INDIA. Delhi Duty Free Services (DDFS) has inaugurated an elegant and engaging new walk-through departures store at Delhi Indira Gandhi International Airport Terminal 3. The completion of the final phase of the departures project follows the opening last year of an upgraded and refurbished arrivals walk-through duty free environment. The retailer’s investment was around US$10 million, backed by more from key brand partners.
The Moodie Davitt Report was in Delhi on Monday for the official opening, in the company of DDFS shareholders Delhi International Airport Ltd, GMR and Aer Rianta International (ARI). A special edition of The Moodie Davitt Spotlight eZine will appear in coming weeks featuring interviews with the key stakeholders at the airport and with leading brand partners. On these pages we feature images and video that illustrate the transformation of the business. Meanwhile DDFS has marked the occasion with a branded makeover of The Moodie Davitt Report home page this week.
Talking points include striking personalised zones for key spirits brands and the overall upgrade of this vital category and enhanced space for beauty, with 14 new brands added to the offer and some stunning finishes from suppliers. Other standout elements include a focus on digitalisation, with heavy promotion of the company’s strong value messages in-store and the Rupee pricing that was introduced in January 2018, plus attractive ceiling design and lighting that guides travellers throughout.
Delhi International Airport Ltd CEO Videh Kumar Jaipuriar told The Moodie Davitt Report: “This store can compare with the best in the world. You don’t have to buy elsewhere today; you can buy in Delhi, at the airport and you can do so in beauty as well as liquor or confectionery. We are now as competitive in terms of brand offer, quality and pricing as anywhere else.
“Duty free is one of the highest contributors to our business. It’s the biggest non-aeronautical sector. More than that, it gives an excellent first impression to the passenger on their journey. The premium look and feel of the new store creates positive perceptions compared to other top-class airports. This gives the passenger an experience and helps us position the airport as a premium location.”
ARI Chief Executive Ray Hernan said: “As a shareholder in the Delhi Duty Free business, we collaborate closely with DIAL and GMR for mutual benefit and we were fully supportive of this investment. We have seen the Indian economy grow and traffic increase substantially in recent years and we still see a lot of opportunity here.
“That opportunity is not simply about passenger growth. The team has driven passenger average spend by double digits last year, and achieved double-digit growth in ATV and penetration. We hope this investment will keep that trajectory going.”
Hernan added: “It brings the core duty free offer here to another level. Delhi Duty Free is a best-in-class operation, with best practice shop-fits, more digitalisation in-store, activity to engage and attract passengers. That also helps develop the growth categories, with P&C a huge opportunity.
“Delhi is important in income terms for us and will become more important as this business grows. It’s a profitable operation and that helps support our overall performance.”
Delhi Duty Free Services CEO Philip Eckles said: “You will be hard pushed to find a retail environment of this calibre anywhere in India. There are luxury stand-alone stores in the local market, but under one roof, you could not beat Delhi Duty Free. It also compares to anything you’ll see at the biggest and best airports worldwide.”
The company’s impressive new retail arena in departures covers 1,892sq m of full walk-through space compared to around 2,080sq m previously; in arrivals it occupies 1,081sq m against 1,296sq m before. The reduced space is mainly down to the introduction of 5m wide walkways through both shops that allow ease of access during peak times and to meet airport requirements.
Liquor is the dominant category, as noted above, at around 62% in the first three months of the latest financial year (April to June) and as high as 73% of arrivals sales. That dominance is reflected in powerful branded areas and displays for the best-selling brands from Diageo (led by Johnnie Walker Black), Pernod Ricard (led by Chivas Regal) and William Grant & Sons (led by Glenfiddich) in both arrivals and departures.
The Whisky Collection takes an ARI concept originally developed in Ireland and ensures a strong Scotch focus, with malts to the fore and many super-premium, collectible expressions across the range, both in departures and arrivals.
White spirits is given dedicated space, with a vodka ‘tree’ a stunning feature of departures, alongside a clever Grey Goose Indian-themed installation. This sub-category is also given good weight in arrivals, as Delhi Duty Free targets more female traveller spend and more from European visitors.
The biggest change in layout comes with the much-enhanced emphasis on fragrances & cosmetics, which represents just over 17% of total sales but is over-represented in relative terms with its space allocation. In departures, the stunning P&C zone takes 705sq m compared to 467sqm for spirits & wines. Confectionery across the stores accounts for just under 10% of sales; it occupies 269sq m in the new-look departures store.
Within beauty, new brand additions are led by two key partners: The Estée Lauder Companies and L’Oréal Luxe, with Estée Lauder, Clinique, Tom Ford Cosmetics, Jo Malone, Origins, Kiehl’s, Urban Decay and Armani Cosmetics all new to the retailer and with prominent space in departures. Other beauty firsts for Delhi Duty Free include Sulwhasoo, Benefit, Amouage, Laneige, Glamglow, Toni & Guy and Moroccanoil. Display highlights include the eye-catching The Alchemist’s Garden from Gucci plus front of house executions from Chanel, Dior (including Dior Backstage makeup offer and zone) and YSL.
Digital screens feature in most of the ‘hero’ brand spaces, with several HPP areas among the high-quality P&C space and makeup stations across the environment to help brands interact with travellers.
Eckles said: “Last year P&C contributed 16.2% of our business, we are now at 17.4% in Q1 and are looking to hit 18% across the business. In departures, beauty has moved ahead even more with the extra space, from 22.4% to 25.3% in the first three months, even beyond where we aimed to be. It reduces our reliance on liquor, though that will remain the core of the offer for our Indian travellers.”
The strengthening of beauty also tells a story about brands’ willingness to invest at Delhi Duty Free, he added.
“At the time that Terminal 3 opened in 2010 the industry was still sceptical about the Indian market but we’ve seen the market grow and develop. Attitudes have changed; we have brands here that would not have come before but are now well represented. We will welcome more if we can get the space, especially in high-end beauty. It’s a very different environment now and is worlds apart from what went before.
There is Sense of Place in departures with a solid Indian merchandise range, led by tea and food, though the category’s space was reduced to allow more for P&C. And there are some impressive installations from the key confectionery partners, led by best-selling brands Lindt and Toblerone, but also from Hershey, Godiva, KitKat, Mars, Harison, Haribo, Loacker, Ferrero and others.
Eckles said: “This was a challenging project, but in the end we have over 4,000sq m of top-class retail space. We will grow with the new departures complementing what we have done in arrivals, where we have been very good at maximising the two-litre allowance in spirits.
“We have a good strong pricing message but that is only one factor. We have some of the best customer service standards in the industry too. Indians expect attentive, one-to-one service, and that’s important when they represent over half of our transactions.
“We have a highly educated, well trained workforce. We are spoiled with the calibre of people that come through the education system in India – everyone who works for us has a degree – and they are proud of the environment they work in too.”
He said that the new retail arena would help drive sales to new heights in 2019. “Last year sales grew by 21.5% on 7% passenger growth. We are targeting 22% growth this year on 9% passenger growth.”
DIAL Deputy CEO Shyam Sundar said: “The past three years has seen a refresh of our commercial offerings across 250 locations, culminating in this duty free store. We are now seeing very high growth in duty free, from a world-class product.
“This project hinged on three pillars: enhancing the offer, improving the experience and growing our revenues. The results so far are very satisfying.”
PICTORIAL HIGHLIGHTS OF THE ARRIVALS DUTY FREE OFFER
*Watch out for a special Spotlight eZine on the transformation of Delhi Duty Free, out in coming weeks; note also the colourful makeover of our home page with Delhi Duty Free branding this week, with further elements in a campaign to showcase the new stores to follow.