Duty-free Stores Need 'Freedom'

At a time when international travel has edged up to score tremendous highs, shopping at airports during departures and arrivals has begun to touch peak points, especially true in the case of products like cosmetics and liquor. However, duty free stores continue to be shackled with restrictions that prevent them from offering much more to their customers. As Avishek Bambii Das, CEO, Ospree Duty Free by MTRPL points out that much needs to be done to create a homogeneous environment for customers to dwell for a longer time in duty-free stores.

In the financial year 2023-24, international passenger traffic for Indian carriers surpassed the pre-pandemic levels, reaching over 26 million, thus marking a growth of approximately 7 percent year-over-year. According to Avishek Bambii Das, perfumes, liquor and tobacco rank as the top three best selling categories in duty-free stores in India, with wines and spirits leading in consumer preferences.

"Liquor sales, particularly in deluxe Scotch and premium white spirits, drive significant revenue growth, fuelled by a rising number of young Indian consumers. Additionally, the cosmetics category is experiencing robust growth, driven by increased travel among women for both work and leisure purposes," asserts Avishek. In addition to product variety, promotional offers play a key role in attracting Indian consumers to duty-free stores. According to Avishek, duty-free shops at airport arrivals outperform those at departures, with liquor emerging as the highest-selling category. "This is primarily due to the competitive pricing of liquor products at duty-free shops. Arrivals contribute to the majority of sales at duty-free shops, as inbound travellers often take advantage of the opportunity to purchase items before returning to their cities," he observes.

Given these emerging trends, Ospree Duty Free is implementing various strategies to enhance shopping experiences. Ospree Duty Free by Mumbai Travel Retail Private Limited (MTRPL) is a JV between Adani Airport Holdings Limited (AAHL) and Flemingo Travel Retail Private Limited (FTRPL). Ospree brings together the strengths of both parent organisations, Adani Enterprise - one of India's largest conglomerates and Flemingo Group - India's largest duty-free travel retail operator.

He observes that in addition to product variety, promotional offers play a key role in attracting Indian consumers to duty free stores. Interestingly, duty-free shops at airport arrivals outperform those at departures, with liquor emerging as the highest-selling category. This is primarily due to the competitive pricing of liquor products at duty-free shops. Arrivals contribute to the majority of sales at duty-free shops, as inbound travellers often take advantage of the opportunity to purchase items before returning to their cities. Given these emerging trends, Ospree Duty Free is implementing various strategies to enhance shopping experiences.

These include optimising store layouts, offering exclusive products and leveraging technology for personalised recommendations. "To enhance customer engagement while shopping for liquor, we focus on providing knowledgeable staff, organising tasting events and utilising digital platforms for pre-ordering and pick-up services, thereby ensuring a seamless and enjoyable shopping experience for our customers," says Avishek.

Creating Shopping Memories

Ospree Duty Free operates stores in seven locations throughout India, including Mumbai, Ahmedabad, Amritsar, Jaipur, Lucknow, Mangalore and Thiruvananthapuram, with future presence in six upcoming seaports on the cards. The company won its first concession outside India with a deal to run the duty-free business at Eurotunnel's French terminal in Coquilles near Calais, in France. 

Distilling this broad experience and geographical breadth, the company works with the philosophy that the retail experience should be experiential and not transactional. International travel can often be a taxing and exhausting endeavour. Lengthy queues at security, immigration counters and check-ins consume considerable time and energy. However, upon entering Ospree Duty Free store, travellers are greeted with a warm welcome and the delightful ambience of a live DJ playing their favourite tunes instantly lifting their spirits.

"These engaging activities contribute to enhancing the dwell time within the store. Increased time spent in the store translates to greater opportunities for shoppers to explore and make purchases," Avishek states. 

A part of this strategy is also to engage with alcoholic beverage companies, involving building strong partnerships to create exclusive launch experiences tailored for travellers. This collaboration typically includes co-designing unique
offerings, organising special events or tastings and leveraging the company's marketing resources to promote the launch to travellers.

Customer is King

Avishek informs that prioritising customer needs and preferences in duty-free shops involves various steps, such as conducting market research, analysing passenger demographics, and gathering feedback from customers. Ospree Duty Free also takes into account factors like popular brands, regional preferences, and trends in the alcoholic beverages industry.

"By leveraging data analytics and customer insights, we tailor the layout and assortment of products to meet the diverse preferences of travellers, ensuring a satisfying shopping experience that reflects their interests and desires," Avishek elaborates. Additionally, the company regularly reviews and updates its offerings to adapt to changing consumer preferences and market trends.

Going Digital

Innovative digital solutions are the order of the day when it comes to elevating the shopping experience for travellers in duty-free shops. As such, Ospree Duty Free is working closely with Adani One mobile app and website to showcase products and combos for streamlining pre-orders. Adani One comes with array of services to enhance consumer shopping and provide convenience, including providing access to online exclusive products and offers of exciting deals and discounts of up to 30 percent through tie-ups with banks and brands. It also helps unlock special deals and loyalty points for repeat purchase or second purchase.

Technology also helps in the gathering and utilisation of customer feedback, which is essential for continuous improvement and innovation in the duty-free shopping environment. "We collect feedback through various channels such as digital surveys, tracking online reviews, customer care e-mails and through direct interactions with customers. Once gathered, we analyse the feedback to identify common themes, pain points and areas for improvement," Avishek reveals.

The feedback helps in adjusting the layout of the store, expanding or refining product selections, enhancing customer service training, or in introducing new technologies to streamline the shopping experience.

Challenges Abound

To be able to take duty-free shopping to the next level, companies like Ospree Duty Free and others firmly believe that there are certain specific issues which need to be addressed. "For instance, the current pain point for international travellers is the longer waiting lines and serpentine queues at security checks and immigrations. It is suggested that a biometric immigration process would fast track the movement and improve the dwell time at duty-free stores. Further, allowance plays a bigger role when it comes to shopping at a duty-free store and an increase in allowance would help serve consumers in an enhanced way," elaborates Avishek.

"At present, for arrival shopping we are restricted to club products, display exclusives, etc. but with ease of allowance consumers can pick their favourites and club them with various offerings like 'Buy 3 Get 1 Free or Buy 2 Get 1 Free' on a single passport. This would work wonders. Departure shopping ideally won't be affected as the allowance depends on the country consumers are travelling to but with higher allowance we can optimise and offer much more to the consumers," Avishek points out. 

The common opinion is that international travel should become a hassle-free process that must be enjoyed by all and not be looked upon as a mandatory and wearisome task.