30 May 2017

Airports & Duty Free


Fame and fortune
April 2001 12
With its new state-of-the-art shopping complex, Dubai Duty Free keeps making and breaking the records

Eighteen years ago Dubai Duty Free (DDF) was more known to international travellers than Dubai itself. In the days before Emirates existed and before the golf courses attracted world class stars of the calibre of Tiger Woods, the DDF was something fresh in a rather dull desert surround.

The Department of Tourism and Commerce Marketing (DTCM) was then still a far-off dream, and the world's most famous hotel, the Burj Al Arab, was not even on the drawing boards.

Now a day hardly passes when Dubai itself does not make international headlines, with the DDF still playing a key role in its famed identity, especially among global travellers.

And with a record shop-floor sales figure of $1 million on March 2, it is clear the outlet that proudly displays banners identifying it as the best airport shop in the world, is not resting on its laurels.

DDF managing director Colm McLoughlin quickly highlights the need to increase some product lines and pull back others when asked if any potential improvements have recently been identified. But he is justifiably proud of the fame, fortune and finesse that DDF is identified with.

There may be no perfect time for ever on-going improvements and changes with the outlet open 24 hours a day, 365 days a year, but it is an evolving process with presentations changed and new and fresh marketing to the fore.

DDF's state-of-the art-shopping complex is at the heart of Dubai International Airport's $600 million Sheikh Rashid Terminal which opened last April. And since Day One it has been consistently breaking impressive records set over the 17 years of previous trading.

While in the first full year of trading the turnover was $20 million, last year the super tax-free shopping complex finished with an all-time-high turnover in excess of Dh800 million ($220 million) representing a 17 per cent increase over 1999.

This and more further underscores the confidence of McLoughlin and his cosmopolitan team of 870 staff made up of 28 nationalities speaking 36 languages following the success of DDF being voted Airport Retailer of the Year in the "Oscars" of the duty free industry in Cannes, France.

In the days before Dubai became recognised as the Hong Kong of the Middle East with such internationally acclaimed attractions as the month-long Shopping Festival, the World's Richest Horse Race and year-round tourism, McLoughlin concedes DDF was one of the early real success stories.

As one of the first, if not the first, airports to raffle luxury cars, Dubai set a trend that has since been followed regionally and internationally with DDF "winning some awards which we used to promote the airport and of course sponsorship which has helped tremendously."

Billed as the longest running promotion in the world, the Finest Surprise Car Draw has since resulted in nearly 1,000 luxury cars being won by international travellers from more than 60 countries. Now equally famous is the Millennium Millionaire. Since its launch in June 1999, it has created several millionaires, each purchasing a $278 ticket in a limited 5,000-ticket series.

The airport's 5,400 sq m duty free complex is at the centre of the terminal and is double the size of the old shop area; a situation that has resulted in "much better penetration of passengers and this has given us a tremendous advantage," says McLoughlin.

The potpourri of sales sees gold and perfume claiming the top two sales spots while last year jewellery and ladies wear recorded dramatic increases of 79 and 123 per cent respectively.

In total there are 25,000 - 30,000 items on offer in the DDF complex and this extends to 66,000 items when different sizes of various items including clothes are taken into account.

The best-selling item in weight terms is nuts, with 482,263 kgs sold last year while the orange drink Tang weighed in with 436,317 kgs of sales during 2000. In addition, shoppers snapped up 353,254 kgs of Nido powdered milk.

The most expensive item in DDF is a gold Rolex and diamond watch selling for $35,000, with 16 among the more than 82,000 watches sold in total in 2000.

In addition the tills also rang up sales of nearly one-and a-half million cartons of cigarettes and more than 1.7 million bottles of liquor. However this represented only 18 per cent of total business in 2000 compared to in 1984 when liquor and tobacco sales represented more than a third of DDF trading.

Last year the sale of perfume topped 680,000 bottles, and confectionery sales, which at one time was 3 - 4 per cent of business increased to take a 11 per cent share.

Statistics indicate that 16,800 sales transactions take place on average each trading day, with DDF customers falling into three categories: Arab, regional and international.

Surveys help DDF management identify with trends and customer comment cards and the web site also provides addition information.

"Customer service is all important and with this in mind there has been a conscious move to ensure that staff speak a wide range of languages to properly service the cosmopolitan clientele," says McLoughlin.

Trends indicate that there is an increasing demand for Information Technology (IT) products with mobile phones and laptop computers quick to move.

Fashion accessories are increasingly popular and sporting goods and select niche items that follow trends are all very important.

Arrival duty-free shopping has helped provide a big new business opportunity, with last year seeing just over 5 per cent of total revenue from the outlet. "And this is likely to grow," says McLoughlin.

Looking ahead to 2005 when the third Dubai terminal is scheduled to open, a new duty free shop will open to cater solely for the all-Emirates passengers exclusively using the new building.

With Emirates passengers then away from the present Terminal Two this will then mean an increased growth capacity for other airlines.

This situation is likely to see DDF business continuing to expand beyond its present customer base of passengers from more than 100 airlines, including charter carriers, that operate through Dubai at present.




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