23 October, 2016
UDAN - a A Flight for Retailers
13 March, 2014
Food Retail is tuff…
Restaurant business is damn exciting. While people don’t shop for clothes and mobiles every weekend, most people drop over for a good meal frequently and a great meal, once in a while. Great Meal, I mean is a bit indulgent. It could be a Michelin rated restaurant. It could be one among the top 10 restaurants in the country. It could be a celebrity chef’s eating place. Ofcourse, the Five-Stars. The list is long. However, the food business is also one of the tuffest to be in. In fact, it is also one of the retail formats where the churn is very high. For every 6 successful restaurants, three of them fail. And the reasons for failure are aplenty, Customer Service (or the lack of it) being one of the main reasons why restaurants cannot keep up in the short to medium term. Also, investors are not too keen to fund ventures that do not show the ability to scale. 2-3 outlets is not scaling up. It should be in double digits. Most of the restaurant owners are entrepreneurs, many having chosen the route to entrepreneurship after stints in corporate life. They invest their life time savings to open a restaurant (also includes Pubs / Nighclubs / Others) and usually find the going tuff within 18-24 months of opening. That’s when the business matures and needs further investment in marketing and PR – the machinery that keeps restaurants going. I was at a restaurant called “Tangerine” in the upmarket Alwarpet locality in Chennai. The last I had been there was about a decade back. The food was excellent, just how I remember it had tasted during my last visit. However, the place was a bit worn down. The kitchen, which has limited space and equipment cannot cook more than two dishes at a time, which increases the waiting time for guests. The staff fare not all that excited, since they don’t get regular footfalls all over the week.
The business is all the more difficult if they operate in niche categories. In a city like Chennai, there is a strong thrust on Veg-only restaurants. Yes, you heard that right. In fact, India is the only country in the world which has so many veg-only restaurants and that too, all across the country. I visited one last month. It is called La Shakahari. La, being a french word and Shakahari being vegetarian in Hindi language. The restaurant is located inside a residential area and I was almost being challenged by the Google Map in my phone to find the place despite its best efforts. But once we entered, we realized what a great place it was. They had a set-menu as well as A la Carte. The set-menu offerred more items for what we would have paid otherwise while ordering them individually.
One of the biggest challenges that Restaurateurs face is the inability to scale-up. Most times, it’s the lack of capital. At times, it’s the lack of intent and interest to grow. A potential investor would indeed be able to show inclination to projects which are tried and tested. However, many entrepreneurs just don’t expand. Another option to scale up is the Franchising route. However, the risk is you would lose consistency in the long term and many of them would probably serve food that tastes different. For fear of not diluting their exclusive menu and taste that it offers, these restaurants remain standalone ventures and thus allow others to crop up in other parts of the city.
Of all retail formats, the F&B format is one of the toughest to operate. Many of them shut shop within 24 months of opening. If they withstand any further, then they strive to stay for a long time in their lifecycle. It also depends on the choice of real estate – Rent is almost 20% of Sales in Malls and about 12-15% at High Street locations. And that’s why you don’t find many of them in Malls not doing well or being priced exorbitantly. At the end of the day, the success of a restaurant is actually many factors playing in.
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.
30 September, 2013
Airport Retailers get an added advantage
06 March, 2013
Consumer Spend – a loot at Airports
Recently, the Chief Minister of Tamil Nadu launched a populist move in Chennai to commemorate her birthday – a Government funded canteen that serves one idly (rice patty) for Re 1 (1 USD is Rs. 53 approx.) Yes, you read that right, One Rupee for a Idly. The move is aimed to cater to the needs of those under the poverty line and the poor, the working class such as drivers of autos, taxis, trucks and so on. This was a way Amma (mother) as she is fondly known as, appeased the vote bank. It is not sure how much this scheme is going to cause to the State. Ofcourse, these so called welfare measures are out of the state’s coffers – tax payers money. It so happened that the very next day since this scheme was launched, I was travelling through the Chennai Airport which is managed by Airports Authority of India, a government body which also operates the Airport in Kolkata. These two airports faced stiff opposition by the unions when the Ministry of Aviation privatized the other major airports in India in 2005 located at Delhi, Mumbai, Bangalore and Hyderabad. These six airports contribute to over 70% or more of the total air travellers in the country which is estimated at 110 million pax per year. While the Kolkata Airport has been recently renovated at a cost of Rs. 3,000 Crores, the Chennai Airport has been renovated for aorund the same cost and was inaugurated recently although the terminal buildings havent been opened up to the public due to lack of passenger amenities, a move that the Commercial Department of AAI conveniently seemed to have forgotten while planning the terminal building.
