Op­ti­mis­ing Rev­enue Po­ten­tial and Pas­sen­ger Ex­pe­ri­ence

Op­ti­mis­ing Rev­enue Po­ten­tial and Pas­sen­ger Ex­pe­ri­ence

Images Retail - - FRONT PAGE - – By Zainab S Kazi

The Yesteryears… It is al­ways in­ter­est­ing to re­visit the pages of his­tory to know the ori­gin of things. The jour­ney of travel re­tail is in its 71st year. The Shan­non air­port, in Ire­land, is where the first steps were taken in 1947. This air­port served as a tran­sit stop for flights between Europe and North Amer­ica. Once the pas­sen­gers had passed pass­port con­trol, they could shop to their hearts con­tent with­out end­ing up hav­ing to pay taxes and du­ties on their pur­chases.

The con­cept caught mo­men­tum in 1960s when two Amer­i­can en­trepreneurs – Char­les Feeney and Robert Miller – started DFS (Duty Free Shop). Hong Kong was their first des­ti­na­tion fol­lowed by fast-paced global ex­pan­sion. To­day, DFS stands as one of the world’s largest and most in­flu­en­tial re­tailer. The In­dia Story

In In­dia, the his­tory of air­port re­tail isn’t very old. The ma­jor turn­ing point that gave a boost to travel re­tail (spe­cific to air­ports) in the coun­try was with the emer­gence of PPP air­ports. Saloni Nan­gia from Technopak elab­o­rates, “In In­dia, the fo­cus came only a few years ago, with the PPP Air­ports (New Delhi, Mum­bai, Ban­ga­lore and Hy­der­abad) and some AAI Air­ports tak­ing a lead. So the years from 2008 on­wards, when the new PPP air­ports came up, were the start­ing point. If we take a look into the cur­rent dy­nam­ics of re­tail, the en­tire de­bate re­volv­ing around oǎine vs. on­line re­tail holds no ground. Each has its own place and each of it is grow­ing strong at its own pace. From high streets to malls and now to air­ports, rail­way sta­tions, metro sta­tions and high­ways, oǎine re­tail man­ages to NJnd new grounds each time the chal­lenge of its ex­is­tence crops up. Tran­sit re­tail is not new but then in In­dia, it has been in ex­is­tence since less than a decade in the true sense and it is only now that it is pick­ing up tempo to be a topic of dis­cus­sion at any re­tail meets and fo­rums. Go­ing by the over­all opin­ions, we can safely say that Tran­sit Re­tail is poised for growth and with PPP Air­ports and Metro Sta­tions, the go­ing is only go­ing to get bet­ter.

The ex­pe­ri­ence and busi­ness model has evolved since then.”

To hear it from the spokesper­son of GVK – the com­pany which leads Mum­bai In­ter­na­tional

Air­port Ltd. that man­ages and op­er­ates the Ch­ha­tra­p­ati Shivaji Ma­haraj In­ter­na­tional Air­port, Mum­bai, “Travel re­tail is com­pletely de­pen­dent on the trav­el­ling pop­u­la­tion. With 300+ mil­lion pas­sen­gers in FY 17-18 trav­el­ling to/from In­dian air­ports, grow­ing at 16.5 per­cent YOY, and travel re­tail pro­jec­tions in­di­cate that this is bound to grow by leaps and bounds. As per the re­port of Tech­navio, global travel re­tail mar­ket is ex­pected to grow by 8 per­cent YOY upto 2021.”

Ac­cord­ing to GVK, the fu­ture of travel re­tail holds lots of po­ten­tial. As per Red­seer Re­search, In­dia will be amongst the top 10 global duty-free mar­kets by 2025. This is well ac­cen­tu­ated by the fact that to­day air­ports have evolved from be­ing a pure util­ity to des­ti­na­tions of­fer­ing var­i­ous ser­vices, fa­cil­i­ties and con­ve­niences un­der one roof. As the spokesper­son adds, “With this evo­lu­tion, pas­sen­gers not only de­cide the air­line they want to travel on but also se­lect the pre­ferred air­port(s), de­pend­ing on the tran­sit pat­terns.in In­dia, the air­port in­fra­struc­ture is con­tin­u­ously grow­ing. Not only the metro air­ports but Tier II/III air­ports are ex­pand­ing their in­fra­struc­ture, fol­lowed by the ser­vice of­fer­ings. This is con­sid­er­ing the fact that there is a sig­nif­i­cant jump in the trav­el­ling pop­u­la­tion with an in­crease in the pur­chas­ing power, more busi­ness needs, etc. At Mum­bai Air­port, our ob­ser­va­tion is that more than 98 per­cent pas­sen­gers spend an av­er­age of one hour at the air­port for do­mes­tic flights, while 83 per­cent pas­sen­gers spend around two hours for in­ter­na­tional flights.”

