Travel Retail and Duty Free Business Intelligence    Tuesday 02 September 2014

WRITING INSTRUMENTS

Bengaluru International Airport marks first anniversary – 23/05/09

Published: 22/05/09

Source: ©The Moodie Report

By The Moodie Report News Room

INDIA. On 24 May 2008, 17 years after it was conceived, Bengaluru International Airport celebrated its first commercial flight.

That flight – Air India IC 957 to Singapore – took off at 00.05 hours, prompting jubilation among management and employees at operating company Bangalore International Airport Limited (BIAL).

BIAL describes the intervening year as “an exhilarating rollercoaster ride”, noting that some 700 employees “have seen the airport grow brick by brick from a barren stretch of land to the bustling airport that it is today. Every take-off and every landing is a testimony to the years of hard work and perseverance that went in. Every passenger's smile lets us know that it was worth it all.”


The Nuance Group has driven a world-class duty free operation at Bengaluru International Airport
Retail, food & beverage and other consumer services such as advertising have been integral to BIAL’s attempts to create a memorable passenger experience. To celebrate the first anniversary, the airport company is introducing a range of innovative displays, promotions, products and services.

BIAL Chief Commercial Officer Manisha Grover spoke to The Moodie Report about the airport’s commercial revenues performance in this pioneering year.

The Moodie Report: How has the commercial mix and offer evolved over the first year?

Manisha Grover:
We have come a long way in the last 12 months of operations and have reached a high level of operational efficiency.

We firmly believe that travel retail plays a significant role in defining passenger experience at any airport. The Bengaluru International Airport has set benchmarks for travel retail at airports in India. We have ensured the right mix of international and domestic brands to cater to the wide variety of passengers passing through the airport.

A unique and high-quality retail design also helps to create a sense of space at the airport that is remembered by the passenger. The inspiration for the design of layouts and outlets in this area comes from the flowers and leaves of the famous Lal Bagh gardens situated in Bangalore.

BIAL has successfully created "a sense of space at the airport that is remembered by the passenger"
The first year has been one of much learning and our retail offerings are evolving every day. We are closely monitoring the passenger/visitor response and base the inclusion and exclusion of segments and brands accordingly.

Can you give us some examples?

The demand of products and brands varies from international to domestic due to the passenger profile. Chocolates, confectionary, casual-wear apparel, jewellery and perfumes do well in the domestic section whereas liquor, perfumes and designer brands do well at the international section.

The retail composition at Bengaluru International Airport includes the international departure area which houses one of the largest duty free outlets in India, selling the best of international perfumes and cosmetics, chocolates and other confectionary, liquor, tobacco (including an exclusive humidor for cigars. The Crossword book store retails books, magazines, music and accessories, souvenirs from the state of Karnataka and India, gifts, arts and crafts from local artisans.

Sound & Vision retails electronic gadgets and accessories. Cocoon, the fashion island, retails international haute couture, local and international fashion, apparel, sunglasses, jewellery and accessories and Indian designer wear including Deepika Govind. Ethos sells popular international brands of time wear.

The Arrivals duty free outlet offers liquor and tobacco, perfumes and cosmetics, chocolates, electronics and accessories. With increasing security regulations, this duty free outlet is an instant hit for arriving passengers.

The domestic departures area includes a Shoppers’ Stop department store, a Crossword book store, Life Spirit which sells electronics, souvenirs and toys, and a confectionery store – Mithaas. La Moda, the fashion island, retails fashion brands and accessories of popular domestic and international brands.

On the kerbside and in the Arrivals hall, Odyssey retails books, music, gifts, souvenirs and flowers; Café Coffee Day sells coffee and other beverages and Subway, Baskin Robbins, Kaatizone and RKHS are the other operators who sell various Indian and international food & beverage.

Café Coffee Day, phenomenally popular in India, has proven a big success in the airport environment

What have been the trading highlights? And the major trends?


The domestic passenger traffic at the new airport makes up approximately 80% of the total traffic with the remaining 20% international travellers. The Silicon Valley of India sends more than 60% of its international passengers to the US and Europe – one may identify them as knowledge workers and IT professionals.

In domestic aviation, more than 60% of travellers are on business while the others are on personal or leisure travel. This categorisation shows the mix of passengers, which translates into one of the best target segments for an exciting retail environment.

