TRAVEL RETAIL QUESTION TIME
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DDF COO cuts to the heart of industry’s current predicament
In the very first Travel Retail Question Time video interview, Dubai Duty Free (DDF) Chief Operating Officer Ramesh Cidambi provides the answers to submitted questions from members of the DF&TR industry. Charlotte Turner presents the highlights from that video.
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COO, DUBAI DUTY FREE RAMESH CIDAMBI TR QUESTION TIME
T
he first question asked of Cidambi, which was submitted by a member of
the industry and then consequently voted the most popular by TRBusiness readers, addressed the failure of the industry to provide significant differentiation:
The travel retail industry is losing its USP as brands do not invest enough to differentiate the TR product range from its domestic ones. At the same time, the airports are squeezing a lot from both retailers and brands, which makes it harder for brands to justify the investment above. How can the industry be transformed to meet the future challenges and needs of a new generation of travellers who are no longer interested to shop at the airports? Challenging the premise of the question, Cidambi first addressed the difficulties he and suppliers are
“The retailers have worked with the brands and got themselves in a position where both are financially stretched in terms of margins and in terms of returns.”
Ramesh Cidambi, COO, Dubai Duty Free
Ramesh Cidambi speaks to TRBusiness Managing Editor Charlotte Turner. 22 TRBUSINESS JUNE 2019
currently facing. “I’d first like to address the context
of this question and the current state of the industry… It is a fact passenger demand continues to grow year after year and both ACI and IATA expect single-digit growth up until 2035. “So you have a situation where
investment is clearly needed to develop airport infrastructure. This then puts pressure on the airports to develop both aeronautical and non-aeronautical revenue, and the airports have successfully transferred that pressure on to the retailers to generate more and more money. “The retailers have then worked
with the brands and got themselves in a position where both are financially stretched in terms of margins and in terms of returns.” Pressure from ecommerce giants
and brands’ own online platforms only amplifies the pressure on all three stakeholders: airports, retailers and suppliers . “So in general the travel retail industry is stretched,” he reiterated.
“So even if you got the airports
the retailers and the brands on the same page, you wouldn’t be able to solve the future challenges which are there, because the threats to the industry are external.” Cidambi felt that because of this
context, the brands certainly could not be blamed for not investing in the travel retail sector and made it clear that, on the contrary, they are ‘very committed’ and are ‘ensuring that they themselves remain relevant’. “How are we going to make
the transition to the next level of retailing, when the online players – both pure ecommerce players and the brands who have a strong digital presence – have a fantastic amount of data and information and insight on the customers? “In addition to this, they have a
fantastic assortment and they are able to provide a very convenient service to customers. The degree of investment required in terms of technology; in terms of logistics; in terms of fulfilment is far greater than what most travel retailers
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