Talk­ing about the con­ver­sion rate, the GVK spokesper­son points out that given the right prod­uct as­sort­ment, a pas­sen­ger can eas­ily be con­verted from a win­dow shop­per to an ac­tual shop­per. Though he points out that in In­dia, the con­ver­sion rate is still low com­pared to ma­jor global air­ports - less than 30 per­cent, but we are grad­u­ally see­ing an in­crease in con­ver­sion rates.

The pri­va­ti­za­tion of air­ports be­gan in In­dia in 2009. This was also the time Travel

Food Ser­vices spot­ted the op­por­tu­nity of­fered in the space of food re­tail­ing and took the leap of faith to be a part of the rev­o­lu­tion and evo­lu­tion of Air­port Re­tail­ing in In­dia. Gau­rav De­wan, Chief Op­er­at­ing Of­fi­cer & Busi­ness Head – Travel Food Ser­vices

shares, “We had started in the ini­tial days, when air­ports were just get­ting pri­va­tised and not many op­tions were avail­able in terms of re­tail or F&B. Back in those days, the chal­lenges were many, right from get­ting and cre­at­ing brands to sup­ply chain, every­thing was nascent. There was not a sin­gle day we did not learn, and we are still learn­ing.”

Shar­ing de­tails about the cus­tomer dif­fer­en­ti­a­tion, he adds, “The pro­file of a per­son who goes to a first-class lounge is com­pletely dif­fer­ent from a per­son who eats at a food court. We plan our out­lets as per the cus­tomer pref­er­ences, the right mix of part­ner brands, in-house brands and lo­cal favourites. Part­ner brands are sim­i­lar, like a Domi­nos that ap­peals to all classes of TG. At the same time, we also in­tro­duce lo­cal favourites; for in­stance, Visakha­p­at­nam has Sai Ram Par­lour, Kolkata has Kusum Rolls, Delhi has a Dil­listreat and so on.”


Scout­ing the Op­por­tu­ni­ties It goes with­out say­ing that air­ports and metro sta­tions of­fers ex­cit­ing op­por­tu­ni­ties for re­tail­ers. The same can­not be said about high­ways and rail­way sta­tions. Be­fore we get into the why of this, it is in­ter­est­ing to hear from Saloni Nan­gia on the op­por­tu­ni­ties all of these of­fer to­gether. “There are mul­ti­ple op­por­tu­ni­ties for re­tail and food ser­vices in travel re­tail, in­clud­ing air­ports, rail­way sta­tions, high­ways, bus sta­tions, and now metro sta­tions in many ci­ties,” she says.

But then have these been well uti­lized? Nan­gia is of the opin­ion that the op­por­tu­ni­ties haven’t as yet been truly cap­i­tal­ized upon. “While there are ba­sic re­tail and food ser­vices op­tions avail­able in most of these cases, these op­por­tu­ni­ties have not been de­signed or planned to create ex­pe­ri­ence / con­ve­nience for the pas­sen­ger and gen­er­ate ad­di­tional rev­enue for the travel op­er­a­tor. World­wide, non fare rev­enue (rev­enue gen­er­ated through all other ac­tiv­i­ties apart from the travel fare) can be as high as 55-60 per cent of the to­tal rev­enue gen­er­ated by the travel op­er­a­tor,” she ex­plains.

Lakhs of pas­sen­gers use the met­ros, rail­ways and high­ways on a daily ba­sis. This is rea­son enough to catch the at­ten­tion of a dis­cern­ing re­tailer and plan out a re­tail for­mat that can be repli­cated across the coun­try. Ac­cord­ing to Pan­neer­sel­vam Madanagopal, Chief Ex­ec­u­tive Of­fi­cer, Stake­holder Man­age­ment

Con­sult­ing, the Re­liance A1 Plaza was sup­posed to be a game changer but then the project fiz­zled out. Chal­lenges of Travel Re­tail Talk­ing about the chal­lenges tran­sit re­tail faces in In­dia, Nan­gia says, “Tran­sit re­tail, es­pe­cially in air­ports, is not of the same scale as we see in some key tran­sit hubs across the world. Usu­ally pas­sen­gers get to spend time in tran­sit air­ports across the world which helps in in­creas­ing travel re­tail rev­enue. In­dian air­lines and air­ports have not been able to de­velop any of the In­dian ci­ties as an in­ter­na­tional tran­sit hub, so there is neg­li­gi­ble rev­enue op­por­tu­nity there. In the do­mes­tic mar­ket, some of the larger air­ports (Delhi, Mum­bai) have be­come tran­sit air­ports for do­mes­tic air travel and of­fer a good re­tail op­tion for the tran­sit pas­sen­gers. Their role as tran­sit hubs might be­come lesser with many more short haul flights be­ing in­tro­duced by the air­lines between smaller ci­ties and with the Udaan scheme gain­ing mo­men­tum.”

