A Case For

Anil Prabhakar is vice president business development at the Gitanjali Group. He has over two decades of experience and has worked with brands such as Blue Star, Onida, Citizen, Westar, Rado and Dunhill.

Airport Retail

[ By Anil Prabhakar ]

The number of passengers travelling for business or pleasure is growing, helped no doubt by the reviving Indian economy. These customers are more affluent than those travelling by rail or road. Indian airports are modernising and creating new opportunities not just for advertising and branding but for retailing as well. In such a scenario it makes business sense to have a retail presence at the domestic and international Indian airports. However, its necessary to understand the airport environment and consider the following:

Product Category
The consumer visits the airport for the purpose of travelling whereas he visits a mall for shopping and entertainment. Shopping at the airport is thus a secondary consideration. He or she is therefore a prospect only for limited categories of products such as: Watches and jewellery that are purchased for gifting as well as personal use. Gitanjali and Swarovski have set up kiosks and stores at domestic and international airports. In the watch retail space, the multi-brand retailer Ethos has set up outlets at major international and domestic airports. Items that are easy to carry. Local products that are not available elsewhere like Paradise Biryani and Kayani biscuits at Hyderabad airport and seedless dates at Dubai. Products that help to pass time such as books, CDs, toys. Crossword and Odyssey are doing very good business at domestic airports in India. Travel accessories such as bags, pouches, totes etc. Hidesign has set up stores at various airports to capitalise on this opportunity. Personal care products such as cosmetics and fragrances. Indias leading distributor of beauty products Baccarose has set up a kiosk at the recently opened terminal at Mumbai domestic airport. It is doing brisk business. Dubai Duty Free was declared as the biggest single airport retail operation in the world in 2009. The sales at Dubai have surpassed those of Heathrow airport and Seoul. Perfume sales were the highest, followed by liquor at number two, gold at number three, tobacco and cigarettes at number four and confectionery at number five. Sale of precious jewellery at Dubai Duty Free is growing at 20%.

Indian airports are modernising and creating new opportunities not just for advertising and branding but for retailing as well. In such a scenario it makes business sense to have a retail presence at the domestic and international Indian airports.
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To make matters Pricing worse, the process To increase sales, products retailed from the domestic airports should be fairly of securing priced. The consumer should feel that he is getting a good bargain. It is advisable to space involves run promotions such as gifts with purchases in order to lure the customer. Products available at the international airports need to be cheaper than domestic sale and complicated and the saving in taxes should be passed on to the customers. Frequent international time-consuming travellers to and from India are aware of the prices prevailing at Dubai, Singapore processes such and Hong Kong airports. In order to attract these customers, DFS India has priced as tendering and its products cheaper than anywhere else in the world. They advertise this fact by way negotiations of tent cards. The highest selling whisky brand Johnny Walker Black label is priced at $60 for with the airport two bottles. authorities or private operators Product and Visual Merchandising such as GMR and Most purchases for speciality products at the airport are impulse purchases and not GVK. planned. It is therefore necessary to have neat and clutter-free merchandise.
As the space allocated to a retailer is very limited, the product selection has to be done with utmost care in order to maximise visibility and revenue. Streamlining the product mix optimises the consumers limited time to browse, select and purchase a product of his choice.

Location
The retail space available at airports is always in short supply. Besides, it is more expensive than malls. To make matters worse, the process of securing space involves complicated and time-consuming processes such as tendering and negotiations with the airport authorities or private operators such as GMR and GVK. Airport retail therefore needs advance planning and a focused business development team.
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Recruitment at Airport Locations

Hiring employees at an airport location takes longer than it would for a mall. There are certain issues such as security, background checks and permissions from different government departments such as airport authority, police department, etc. Wage levels for airport retail employees are usually higher than those of mall employees. This is because airport retail is a 365-day activity with longer and odd working hours.

Gitanjali has retail outlets at various airports in the country such as Mumbai, Hyderabad, Bangalore, Calicut, Bhopal, Indore and Lucknow. The format ranges from a multi-brand store at Hyderabad, a shopin-shop at Bangalore and an exclusive brand outlet for Gili at Mumbais domestic airport.

Business Plan
A well-thought-out business plan is a must before embarking on a retail venture at the airport. The plan should clearly state the objectives and list realistic projections. An airport retail outlet may take longer to break even than in a city. A lot depends on the traffic at the airport, the consumer profile, the product mix and the location. Inadequate infrastructure such as logistics and security coupled with manpower issues has made airport retailing a complicated business to be in today. The new international Delhi airport may be the next big destination which could spur retailers to look at this model going forward.

Gitanjali Groups Airport Retail Initiatives

Gitanjali has retail outlets at various airports in the country such as Mumbai, Hyderabad, Bangalore, Calicut, Bhopal, Indore and Lucknow. The format ranges from a multi-brand store at Hyderabad, a shop-in-shop at Bangalore and an exclusive brand outlet for Gili at Mumbais domestic airport. Indias first duty-free, multi-brand diamond jewellery outlet was opened in August 2010 at Mumbai. With the exception of Calicut, all the airport outlets are doing very good business. Running a retail outlet at smaller centres such as Indore, Bhopal, Lucknow is a great learning experience. These airports are gateways to rural markets. With 80% of the travellers opting for budget airlines, many consumers prefer to travel by air from the nearest airport.

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Moreover, according to the new airport regulations, travellers are required to check-in three hours before the stipulated flight time. This ensures enough time for them to browse through various shopping options available at the airports. As all the Gitanjali brands are being advertised aggressively, there is good awareness among the consumers. Availability of the products at the airports helps in generating sales. It also helps the company get trade and franchise enquiries. About 4 million travellers use the Mumbai international airport every year and this offers a fantastic branding and sales opportunity. Gitanjali Group is very bullish on airport retail. The initial response to the outlet at Mumbai international airport has been extremely encouraging and surpassed the initial expectations. It is heartening to note that in addition to non-resident Indians (NRIs), consumers from Africa and the Middle East have been purchasing Indian brands such as Nakshatra, Asmi and Gili. Gitanjali now wants to open outlets at major airports abroad as well. Mehul Choksi, chairman of Gitanjali, the diversified diamond jewellery manufacturer and largest retailer, said, We want to go the Bulgari way where leading jewellery brands would be available, but with a major emphasis on our own brands. The idea is to have all leading jewellery brands anywhere and everywhere in the world. India offers phenomenal opportunities for retailers. Its emerging middle class, strong consumer culture and rising number of air travellers will drive this growth to its limits. It wont be surprising then to predict that the next turf wars would be played out at these newly emerging airport battlescapes. n

We want to go the Bulgari way where leading jewellery brands would be available, but with a major emphasis on our own brands. The idea is to have all leading jewellery brands anywhere and everywhere in the world.

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