DFS and CAG’s $68m game changer

By Doug Newhouse |

DFS is investing just over S$85m ($67.9m) in a ‘reinvention’ of Changi Airport’s Liquor & Tobacco business across 85,350sq ft in all four terminals.


Michael Schriver, COO of DFS Group described the project as DFS’ most ambitious airport store ever, promising that it will ‘elevate the passenger experience, and reinforce Changi’s position as the world’s best airport’.


In a joint press initiative yesterday, DFS and the Changi Airport Group (CAG) highlighted the much talked about bold, unique and ambitious duplex store designs for the L&T duty free contract. This business currently generates about 20% of Changi’s concession sales, according to Ms. Lim Peck Hoon EVP, Commercial at CAG and is its biggest single commercial concession contract.


DFS says that once constructed this new offer is designed to deliver one of the world’s most extensive selections of standard, premium and exclusive L&T products in any airport worldwide. Schriver adds that it will also go some considerable distance towards achieving DFS and CAG’s ambition to literally ‘elevate’ Changi Airport’s L&T retail landscape.


DFS’s offer was chosen ahead of other bidders after submitting this bold new proposal as part of the ‘blue sky thinking’ section in the tender – an additional section to the compliance segment in the tender document.


[CAG also received at least one other ‘blue sky offer’ and it also seems quite possible that DFS did not offer the highest monetary guarantee, although TRBusiness does not know if this is true or not-Ed].

DFS renovated and rebranded its 100,000sq ft T Galleria in Scotts Walk Singapore last March.



This new concession will involve an increase of 34,000sq ft over and above the present L&T retail space, driven by the duplex two-storey L&T stores which will literally benefit from the incorporation of two floors occupying one space, as opposed to the single storey shops that are operated today.


Constructing these stores to fit terminals with varying ceiling configurations will be a challenge in itself, so these stores will open in phases with all renovation expected to be complete by 2016. [Terminal 4 is in the initial planning stages at present, since it is not open yet-Ed]


Schriver said yesterday: “Even after partnering since 1981, DFS and Changi continue to come up with new ways to pioneer and innovate in airport retail experiences. We set out to create a shopping destination that challenges the conventional retail concept and build a unique platform that engages the traveller in a dynamic and personalized way.


“The result of our collaboration combines futuristic design with one of the most extensive collections of wines and spirits ever offered within any retail environment, better yet an airport environment. We are delighted to continue our partnership with Changi Airport Group, and to bring our shared vision to life.”


“With an extensive product offering and forward-thinking design concept, DFS and CAG aspires to create the best retail experience with ‘First in Class’ stores through innovative ideas that have never been tried, on or off an airport. Together, DFS and CAG will continue to anticipate the changing needs of the travellers, with the aim to make every customer experience stimulating, adventurous and delightful.


“In partnership with the Raffles Hotel, DFS and CAG will deliver a World First Exclusive to Changi Airport – the Raffles Long Bar experience at Terminal 3. Creating an entirely unique and exciting experience for travellers, the Long Bar will play host to regular Mix- it-Bar Events, as well as events featuring Raffles Doormen and Raffles Bartenders.”


Michael Schriver, COO of DFS Group.


The retailer adds that ready-to-serve products including the ‘Singapore Sling’ will also be available and in addition to the Long Bar, a Raffles Gifts Shop concept will also open in T3. The retailer is also promising ‘Asia’s largest assortment’ of single malt Scotch in an airport, as well as an unrivalled selection of wine from key regions all around the world.


DFS’ unique ‘Reserve’ Wine Library concept will feature wine events and appearances from brand ambassadors and winemakers from leading producers, and offer customers top vintage wines through the Cellar Masters Guarantee, a unique concept that allows for DFS to deliver direct from chateau cellars to DFS stores worldwide, offering customers the opportunity to shop direct from cellar library stock.


Schriver said that DFS will also introduce its first airport exclusive member’s lounge at Changi for VIP customers. New technology- based services will be offered as well, including self-service technology and the ability to pre-order products online or when they are departing. Renovations across all terminals are expected to be completed in 2016.


Adding her comments, Ms. Lim Peck Hoon EVP, Commercial at Changi Airport Group said: “We are thrilled to be working with DFS on the transformation of Changi’s L&T concessions, which serve as the key anchors of our retail offerings.


“The new concessions will showcase an awe inspiring design concept that will serve to solidify Changi Airport’s position as a world-class airport and provide our travellers with an innovative and dynamic shopping environment. Together with DFS, we look forward to continuing our journey to create an unparalleled retail experience for world travellers.”


Kevin Roche, Senior Vice President, Global Design of DFS Group added: “Our creative inspiration for the flagship L&T concessions is a unique fusion between traditional and modern, as we looked to capture the dynamic, progressive city that Singapore has become, while also encapsulating its rich heritage. We want to create an environment that will bring a sense of curiosity and wonderment, and inspire the traveller to linger, explore and discover what Changi and Singapore have to offer.


Ms. Lim Peck Hoon EVP, Commercial at Changi Airport Group.



“DFS’ new design for Changi’s Liquor and Tobacco Concessions was planned with the traveller in mind. An efficient circular plan encourages natural movement from room to room for a fluid and organic experience, ensuring that the customers are able to enjoy their shopping experience in a comfortable way.


“The new architecture also pays tribute to the products by showcasing the products in a visually stunning way.”


This new bold transformation of Changi’s L&T stores follows the Masters of Spirits events that DFS has run very successfully in Singapore, plus the aforementioned market developments and the renovation and rebranding of its 100,000sq ft Singapore T Galleria last March.


The retailer has worked very hard to differentiate itself from its competitors by adding value to protect its considerable business at Changi Airport and its T Galleria, where it currently employs more than 950 people. Even some of DFS’ competitors who were unsuccessful at Changi have graciously (but privately) admitted that this is a big step up for the business ‘entry level’ in general.


DFS says this new concept will be all inclusive, offering standard brands, premium and super premium.


DFS has clearly raised the bar for everyone and it will shortly get down to the business of building these new stores under its new six-year contract. To the CAG’s great credit, this extended agreement length also breaks new ground of its own for Changi’s core anchor L&T business over the former three-plus-two model whoever operates the concession in future [the same tenure period was applied to the P&C tender won by Shilla Duty Free-Ed].


Schriver quite openly acknowledges that without this extended tenure period, DFS would never be able to amortise its huge investment. The scale and ambition of this new operation will also not be lost on some of Asia’s other airport commercial departments that are planning to release their own tenders in the short to medium term.


[A much more in-depth report will appear in the next issue of the TRBusiness print edition-Ed].

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