And like at malls and high streets, is there a con­cept of ‘suitable shop­ping time’ within the air­ports? Ac­cord­ing to GVK, it is more re­lated to the prod­uct mix. Ex­plain­ing this, the spokesper­son shares, “This is true as more the num­ber of pas­sen­gers, more will be the shop­ping and higher the con­ver­sions. How­ever, there are other pa­ram­e­ters which need to be kept in mind apart from

the con­cept of ‘suitable time.’ Con­ver­sions are di­rectly re­lated to the type of prod­ucts of­fered, value deals and the over­all as­sort­ment of com­mer­cial of­fer­ings. For ex­am­ple, if there are no prod­uct of­fer­ings which cater to the re­quire­ment of busi­ness traf­fic, de­spite the fact that there are busi­ness trav­ellers, it will be dif­fi­cult for an air­port to see higher con­ver­sions.”

So, what ac­tu­ally pulls the shop­pers to shop at air­ports con­sid­er­ing that the sim­i­lar brands are present at malls and high streets? Is it the pric­ing or the need? The

GVK spokesper­son strongly at­tributes the an­swer to the over­all ex­pe­ri­ence.

“To­day’s in­tel­li­gent cus­tomer looks for the value in each trans­ac­tion, whether at the air­port or out­side.

With more travel, air­ports are be­com­ing des­ti­na­tions in them­selves and pas­sen­gers spend con­sid­er­able time at the air­ports. With these three key vari­ables, it is in­cor­rect to say that there is more of need based shop­ping at the air­ports. In case of prod­ucts where pric­ing dif­fer­en­ti­a­tion is high com­pared to city side pric­ing (e.g. liquor), pas­sen­gers tend to shop at the air­port. Also, over­all ex­pe­ri­ence of the pas­sen­gers at the air­port is sig­nif­i­cantly higher com­pared to down­town / malls, thereby fur­ther al­le­vi­at­ing the ten­dency to shop at the air­port,” he says.

Just like it hap­pens in malls, the brands and the de­vel­oper here work in sync as well to pro­mote con­sumerism. There is a con­tract in place and the brands re­ceive a thor­ough hand holdin­gas and when needed. The GVK spokesper­son shares, “A typ­i­cal con­tract du­ra­tion is for 5 years how­ever the du­ra­tion varies if in case it is a mas­ter con­ces­sion­aire. We have a mix of rev­enue shar­ing and min­i­mum guar­an­tee mod­els. We work on the premise of ‘win-win’ with our brands. Through var­i­ous mea­sures we en­sure that the brand con­tin­ues to per­form well at the air­port, main­tain­ing a long-term re­la­tion­ship.

These mea­sures in­clude rou­tine re­views, pro­mo­tions, mar­ket­ing, etc. Dis­con­tin­u­ance is the last, ex­treme step.”

On the zon­ing, the spokesper­son ex­plains that zon­ing is de­pen­dent on what are the var­ied cat­e­gories of pas­sen­gers and their re­quire­ments. Ac­cord­ingly, var­i­ous com­mer­cial cat­e­gories are formed. As de­tailed by the Air­ports Coun­cil In­ter­na­tional (ACI), there are typ­i­cally six cat­e­gories of com­mer­cial of­fer­ings – Sit down restau­rants, fast food restau­rants, con­ve­nience re­tail, spe­cialty re­tail, duty free and ser­vices. Ba­sis pas­sen­ger travel be­hav­iour, the zon­ing takes place. Some ex­am­ples are: ba­sis Pas­sen­ger Jour­ney Chart, pas­sen­ger anx­i­ety lev­els are high­est prese­cu­rity/im­mi­gra­tions.