Notably, these are the passengers who are actually ‘consuming’ at the airport – from shopping for diamonds and sunglasses in domestic Departures to ensuring they pick their favourite Scotches and wine at the Arrivals duty free.

The spend-per-passenger – both across the various zones as well as collectively – has risen consistently over the past 11 months of operation. On an average, passengers travelling through our airport have spent about US$ 6 since we have opened. That is quite a satisfying performance in the very first year of the operations, which has also been quite challenging due to the worldwide economic downturn.

Duty Free operator Nuance launched LCD TVs at the Arrivals in January and it’s already a runaway hit. Domestic retailer Shoppers’ Stop sells four to five diamonds every day.

Various forms of the Indian Tea, which is popular worldwide, are sold across various zones.

Books, music and souvenirs can be picked up across various outlets that are located conveniently across the terminal. Even domestic passengers come to the airport early to catch up on their favourite local cuisine and a drink just before they leave ‘the Pub city’.

Popular Indian beer Kingfisher is now synonymous with this classy bar at Bengaluru Internationa Airport
Visitors who come to the airport to receive or see off their relatives and friends are also excited about the offering – so much so, that they come back over the weekends to just spend time at the airport’s coffee shops and restaurants on the kerbside.

What have been the main lessons you have learned?

If there is a lesson, it is ‘never to presume what the consumer wants (or does not want)’.

Since we commenced operations, we have constantly been surprised at the customer feedback and reaction to the merchandise – categories, range and brands. We have taken this in our stride and developed a dynamic approach to this business that caters to this very special ‘floating’ category of customers.

Diamonds and footwear are the surprise categories that find demand among our passengers. Our partners in this business have proactively dealt with the consumers’ preferences and thanks to their continued foresight and understanding of the business, we have been able to keep pace with the passenger’s requirements.

Minister for Tourism and Infrastructure Development, Government of Karnataka Shri G Janardhana Reddy declares the pioneering airport shopping festival open this month as CEO Marcel Hungerbuehler (second from left) looks on
How would you describe the consumer reaction to the airport's commercial offer and consumer services

All the thought and planning that has gone into the development of our retail space has resulted in an encouraging response from our passengers and visitors.

While international passengers are usually known to shop at airports, they are more evolved travel shoppers and know exactly what they want.

Also, the dwell time is longer here and has an impact on the type and volume of purchase.

Traditionally, arriving Indian passengers were considered ‘value-conscious’ but this has change, especially at our airport, if the sales trends of the premium brands of Scotches and wines are anything to go by.

Domestic travel retail on the other hand, is a relatively new concept in India but is evolving at a fast and encouraging pace. Our retailers have been quick to catch up on this trend and are trying their best to give our passengers what they want – each time they travel.

The most recent phenomenon is the highly popular IPL merchandise that includes jerseys, T-Shirts, footwear, bags, caps etc.

In food, we have now developed a whole range of cuisine from the locally preferred to the internationally accepted ones – and hybrid items in between. We are glad to see passengers experiment and appreciate the offerings which are regularly changed to the liking of the frequent fliers.

The combination of international and local cuisine has begun to change the perception of airport food & beverage in India
Looking forward, how we will see the commercial offer evolve?

We are currently focusing on getting the best out of the existing retail and F&B set-up. We are convinced that there is much more to achieve in terms of optimising the business.

We would look forward to using the learnings from the first few years for the expansion of the retail footprint as part of the second terminal. Until then, the key challenge is to offer the most exciting products and experiences to our travellers every time they pass through our airport.

Although we do not claim to compete with the other airports in the region, our endeavour is to conquer the minds of our passengers – so much so that they prefer to shop and dine (when they travel), at the Bengaluru International Airport. We are sure that BIAL will continue to set new benchmarks.

A clean, chic environment and ambience presents a stark contrast to the old Bangalore International Airport
MORE STORIES ON BENGALURU INTERNATIONAL AIRPORT

Bengaluru International Airport unveils month-long shopping festival to celebrate Karnataka’s cultural vibrancy – 18/05/09

Bangalore International Airport Limited duty free award dispute to be heard on 24 March – 07/03/09

Bangalore Airport duty free dispute set for March resolution; ITDC tagged to Flemingo Duty Free Shops case – 18/02/09

Supreme Court grants stay of execution for Bangalore duty free award reversal – but only for ten days – 08/02/09

Bengaluru International Airport spurred by new User Development Fee for domestic departing passengers – 12/01/09

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