10 April, 2019
Retailers and Jet Airways – Cross Learnings
28 October, 2013
Chennai Airport is a sham(e)!
Even before I was part of the exciting world of Airports (in 2006), I have always been a big fan of the commercial opportunities at transit points, be it the railway stations or bus terminals, let alone airports. It was always a craze to have a cup of coffee at the railway station when we would go over to pick up our loved ones arriving from long distances, especially if the visits were made once in a couple of years. It was yet another joy to consume within trains – from Rajdhanis to Shatabdis to the passenger trains that would have hawkers selling everything from peanuts to guavas to oranges to chips and snacks. The joy of consumption during travel would somehow take over the joy of travel itself.
I have been using airports for just over 15 years now. My first flight was to Mumbai from Chennai to attend a job interview with a leading Retail Chain, with air tickets being sponsored by the company. That was the first time I was inside an Airport terminal, although I have been several times before that to drop off or receive guests from the Chennai Airport. The airport was and continues to be an important piece of the growth story of the state (of Tamilnadu) as well as served as a gateway to the rest of Southern India. In 2005, when the Government of India announced privatisation of Airports, the most protests were seen outside the Chennai Airport, the maximum being only second to the city of Kolkata. The staff of Airports Authority of India (AAI) and allied agencies protested that their livelihoods would be lost if the airport was privatised. The Government succumbed to pressure; Chennai’s loss was to the gain of Bangalore and Hyderabad. Both the cities claim to be the Gateway to South India and came up with world class private airports in the outskirts of the city in 2008, albeit the cities have been growing faster in their respective airport corridors over the past 8 years. Mumbai and Delhi somehow managed to keep the privatisation tab on. Delhi’s T3 Airport Terminal, which is managed by the GMR Group was built in record time and is now ranked among the top 5 in the world, consecutively for the past 3 years. Mumbai Airport, managed by the GVK Group built two new terminals for Domestic and International passengers and is struggling the political onslaught for space within its precincts which has been occupied by the public at large. Kolkata and Chennai Airports were allowed to be redeveloped by AAI and the work completed early this year with a time overshoot of over 9 months and a cost escalation of several hundred crores.
According to a recent survey by passengers on sleepinginairports.com, Kolkata Airport has been ranked 2nd worst in the world, with Chennai following a close third. What an infamy for a state which is considered the Detroit of India housing majors such as Ford, Nissan, Hyundai, Royal Enfield, Ashok Leyland, Hindustan Motors, MRF Tyres, Saint Gobain, Nokia, Samsung and many more! Chennai Port handles one of the highest loads in the peninsula. Chennai’s knowledgeable crowd contributes significantly to the Indian economy with Chennaites occupying important positions in the Indian Government as well as in global positions worldwide. And we have such a dud of an airport!
I feel quite disappointed, first as a citizen of the country and then as a resident of the city to pass through such an unglamorous airport every week, when I travel on work. The facilities are poorly planned. The Four Cs of airports, Comfort, Convenience, Cleanliness and Customer Service are shameful, to say the least. The only saving grace is the imposing façade which looks attractive for those passing by on the Grand Southern Trunk Road outside, but nothing more inside. There are no refreshments available outside the terminal, save for a sole counter which sells local cuisine at thrice the price of what’s sold downtown and a small kiosk of Café Coffee Day. The check-in hall has two ‘counters” where one needs to stand and eat snacks or sip coffee, just next to a dustbin which usually overflows, as though it’s a sort of a punishment. There is no bookshop or any other similar offering around; the only thing that solves passengers’ woes being the complimentary newspapers. The Departure areas are even worse. The layout of shops and other convenience is so bad that one would rather not step in than feeling disappointed thereafter. Cookieman and Frech Loaf are the only saving grace in the mess, although tehir products are meant to be take aways rather than consuming then and there. No Foodcourts or QSRs, just a restaurant located at the far end of the terminal. Services such as Taxi Operators and Forex are abysmally managed, with long queues for taxis in the peak hours in the evenings with unavailability of taxis for passengers. Airside services such as baggage handling are terrible. There are only four baggage belts and checked in luggage may arrive anywhere between 15-45 minutes after you land at the airport. There are only four aerobridges and the buses which provide ground transportation from the terminal to the aircrafts are poorly maintained. There is no complimentary Wi+Fi within the terminals. The airline staff and security staff from Central Industrial Security Force or CISF have a similar attitude as those who manage the airport – one that is indifferent and unfriendly. After all, it’s not just their fault since there is no one to oversee how good (or bad) their service towards passengers is.
