When I came to India early 2008 without a job, I planned to take
some time out to acclimatized, getting familiar with my new city and just take
it easy. I had this privilege because my then fiancée (today wife) was already
well established in Bangalore for 10 years and I was landing in a warm and well
taken care of nest. But this plan did not take place and as I was blessed with
an opportunity difficult to deny, to take care of the entire retail space in
the soon to be opened Bangalore International Airport. So I joined as General
Manager to build the retail team from scratch, as the first employee to be
enrolled.
At that time, hardly any airport was privatized in a PPT model
(Public Private Partnership) and accordingly airport retail was generally
reduce to selling liquor and cigarettes from a simple rack and if you were
lucky, you could find some space to sit and sip a cup of coffee. This was to be
changed with the Greenfield Project at Devanahalli, a little outside of the
Bangalore center. So we were left with no best practice or modern retail
history in the country and had to try our luck with the success models generate
across the world. So we did. But India would not be India, if it was that easy.
We decided to invest a lot of energy, analysis, data crunching to learn the
local flavor and shopping behavior and therefore to improve our performance and
the shoppers experience. Going through this massive learning experience, I am
keen to share some success and failure stories:
Electronics
Like in any other airport, we were focusing on mobile electronics;
Digital Photo, Handycam, MP3 etc. Spending many nights at the airport to
observe operations, one could not oversee the many TV panels on the luggage
belt, accompanying predominantly passengers arriving from Thailand and Dubai.
So I approached our buying head to propose the launch of TV’s in the arrival
shop. Oh dear, I was given a lecture in Indian culture and that Indians would
never buy a TV without being home delivered and installed, furthermore the lack
of local warranty and servicing (being a Duty Free store) would be a deterrent.
But this does not make sense! Why would arriving passengers importing TV sets
from Thailand and Dubai, but not ready to buy the same in the Duty Free store
in India. I spent many meeting hours with team members to try to convince but
was always given some educational lessons in Indian culture. Finally I decided
to drag the respective members to the arrival store one night to show them 21
TV’s landing on the conveyer belt. Seeing is believing! It took us another 12
month and several visits to the arrival store, to convince the market leader of
TV in India, and to finally launch this category as First in India Duty Free.
Guess what,.., not only was it a huge success, soon you could find TV offers in
all major airports in India.
Perfume & Cosmetics
P&C is normally a value driver in any airport and also we banked
big time on it and allocated massive space for all major international well-known
brands. Not so in India, the ‘C’ for cosmetics hardly existed and the expensive
perfumes did not sell well apart from a few exceptions. We took the very bold
call to massively reduce the P&C section, remove some of the aspiring
brands and replace them with some of the most successful local brands,
including also local ayurvedic brands, keeping in mind that we are located in
the south of India, the heaven of Ayurveda.
Furthermore we did an in-depth
analysis of the best-selling perfumes, only to learn that majority of female
perfumes were bought by men and visa-versa. Concluding that this was either planned
purchase, ordered by spouses, or gifts for the same consumer group. So we
decided to launch a test to add on to this need, by simple pre gift wrap 50% of
the entire perfume section. Not only this left a superb visual impression,
buyers also appreciated the fact to make a gift, rather than just being the
delivery boy. A promotion we would repeat frequently and without a doubt
delivery 20% plus increase of sale.
Food
The success model in food is normally dominated by chocolate, in our
case Swiss chocolate. As we dramatically reduce the P&C section, we had
considerable space left free, next to the food/chocolate section. Again my
preference would go to domestic food products, on which I would get another salvation
of Indian culture from my colleagues. My proposal to launch a wide range of
Indian Tea was smashed with the argument that everyone Indian would buy their
favorite tea before they depart from the country and foreigners would not buy
because of the low savings in duty due to low price. Having the TV experience
still in my bones, I would not let go so easily and insisted on the expansion
of our food section with not only tea but also ready to eat Indian food, Banana
Chips from Kerala, Cashew Nuts and (belief it or not) Indian chocolate.
Once
more our experimental spirit was well rewarded; we could observe Indians buying
entire shelfs of ready to eat food, being challenged to carry the additional
luggage on board. With the tea category my colleagues were proven right,
Indians hardly bought our local luxury tea, as they felt they could buy their
own tea cheaper somewhere else. However the foreigners used the opportunity to
stack up their inventory of tea at home and where not shy to shop multiple
brands and flavors. Trying to push the foreigners also into the ready to eat
space, we launched a tasting section, where we precooked the dishes, installed
a microwave to demonstrate the fantastic taste of the Indian cuisine. Only we
missed a small element in our endeavor. The foreigners were pretty much scared
to eat/taste Indian food before a long distance flight. They feared stomach
issues during the flight and did not try a single spoon. The Indians already knew
the taste and did not need to try. After only a few days, we came to the
conclusion, to remove the tasting section and continue to focus on Indians to
extend the taste pallet with Indian food, wherever they were heading to.
