Raising the benchmark for airport retailing

 

Raising the benchmark for airport retailing
Colm McLoughlin, Executive Vice Chairman and CEO, Dubai Duty Free (DDF)

Colm McLoughlin, Executive Vice Chairman and CEO, Dubai Duty Free (DDF), is synonymous with DDF's operations, having played a vital role in making it a world-renowned retail organisation. He recollects the past and peeks into the future in an interview with Suchitra Steven Samuel

by

Suchitra Steven Samuel

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Published: Sun 23 Dec 2018, 11:03 AM

Last updated: Mon 31 Dec 2018, 1:22 PM

From humble beginnings, Dubai Duty Free (DDF) has grown into one of the biggest travel retail operators in the world since it opened on December 20, 1983. With sales set to cross $2 billion, Colm McLoughlin, Executive Vice Chairman and CEO, recalls a time when DDF started with 100 staff in 1983, of which 26 are still working for the company. DDF today has almost 6,200 staff members from 45 different countries, with 270 of them still onboard 20 years later, leading McLoughlin to assert, "We are very successful because of our team and staff. And I continue to praise them as much as I can. I remember the Original Irish Trinity, George Horan, former President, and John Sutcliffe, as we celebrate our  anniversary."

It all began 35 years ago with an allotted time of six months to set up operations, after which McLoughlin was invited to stay in Dubai. "We are expecting our business to touch just over $2 billion. So, I am delighted with our time, and am pleased with our progress. Dubai Duty Free has gone on to become the single largest Duty Free in a single airport in the world," he notes.

Dubai and DDF grow in tandem
The success story compels McLoughlin to speak about the core attributes, which according to him, have made DDF so successful as a brand. "H.H. Sheikh Ahmed bin Saeed Al Maktoum, President of Dubai Civil Aviation Authority and Chairman of Dubai Duty Free, has been very supportive of our business all the time."

He elaborates that by offering customers very different kinds of promotions and activities where they ensure that they get good value for the merchandise when they purchase with DDF has paid off. "Our team has been the backbone of our businesses since we started," conveys McLoughlin.

Additionally, he informs that their outlay of promotions - where a percentage of their top line is invested on promotions, advertising and sponsorships - have collectively had a very positive effect on footfall and DDF.

In fact, DDF has grown in tandem with Dubai, and McLoughlin presents his views on the growth of the city. "Dubai has been a tremendous success story. You know when we started in 1983, around 250,000 people were living in Dubai, and 3 million passengers used the airport. Now 3.1 million people are living in Dubai and the number of passengers going through the airport last year was 88 million. So, the airport has grown, and Dubai has grown."

Expressing thorough happiness on the growth of DDF, which has grown by a more significant percentage than the traffic through the airport, McLoughlin remarks, "I think the over 600 awards that DDF has won, make us all wake up in the morning feeling full of energy."

Next phase, technology and foresight
According to McLoughlin, the Duty-Free industry in the world is estimated to be around $70 billion. The indications are that it is going to continue to grow as the travel industry expands. "I was speaking at a Duty Free conference in Shanghai recently, where figures shared show that there would be 138 million Chinese travelling out of China next year. And they have a big impact on the Duty Free business in many parts of the world," briefs McLoughlin.
Airline traffic is expected to continue to grow everywhere, and is an indicator of the improvements foreseen for the Duty Free industry. The second airport under development in Dubai is currently operating at a capacity of 27 million passengers, with additions by 2028 or 2030.

McLoughlin continues, "There will be three runways in operation, and there would be a capacity for 135 million visitors. I think all of these things added together would ensure that DDF continues to grow."

While modern technology is changing the face of retail sales, McLoughlin is well aware that several successful online-exclusive shopping companies are taking their presence into physical outlets and malls to enhance the shopping experience.

In step with modern trends, DDF has introduced an online facility for passengers called 'click and collect', two years ago. "We are doing some sales, but not huge. We expect to have $20 million online sales this year. We see it as a service that people want. And, of course, other things come out of online shopping, like Ali Pay, Samsung Pay, or Apple Pay being introduced in many of our Duty Free outlets," he notes.