I still believe there is hope. There is a plan to privatize the terminals through an open tender and the decision is expected to be taken by the end of this year with work to begin early 2014. Senior Executives from the companies which plan to bid had visited the airport to conduct a survey two weeks back were apparently welcomed by protestors from AAI, shooing them back not wanting privatization. But this time around, the Government doesn’t seem to back out. Hopefully, good sense would prevail and the airport would be handed over to a competent agency to serve passengers better.
An Airport is the face of a city and must display pride of place. It is the first point where international visitors to the country alight at. It is indeed important to put up a great one and maintain it as well. Lets hope.
21 November, 2011
What Retailers can learn from Kingfisher Airlines
The past few weeks would have been one of the most tumultuous for India’s five star Airline, Kingfisher! The Airline and its promoter Dr. Vijay Mallya were in the news (and continue to be) for all the wrong reasons. The India Media which I personally respect a lot were making some scathing remarks and reports all of a sudden about the airline’s business health although it knew about it for many years now being a public limited company. With a debt exceeding Rs. 7,000 Crores (USD 1.80 Billion), Cash-and-carry of Fuel at airports and a few flights grounded for reconfiguration of seats, the Airline was abused by one and all including those who otherwise held it in high esteem. It was common to see many passengers at airport lounges discussing their wisdom and advising how the Airline should be run and how the promoter and the Management can do better. These were some of those who earlier yearned to be seen in the Kingfisher Lounges at airports! In fact, some subscribed for the Kingfisher-Amex credit card so they would get free and immediate access to these Lounges (obviously not for Kingfisher parties which were for the most elite). And some would go any length to get a Kingfisher calendar (in the same lines of a Pirelli calendar). Serious. No Kidding. Anybody who is somebody had a word of advice for the airline. They should do this; they shouldn’t have done that and so on. Naturally (sic).
I am not an Aviation Expert or one who shares Management Consulting for free. I have my own thoughts about the airline, and those are my views. Running a USD 2 Billion empire and being the second largest liquor company in the world (UB is expected to reach the number one position sometime in 2012), I believe Mr. Mallya and Co. knows their business best despite the unconventional ways of how entrepreneurs run their business (rare to see them plunge in Horse & Car Racing or hosting the most enviable parties at Monaco & Monte Carlo). The airline is going through some turbulence and I am sure they would come out of it sooner than later. Whether someone picks up a stake in the airline or if the Banks bail them out is one thing, but the exemplary five-star service which Kingfisher introduced is something that is worth living for. As eminent scholar Swaminathan Anklesaria Aiyar said in his recent article, “Kingfisher is worth saving!”
There are some interesting learning that our Retail Industry could take from the state of affairs of Kingfisher, which I have listed as below;
Scale-Up but at what cost
The airline was founded six years ago and has hence scaled up reasonably well, in fact started flying international since 2009 after acquiring Air Deccan (which was seen as the main reason for buying out). However, some of the routes it was operating were just not profitable. A Few were as per govt. Regulations such as flying to the North East of India, but there were some routes that could have been avoided. I guess this applies to Retailers as well. In a quest to expand their presence some Retailers like those in the F&B business such as cafes, speciality restaurants, etc. enter new cities and towns although they would just not be profitable ever! For Ex., the number of staff who are required to manage an outlet, a region & a territory would just not make sense unless the number of stores are reasonably big.
Being Everything for Everybody
At the India Retail Forum in 2010, Mr. Kishore Biyani of The Future Group made a statement which many of us in the industry vouched for – “A Retailer cannot be everything for everybody!”. Such powerful words. And makes so much sense. This applies a lot especially for Luxury Retailers. One thing that Kingfisher did was to position itself for the fashionable few with all its flamboyance and exclusivity. Later, when it bought out Air Deccan, it created a platform in the low-cost segment with “Kingfisher Red” which was recently scrapped off. In the meanwhile, Kingfisher was offering differential service patterns across its flights – some were served hot food on the house while some had to pay exorbitant prices for cold sandwiches!
