While Philip Eckles may only have been the CEO of Delhi Duty Free Services since the beginning of October last year, he’s known about the company for years. “One of my previous roles was as CEO of Aer Rianta International (ARI) Middle East division, which is based out of Bahrain. ARI is one of the shareholders of Delhi Duty Free Services, and I had the pleasure of sitting on the board of directors for a five-year period. So I knew Delhi Duty Free Services very well,” Philip explains.
“My role with ARI was changing and as the HQ is in Dublin, Ireland, there was a chance I would need to relocate there. However, the opportunity to take over as CEO at Delhi Duty Free Services came up and I saw it as the perfect time to join this fast-growing company. Plus, India is such an exciting country and the company is one of the leading duty-free operations in Asia, as well as the largest in India. It was a wonderful opportunity that I couldn’t let pass me by.”
As he gets ready to wrap up his first year with Delhi Duty Free Services, Philip has had the opportunity to look back on all that they’ve achieved over the 12 months. “I was lucky to inherit a wonderful team of high calibre and professional people,” he says.
“It’s helped us have a very successful financial year. Obviously, I can’t take all the credit, as a lot of this success is down to the hard work and dedication of the team before I took over as CEO. A huge part of my task now is, of course, to make sure that all the good work that has gone before me continues into the future.”
A big part of that future work is building out the business in line with its two central pillars: growing passenger spend and growing per passenger profit. “Last year, our passenger growth was just under 7.5%, which was slightly down from the previous year when it was about 11.5%. However, it’s still a great number and in line with the increase achieved by Delhi International Airport for the year,” he says.
“More importantly, our sales were up for the last financial year by 21.5%. A lot of this is down to the fact that we’ve been very successful at growing the average spend per passenger over the past couple of years. It’s all been driven by the time and effort that’s gone into the redevelopment of our duty-free stores, in both the arrivals and departures areas of the airport.”
Philip is under no illusion about the competitive nature of the Asian duty-free market. With so many duty-free operations within the region all vying for the passenger dollar, it seems prudent to ask him what it is that makes Delhi Duty Free Services stand out.
“I guess the first thing is that we make sure we’re maintaining competitive pricing with our key competitors, which would be the airports of Dubai, Bangkok, Singapore and London,” Philip explains.
“We also do a lot of work on getting our messaging right and ensuring it gets to the right people. Most of this is done instore and face-to-face with passengers and, of course, by word of mouth, but our social media and digital marketing also play a big part in getting the message out there. We work very hard to get that right. And we must be doing something right, as our social media presence recently won us a number of awards. The Moodie Davitt Report, which is one of our industry’s leading duty-free magazines, recently presented us with awards for the best use of Twitter, the best use of social/digital media, the best use of Facebook, and an award for the best overall website.”
The use of digital marketing to drive growth is obviously an incredibly important part of a 21st century business strategy, and driving growth is one area Philip is particularly focused on. However, it doesn’t come without its challenges.
“Delhi Duty Free is a joint venture between GMR Group’s Airports division, Delhi International Airport Limited and ARI. Because of foreign investment limitations, we are restricted with the things we can do and are currently limited to only operating duty-free shops within Delhi International Airport. This means that any future growth is limited to what happens within that airport,” he says.
“Part of our growth strategy has been to complete the refurbishments of our shops in the arrival and departure areas, which is now almost done. We still have a small amount of work to do, which will take place over the course of the next month, but these stores will be the backbone of the growth we’re hoping to achieve over the next few years. Pushing passenger average spend is critical for us, as we don’t want to simply rely on passenger growth to achieve our goals. We need to make sure we continue to have the products that passengers want, at the right prices, and to keep working with our vendor partners. We have fantastic new installations from key brands such as Chanel and Dior, and MAC Cosmetics is a completely new installation for us in our Arrivals store, as are Estée Lauder, Jo Malone, Clinique, Urban Decay, Kiehl’s and Origins in Departures.”