“Thus, hav­ing var­i­ous com­mer­cial of­fer­ings in that lo­ca­tion may not be fruit­ful. Sim­i­larly, es­sen­tial pas­sen­ger ser­vices (forex/atm, etc) are re­quired at mul­ti­ple lo­ca­tions. Con­ve­nience re­tail seems to be ben­e­fi­cial at gates or at ar­rivals. More­over, sim­i­lar cat­e­gories are zoned to­gether. It is to be noted that air­port zon­ing is very much dif­fer­ent from other com­mer­cial set­ups, e.g. malls. In a mall, it is the area that drives sales whereas in the air­port en­vi­ron­ment, it is the sales that drives an area,” the GVK spokesper­son states. Un­der­stand­ing the Dis­tinc­tion As Madanagopal puts it, broadly speak­ing, the two cat­e­gories that help un­der­stand the dif­fer­ence between travel and tran­sit re­tail can be clas­si­fied un­der – Func­tional and Ex­pe­ri­en­tial. Ac­cord­ing to him, “Where metro sta­tions and high­ways can serve the cus­tomers with goods and ser­vices that are more need based, air­ports usu­ally house re­tail­ers with prod­ucts that fall un­der the ex­pe­ri­en­tial cat­e­gory which in­clude more of life­style prod­ucts. He fur­ther says high­ways can be per­fect des­ti­na­tions for pro­mot­ing lo­cal hand­i­crafts and lo­cal food as well be­sides be­ing a gen­eral hub for foods and re­fresh­ments.

Nan­gia elab­o­rates on the cat­e­gory dis­tinc­tions, “Cat­e­gories for travel re­tail can be broadly di­vided into 5 : Con­ve­nience led / ba­sic ne­ces­si­ties, in­clud­ing Pharma, Per­sonal care, travel ac­ces­sories, wa­ter, books, gift­ing among oth­ers; Brows­ing / im­pulse/ gift­ing led in­clud­ing mo­biles, com­put­ers, gad­gets and ac­ces­sories, fra­grances, watches, jew­elry, toys, writ­ing in­stru­ments – these are also at­trac­tive for pas­sen­gers from smaller ci­ties tran­sit­ing through big­ger travel lo­ca­tions as their reach might be lim­ited in smaller ci­ties.”

High­light­ing an in­ter­est­ing point, Nan­gia fur­ther shares, “At times brands are present at the air­port as a mar­ket­ing in­vest­ment as well, for the con­sumers to see and

con­nect with the brand; Lo­cal food / craft prod­ucts

which are lo­cal spe­cial­ties;

Ser­vices in­clud­ing Spa, en­ter­tain­ment in­clud­ing screens, among oth­ers and

food, in­clud­ing con­ve­nience, café, fast food, food courts, lo­cal cuisines, bars among oth­ers. For in­ter­na­tional travel, duty free is a sig­nif­i­cant cat­e­gory, es­pe­cially for al­co­hol, to­bacco, choco­lates, fra­grances and beauty prod­ucts. It ex­tends to lux­ury and bridge to lux­ury brands as well.”

Talk­ing about brand and cat­e­gory mix at air­ports, ac­cord­ing to GVK, in­clu­sion of re­gional brands/stores gives a lo­cal, dis­tinct of­fer­ing to the pas­sen­gers, es­pe­cially to those pas­sen­gers who are not from the lo­cal re­gion. This cat­e­gory of of­fer­ing also helps in dif­fer­en­ti­at­ing the over­all com­mer­cial of­fer­ings of an air­port from the other. For ex­am­ple, at the Ch­ha­tra­p­ati Shivaji Ma­haraj In­ter­na­tional Air­port, Mum­bai, there is a healthy com­bi­na­tion of In­dian/ma­ha­rash­trian art and craft, sou­venirs, food, etc.

The spokesper­son elab­o­rates, “Not only this, our pro­mo­tions and events also fo­cus on pop­u­lar­is­ing the lo­cal flavours. We work very closely with the lo­cal brands who can show­case their unique prod­ucts to the pas­sen­gers along with the re­quired com­mer­cial vi­a­bil­ity. The in­cen­tives for such con­ces­sion­aires can­not be sim­i­lar and de­pend­ing on the re­quire­ment and mu­tual dis­cus­sions, the re­quired ac­tion is taken.”