Price Matters – Discounts don’t work all the time
In tune with many other airlines offering everyday low fares, Kingfisher was also pricing its fares accordingly. This, I believe was one of the earliest and biggest mistakes the airline did although it had an option not to do so. Many Retailers, to gain easy and quick market share especially Hypermarkets and Supermarkets work aggressively on their pricing and create hundreds of loss-leaders. That way, they attract footfalls in the initial stages although they would never be able to lift prices in future. This is a dangerous strategy that Retailers should keep monitoring constantly. Although it is fine to change the market positioning once in a while, one has to be careful in the long-term.
Competition – Creating a Niche for oneself
Over time, Competition will increase, irrespective of which business one is operating in. For Kingfisher, it was initially the low cost Indian counterparts and over time, International airlines were also competing for market share. This applies to Retailers such as those in the Fashion segment. It is but natural that international brands would enter India eventually, given the potential the 10 million plus affluent households we have which is their main target segment. This should be part of the Strategy and not a knee-jerk reaction.
Managing the Media
Most importantly, Media should be well-managed – always. To say the least, lesser the better. Kingfisher has been the darling of the Media, with all the red short skirts, the sexy parties and those PYTs who are partying. Every move of the airline has been well covered and captured right from the first page, the Page 3 as well as in the last pages of the newspapers (the sports pages, usually). TV Channels have never missed covering its important times, and there is even a channel dedicated to the Good Times! Most Retailers fail to engage the Media well – either they are over exposed or under-exposed. Well, its worth discussing the business priorities and problems from time to time to- and with the media, rather than bringing it all at once. The recent discussions and view points on allowing FDI in Retail is a great example. Many Retailers, who were initially reluctant on the subject have now done a volte-face because they are cash-strapped by agreeing to bring in foreign retailers in to the fray! This stance will affect them sooner than later, with the media as well as their consumers.
Life’s lessons come from various quarters all the while and this time it is in the form of Kingfisher airlines. It is up to us to make good use of wisdom, irrespective where it comes from.
14 October, 2011
Airports, A/c and Retail Opportunities
I came across an article recently on Times of India according to which Airports Authority of India (AAI) plans to turn-off air-conditioning in certain parts of the airports to reduce its expenses. “Our model for low-cost airports is based on a good low-cost carrier where people will get good, cost-efficient services. AC is the single biggest cost factor in airports. We are examining models to cut down the need for air-conditioning in the tier III airports that will come up,” said a senior official of AAI. Hubli in Karnataka will prove to be the first test case for this new phenomenon. The AAI is building an airport in Hubli for which the terminal cost has been pegged at Rs 60 crore (USD 13 Million). “We are going to further reduce this cost by shunning the fancy and shining tiles used for flooring and are looking at more areas for economy without compromising the efficiency and comfort level for flyers,” said sources. There is an increasing clamour among airlines, many of whom are struggling to survive and unable to pay hefty fees that the fancy new airports levy. Their logic: have economic airports with low charges so that flying remains affordable as high charges for ‘Taj Mahal’ kind of airports would have to be recovered in the form of higher fares from passengers.
(Suggested Reading: Airline guidelines – a boon to Retailers)
Another recent article in The Economic Times illustrates the financial performance of GMR Airports, the company that has built and manages two of the top 6 airports in India at Delhi and Hyderabad. Incidentally, Hyderabad Airport is the Number 1 among its peers according to the latest ACI Survey which grades airports across the world on passenger amenities and services. And yes, GMR neither switches off nor plans to switch of A/c. Their opportunity – non-Aeronautical Revenues which includes Retail and F&B options at the airport premises. World over, non-Aeronautical revenues account 30-50% of an airport’s revenues. Of this, Retail/F&B contributes significantly, over 70% in some cases closely followed by “Car Parking Revenues”.
In India, the focus on Non-Aero income has hardly been given importance by AAI, the erstwhile operator of the top airports in India (located at Mumbai, Delhi, Bangalore and Hyderabad which are now privatised). In the year 2006, Airport privatisation was formally passed on a Private-Public Partnership model (PPP) and Delhi, Mumbai airports were handed over by AAI to two private parties, viz., GMR and GVK to modernize the respective airports. While Mumbai is half-done (not sure which half), Delhi has a swanky new terminal, more popularly known as T3, built at a cost of over USD 2.5 billion. Over 100,000 sft of space is dedicated to Retail, F&B and other commercial areas and also boasts the largest car parking facility in town! (while compared to any other Mall or Shopping Centre). Hyderabad and Bangalore had their own greenfield (built from scratch) airports led by GMR and Zurich airports’ consortium in the year 2008.
