New Delhi International Airport's new $1.3bn Terminal 3 is due to open tomorrow, complete with 20,000sq m of retail space allocated for duty free and landside shopping. On a recent visit to India, Delhi Duty

Free Ceo, Nicholas Palmer gave The Travel Retail Business magazine and TREND a detailed insight into what passengers can expect from the new joint venture duty free offering, which Aer Rianta International Middle East and its partners see as 'an opportunity to recreate duty free in India'.

Built at an estimated cost of $1.3bn, New Delhi International Airport's nine-storey glass and steel terminal building will elevate New Delhi International Airport's ranking to the third-largest airport in Asia and the fifth largest in the world.

Designed to handle all international flights in future, the gleaming ultra-modern terminal symbolises India's aspirations as an emerging global super power and replaces the dingy, worn out Terminal 2 with its run down food and beverage and shopping facilities.

Covering 502,000sq m of floor area, T3's facilities include 78 passenger boarding bridges, 173 check in desks and 95 immigration counters, enabling it to handle 34m passengers a year. International flights are due to commence tomorrow, with domestic services set to use the terminal when domestic flights begin transferring to T3 a little later.

The new shopping facilities in T3 have been designed to set a new standard in the Indian sub-continent and surrounding region and some 20,000sq m of retail space has been allocated for duty free and landside shopping. In addition to luxury brands, passengers also will recognise British High Street retail names, including WHSmith and the Early Learning Centre.

PUBLIC PRIVATE PARTNERSHIP
Terminal 3 has been constructed by Delhi International Airport Ltd (DIAL), a Public Private Partnership consortium led by Bangalore-based GMR, with Airports Authority of India, Fraport and Eraman Malaysia as the other consortium members.

DIAL took over the operation of Indira Gandhi International Airport in 2006 under a 30-year contract which is extendable by 30 more years. The consortium subsequently awarded Delhi Duty Free, a partnership between Aer Rianta International Middle East (ARIME), IDFS and the airport the concession to operate duty free liquor, tobacco, perfumes, cosmetics and confectionery shops totalling 4,000sq m in T3's departure and arrival areas.

ARIME designed the duty free retail area, which incorporates state-of-the-art visual effects to advertise and promote the wide range of products on sale. Aer Rianta's retail design takes advantage of the departure hall layout which has been planned to enhance the duty free shopping experience.

A VIRTUAL TOUR
After passing through passport control, all passengers follow an S-shape concourse through the duty free area into the main departure hall. ‘We have this wonderful opportunity to capture everyone. There is a seamless video wall at the start of the concourse and so there is an opportunity to capture people as they enter,’ explained Delhi Duty Free Ceo, Nicholas Palmer.

‘We have not given space to all brands. We have kept space for changes in the season. Brands give us flexibility to change the shops according to what is happening at Delhi Airport. It's important for us to retain this.’

Entering the S-shaped concourse, passengers walk past an open fronted 1,030sq m liquor and tobacco shop on their left, while a 730sq m perfume and cosmetics shop is situated to their right. Continuing further, a 1,100sq m confectionery shop is located after the liquor and tobacco shop on the left of the concourse, just as passengers enter the main departure area.

VIDEO WALLS IN FOUR LOCATIONS
In keeping with the modern T3 and duty free retail area design, Delhi Duty Free has installed video walls in four locations in the different duty free retail areas and 52-inch TV screens in its various shops to advertise and promote selected products.

The screens and video walls can be used to display different products, or to present advertising allowing for endless possibilities in screen-based advertising.

‘This is not an ordinary shop. We see this as an opportunity to recreate duty free in India. We have done that in the design,’ said Palmer, noting that 32 TV screens have been installed in the various shops.

‘We have done the TV screens and video walls in a coordinated way. The idea is the screen image always will be fresh. We can do one message on 32 screens, or 32 different messages.

‘We can change the screen show for the different time of the day, the day of the week, the season – so that we are more in control. Delhi is a developing market where there is a young population with disposable income and an aspiration to fly.’

For example, Palmer noted that Delhi Duty Free has installed technology which, during the October Commonwealth Games in New Delhi, will allow the four video walls to be linked together.

‘We can tie in with national and international events. We will do things not covered in mainstream advertising,’ Palmer remarked. ‘Our marketing will be Delhi driven and linked to India.’

Delhi International Airport caters to a wide range of travellers, including businessmen, tourists and contract labourers flying to join work gangs in the Middle East. Products have been selected to attract all customers.

‘This airport is a gateway to India and we will serve all passengers regardless of their income,’ Palmer said.

‘Confectionery is usually international in appeal. Our main check-out area has confectionery and there is some in the liquor section. Also, we have Indian tea and local products near the check outs.’

Four 52-inch TV screens are positioned around the four-sided column at the entrance to the liquor and tobacco shop just as passengers leave the passport control area.

‘In our liquor and tobacco area we have got a humidor with mostly Cuban cigars. From there, passengers move into the luxury section with malt whiskies from around the world in a very contemporary design,’ said Palmer. ‘It's an opportunity for people to learn – to taste and buy whiskies from Scotland, Ireland and other countries in a lounge-type environment.’

NEW BLOOD AND A NEW TEAM
Staff working in the luxury liquor section have been given training to advise customers of the subtle differences between the various malts stocked.

Asked about staffing arrangements for the new shop, Palmer noted that the company has hired and trained a new team after deciding not to recruit retail staff from the old international terminal.