Shar­ing de­tails on the how best they go about choos­ing the right mix of food brands, De­wan states, “Our brand­mixes are de­vel­oped with a lot of con­sumer sur­veys, in­ter­nal and ex­ter­nal stake­holder’s de­lib­er­a­tions and so on. We look at cre­at­ing ex­pe­ri­ences food is close to our heart and chang­ing the sce­nario at travel ports across In­dia is some­thing we are very pas­sion­ate about. There­fore, we care­fully pick and choose brands for a par­tic­u­lar ge­og­ra­phy. It is a mix of In­ter­na­tional, Na­tional, Lo­cal Favourites and In-house be­spoke; to quote an in­stance - in Kolkata, we have Domi­nos, KFC, The Cof­fee Bean & Tea Leaf etc. from in­ter­na­tional brand part­ner­ships. Then there is Café Cof­fee Day, Wow Mo­mos from na­tional brand part­ner­ships and fi­nally there are some lo­cal favourite like Kusum Rolls from the streets of Kolkata, and Flury’s a lo­cal favourite bak­ery. At the same time there are Biryani Bhai an in-house be­spoke con­cept, The Ir­ish House and Cop­per Chim­ney for North In­dian tastes.” Ex­plor­ing In-Njight Re­tail The joy of shop­ping mid-air can be bliss­ful pro­vided that op­tions given are al­lur­ing enough. No one wants to keep look­ing at a cat­a­logue that has noth­ing bet­ter to of­fer than the same old pearl set or his and her wrist watch set.

“The prod­uct mix has to be mean­ing­ful. Only then in­flight re­tail can be suc­cess­ful,” shares Madanagopal. He minces no words when he talks about how air­lines in In­dia haven’t truly cap­i­tal­ized on the op­por­tu­nity be­fore them. “It is just that the pro­hib­i­tive prices keep­ing the cus­tomers away. If they get their pric­ing strat­egy right they can cap­i­tal­ize on the pas­sen­gers they are fly­ing.

The lo­gis­tics and man­ag­ing should be done in a very pro­fes­sional man­ner. It can be­come a strong rev­enue stream for air­lines if done and man­aged well.”

Shar­ing his list of air­lines that can be an in­spi­ra­tion for other air­lines, Madan­gopal is all praise for Emi­rates,

Qatar and Qan­tas air­lines. He says, “Emi­rates re­mains the undis­puted leader when we talk of in-flight re­tail, but I am very im­pressed by Qatar’s of­fer­ing of con­tent and shop­ping cat­a­logue. The shop­ping cat­a­logue has a range of prod­ucts to choose from in­clud­ing fine wine and elec­tronic gad­gets.”

He fur­ther high­lights an im­por­tant cat­e­gory that has yet not been cap­i­tal­ized upon by any air­lines – the kid’s wear cat­e­gory. “There are a lot many busi­ness trav­el­ers and they would want to go home with a gift for their chil­dren. No air­lines of­fer things a man or woman can take home for his / her child.”

Dos & Don’ts Anand Ku­mar, Ex­ec­u­tive

Di­rec­tor – ABRA, a Dubai based firm that has to its credit de­sign­ing a host of stores across 17 air­ports to date dis­cusses in depth what brands need to keep in mind while set­ting up their stores at air­ports and other travel hubs. “Brands have to be se­lec­tive in what they de­cide to sell in travel re­tail, it’s a niche and is not to be treated as an­other point of sale, as


in a new do­mes­tic lo­ca­tion. They must not go in with their full port­fo­lio, as peo­ple tend to look for nov­elty and travel re­tail ex­clu­sives, for which many brands do suc­cess­fully with spe­cific sizes and promo packs(mainly in beauty and con­fec­tionary prod­ucts). This also makes way for dif­fer­ent price points that can­not be com­pared with what is avail­able in the do­mes­tic re­tail,” he says.

“Last minute gift­ing rep­re­sents a huge op­por­tu­nity for travel re­tail­ers, when the cus­tomer might not have the time to pick up some­thing dur­ing their hec­tic trip and the air­port rep­re­sents a last op­por­tu­nity to make a pur­chase to take home, and hence brands must ap­peal to this au­di­ence with the right as­sort­ment of prod­ucts. Fi­nally brands have to make it con­ve­nient for the shop­per to pick and go, as there is lim­ited time to en­gage the cus­tomer or try a prod­uct and hence the mer­chan­dis­ers in travel re­tail have to be trained to man­age a cus­tomer that’s in a hurry, to avoid a lost sale,” he adds.

On the de­sign in­tri­ca­cies for food stores at the air­port, De­wansays, “Air­ports to­day are equipped with more ex­pe­ri­ence zones than a mall or high-street. Ba­sis the lo­ca­tion of the out­let and pas­sen­ger pref­er­ence, we de­sign our out­lets, and some of them are notch bet­ter than those at a mall or a high – street. For in­stance, the ex­pe­ri­ence one gets at our Dil­listreat out­let at IGIA T3 de­par­tures, GVK Lounge at CSIA T2 de­par­tures, or Ir­ish house are in­com­pa­ra­ble. At the same time, we have take-away coun­ters and food courts, wherein look and feel and am­bi­ence are all sim­i­lar. How­ever, the menu is de­signed ba­sis a travel port.”