(Also read: Privatisation of airports)
Instead of switching off A/c or using inferior quality of flooring and other amenities, AAI should rather focus more on the commercial opportunities. AAI follows the “Competitive Tender” model where the bidder with the highest bid amount qualifies to operate the said commercial locations. Needless to say, most of the branded players shun from such tenders due to inconsistency of participation. For example, a branded pizza chain cannot sell beyond their range, so does a branded formal wear Retailer! Most of the spaces that are tendered out are between 8-20 sqm (about 90 – 220 sft) for a snack bar or even a specialised category apparel / accessories store or a book store! It’s not only a business challenge to run a retail establishment within such a small area – but it doesn’t provide a good retail experience as well. This is a fundamental philosophy-flaw of AAI that needs to change. Change NOW.
If done properly, AAI can expect to garner reasonably good revenues from Non-Aero revenues. Chennai and Kolkata Airports which are being modernised by the AAI themselves will be a litmus test for Retailers. These airports are as large or larger than Bangalore & Hyderabad and the customer (Read: Passenger) is the same who is spending time and money at Delhi, Mumbai and other International airports. So, the intent to spend / opportunity to serve is already huge. With the burgeoning spends in Organized Retail even in tier II and tier III cities growing by over 35% year on year, it is no surprise that passengers in smaller airports / cities would spend on good quality products and services. HMSHost, a leading player in the F&B space at airports worldwide is now the largest player across Indian airports with significant presence at Bangalore, Hyderabad, Mumbai and more recently at AAI managed airports at Chandigarh and Lucknow. Cafe Coffee Day, India’s largest cafe chain operates over 25 locations across various airports in India.
(Also Read: A lot happened over coffee!)
So now, its up to AAI how they would want to capture the wallet-spends of its passengers! As a regular user of airports, I wouldn’t mind lesser space at the terminals (as a passenger, my dwell time is no more than 45 minutes and I am not going to play football anyway), rather prefer a comfortable environment – reasonably well maintained terminals and hygienic toilets included.
Hope – the most important word in our lives. I hope things will change. Even with AAI. Let’s see.
13 September, 2011
Luxury Retailing in India
Last week was a fascinating one to the world of Travel Retail and Luxury Retail. One of the world’s most coveted luxury brands, Louis Vuitton from the house of Moet Hennessey Louis Vuitton (LVMH) finally debuted at Incheon Airport in Korea (which has also been ranked the number 1 airport in the world in passenger satisfaction by ACI International) amid much fanfare and excitement according to the first online update from The Moodie Report. Korea, which is famous for its “cheaper” alternatives in electronic products and automobiles (led by Hyundai) was the obvious choice for the cult brand since it is the most preferred transit destination between Mainland China, Japan and Korea and the rest of the world. Louis Vuitton was also ranked the number one luxury retail fashion brand (behind Hermes, Gucci, Chanel and Cartier) by the media house “My Retail Media” recently. LV, as it is popularly known, is most famous for its accessories & luggage (which ranges between USD 500 – 5,000) and is one of the last brands in the “Luxury” segment to enter the glamorous world of Travel Retail. Such is the potential of passengers travelling through airports!
(Suggested Reading: Travel Retail)
When LV entered the city of Bangalore in India (2008), it had installed a huge trunk outside the terminal building of Bangalore International Airport (BIAL), a first of its kind in the country but one which the brand does quite frequently across the world. Apart from this, LV operates at Delhi and Mumbai and is looking forward to expanding across other Indian cities in times to come. Hermes opened its first outlet in Pune this year, which was later followed by its flagship store at Mumbai. The beauty of this location is that it opened its store where the distance from / to Mumbai is ‘0’km (zero km)! Other luxury brands such as Gucci, Chanel, Cartier, Rolex, D&G, Armani, Hugo Boss, Omega, etc. have their standalone stores at Mumbai, Delhi and Bangalore. Although, the offtake is not as expected, according to market reports. There was even a recent article online in which the writer claims that the “Indian Luxury” market is a not as successful citing examples of how Nita Ambani (wife of Mukesh Ambani, one of the world’s top billionaires and the Chairman of Reliance Industries) shopped her porcelain from nearby Sri Lanka for their new billion dollar home! Indeed, Gucci, Prada and their ilk in Luxury Retail have not taken off the same way in India (estimated at less than USD 1 billion compared to that of USD 17 billion in China) but I wonder if that’s just the measure.