I was taking an early morning flight, a long one that too to Ahmedabad via Mumbai, an arduous 5 hour journey. And I was flying Spicejet, India’s most preferred low-cost airline which doesn’t offer complimentary meals on board, rather “sells” Cashews and Sandwiches at exorbitant prices. So I chose to have a quick breakfast before the Security Check for which I had quite some time. I walked up to the nearest F&B Kiosk which was serving hot food items. I ordered a plate of idly consisting two pieces and a Vada. The damage was Rs. 100/-. Yes, you read that right. Most passengers like me had no option but to pay such steep prices at airports to quench their hunger and thirst. What was more surprising is that the staff do not issue bills for every item sold on their own. Rather, the consumer needs to insist one of they really need one. I demanded one. And bingo, the staff tore a piece of paper from the manual bill book which had pre-written “Breakfast” in many of the bills. A closer look and the TIN numbers which are mandatory were indeed printed. But VAT or Value Added Tax and other charges such as Service Charge, Service Tax, etc. were not explicitly mentioned in the bill. I couldn’t blame the staff because they were just doing their job. I quietly paid the bill and proceeded to the aircraft. Afterall, this is not an isolated case at Chennai Airport. Almost all airports managed by AAI have the same issues more or less.
So, why are airport food products so expensive? To begin with, it’s the way the places are leased out by AAI. They follow an age-old practice of an out-dated tender system wherein those who qualify should propose a base price for the said location. H1, which is the highest quote gets selected. The tender period is usually for 3-5 years and doesn’t specify the architectural look and feel of the outlet. And most often, there is no seating option that is provided. This is completely contrasted by the approach taken by private Airport operators such as GVK and GMR Groups which manage Mumbai & Bangalore and Delhi & Hyderabad Airports respectively. The chosen partners need to submit and discuss schematic drawings and layouts with the airports and thereafter finalized. The design is not just contemporary but also functional and convenient. During my tenure at Bangalore Airport (BIAL) in 2006, we launched a global tender for Retail and F&B which attracted top players in the world to compete on a level playing field. The selection process was touted as one of the most transparent and efficient processes by international media which tracks Travel Retail.
AAI’s outdated tender system is the mother of all troubles. Coupled with it is its terrible space planning with outlets spread haywire here and there. Add to it, unqualified commercial guys who have no clue of global best practices and arbitrarily follow the H1 route to choose partners. It is quite obvious that they quote higher fees in the tender and therefore over charge customers. Branded players like Café Coffee Day, Subway, Pizza Hut, McDonalds, etc who also operate at airports follow a corporate pricing policy and provide bills with all statutory requirements. Due to high entry costs and related operating costs such as complimentary snacks and beverages to airport staff, most organized players do not even venture into this arena.
A popular Indian Aviation Entrepreneur who successfully started and shut a low-cost airline often used to quip that there is a private mafia now in the form of private airport operators. But then, the government operated airports are no better.
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.
20 September, 2011
Alcohol and Consumers
According to a recent report by World Health Organization, alcohol use results in the death of 2.5 million people annually. Nearly 4% of all deaths are related to alcohol. Most alcohol-related deaths are caused by injuries, cancer, cardiovascular diseases and liver cirrhosis. Globally, 6.2% of all male deaths are related to alcohol, compared to 1.1% of female deaths. Worldwide, 3.2 lakh young people aged 15-29 years die annually from alcohol-related causes, resulting in 9% of all deaths in that age group. Alcohol raises the risk of as many as 60 different diseases, according to a recent study in the medical journal `Lancet'. Nearly 62.5 million people in India drink alcohol with per capita consumption being around four litres per adult per year. For every six men, one woman drinks alcohol in India. Over 40% of road crashes occur in India during the night, with one-third of them being due to drunk driving. It observes that India saw a robust increase in recorded adult per capita consumption of alcohol. When it came to only drinkers, the average per capita consumption of pure alcohol of a 15-year-old and above in India between 2003-05 was 22.25 litres (23.93 litres among men and 10.35 litres among women). Nearly 62.5 million people in India drink alcohol with per capita consumption being around four litres per adult per year. For every six men, one woman drinks alcohol in India. Over 40% of road crashes occur in India during the night, with one-third of them being due to drunk driving.