It is in­ter­est­ing to visit the his­tory books of brands and their jour­ney of hav­ing stores at air­ports and other travel / tran­sit re­tail des­ti­na­tions. To take an ex­am­ple of Al­mond House, one of Hy­der­abad’s most cov­eted dessert and bak­ery del­i­ca­cies brand, the jour­ney to have a store at the Ra­jiv Gandhi In­ter­na­tional Air­port in Hy­der­abad be­gan in 2015. And just within three

years to­day, they have four stores at the same air­port.

Cit­ing the jour­ney so far, Chai­tanya, CEO – Al­mond

House, says, “In July 2015, we started op­er­a­tions in Do­mes­tic Ter­mi­nal in RGIA Hy­der­abad, es­sen­tially as a mech­a­nism to boost the brand vis­i­bil­ity among our tar­get cus­tomers. Hav­ing an air­port store also re­it­er­ated our su­per pre­mium po­si­tion­ing of the brand, also ex­pe­ri­ence and the am­bi­ence at an air­port ren­dered it­self well to our po­si­tion­ing as well. How­ever, it turned out to be pos­i­tive con­trib­u­tor to our top-line as well, since then­there has been no look­ing back. As we speak, to­day we are work­ing on our 4th­store in RGIA Hy­der­abad and we are in talks with Delhi and Mum­bai air­ports for launch­ing our stores.”

And the jour­ney doesn’t stop there. Ac­cord­ing to Chai­tanya the brand is also li­ais­ing with in­ter­na­tional air­ports such Sin­ga­pore and Dubai for Al­mond House stores. But then no jour­ney comes with­out its share of chal­lenges. Though Al­mond House has not much to lament about ex­cept the fact that they a min­i­mal time win­dow to let know the cus­tomer who they are and the qual­ity of the prod­ucts.

Elab­o­rat­ing on their prod­uct port­fo­lio, he shares, “Our stance is that we are a ‘Gourmet brand from In­dia for the Global palette,’ hence we al­ways did prod­ucts that suit a wider au­di­ence, to­day we of­fer Ve­gan Sweets, Gluten Free that are be­com­ing main­stay across the globe. We have ab­so­lutely fresh prod­ucts that are prepacked in travel friendly pack­ag­ing that are easy for the cus­tomers to pick n go! We of­fer spe­cial com­bi­na­tion / as­sort­ment packs for the trav­ellers to the best of our of­fer­ing at one go.”

BIBA, a brand that res­onates with chic In­dian eth­nic wear has been at­tract­ing a lot of at­ten­tion

at the air­ports with their swanky de­signs al­lur­ing women to have a look at their col­lec­tion. Sid­dharth Bin­dra - Man­ag­ing Di­rec­tor,

BIBA shares, “We have our pres­ence across all metro ci­ties. Our stores are lo­cated at ma­jor­ity air­ports like Delhi2, Mum­bai-2 and Goa -1.”

On the key things to be kept in mind, Bin­dra says, “A good mix of all vari­ants from all col­lec­tions i.e. from eth­nic to Indo-western to western wear need to be stocked. The avail­abil­ity of prod­ucts in all sizes is also to be kept in mind. The store dis­play needs to be given ex­tra care. It needs to be ap­peal­ing and easy to ex­plore for cus­tomers, as you get a very lit­tle time to at­tract and en­gage the cus­tomers at such places. The staff should be well equipped with lan­guage and should be ex­tremely dis­ci­plined, po­lite and help­ful.”

For the brands, one of the chal­lenge that hits them the most is with re­gards to the op­er­a­tional cost. There is no dearth of cus­tomers but then to main­tain the ROI with the high op­er­a­tional cost does create a road­block for growth.

Chai­tanya says, “Given the high op­er­a­tional costs it does take lit­tle longer to break even than our high street stores. Higher op­er­a­tional costs are ow­ing to spe­cial pack­ag­ing, lo­gis­tics and staff who are to be ver­i­fied for se­cu­rity etc.”

Talk­ing about the most prom­i­nent chal­lenges, Bin­dra says, “Stores open ear­lier and stay open till late, which means more shifts and odd­hour shifts, though there is min­i­mal staffing, as stores are small. Staff mem­bers need ad­di­tional se­cu­rity checks to work in­side the air­port, so re­cruit­ing and on board­ing takes longer. Some air­ports and stores even need mul­ti­lin­gual staff mem­bers and lastly the sup­ply cal­en­dars have to be planned far in ad­vance as de­liv­ery times are strict. This leaves lit­tle room for ad hoc re­sup­plies.”