(Read: World’s cheapest car and its possible impact on Retailers)
The article also quotes the number of dollar millionaires – I guess, the methodology in itself is flawed. There is probably more “black money” in India than in white, hence it is not the best way to assess the wealth of native Indians. Mercedes Benz, the oldest German luxury automobile in India along with with its country counter parts Audi and BMW sold over 2,500 cars last year (at an average price of USD 100,000). Property Developers such as DLF, Prestige, Sobha and many more are developing high-end customised villas that range from INR 2 Crores to 5 Crores (USD 500,000 onwards). A typical Indian middle class family spends between USD 20,000 – 50,000 – something that’s unheard of in the Western world where Church weddings do not accommodate more than a 100 people while the big fat Indian weddings feed over a thousand people, twice a day, for 3-7 days! If western wear and accessories are any measure to say that Luxury Retail in India hasn’t take off, that’s right. But then, the Indian shopper doesn’t consider Western wear for day today use and hence their usability is restricted. The article claims that even an entry level secretary in Japan or China would sport a LV bag (it doesn’t mention if original) which is not the case in India. (But they do sport gold jewellery which is not considered…). High end electronic gadgets are favourites with the working middle class including the iPod, the iPhone the iPad and a wide range of mobile phones and related accessories.
I wonder why “Luxury Retail” in India is always connected with western apparel and accessories. Women do not sport western wear to work everyday! And the reason is simple – an average Indian (women) is more comfortable in her Indian clothing. The climatic condition is more conducive for comfortable dressing and hence their preference. Would this change in the next 20 years, yes. Would it match the world markets? No. I can assure that this market will never be the same in size as what it is in Japan or China, forget Europe or the US. Indian women and the society at large are indeed embracing western wear in a big way, especially for formal occasions at workplace. Even for holidays and other occasions. However, the appreciation for high-end Luxury remains lukewarm since the reasons to wear (other clothing) is far more. Cufflinks are famous all over the world to match blazers, jackets or suits. But a majority of people in the working class do not wear a full-sleeve shirt to work, forget other accessories! And the reason is that the Indian weather conditions do not permit wearing a heavy suit all day at work. Two thirds of the working class still commute in public transport (Metros / A/c buses) and two-wheelers and hence prefer an easy attire than the complicated ones. This is one reason why “wrinkle-free” shirts and trousers are a big draw in the country.
(Also Read: Luxury Retail at Airports)
But no one bothers to compare the gold consumption in India – the most coveted precious metal with the rest of the world. Some one from the Jewellery industry told me recently that if all the gold in Indian houses is collected and offered in the world market, the price of it would be cheaper than that of copper! Really. That’s the amount of gold that is collected and retained in India. For Indians, gold (Swarna, as in Goddess Lakshmi) is bought for various reasons – as traditional jewellery, as savings for future, as a means to display wealth and so on. A former minister from the state of Karnataka who was recently arrested and jailed apparently had a gold-plated chair and even cutlery / crockery for dining at his home according to press reports when the CBI raided his house!
I am sure that the Luxury Market as opined by experts will indeed grow - Coupled with better Retail Infrastructure and Government taxation norms. Soon, one can expect an LV at an Indian airport too. You never know. It’s just a matter of time.
05 August, 2011
Spicejet and Indigo will help Retailers grow!
Photo courtesy: campaonindia.in
It was heartening to read that two of India’s low-cost airlines, Spicejet and IndiGo have ordered new aircraft. My former colleague and boss at BIAL Stephan Widrig, currently the Chief Commercial Officer at Zurich Airport used to say that world over, Aviation grows twice at the rate of national GDP. And rightfully so. Except for 2008-09 when India’s aviation landscape saw a slowdown, which was mostly a perceived threat to future incomes than any direct effect on current earnings, I guess we have been flying happily. The flight I just took, a Jet Lite from Delhi to Bangalore (low-cost identity of India’s premier airline Jet Aiways) was almost full,. When my ticket was booked a week ago, the return fare was around Rs. 11,000 (USD 230). Not bad, I would say. And almost all airlines are running full during the peak hours and the load factor on an average seems to be over 80% (no of seats filled per craft).