Actor Imran Khan had recently announced to file a Public Interest Litigation (PIL) at the Bombay High Court challenging the State Government’s proposal to ban “alcohol consumption” under the age of 25 years according to a recent news article in Times of India. The co-petitioner is his brother-in-law Vedant Malik, 22, who wants to "espouse the cause on behalf of youth below the age of 25 years", says the PIL. The respondents are the Maharashtra government, the secretary of the department of social justice and state excise commissioner. The PIL states that the government "seeks to impinge on the right of equality and personal liberty" of the youth, who are otherwise vested with the right to vote, marry, serve in the military, drive vehicles and enter into legal contracts. The PIL informs that legal drinking ages worldwide are usually 18 to 21. Incidentally, Maharashtra's and Delhi's drinking age limit of 25 is among the highest in the world, except for Maharashtra's Wardha district, where it is 30. The PIL states that the petitioners were surprised to find that the 25 drinking age limit was actually in force since September 26, 2005, but was not being implemented. "The petitioners were therefore under the bonafide belief that the age limit to apply for a liquor permit was 21 years and not 25 years,'' the PIL says. The petitioners then read news articles saying that the Maharashtra cabinet on June 1, 2011 introduced a de-addiction policy that said the legal drinking age for hard liquor was 25 and mild beer 21. They decided to challenge the higher drinking age and asked the department of social justice and empowerment and excise commissioner for the policy. They learnt that the policy was "only at a nascent stage of discussion and yet to be implemented.
I would say this is indeed a noble move had it been done by any other person than the said actor who played the role of an urban youth in his recent movie “Delhi Belly”, which was produced by his uncle and ace actor Aamir Khan. In the film, the actor and crew have professed and performed some of the most vulgar acts (some really meant only within closed doors) which even couples in their 30s (without their children) couldn’t fathom watching at the cinema! The fraternity and junta laughed off the whole episode, claimed and hailed the actor-uncle duo to have taken Indian cinema to global echelons! Neither the saffron brigade nor any mullah condemned or took them to the roads or to the court; no women’s panel took notice of such derogatory remarks in the film. A song featuring “chaste Delhi / national abuse” was reformulated in the soundtrack which went on to become a Chartbuster. Indeed, there was some criticism, but Aamir Khan himself appeared on Tv to justify this and said it was just a song, just a movie! And Hyundai Motor Corp. whose brand ambassador happens to be Shah Rukh Khan (apparently the two Khans are considered arch rivals and do not see eye-to-eye ) announced that it would sue the movie-makers due to a dialogue spelled in the film, where a modified “Hyundai Santro” is abused with the choicest derogatory words which goes “this looks like the outcome if a donkey had f****d a rickshaw!” The film grossed over INR 20 Crores during the opening weekend and was declared a super-hit at the Box-Office, an important attribute to commercial success!
Look who’s talking about social causes! And in a recent interview in Times of India, the actor says he is supporting the freedom of choice! Well, we live in a democratic set-up and each one of us is free to propose our likings and wishes. But a youth icon such as Imran Khan standing up for a frivolous cause such as this is rather disappointing.
As consumers, we all have the right to choose what we want to buy and consume. In fact retailers like Spencer’s, Hypercity, SPAR, More, Total, star Bazaar and many more have separate sections within their stores that are dedicated to alcohol. At Airports, Duty Free Liquor and Tobacco is one of the fastest selling items. I remember way back in 2001, Spencer's stores in Chennai city would sell alcoholic beverages within a distant corner of the store, or rather abutting the main supermarket. Liquor was not part of monthly shopping baskets earlier, which has changed dramatically over the years. The typical 365 litre refrigerators have given way to larger capacity ones, thanks to the increasing consumption patterns of consumers. Today, there is a specific place allotted for wine, beer, soda and other beverages within the cooling equipment. Consumers have evolved and know what to drink and when to drink. most boutique Restaurants that have opened recently have liquor permits and serve alcohol (no one really checks the age). Even Pizza Hut started serving wine at some of its outlets which was later withdrawn due to poor response. While every one talks about “legal drinking age”, it is not implemented in its spirit.
The issue arises when unwanted propaganda such as this is promulgated. When the Government issued such a notice (in Maharashtra), not a single liquor company or a Retailer came forward with such a PIL. For obvious reasons. No one wants to be known supporting alcoholism. But the way the actor has done this doesn’t merit anyone other than him with some additional publicity which I am sure he could do without. Even if he had filed it as a “consumer”, his agency could have remained silent about it. (I am not even bringing his religion into the picture as this blog is not meant for discussing such purposes).
Consumers today are well aware of their rights with permissible laws (and outside). They are learned, educated and know what is really good for them and their families. Whether the PIL is granted or rejected or not, alcoholism is a peril that will continue to daunt the society unless managed well (by each one of us) with personal and social responsibility.
Cheers to Consumers.
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.
