seat­ing space, sound­proof­ing it and of­fer­ing it as a busi­ness lounge at a small pre­mium. We might even have a Hand­i­crafts Emporium stall in Madu­rai or a Dilli Haat store in (you-guessed-it) Delhi. The Croma store would not be sell­ing just tech; it could be sell­ing songs to load on your MP3 player / phone and there could even be a ver­sion of Big Bazaar sell­ing pack­aged Ragi puttu flour, Holige, Priya pick­les that you could carry as a gift from Ban­ga­lore to your rel­a­tives in Lucknow (All views ex­pressed here are the au­thor’s alone and not that of TNS or any af­fil­i­ated com­pa­nies. To contact Tara Prab­hakar you can ei­ther call +919731860033 or email her at tara. prab­hakar@tns­global.com)

When de­sign­ing the re­tail mix at the air­port, it is use­ful to see if all dom­i­nant grat­i­fi­ca­tions are catered to or whether cer­tain grat­i­fi­ca­tions are be­ing over-ser­viced. A ca­sual look at any of the do­mes­tic air­ports would re­veal that over-ser­vic­ing is the norm to­day. Over­ser­vic­ing typ­i­cally means more choice to the shop­per but fewer re­turns to the re­tail­ers. Look­ing at the un­met grat­i­fi­ca­tions help al­lo­cate re­tail space ef­fi­ciently and im­prove con­ver­sions for each out­let.

Tara Prab­hakar, De­vel­op­ment Di­rec­tor, TNS Re­tail & Shop­per

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