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Duty Free Retailing – A New Way
Category: Duty Free Retailing | 08/08/2007 - 16:01:20
The historical perception has been that Airside, which is after Passport Control and now Security, had smaller shops with less choice even if it was Duty Free. There has now been a fundamental shift especially in the UK and European airports that Airside is a more important retail area for the airport operator and passenger alike. Another rather inhospitable change also has happened in that the European Union decided to abolish the Duty Free element of airport shopping amongst the member states. It is still Tax Free but not duty.
The major change has been that airport operators and retailers alike have gone for “price promises” and a higher level of offer and service in order to attract and keep the passenger shopping. Airside space can now account for up to 85% of the total retail offer in Europe while in the USA it can be as low as single figures. What would happen if a passenger could have both – Airside and Landside on a vast scale? In fact so large and fantastic that Landside could not only be a major store in itself but also Duty Free plus yet another element, it is not going to be situated at the airport at all but “Downtown”. This is precisely what has been created at the new Suvarnbhumi Airport in Bangkok, Thailand, operated by King Power.
There have been two major elements to The Design Solution’s work at Suvarnbhumi Airport. The first was the reconfiguring of the airports interior by the removal of part of the 120-meter length moving walkway, reducing it to just 75 meters and the raising of floor level in the central concourse. This and other major structural changes came about while the airport was actually being constructed such was the need for an efficient master plan that fully understood the desires of the operator, King Power.
Another element of the King Power vision was to build an off site Duty Free store located in Downtown Bangkok. Here the company have taken a 30-year lease on a 12-acre site, a location owned by the Thai Royal Family’s property department and is located next to the new airport train terminal in the City. The store has 130,000 square feet of retail area together with King Power’s new office and a 400-room hotel, restaurant and other leisure facilities. The building’s interior style is Thai due in part to the ground floor retail level show casing Thai’s products. There are three levels of Duty Free retail with a wide variety of concept stores developed specifically for the Downtown complex. The retail master planning of the three floors of Duty Free offer includes a 13,000 square feet of fragrance and cosmetics space together with a very significant stand alone premium watch shop. All this design and master planning carried out by The Design Solution has been to analyse how Duty Free retail is going to move in the future and take that as a basis on which to build.
Having an off site Duty Free mega store ensures that the operator has more freedom and a lot more space. Airports are not known for having a proliferation of spare space. The question is as it is off site and not within the control of either security or passport checks how does it work? As mentioned it is sited next to the railway terminal to the airport so that is of great assistance to the passengers from a logistical point of view. Thai nationals can shop up to 60 days prior to any overseas flight and then collect their purchases Airside at the airport just prior to departure upon production of their sale of goods ticket. This of course works for other passengers and by allowing virtually two months prior to outward bound departures helps promote a much more relaxed shopping experience and therefore spend is likely to be higher. All passengers must be in possession of an outward-bound air ticket.
Part of King Power’s thinking has been to create its own retail concepts and brands and this is yet another step that separates what is happening here at Suvarnbhumi airport and the rest of the world. The historical aspect of the Duty Free airport offer has been to mix global with local brands a kind of mix and match. This works perfectly well as each brand can bounce off one another, King Power sort to change drastically not only the typical branding issues but also the shop’s products range. If a passenger is interested in food for example then the store should sell all products related to food together with food itself. This idea has necessitated The Design Solution having to create a brand for each outlet as well as designing the shops interior and setting.
The food shop was branded “Thomas and Tonini”. On the face of it the theory is right for the client but that is rather dangerous commercially as the whole scenario for the way King Power and The Design Solution have created the airport’s Duty Free is backed up by King Power’s own in-depth passenger and retail research. Another retail offer is luggage, so all the best brands of luggage have been brought together in one shop. For The Design Solution this totally new direction presented a fabulous blank canvas with no history or preconceived retail ideas to have to contend with. It also meant that the design teams had to be at the height of their creativity because whatever was created had to stand next to a truly global brand that everyone knew. Everything that was put together had to be credible or the whole programme could fall apart.
The major retail space for the airport is situated on Level Four, which is approximately 82,000 square feet. This area is broken down into specific category areas thereby creating points of difference for the passengers. The entire length of the concourse is a kilometre long so it’s had to be broken up. In all there are five zones staring with the World of Thailand, next to this is the luxury and specialist brand areas followed by Duty Free and then Home plus Fashion. This style and configuration is giving the passenger the shopping experience akin to an upmarket department store but on one continuous level.
This airport represents a new way of looking at the business of retailing and Duty Free sales in particular. For The Design Solution it represents a tremendous creative challenge. From the huge project of commercial master planning through to brand creation and shop design as a result. The end result is an innovative airport retail solution based on the commercial research carried out by King Power to check their vision. A vision of airport retailing for the future.