Hidesign as a band has earned an in­ter­na­tional rep­u­ta­tion for it­self with a pres­ence over­seas so the brand’s pres­ence at the air­ports is well re­ceived by the pas­sen­gers. Dilip Ka­pur,

Pres­i­dent Hidesign, says, “In In­dia, we opened our sec­ond out­let at the Hy­der­abad Ra­jiv Gandhi Air­port In­ter­na­tional De­par­tures area, the first one is in the Do­mes­tic De­par­tures area. We are plan­ning to open new stores at air­ports and malls by this year De­cem­berend. We will open stores at air­ports in Ban­ga­lore, Mum­bai, Delhi and Kochi, while other stores we plan to launch them in Tieri ci­ties.”

Shar­ing de­tails about their foray into air­port re­tail­ing, Ka­pur says, ‘We got into air­port re­tail way back in

2009, as we un­der­stood the im­por­tance of the air­port stores since then. We be­lieve that air­port is a very sig­nif­i­cant plat­form for our brand as our ideal Hidesign cus­tomer is well-trav­elled and suc­cess­ful. We are cur­rently present in 12 air­port stores and this year, we plan to dou­ble that num­ber. We do sig­nif­i­cantly well at the air­ports.” Ac­cord­ing to hi,, with the de­ci­sion to pri­va­tize re­tail at more air­ports there will be no more road­blocks only op­por­tu­ni­ties.

Talk­ing about the high­est sell­ing SKUS at the air­ports, Ka­pur re­veals, “Prod­ucts for per­sonal use such as wal­lets, shoes, lap­top bags and travel bags are an easy fit and also make great gifts. Travel themed prod­ucts are an­other great op­tion.”

Go­ing by its name, one would have ex­pected The Bom­bay Store to have their pres­ence at the Mum­bai Air­port but their foray into air­port re­tail­ing be­gan its jour­ney with a store at the Hy­der­abad Air­port on June 09, 2018. Sam­son Pe­ter, Gen­eral Man­ager, Op­er­a­tions - The

Bom­bay Store, shares, “The Bom­bay Store opened its first Air­port Re­tail Store in SRA (Se­cu­rity Re­stricted Area) of Do­mes­tic de­par­tures of


Hy­der­abad Air­port on 9th June-2018, we had fore­casted a great op­por­tu­nity into this busi­ness model at Air­port Ter­mi­nals where the brands recog­ni­tion prod­ucts and value can be driven across the coun­try and over­seas through all our Air­port Cus­tomers trav­el­ling to var­i­ous des­ti­na­tions within In­dia and glob­ally. We had a great learn­ing and op­por­tu­nity to un­der­stand on how an Air­line Cus­tomers are in­clined to­wards our cat­e­gory of prod­ucts and how they shop dif­fer­ently from our Air­port Store vis-à-vis our other Mall or Stand-alone store.”

Elab­o­rat­ing on this, he ex­plains: “Air­port stores are an ideal shop­ping lo­ca­tion for pas­sen­gers with a hol­i­day mind­set, in­spir­ing them for more im­pul­sive shop­ping with bet­ter deals around the store.”

Lo­gis­ti­cal Road­blocks

Be­sides hav­ing to deal with bu­reau­cratic for­mal­i­ties, the pri­vate play­ers op­er­at­ing in tran­sit re­tail hubs which come un­der gov­ern­ment con­trol, there are lo­gis­ti­cal chal­lenges that re­tail­ers need to over­come be­fore they are able to set the ball rolling in true sense for travel re­tail in In­dia. This ap­plies to tran­sit re­tail as well to some ex­tent.

Nan­gia says, “The big­gest chal­lenge in In­dia is the lack of recog­ni­tion of the fact that well planned travel re­tail and food ser­vices in a travel hub can be a big rev­enue con­trib­u­tor to the travel op­er­a­tor, there­fore there is re­luc­tance in in­vest­ing and de­vel­op­ing the right plan and in­fra­struc­ture for it. This should ideally be done at the plan­ning and con­struc­tion stage. Even though there is a large amount of new travel in­fra­struc­ture which have been de­vel­oped in the last decade (air­ports, metro sta­tions, high­ways, some train sta­tions among oth­ers), there is still a very lim­ited fo­cus and thought into this as­pect.” Re­it­er­at­ing this is Chai­tanya, “Avail­abil­ity of the real es­tate within air­ports are crit­i­cal for growth, as ma­jor in­ter­na­tional air­ports are de­signed with a non-aero rev­enues in mind, in In­dia it is still a work in progress.”

