A QUADRUPLE WIN This is that rarest of results in the crazy world of airport concessions: a win for all parties, airport, retailers, brands and, not least, the consumer. Changi Airport Group’s decision to extend both its anchor duty free concessions will resonate throughout the industry. During their not always easy contract tenures, both retailers have been responsible for some of the highest-class, most ambitious launches, activations and campaigns the industry has seen. But such investments come at a cost. Korean travel retail powerhouse Shilla, in particular, has found its contract hard going, posting punitive losses through the early years after winning the business ahead of white-hot competition in late 2013. It only just edged into profit for the first time in the third quarter of this year. But in a sure sign of improving fortunes Hotel Shilla President of Travel Retail Division Ingyu Han told The Moodie Davitt Report earlier this year that the retailer was poised to come off MAG terms and pay a percentage of revenues instead. While the initial contract term will go down as a heavy loss-maker for Shilla, the retailer now has the chance to leverage its improved fortunes and learnings to profitable effect. DFS values its Changi liquor & tobacco concession highly. It retained the business in 2014, ahead of tough competition from Nuance-Watson Singapore (now Dufry), Lotte Duty Free; King Power Group Hong Kong; World Duty Free Group (again, now Dufry); and Sky Connection. Its Changi wines & spirits operation, in particular, is widely acknowledged as the industry’s best (it has been named number one in The Moodie Davitt Report’s annual Dreamstore ranking for consecutive years). CAG will be pleased with the continuity that its decision brings and so, by and large, will brands. And the consumer? Simple. They will continue to discover two of the world’s best travel retailers bringing their respective A games to play. A quadruple win. |
SINGAPORE. In big breaking news, Changi Airport Group (CAG) today announced that it will extend its key duty free liquor (wines & spirits) & tobacco, and beauty concessions, held by DFS Venture Singapore and Shilla Travel Retail, respectively, each for a two-year period.
The extensions start from 2020, after the expiration of both retailers’ current six-year concessions.
CAG said that over the past four years, the airport’s two core-category concessions have delivered “pioneering retail concepts”, including unique duplex stores, the world’s first airport integrated duty free zone, the famous Raffles Hotel Long Bar (DFS) and the luxurious Shilla Beauty Loft, “wowing” Changi’s passengers.
“These innovative concepts, coupled with the concessions’ extensive product ranges and exciting in-store activations, have transformed Changi Airport’s travel retail scene and brought the airport shopping experience to a whole new level,” the airport operator said.
Changi Airport Group Executive Vice President of Commercial Ms Lim Peck Hoon said, “We are very pleased to continue our partnership with DFS and The Shilla Duty Free for another two years.
“Their passion for the travel retail industry continue to deliver new ideas and novel retail concepts at Changi Airport, and were instrumental in driving sales growth over the past four years.”
Reacting to the news, DFS Group Region President Asia South Robert Calzadilla commented: “DFS is delighted to continue our partnership with Changi Airport Group, providing a world-class shopping experience at Changi Airport.
“We look forward to finding new ways to excite and inspire our travelling customers, offering the very best wines and spirits accompanied by exceptional concepts and activations.”
The Shilla Duty Free Vice President of International Division Jinhyuk Kim said, “The Shilla Duty Free is grateful for CAG’s decision on extending the key beauty concession for two years. The Shilla Duty Free will continue our efforts to thrive with Changi Airport throughout our operation period.”
CAG continued: “As consumer trends and expectations evolve, CAG will continue to work closely with its retailers and brands to deliver new and memorable shopping experiences for passengers.
“This includes leveraging new technologies and innovations for a seamless retail experience when passengers shop from online to offline – from before they fly to the time when they board.
“In its pursuit to become one of the world’s best airports to shop and dine at, CAG has been working closely with the two anchor concessions to push the frontiers of retail at Changi.”
Big retail plans in the pipeline
CAG said that DFS will set up two exclusive brand boutiques to give travellers an opportunity to learn about the chosen brands’ rich heritage and craftmanship. The retailer will also organise a “world-class” wines and spirits event with a series of hands-on tastings and masterclasses.
For beauty, The Shilla Duty Free has ambitious plans to rejuvenate its offer, CAG noted.
In addition to its diverse range of perfumes and cosmetics, the beauty concession will bring in new brands and refurbish one of its existing stores with a”new and inviting retail concept that promises to delight every beauty fan”, CAG commented. There will also be large-scale beauty events packed with interactive workshops and special deals.
The extended tenancy terms for the liquor concession will commence from 9 April 2020 until 8 April 2022, covering 18 stores and spanning over 8,000 sqm of retail space in Terminals 1, 2, 3 and 4.
For the beauty concession, the extended tenancy terms will begin from 1 October 2020 and run to 30 September 2022, covering 22 outlets and spanning over 7,400 sqm of retail space across Changi Airport’s four terminals.
More to follow on this big breaking story soon.
NOTE TO AIRPORT OPERATORS: The Moodie Davitt Report is the industry’s most popular channel for launching commercial proposals and for publishing the results. If you wish to promote an Expression of Interest, Request for Proposals or full tender process for any sector of airport revenues, simply e-mail Martin Moodie at Martin@MoodieDavittReport.com.
We have a variety of options that will ensure you reach the widest, most high-quality concessionaire/retailer/operator base in the industry – globally and immediately.
Similarly The Moodie Davitt Report is the only international business intelligence service and industry media to cover all airport consumer services, revenue generating and otherwise. We embrace all airport non-aeronautical revenues, including property, passenger lounges, car parking, hotels, hospital and other medical facilities, the Internet, advertising and related revenue streams.
Please send relevant material, including images, to Martin Moodie at Martin@MoodieDavittReport.com for instant, quality global coverage.