16 August, 2010
New Airline guidelines – a boon to Retailers
Since I had already done a web-check the previous day, all I needed to do was carry a print out to show the Security staff and run to the boarding gates. The usually unfriendly and rude staff of CISF at Delhi Airport was, for a change nice and polite and let me past the security gates, while also advising that I need to really rush as the flight’s about to take off. Even as I approached the waiting area, my name along with a few others were being screamed on the Public Address systems and I had to run across the 2,000 sqm terminal building to reach the boarding gates. Just that I was feeling a bit guilty that I wasn’t taking anything back for my family or friends from the sprawling Retail areas. What was reassuring was that there was an all-purpose retail outlet at the Arrival areas at Bangalore International Airport, managed by India’s leading Leisure Retailer Odyssey that stocks everything from toys to chocolates, books to music. So I didn’t have to worry much since I could pick it up after reaching Bangalore.
While my getting into the flight was indeed some kind of magic, it was an eye-opener and warning, given the new guidelines laid down by many of the airlines in conjunction with the airports – Check-In counters for Domestic Flights would close 45 minutes prior to scheduled departure (previously 30 minutes) and 75 minutes prior for International flights and this would be applicable at the top six airports by passenger volumes in India including Mumbai, Delhi, Chennai, Bangalore, Kolkata and Hyderabad. This means one wouldn’t be able to check-in at the airport after the counters close, but could still board the flight if check-in has already been done though telephone or on the Web well in advance. Over a period of time, this trend would result in passengers arriving early to the airport, like how they do at other points of transit such as Railway stations and Bus stands. Earlier, the airports were smaller and cramped, but all this changed with the Government allowing private participation in constructing new infrastructure at airports. Bangalore International Airport was the first one to be signed on paper although Hyderabad International Airport was the first to commence its Greenfield Airport in 2008. GVK managed Mumbai International Airport had its new terminal building inaugurated a few months ago and GMR operated Delhi International Airport has recently commenced India’s pride, Terminal 3, or T3 as it is fondly called. Other airports at Chennai, Kolkata, Mangalore, Ahmadabad and many others managed by Airports Authority of India are being modernised at a total cost of over USD 4 Billion.
While arriving at the airport was not seen as a major attraction a few years ago, today passengers seem to love it. For Example, Cafe Coffee Day, the first national Retail Brand to enter airports many years ago had its share of patrons arriving at the erstwhile HAL Airport in Bangalore only to sip a cup of hot coffee before they left the city which they do even today at the new airport. Currently, CCD operates over 30 outlets across leading airports in India and is planning to enter many more in the years to come. The Bangalore International Airport was the first one in the country to have a properly planned and well-managed Retail footprint, led by India’s largest retailer in the lifestyle business, viz. Shoppers Stop which also incidentally operates at Hyderabad Airport. T3 at Delhi has over 20,000 sqm of Retail areas and hosts leading domestic, regional and international brands alike across domestic & International Departure and Arrival areas. It is quite common to see passengers packing sandwiches or burgers from CCD outlets along with a cold coffee or a frappe or Pizzas & Pepsi from Pizza Hut outlets at various airport terminals, thanks to the advent of low-cost airlines (which command a 35% market share in the Indian skies) that do not serve complimentary meals on board.
While arriving early to shop at Duty Free areas in the International Departures is common worldwide, the trend was basic and functional many years ago which was again altered at the Bangalore International Airport which hosts one of the best collections of Scotch, Tobacco, perfumes & cosmetics, Electronics etc. This is the airport where leading city-side retailers such as Odyssey Books and Leisure, Ethos Swiss Watch studio and fashion designer Deepika Govind started their airport retail journey. Today, Odyssey aand Ethos have mastered the trade and operate at many other airports while planning for more stores in times to come.
There are indeed many advantages for passengers to shop at airports. To begin with, it’s a lot of time saved for business passengers and busy executives, compared to that at the over-crowded malls in the city where entering and exiting could take more than 20 minutes during the weekends. Since these store understand the pulse of their customers, they stock the right kind of products so the decision making is quicker. Most importantly, these outlets offer a value-addition to their customers by bundling various promotions – afterall, the passenger doesn’t and cannot come every day to the airport! F&B operators focus on speed of delivery and high quality products and even offer tamper-proof packing so that there is no spill over even if it were to be consumed 20,000 ft above sea level. They also offer a wide assortment which caters to the millions of travellers who could never get bored of the offering.
So, if you are travelling through an airport next time, reach early. You might be in for a surprise looking at what’s available at the airport. Needless to say, the writer is not responsible if you exceed the limits on your credit card. Happy Shopping & Dining!
15 June, 2010
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