Spicejet was recently acquired by media baron Kalanithi Maran, who runs the Sun television network across the country. Though media and aviation have nothing much to do (atleast directly to spur each other’s growth), he would be the only person who would know the reason and logic behind entering a rather unknown industry. Having said that, he has been an excellent entrepreneur in his own right and has created a niche for himself in the media industry, in which his company controls over 70% of channels and viewership in Tamil Nadu, especially in South India. While he is known to be a media-shy person, he is also known for his aggressiveness in his business approach. So, when Spicejet announced expansion plans by acquiring new aircraft and applying for international routes, industry observes are not surprised. But his team and he are doing something rather differently. Instead of buying an Airbus or a Boeing, they have chosen to buy Bombardier aircraft. Except those in the industry, many wouldn’t know that aircraft which have lesser than 80 seats are exempt from various aviation and airport taxes in India. Most importantly, they don’t have to pay landing and parking charges at these airports. Since they have smaller aircraft sizes, they can easily land in smaller landing strips of 2,000 – 3,500 metres (Delhi has 4,200 metre long runway which is capable of handling the Airbus 380, the largest passenger plane currently). Many years back, Captain Gopinath, the pioneer of low-cost flying used the same to his advantage when he launched Air Deccan, India’s first low-cost airline by operating mostly ATRs to fly regional short-haul (less than 2 hour) routes. Similarly, Paramount Airways (which is now defunct and has severe debts) used Embraer aircraft and reaped benefits until such time they were alive. Sadly, both companies couldn’t sustain for too long due to investments and cash flows. Maran, hopefully shouldn’t have that issue.
Now, how does that help Retailers? Indeed, it does. Indigo and Spicejet have announced plans for International expansion. While Spicejet has chosen Hyderabad Airport as its hub, Indigo will use Delhi for expanding its base. Thanks to low-cost operations, both these airlines are expected to penetrate into Tier II towns. Smaller airports such as Raipur, Ranchi and Patna have demonstrated double-digit passenger growth over the past two years. Thanks to employment opportunities, youth from these cities are living and working in bigger cities like Mumbai, Delhi and Bangalore and fly down to their home-towns when required rather than spending days together in trains like in the good old times. Now – more the number of passengers, more the opportunity for commercial establishments. And that’s where Retailers are expected to benefit. For example, after successfully operating at Bangalore and Hyderabad airports for the past three years, HMSHost, the $8 Billion F&B Retailer has recently won 10 year contracts at Chandigarh and Lucknow! While their bid was aggressive and raised eyebrows among the Industry, the company seems to be unfazed, After all, they operate at most number of airport locations in the world as a company, and should know better than anyone else. With their knowledge and expertise, not only would they set the standard in these airports, but would also fulfil the passenger requirements to the best possible. TFS, a newly launched company 2 years ago now operates F&B concessions at Mumbai and Delhi airports (the two airports account for over 45% of aviation in India). Chennai and Kolkata airports which are undergoing modernisation by the state-owned Airports Authority of India are also expected to go the master concessionaire way!
Regional Airports like Trichy, Coimbatore, Mangalore, Nagpur, Pune, Ahmedabad, Bhubaneshwar and many more are expected to propel aviation growth over the nest few years. Not only would they feed domestic traffic, they would also encourage the ever-aspiring middle class to undertake their first foreign jaunts. Indigo is offering a return fare of Rs. 9,999 to Dubai or Singapore from Delhi. Add on another Rs. 5,000 or so from anywhere in India for a connecting Indigo flight and a foreign trip for a couple at less than Rs. 30,000 (excluding cost of stay which works out to be very cheap if one avails package deals). These low-cost carriers are indeed growing the market and this would only help Retail and F&B players who are currently operating, as well as intend to operate at airports. The F&B spend per pax is currently less than a dollar across Indian Airports – compare that with a pax spend (on F&B) across major airports in the world such as Dubai, Singapore, Heathrow, Zurich which ranges from $5 – $15. More so, the low-cost airlines do not provide F&B on-board, so that is another opportunity that the F&B Retailers can capture.
Indeed, there is a long way to go for Travel Retailers in India and yes, it is expected to be a bumpy ride, thanks partially to lack of basic infrastructure requirements and trained manpower, but atleast there is a start that’s in the anvil. It’s up to the Retailers to identify and chase the opportunities and the to make the most out of them.
