Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Agenda
2
• About Flemingo
• Emerging Markets
• Importance of non - aeronautical revenue
• Non - aeronautical revenue figures
• Rubik’s Cube
• Offer
• Passenger profiling
• Maximizing tender process
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Flemingo- Introduction
3
• 138 operations in 31 countries
• Present in Africa, Asia, Europe and
LATAM
• Emerging market, travel retail specialist
• Vision: 2B.BY 2020
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Flemingo – Introduction
4
• Duty Free
• Duty Paid
• Food & Beverage
• Diplomatic
• Inflight
• MASTER RETAILING
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Emerging Markets
5
• Frontier …emerging.. developing…
advanced
• An underdeveloped country / high growth
potential / high risk / significant volatility
• $2000 to $12,000 GDP per capita
• More focus on goods than services
• BRICS (0ver 10 years old)
• CIVETS
• MIKT
• MINT
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Emerging Markets?
6
• India / China
• Brazil
• Argentina
• South Korea
• Vietnam / Myanmar
• Turkey
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Importance of non - aeronautical Revenue
7
• Ranges from 10% to 80%+
•airport retail/catering 27 to 36%
• Funds airport development
• Creates essential facilities
• Activity to satisfy traveler's needs
71%@ Sydney
Airport
58% @ Changi
Airport
54%@ Kuala Lumpur
Airport
81%@ Houston
Airport
Source: www.zawya.com
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Figures of non - aeronautical Revenue
8
Non Aeronautic
al 47%
Aeronautical
53%
Global Average
28%
72%
Global average
Terminal retail revenue
Other revenue
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
The Rubik’s cube to maximize retail/catering
• Research
• Space and location
• Category and brand offer / Tenant mix
• Pricing / value policy and activity
• Contracts / partnerships
• Realistic tenure periods
• Service / standards
• Sense of place
9
50% of the global
passengers plan
purchase after
entering a retail
outlet
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
The offer…
• Duty Free
• Exclusivity, walk through, allowances, departures
and arrivals
• Catering
• To go, coffee corner, fast food, fine dining,
branding
• Convenience
• Water, news, reading material, tobacco
• Local product …sense of place
• Specialist retail to match airport pax profile
• Airside / Landside
10
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Passenger profiling / research benefits
• Who is Travelling?
• What is their time availability?
• Origin / destination ?
• What is their demand for facilities / services / products / brands?
• What is their feedback on what you have to offer today?
• What facilities do they use elsewhere?
• Reason for using or not using your facilities ?
• Penetration / Conversion / Basket spend
11
Source: ACI – Airport Service Quality 2011
30% planned purchase passengers – end up not purchasing due to non
availability of product or poor information and
signage
20 Minutes
Average dwell time
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Target consumer groups (retail)
12
• Price sensitive shopping lovers
• Low income promotion swayed
• Emotional high spenders
• Low budget gift shoppers
• Conventional deal seekers
• Bargain seeking self – indulgers
• Time killing browsers
• Executive pre-planners
• Authentic product seekers
• Inspiration seekers
• Local touch gift buyers
• Wealthy convenience shoppers
• Intensive brand image shoppers
• Rational stock up shoppers
Mind-set research - Travel retail cross category global
segmentation
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Maximizing tender process
• Structured plan / information and transparency from
the beginning
• Maximize pre-tender process collectively
• Don’t attempt winning moves from impossible
positions
• Realistic time frames for process
• Realistic contract periods
• Create win-win relationships
• It is not about the highest bid
• Size does matter
13
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Summary
• Are you maximizing your non-aeronautical
revenue?
• Do you do enough research?
• Rubik’s Cube – Does your retail / catering move to
one colour?
• What is your short / medium / long term plan?
• Is your service offer from car park to boarding
gates consistent?
14
Click to edit Master subtitle style
Travel Retail & Catering in
emerging markets: Generating
non – aeronautical revenue
Paul Topping
Director / Board Member
Flemingo International
Travel retail & Catering in Emerging
Markets
Kuala Lumpur I 02/04/2014
Terima Kasih