Experiential Duty Free Vital To Tap The Luxury Retail Market
The love of luxury goods is growing rapidly among Indians, where a report from Bain and Company shows that luxury spending by Indian consumers is expected to reach around €25 to €30 billion by 2030, up from less than €8 billion last year. And in all this, duty-free retailers are playing a vital role in the growth journey.
Travel is all about creating memories and shopping has a big role in this. It’s something that comes home with you from your travels and bring back the good times. So, experiential retail at duty free plays a vital role in the start or end of journeys. Each place has its unique character which when transformed into experiences go a long way in recall. A hint of regional flavour, authenticity and multisensorial experiences like sounds & fragrances not only attract weary travellers but add joy too.
We had the pleasure to interact with Amit Butani, Vice President of Marketing and Strategic Partnerships at Mumbai Duty Free, to understand more about the Indian luxury market, role of duty-free retailers and the importance of experiential design at duty free shops in India. Amit also shares insights about the customer behaviour and expectations today at duty-free shops, and how experiential retail design can create a memorable experience.
FRDC: Any emerging buying behaviour among the Indian luxury market that you see will impact how duty free stores are curated?
Amit: The evolving consumer landscape in India demonstrates a growing inclination towards premiumisation, where consumers are increasingly willing to invest more in their needs and desires. Indian consumers are now allocating a larger portion of their budget to high-end fashion products, electronics, and health and wellness supplements as these categories experience substantial growth. Furthermore, there is a notable surge in demand for destination products, particularly those manufactured in India. Duty-free shopping is no longer confined to traditional categories but has expanded to incorporate many emerging segments, reflecting the changing preferences and spending patterns of Indian consumers.
FRDC. How do you see the Indian luxury market evolving in the coming years, and what role will airports and duty-free retailers like Mumbai Duty Free play in this evolution?
Amit: The luxury market is undergoing a significant evolution, particularly after the pandemic. Consumer preferences have shifted, and there is an increase in purchasing power compared to before. High-end luxury brands are diversifying into the food and beverage sector, making it advantageous for airports to incorporate such concepts within their premises. Additionally, the luxury second-hand market has also experienced notable growth, with consumers increasingly open to purchasing pre-owned high-end brands. This presents an exciting opportunity to consider incorporating pre-owned luxury items into duty-free stores.
FRDC: How are international luxury brands and Indian luxury brands competing for market share at Mumbai Duty Free, and what are some of the strategies they are using to stand out in the crowded marketplace?
Amit: Luxury brands are now looking beyond the traditional supplier-retailer relationship and seeking strategic partnerships across various platforms. They actively engage with retailers on in-store and digital platforms to create a cohesive brand experience. This includes providing unique experiences in-store, offering product samplers, and pampering high-end consumers within city limits to build brand recall and loyalty.
FRDC: Do you think Indian duty free stores must have a character of its own through hyperlocal experience retail / spatial design?
Amit: Indeed, incorporating local arts and crafts designs into the motifs of duty-free stores amplifies the essence of the local area and its heritage. An additional vital aspect lies in the creation of a multisensory experience. Deliberate employment of lighting, ambient sound, and non-alcoholic fragrances, such as bespoke perfumes or scents explicitly designed for high-end malts, facilitates an elevated sensory journey and leaves a lasting impression.
Another critical aspect is utilizing digital signage and shelf talkers that change dynamically with flight arrivals and departures, which adds a sense of dynamism and relevance to the store. Additionally, incorporating virtual reality (VR) experiences can elevate the shopping experience.
FRDC: Are there any specific sensibilities we need to keep in mind while designing duty free areas in India today?
Amit: When designing duty-free stores in India, it is crucial to consider specific sensibilities that cater to the diverse needs of customers.
The design should prioritise ease of use and navigation, accompanied by simple and impactful signage that does not overwhelm passing consumers with excessive text.
Accessibility is another critical factor, with the store areas designed to accommodate individuals with disabilities and senior citizens ensuring equal access for all.
Incorporating sustainable and eco-friendly materials is essential, focusing on locally sourced materials and emphasising environmental consciousness.
The design should foster a strong sense of spatial connectivity, creating a cohesive and harmonious shopping environment.