Toys
This seemed a difficult category in an airport, because the products
are often bought with the support and influence of the consumer, the child.
Keeping this in mind, we positioned this category as a so called guilt purchase
of returning parents, placing it strategically at the entrance of the store, so
that everyone (parent) could see it and be reminded of their loved ones at
home, awaiting their return. A gift can only compensate the pain caused due
their long absence! Now my Indian colleagues wanted to go one step ahead and
activate the category by an experience section, where one could actually play
with the toys. I was very reluctant, considering that the kids would not be
around and only the buying parent to select the toy, therefore no activation
should be required. I handed in for a test period and will never forget the
debate we had on who, of our team members, had to solve the 2000 pieces puzzle
of the Taj Mahal to put it on display. Yes, another success story, the parents
loved the section with remote controlled cars to play with, finished puzzles
and flying objects on the ceiling.
Liquor – the King’s
category
Finally, some experience in the king’s category liquor, which is the
biggest value driver in all Indian airports, without a doubt. The question we
asked ourselves was very simple; how to increase the average ticket value in
liquor. Given the import restrictions most countries have, the focus was on
upselling to more expensive products than the personal favorite one might be.
Having failed with tasting in the food section, I did not want to let loose on
this initiative, as it is a proven concept around the world. Knowing that most
of the international flights would depart post-midnight and passengers would
arrive at the departure terminal with empty stomach, I also presumed that one
or two 5ml Whisky taster would make them very happy and put them in a good
shopping mood. Beside they could taste some liquids which under normal
circumstances would not be a part of their repertoire but given the Duty Free
price advantage, one might want to trade up. All said and done, the concept
would surely work as planned but some considerable obstacles came in to our
way. The Indian excise department gave special approval, but changed their mind
later on the question, whether this is consumption of liquor or it could be
termed as tasting to support buying decision. The bar just behind our liquor
section was not happy at all to watch us serving tester of liquor as they
assumed their revenue would go down. The tension with both parties made us hand
in and stop this concept before it really took off. So we had to look out for
other options. This brought us to the attempt to increase the conversion (% of
liquor buyers out of total passengers) rather than upselling.
So the question
was how to engage more passengers in liquor purchase? Or a little broader
expressed; how to engage more people in Duty Free shopping? I didn’t know! To
get a better insight, I ordered my entire back-end team to spend at least one
night per week on the shop floor selling products, regardless of their position
or designation. Oh my,.., I received a lot of resistance and people explained
my about their job description and why they would have to spend extra hours in
a function, which was not their area of responsibility. Running the risk of
becoming the bad guy I still insisted on this project, but allowed that one
could team up with their colleagues in pairs or multiple to enforce the team
building effect. Still adamant people did not have the choice but to oblige. It
actually turned out to be one of the best initiatives ever. People had initial
doubts but got first-hand experience, which they otherwise would have never
gotten. All of the back-enders gained ‘stories’ which they kept on telling
months later. And exactly out of these stories, the underlining message was
that the success in selling lies in the friendly and spirited interaction with
the customer. So we hired a group of young students, well versed in
communication, with the only aim to get involved in discussion with passengers
and engage them with our products. I would like to stress the point that these
students had neither extra knowledge nor training in any of our product
categories. The briefing was very simple; to friendly greet and get engaged
with passengers and lead them to the section of interest, if they so want. But
most important be you and have fun. The result was astonishing, we would sell
liquor bottles priced $ 1’000 and higher, which already accumulated dust,
initiated by these students.
Sales at Cash Tills
Another interesting element came out of a customer survey, where the
passengers claimed that the waiting time at the cash till was taking too long.
We were aware of this challenge, but not in a position to cover the peak times,
for arriving / departing full body aircrafts with big number of passengers.
Taking the feedback into consideration, we agreed that the waiting time is also
influenced by the perception of waiting, while not doing anything, for one’s
own check out process. So we created aisle of impulse products left and right
of the cues. These aisles would display chocolate, toys, miniatures of any kind
etc., whatever does not need long thinking in the purchasing decision. Not only
we could reduce the perceived waiting time and make the shoppers happier, we
also increased sales, article per ticket and overall ticket value to make us
happier.
What I did not highlight in my entire excursion is the common
saying; Retail is Detail! Even though this all sounds very simple, the devil
lies in the detail. Success and failure is very close to each other.
Fortunately in airport retail, we got immediate response on winning concepts
and could further fine tune success models.
Wishing you happy selling..
