UAE. Dubai Duty Free plans to step up its online activity next year as it seeks to ‘narrowcast’ to its shoppers, in the words of Chief Operating Officer Ramesh Cidambi.
Speaking at the Middle East & Africa Duty Free Association annual conference* this week in Beirut, Cidambi said that personalised marketing was now a necessary requirement to drive sales.
“The very big priority for us is marketing,” he said. By that, he was not only referencing the wide range of sports sponsorships and activities – from horse racing to golf and tennis – that support the Dubai Duty Free brand.
“We do the broadcasting well for the Dubai Duty Free image and brand, but we also want to narrowcast by engaging in a more personalised and particular way with the consumer,” he told the audience. “This is a big switch and it is not easy.”
He hailed e-commerce players such as Amazon and Alibaba “who are absolute masters at this”. Cidambi said: “They have taken it to a science and are fantastic at communicating directly to the customer.”
Dubai Duty Free – which hopes to break the US$2 billion sales barrier in 2018 – is about to revamp its website – and its click-and-collection solution – by making it more responsive and more flexible. “It is no longer tenable for a major retailer like us not to have an e-commerce site that is at least comparable to the physical shops we have,” he insisted.
Some push-back from brands
“We have been working hard with suppliers to increase the number of items we have in our online catalogue,” said Cidambi, but added: “We have had to beg and plead with brands to put their products online.”
He warned – based on anecdotal evidence – that if Chinese travellers do not see a brand or product on the Dubai Duty Free site, they assume it is not available in its physical stores.
He pointed out that his company – and the travel retail channel – have not been quick enough to offer an online catalogue that is comparable to what is available in the physical shops. This could be one reason why online sales contribute just 1% of the company’s turnover (about US$20 million), despite about 400,000 people visiting the Dubai Duty Free site every month.
The company has limited data on these visitors. “We need to do digital marketing in the true sense. This is where we take information we already have about our customers, we take it from third party marketplaces, and from our partners and use it to market products, promotions and services to customers,” he said. “The aim is to build up a true customer database and start tracking what the customer is doing with us, how much they are spending and so on.”
From early 2019, three simultaneous projects will go live to revamp the website, to develop the marketing side, and to enhance customer engagement. “When these three things happen I hope we will shift the emphasis and become better at communicating with the customer,” Cidambi said.
“We believe that customers are willing to give up privacy and anonymity for some benefits and recognition from the retailer about who they are and what they are interested in. They are willing to make the trade off.”
Speaking to the brands in the room, he commented: “What would help up enormously is if the brands truly recognised the threat that e-commerce has to retailers like us. Pure-play e-commerce is an existential threat to the travel retail business.”
For more on Dubai Duty Free’s latest projects, see the digital edition of The Official MEADFA Guide.
[*For Moodie Live sound-bite coverage of the two-day MEADFA conference in Beirut, please click here and then click ‘oldest’ to go to the start of the live feed.]