29 July, 2011
Passenger dwell time is precious!
The lady at the check-in counter of Jet Airways, India’s premier airline told me that I just need to show the Boarding Card at the Lounge – they would scan and identify the passenger, rather than providing a Lounge Voucher separately. I was wondering if they were saving paper (Go Green, Save Environment, or one of those fundoo stuff). But actually, it was a smart way of using technology by using a scanner. QR Codes seem to be the rage all over and I now have mine for various purposes – try one of these below. Will write more about the utility of QR Codes to Retailers soon.
As I was walking towards the Security Gates, I was remembering something that my friend Patrick Graf, Head of Retail Marketing & Services at Zurich Airport used to tell me often about one of the best practices followed at his airport – of how Shopping Vouchers were given to passengers at the time of Checking-In. It was indeed a smart way of engaging passengers and guiding them to the Retail / F&B areas rather than pushing them into those Lounges – if they have dwell time (in airport parlance, its the idle time, rather productive time available with passengers before boarding their plane), then we might as well use them at the numerous shops and restaurants. In fact, these are the guys who travel frequently collect air miles, are on the top levels of airline loyalty programs (such as a Platinum Member or Gold) and have very little time to shop for themselves or their loved ones.
I saw just that today at the Carnation Lounge in Mumbai Airport – a 200 sqm facility with over 100 covers and the place was full between 18.30 – 20.30 (I had reached the airport early for a meeting which was cancelled by the other party). Apart from my professional commitments, my favourite past time is to observe consumers (and potential ones too) and was just doing that. There were atleast 7 people that I spotted in the lounge who were fiddling with their iPads; almost everyone of them had a BlackBerry and a Laptop; over a third of them were in formal business suits; and there was a glass of beer or some other form of alcohol at over a fourth of all tables. And they were munching the complimentary buffet sponsored by the airline while continuing their work – most professional / official I would guess.
View of the Carnation Lounge – click on the photo to reach the author
Now, Retailers who have set-up shop (I am using this airport terminal just as an example) in the airside hope some of these influential passengers would pass by – not that those who don’t have Lounge vouchers are not influential – but these are probably a ready bait. With a little more working together between the Airport (Retail team), Airlines and Retailers, the dwell time could be utilised quite efficiently. Here are a few observations and ideas;
- Collaborate - It might be worthwhile for the stakeholders to first agree to a plan; the Lounges do get crowded at times and its productivity is somewhat lost when some Pax do not move from their seats – by offering a special promotion exclusively to them, its not just an opportunity to entice them but also to free up space in the Lounges
- Communicate – what’s seen is what is believed. If there is a partnership between airlines and retailers (at the airport), it should be mentioned loudly – probably at the entrance using a Standee or on the tables using Tent Cards and even on the PA system (though sparingly)
- Co-Promote – I guess Retailers should promote the offers provided to a particular airlines (or a few of them if it is so) at their outlets – pax flying a certain airline may just walk-in to know more about the offer! And Airlines should promote the Retailers especially at the Check-In counters, not to mention on their websites, emailers, e-ticket borders and of course, behind the boarding cards
I have seen airports where the Lounges are located quite far-away and in spite of it, I have found myself waiting outside for a few of them inside to vacate so I can find a seat for myself. This is not particular to India, probably all across the world. There is a learning that we could take from some of the best practices followed at places like Zurich Airport and implement them in our own ways. After all, passengers’ Dwell time is too precious to be let off sipping a complimentary soup or reading the morning newspaper / evening tabloid at the Lounges – intelligence lies in enticing them to walk across the commercials areas – so they could also get a taste of Retail and F&B too. Now, I am gonna work on such a promotion starting shortly Watch out.
15 June, 2010
Low Cost: It’s all about perception!
Does EBIDTA mean much for businesses?
I was in a review meeting with a client recently and we were going through the store level profitability with the CFO. Around 100 stores acr...

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The Meterological department has announced an Orange alert for the city of Chennai as well as a few other districts on 14-15 October 2024. ...
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The week that passed by was abuzz with the news of the sacking (or so it was announced in the media) of Laxman Narasimhan, who was handpicke...
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On 4 Nov. ’24, I stepped down from my role as Executive Vice President, Minmini app. Touted as the world’s first hyperlocal social media pla...