There’s no doubt that travelling and duty-free go hand-in-hand, and a luxuriously stocked store is the perfect way to break up the monotony of a traveller’s long-haul flight. It’s also a place to wander around when a flight is delayed or a gift shop oasis for those business travellers on their way home.
Ensuring the shelves are filled with the latest brands is down to these solid partnerships with incredible vendors that Philip and his team have worked so hard to achieve, and then maintain.
“Alongside the partnership we have with Delhi International Airport, we have incredibly successful partnerships with all our vendors. These are the brands that provide us with the exciting products you’ll find in our duty-free shops as you travel through the airport,” Philip says.
“There are about 20 brands, which represent somewhere in the region of 80% of our business. So, the likes of Pernod Ricard, William Grant, Diago and Brown-Forman on the liquor side, and Chanel, Christian Dior, LVMH, Coty, Puig and others on the perfume and cosmetics side. These companies provide the lion’s share of our sales, and so are critically important to us.”
“There are about 20 brands, which represent somewhere in the region of 80% of our business.”
Having a long and trusted partnership with these vendors has helped Philip in a number of different ways. “Firstly, it allows us to generate the volume of business that we do and ensures we can offer great value pricing to our customers. At the same time, it allows us to generate the profit margins that we need for the business,” he says.
“It also works as a two-way street because we make sure we support the brand in the way they expect. This can be through price as well as how they are displayed within our stores. We work very well with our partners, which is something that was picked up in a survey last year. There’s a company called Advantage Group International, which conducts annual surveys with duty-free operators and duty-free vendors to get a true reflection of how we view each other. Last year, we reached an all-time high, ranked as 12th on a global basis by our vendor partners. Advantage Group International looked at all sorts of components such as the business development, execution, joint business planning, logistics, warehousing, and a whole plethora of metrics. It was a fantastic result for us and demonstrates just how important vendor partnerships are to us, and vice versa.”
With his partnerships running smoothly, Philip states his biggest problem is the amount of space he has to work with. “We have a finite amount of space within Delhi International Airport, and we would like to be able to do more with other brands. But we are space constrained, and so is the airport, and that’s going to inhibit us in being able to do everything we’d like, so we have to pick very carefully what we do going forward,” he says.
“The shop refurbishments have been helpful, particularly in arrivals, where we were able to expand our perfume and cosmetics offering. We have made significant improvements in departures, too, with a number of new brands coming in. They’ll all be new to our Delhi customers, which will help drive sales in the departure hall over the next 12 months. Pushing passenger average spend is critical for us, as we don’t want to just rely on passenger increase to achieve our future growth. We need to make sure that we continue to have the products that passengers want, at the right prices, to drive passenger average spends. And, of course, on the flip side of that, to continue to work with our vendor partners so we are able to improve our margins and, thereby, our returns to our shareholders.”
For Philip, it’s clear that the success of the business comes down to four things: the product, the price, the environment and, most importantly, the right team.
“At the end of the day, our success is dependent on the 1,100 people we have working for the organisation – 940 of them work on the retail side, which makes them the face of our business. I’m incredibly lucky that the dedication and the calibre of people we have working for us is so good. Without them we wouldn’t be half the company we are,” he says.
“It’s actually part of my KPIs that the board set for me to make sure that our staff are well looked after and treated properly.”
“We believe that we are a good employer and have just completed our annual staff survey, where we had an improvement again on last year. That was so important for us. It’s actually part of my KPIs that the board set for me to make sure that our staff are well looked after and treated properly, which should then be reflected in our annual survey. Our staff erosion is something that we are always focusing on, but it’s probably around 50% less than the average within Delhi and in India itself, in the retail environment.”
Respect for employees and customers alike is a core value of the business, and something Philip is incredibly passionate about. “The business philosophy is that we want to live our core values, whether that’s looking after our staff or delivering the best shopping experience to our customers. And to do that, to ensure that every employee and customer is having the best experience, everyone needs to be treated with respect.”
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