Elab­o­rat­ing on the role played by the gov­ern­ment that if re­versed and re­vised upon can be a boon,

Nan­gia re­veals, “Most of the travel hubs are owned and man­aged by the In­dian gov­ern­ment. There is very lim­ited fo­cus on cre­at­ing the right com­mer­cial model for the travel hubs, with no plan­ning. The re­tail­ers and food ser­vice com­pa­nies are se­lected through a bid­ding process, with the high­est bid­der get­ting the con­tract to op­er­ate the space.”

Adding fur­ther on where we stand as com­pared to the in­ter­na­tional dy­nam­ics, she says, “To plan and man­age the busi­ness as a key rev­enue con­trib­u­tor and seg­ment, both for the brand and the travel op­er­a­tor vis a vis just an op­por­tunis­tic chan­nel.”

Pe­ter talks about what makes air­port re­tail­ing

a dif­fi­cult process to get through for brands say­ing, “Get­ting into an air­port re­tail busi­ness in it­self wasa great chal­lenge. Com­mer­cial air­port ter­mi­nals are most se­cured and pro­tected lo­ca­tions in the coun­try. As a stan­dard process, each re­tailer has to un­dergo a spe­cific ver­i­fi­ca­tion process by the Min­istry of Civil Avi­a­tion and other agency re­spon­si­ble for air­port’s se­cu­rity, which in it­self was quite a new and chal­leng­ing task for us. We also had a chal­lenge of plan­ning and ex­e­cut­ing our sup­ply chain man­age­ment and on how quickly and ef­fec­tively we can re­plen­ish the right stock to the store at right time with­out dis­turb­ing the sales op­por­tu­ni­ties.”

Mar­ket­ing & Pro­mo­tions

No mat­ter where the store is housed, no brand can af­ford to ne­glect in­dulging in mar­ket­ing and pro­mo­tion ini­tia­tives to at­tract the shop­pers. The store de­sign too needs to be chic and to an ex­tent eye catch­ing.

A pre-req­ui­site for an air­port store in terms of de­sign and ser­vice ac­cord­ing to Chai­tanya is, “It has to be pre­cise and laser sharp in com­mu­ni­cat­ing the po­si­tion­ing of the brand, clubbed with a su­pe­rior ex­pe­ri­ence by the staff which fa­cil­i­tates con­ver­sion in the short­est span of time. En­gag­ing a wide range of cus­tomers is not an easy task, from a first-time trav­eller to a CEO, the staff needs to be ready take on any queries from in­formed and in­no­cent cus­tomers. En­gag­ing and con­nect­ing the cus­tomers where he is in a hurry to get to their board­ing gates is never an easy task and hence great body lan­guage helps to es­tab­lish the pos­i­tive con­nect faster.”

Elab­o­rat­ing on mar­ket­ing ini­tia­tives that the brand un­der­takes, he says, “We do oc­ca­sional mar­ket­ing ac­tiv­i­ties within the air­ports es­pe­cially dur­ing the fes­tive sea­son such as Rak­sha Band­han,we of­fer free Rakhis for the cus­tomers and Diyas for Di­wali as a to­ken of our thanks to cus­tomers which has been now a reg­u­lar af­fair for many years at our high street stores.”


On a con­clud­ing note, Nan­gia shares, “Suc­cess of travel re­tail lies in un­der­stand­ing the ba­sics of the busi­ness: It is im­por­tant to un­der­stand the pro­file of pas­sen­gers trav­el­ing from each travel lo­ca­tion, the jour­neys / routes they un­der­take and the time avail­able to them. It helps in un­der­stand­ing their re­quire­ments for re­tail and rea­sons for shop­ping / eat­ing at the lo­ca­tion.

This re­quire­ment is then ex­trap­o­lated on the space avail­able at each travel lo­ca­tion for de­vel­op­ing the right in­fra­struc­ture and ex­pe­ri­ence for travel re­tail. Based on the cat­e­gories rel­e­vant for each lo­ca­tion, the space is di­vided op­ti­mally to max­i­mize the pro­duc­tiv­ity and rev­enue po­ten­tial for the re­tail­ers and the lo­ca­tion over­all. There­fore, it is im­por­tant that travel op­er­a­tors and re­tail­ers jointly work to­wards op­ti­miz­ing the rev­enue po­ten­tial and pas­sen­ger ex­pe­ri­ence.”

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.