Historic turning points
The ongoing renovation of the retail offer at Dubai International Airport presents an improved opportunity to display merchandise in a better way, enabling agreements with several suppliers. "Vendor support allows DDF shops in the airport to be branded by world-class names. Twenty-two million passengers are expected for Expo 2020. The creation of parks, building of hotels, highways, motorways and infrastructure in Dubai, all these factors have made a huge difference in the number of visitors to Dubai and DDF's operations," declares McLoughlin.

DDF sponsors horse racing in the UK and Ireland, golf tournaments in Dubai and are the title sponsor for the DDF Irish Open, which was upgraded to become part of the Rolex Series.  They recently partnered with the European Tour to be a global partner.

Commenting on any missed opportunities along the way, McLoughlin shares, "I think in the Duty Free industry, generally the whole value aspect has not been promoted enough. And that is why we think we do more than our share. We have gone into sponsorship in a big way and are increasingly marketing our brand through digital efforts."

McLoughlin points out the positive effects of CSR activities and the impact of staff participation on the business. He cites examples of when 80 of DDF's staff volunteered to clean up the beach in Ajman and more will be volunteering to tidy and clean the roadways in their vicinity.

Road to success
The success trail of Dubai Duty Free continues in a customer-focused environment offering world-class service. "I think the whole secret is building an atmosphere through your staff, that satisfies the customers, makes them realise that they are getting excellent value for money, good service and encourages them to come back again," McLoughlin continues.

Reflecting upon the many years he has lived in Dubai and on what he likes the most, McLoughlin shares his admiration for Dubai's commitment to development. As a golf player, he remembers playing on the sand and using a little piece of astroturf from which to tee the ball off from, to a time where today there are about 12 golf courses in Dubai, many of them among the best in the world.
"The Race to Dubai goes all year round in the European Tour, and the final competition - the DP World Championship, was held in Dubai recently. I love the tolerance in Dubai, and I am very happy that the government appointed a Minister for Happiness. This should be replicated around the world," remarks McLoughlin.
While in the past the DDF did have its share of challenges, namely security requirements and the outbreak of SAARS some years ago, McLoughlin admits that there will always be some problems to overcome. "And that is why we are here. Otherwise, the whole thing would be automatic," he notes.

Millennial outreach
There is practical advice from McLoughlin to the millennial generation who have an emphasis on technology and related fields. He stresses that hard work is the secret, with virtues like honesty and respect being important values in life.
"I realise that in a big company like ours we have to be very high tech in our operation and movement of stock. We sold 73 million pieces of merchandise last year; we did 27.1 million transactions in our registers. And to cope with that, you need to be technically very high tech. But as individuals, I don't think you have to be. And it is much better, in my view, to have simple chats and use telephones," he continues.
"Millennials are great. It is probably true to say that nowadays with the competition and education it is more difficult for individuals to shine. But I think the whole secret is to keep life simple."
As for the generation gap, McLoughlin confirms it to be an attitude of the mind. "I think each generation can communicate very well. I have never run into a problem with somebody whether 10 years older or 10 years younger than me. There are very few people who are 10 years older than me," he says, in a lighter vein.

DDF Foundation
The DDF Foundation, which was launched under the patronage of H.H. Sheikh Ahmed to support many initiatives around the world is helping families and children in need. It has restored one million eyesights, and it is the reason why 4,000 cleft palate operations were performed in the last two years. "We have several children in special needs schools in Dubai," he says. "We pay the salary of four school teachers at one of the autism societies in Dubai," reveals McLoughlin, who believes that every company has an obligation to help people in need.

- suchitra@khaleejtimes.com


I want to thank the authorities in Dubai for their support and trust. I would like to thank the staff of Dubai Duty Free for helping us make, what we think and say, is the best Duty Free in the world with 700 awards to our credit. And, I would like to wish all the readers of Khaleej Times a very Happy DDF Anniversary."
- Colm McLoughlin

Of the original 100 employees who joined in 1983, 26 are still in active service and referred to as “Pioneers”.
Of the original 100 employees who joined in 1983, 26 are still in active service and referred to as “Pioneers”.

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