‘We are starting with new blood and a new team. We have found fantastic staff skills,’ Palmer said. ‘Our whisky team has experienced staff to assist customers. We have got a wooden cask to conduct tastings from. Whisky is huge in India and we are taking a step away from the standards [meaning standard blends-Ed].

‘We have a best of the best liquor selection, with exclusives and limited editions. It's a relaxing environment with seats.

‘I am enthusiastic about starting fresh with a new sales team. We have a fantastic shop design and we are now starting to establish an ethos and culture for a world-class duty free service.

‘We have started to develop a sense of pride which involves the idea 'I want to be part of something that is really good and I see a future here' – we are paying the right salaries and working to incentivise our staff.’

Leaving the luxury liquor section, customers then enter the mainstream liquor area. This section has a video wall across the back wall that can be seen from the S-shaped concourse. In addition, two square-shaped columns, each carrying four 52-inch TV screens, are positioned in this area.

‘Liquor sales will be mainly whisky followed by vodka,’ Palmer said. ‘With both brown and white spirits, people will be trading up – away from standards.’

A STRIKING NEW BEAUTY STORE
The wine area is positioned alongside the main liquor area and features both international wines and Champagne, along with a selection of well regarded local wines. This area also houses a square-shaped column mounted with four 52-inch TV screens.

Delhi Duty Free has also installed a striking perfume and cosmetics store covering 730sq m that lies across the S-shaped concourse opposite the liquor, tobacco and confectionery area.

Palmer noted that a large circular sales floor area is positioned at the centre of the perfumes and cosmetics shop where fixtures can be changed as new special promotions are staged.

‘Perfume and cosmetics is a huge growth area in India. We have a big retail space and can accommodate everyone,’ said Palmer. ‘All product launches will be in the central promotions area. We could have sold that retail space, but we refrained so we can control that space rather than be dictated to by brands.

‘All the brands want to come in as India has huge potential. We have got Chanel, Christian Dior, L'Or?al, Clarins and some smaller brands. We have chosen premium to mid-market brands.’

Perfumes are expected to account for the larger share of sales than cosmetics in the perfume and cosmetics shop. Although cosmetics have long-term growth potential in India, developing sales poses a challenge and will depend on developments in the domestic duty paid market.

‘Men's fragrances and skin care products are also coming in,’ Palmer noted. ‘This is influenced by Bollywood and glamour. These men's products are more acceptable now.’

650SQ M OF ADDITIONAL SPACE
Meanwhile, Delhi Duty Free also plans to sell fashion goods in various shops and boutiques having recently acquired additional retail space from the airport operator. Watches and smaller items will be sold along with luxury brand fashion accessories, although brand names were yet to be disclosed.

Initially, Delhi Duty Free was allocated 200sq m of departure hall retail space to be divided into three 50sq m brand name shops and a 50sq m mixed brands shop. But the retailer was recently allocated a further 650sq m of additional floor space, including 350sq m to set up brand name shops.

‘This could be a last-minute decision on how to use the shops,’ Palmer said. ‘We are still deciding what to do with two 50sq m last-minute pier shops which we will stock with the top 10 to 20 items popular with business travellers rushing through the airport.’

Meanwhile, Delhi Airport has also allocated 1,240sq m of space in the T3 arrivals area for two duty free arrivals shops: ‘The arrivals shops are located either side of the arrivals hall in between immigration counters and the arrivals luggage belts,’ Palmer explained. ‘These outlets include pre-order items for collection on arrival. Customers can order via our website.’

The larger of the two duty free arrivals shops covering 820sq m stocks core category items only – liquor, tobacco and confectionery. In addition to housing 52-inch TV screens mounted on gondolas, two four-sided columns are located within the shop – each mounted with four 52-inch TV screens to ensure all promotions are prominently displayed.

The second smaller arrivals shop covering 420sq m displays premium goods only. Perfumes and cosmetics are on sale, along with premium liquor, tobacco and confectionery brands.

‘This arrival shop has a luxury collection of spirits and a walk-in humidor,’ Palmer said. ‘We are stocking a lot of boxes for availability and continuity of supply. For confectionery this is boxes of chocolates and other items for the premium shop; and on the other side Kit-Kats and other items.’

Delhi Duty Free expects arrivals shop sales to outperform departure shops sales at Delhi International Airport, mirroring duty free sales trends at various other Indian airports. Although most duty free sales in the old terminal have been of standard products until now, the New Delhi duty free market is expected to trade up to premium and luxury items in future, as India's economy expands and disposable incomes grow.

MAINTAINING CONTINUITY OF SUPPLY
‘There is a lot of activity going on now and multimedia developments in our shop. The big thing will be the continuity of supply, products and service – for example, with confectionery,’ Palmer remarked. ‘We have ensured product category availability until we have our own 18 degrees Celsius chilled confectionery warehousing. There is a huge amount of work getting logistics organised here.’

Indian travellers are expected to account for 80% of passengers using the new T3 departure and arrivals shops. An estimated 60% of this customer group are expected to travel overseas once a year.

‘This is really exciting. We have a great space and opportunity with our staffing, training and an energy for where we are going,’ Palmer commented. ‘We have experienced and skilled staff. All the elements are here and we have a great opportunity. I can see this evolving into something world class and unique for India.’

[The full report on the new retail operation at New Delhi International Airport can be found in the July issue of The Travel Retail Business, which is out now. This also includes interviews with India?s premium airline Jet Airways and IDFA India, covering the inflight duty free programmes with Air India, Kingfisher and Jet Airways. For a subscription, contact Janice Hook at: [email protected]].