The Mumbai Duty Free Store brings out an offer to provide value to the customers ‘Mumbai Duty Free Is Now Free’’. With growing competitions in the travel retail industry in India and across the globe, DFS (India) aims at increasing their sales by 15% during the offer. Manishi Sanwal talks about the business strategies and concept behind the offers in the interview.
What was the concept behind the offer ‘Mumbai Duty Free Is Now Free’?
The travel retail industry typically works on value with respect to duty free products, the international competition and providing value to the customer. We at Mumbai Duty Free Is Now Free said that we will provide value to the customer and do it in a far intelligent way. We went around the city to do associations with the down town side and along with the purchase of any products from our store we provide discounts, vouchers, cashbacks, free tickets or a celebrity visit. We will also bring various goodies which will be given to customers complimentary and on top of all this, all the best prices and discounts will remain the same at our stores. For quite some time we have been running campaigns like ‘Best Price Guaranteed’ and ‘Best Value Guaranteed’ and we take pride in stating that we have the single largest duty-free store. Hence this encourages us to come up with the ‘Duty-Free Is Now Free’ campaign. We will provide the same products and services with the international look and feel but on top of that, we will be providing offers equal to the money spent by the customer.
How are you monetizing the services during the current offer?
The way we carry out this exercise is customer facilitation and customer service. We are selling the products at the same prices and same offers but largely the monetization is from the sales we are doing. This promotion is only a value addition to convince customers in shopping with DFS and nowhere else. We are monetizing our services through the goods and services and the offer is adding value to the customer by providing them cashback, vouchers, discounts and many other schemes.
What is the business strategy of DFS India?
From a strategy perspective, people do seek value and people are price conscious where they are perpetually looking for the best deal. We firmly believe that customers shop in other competitive airports despite being quite inconvenient especially for Indians because they have to carry the goods and fly back to their country. This because they feel they will get a better price and better product and hence we have been educating our customers for quite some time that we sell authentic goods and best ranges at the best price. The entire business strategy on these terms is to provide more value to the customer which anybody else can’t easily replicate. Hence if I create offers in association with domestic players, it would be very difficult for international competitors to carry out the same strategy in India. Essentially we are relying on providing more value by doing third party associations.
Wouldn’t providing value on each good be less profitable for DFS in Mumbai?
Most of these are marketing collaborations and we are not buying these offers from various brands but helping them promote the name through our stores. From a customer point of view these offers are to provide them value and we at Duty-Free Stores are not purchasing the vouchers and offers from the brands. As international destination airports receive the crème of customers and for brands, it is a great opportunity for brands to attract these customers. All our stores are pass through stores which means that nobody can enter or exit without passing by our stores and therefore brands tend to tie up with us and there are certain brands which are looking for international travelers and we make sense to those kind of brands.
During the release of the movie ‘Harry Met Sejal’, we had Shahrukh Khan come by our stores and spend time with customers because the film also depicts international destinations.
What kind of response do you expect from this offer? Will it increase the sales for DFS India?
Largely we believe that today there are more people buying from outside rather than duty-free stores. Now we believe that even if a tiny portion of them shift to our side, then we clearly see these initiatives will give us 10-15% of additional growth in Q4. This will take time and for these offers to be acknowledged would require patience which we thoroughly understand. We also understand this campaign is going to be long term for us so it’s not that we do it for 15 days and hope to see the result. We will consistently do it for the next 6 months where the brand partners may change but we will ensure that we provide credible value to the customer. They will get used to the idea that the best prices, best offers, best customer service and the best value added services will be provided to the customers.
Current growth for DFS?
We are growing in double digits that has got us so far to 15% and we expect more 15% additional with the current offer going on. A lot of growth in our industry comes from airport traffic. Many downtown stores serve a purpose for all types of customers. But when you pass through the airport you generally travel and don’t get involved with much of shopping. Hence a good benchmark is the growth of air traffic. The traffic itself is growing to 8-10% for international flights and domestic is growing much faster than that. We mainly are relying on the growth and we are currently growing at 15% during the current quarter. The additional 15% will also make many brands shift and conduct business with us at DFS.
Sales target:
A greater part of the business that comprises of 70% comes from liquor and most of the big brands including any and every big group in the liquor industry deal with us. The second biggest category for us is beauty products wherein we deal with brands like Chanel, Dior and many other brands comprising of 15% in sales. We also conduct campaigns and claim that we have the largest beauty store in India where we have mix of brands under one roof. Chocolates and confectionaries sum up to 10% of our total sales and the rest 5% includes tobacco and other goods.