Emergence of newer airports and changing customer demographic that is travelling more often has fuelled the growth of travel retail in India. In addition to this, the novelty factor of carrying a foreign Duty Free bag has diminished with the travel retail stores at the airports offering the range to match the best airports in the region. Also, competitive pricing and convenience of coming back and shopping at arrival rather than carry it all the way around from one’s origin airport has beefed up the travel retail.
In a candid interaction with Retailer media, Anirban Chowdhury, CEO, Flemingo India - the Indian subsidiary of global Duty Free and travel retail operator Flemingo International spoke about the changing landscape of travel retail and the strategies adopted to attract the footfalls in duty free travel retail stores.
How travel retail has evolved over the years while focusing on consumer convenience?
The privatisation of airports has proved to be a big game changer. Newer airports with better retail planning meant that the retailers like us had to change our stores to keep up with the changing customer demographics. As more Indians are often travelling abroad, the novelty factor of carrying a foreign Duty Free bag has diminished. Higher awareness and affordability has replaced novelty value with convenience.
As compared to 2003, we have seen a shift in passenger profile in 2015 with increase in number of leisure travellers. The number of international flyers from small cities is ever increasing. Therefore Indian traveller’s contribution to duty free sales has increased remarkably.
With focus on in-store experience what are your strategies you adopt to attract footfalls?
Customer friendly store layouts, new additions to the range and exciting promotions help enhance the customer shopping experience which is key factor in travel retail. Since, each region of India has unique customer base, we had to tailor make our store merchandise mix accordingly, unlike in some other parts of the world where customer preferences are more homogeneous.
In addition, we have promotions and offers going on in our store, like recently we had a promotional campaign running wherein a customer shopping with us could win a luxury watch. Going forward, we will have more of these. Also, we conduct market research periodically to understand consumer’s needs and preferences and tailor make our offering for them.
Which category is largely preferred by the consumers on the move?
Liquor sells the most in Duty Free industry in India, within which, we are a brown spirit market. Hence, premium and luxury whisky sells the most. Over the past year, we have seen the sales of Single Malts grow substantially at our stores. So, liquor is the most popular amongst shoppers followed by confectionery then perfumes and cosmetics.
In travel retail which different formats of stores cater the domestic and international passengers?
Travel retail comprises of stores catering to domestic and international passengers. While Duty Free stores are exclusively for international passengers, the other stores like book store, fashion and fashion accessories store, souvenir store, etc are for both domestic and international passengers.
What is your current market presence?
We are a duty free retailer and in India we operate at international airports and seaports. Globally we are present in 34 countries through 200 operations. In India we operate at 11 international airports and 8 seaports. Our airport stores are located at Kolkata, Chennai, Trivandrum, Calicut, Mangalore, Trichy, Amritsar, Lucknow, Jaipur, Goa and Ahmedabad. In Mumbai, we operate in a JV with DFS.
What are your future expansion plans?
We have recently won a tender at 9 airports for 7 years. Kolkata and Chennai are part of these which are among top five international airports with connections to all major destinations across the world. New store building at Chennai and Kolkata is already underway. Hence, we will more than double our store size at both these locations.
How is the response for your eCommerce portal?
Our customers discovered that we have the range to match the best airports in the region with competitive pricing and offer the convenience of coming back and shopping at arrival rather than carry it all the way from your origin airport. Also, our pre-order service, where customers can shop and book online their through our website has proved to be a big hit. With that, customers have the option to shop for their duty free requirements even before they begin their journey. We started our eCommerce initiative and the consumer response has been very positive. A single digit sale of our store comes from eCommerce channel.