Chapter strategize much differently than normal businesses.

Chapter 4: Duty Free Consumption This chapter provides a holistic view of duty free zones microenvironment including all the elements and factors in the duty free zones operations that impacted the sales and revenue. To better understand the duty-free zones microenvironment, the research team focused on duty-free strategies, operations, customer behavior and the technology role in consumer behavior change.4.1 Situating the Duty Free Strategy In order to analyze the strategies for duty free shops and operators to maximize their sales and revenue, it is necessary to strategize much differently than normal businesses. There is a huge difference between day-to-day shops, channels of distribution stores and the international airport retail shops where the latter is considered by many retail commentators to be niche area (Omar and Kent, 2001). Airport retail environment differs from day-to-day shops and stores by its footfall guaranteed and high sales due to the fact that passengers are forced to stay in this environment until their flight is called which make it an attractive purchasing hubs.

(Crawford and Melewar, 2003). Duty-Free shops customers are sequestered from the outside world, especially so during outbound flights with long waiting times. Duty free shop that is unlike many other businesses is that they feature a massive volume of potential shoppers flowing through them each day. This is somewhat like a commercial shopping mall, but again unlike it because the potential buyers are obligated to go through the commercial areas.

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This is increasingly a normal part of the flying process because of the strategic location of the duty free shops for transit passengers in the departure areas. This presents some unique opportunities for duty free operators and their stores. (Euro Monitor 2012).

To gain a holistic view of the duty free consumption, the microenvironment including all the elements and factors in the duty-free zones operations which impacted the sales and revenue are studied in this research. Consumers & ProductsDuty free operators must ensure that their products meet the complex and dynamic needs of international consumers. Custom solutions design for customers are better marketing approaches that start with the products first. Besides visual merchandising and the emphasis of consumer self-selection and matching to meet their needs, lines of custom designed products exclusive to duty free shops have proven to be very popular among consumers. When asked about the primary factors that drove customer sales, managers continually said that the exclusive offers and products that were found only in the duty free shops was a major appeal to customers, and the consumers typically agreed with that assessment.

.(Euro Monitor International, 2012).Major tax free and duty free operators including World Duty Free, DFS, and Dubai Duty Free feature many products that are found only in their own shops, including exclusive promotional alcohol beverages and luxury goods, from designer chocolates to one-of-a-kind jewelry. Many alcoholic beverage brands have special promotional items that are found only in duty free shops. These proved to be popular with customers. One bottle of “Travelers Exclusive” absolute vodka featured promotional artwork of a plane and an exquisite looking venue on the actual bottle. This item could not be found anywhere else, and thus it was a status symbol and unique souvenir item the duty-free shoppers could bring back home.

However, with the growing ability to buy online and to price check digitally there is more that’s needed than the exclusivity alone for most buyers (, 2013 ). Dozens of interviewed consumers with newer smart phones stated that they price-checked with amazon in the actual shop, if they suspected a better deal could be had elsewhere. One shopper in Abu Dhabi’s terminal three almost purchased a TAG Heuer watch but produced his smart phone for his obligatory price check: “I would have bought it now if the prices were better or at least in the same range… But Amazon has this exact model number for a few hundred pounds cheaper!” (, 2013). A snarky glare from the sales clerk prompted the businessman to lean in and add, “But we like to keep these things discrete”.

The notion of value of the solutions is also relevant to the considerations of the consumer, because the main emphasis of the shops should be on satisfying these consumer needs and giving them the greatest value for their purchases rather than trying to start with a product and then hope that it attracts buyers. In Dubai Duty Free for example, the level of product customization and the many different options available to consumers evident through interviews and the obvious visual marketing techniques showed that they do an excellent job of fulfilling customer needs through their excellent value for money for the product offerings and first class customer service for the travelers, not just selling the products to the customers (Dubai Duty Free – DDF Shops 2012). The many instances of impromptu price-checking and online analysis of in-store products speaks to the enduring question of how technology and progression of globalization may somewhat challenge established paradigms of marketing. In many cases, interviewed consumers even crowd sourced their buying ideas by messaging, Tweeting, Facebooking, or Instagramming product ideas to family, friends, acquaintances, and total strangers around the world for instant feedback. Phenomena such as these are difficult to sequester within traditional typologies including Kotler’s demarcation of “cultural, social, personal, and psychological” motivations (Kotler and Armstrong 1996).

The growing role of social media and mobile technology in driving consumer sales is a trend that spans many categories of managerial considerations and should be more effectively understood and leveraged; it was one area in which customers had much more to discuss and critique than staff.Costs ; PricesIn terms of the actual price of goods, some consumers favored the prices generally, some favored prices at specific airports or regions because of lower prices and negative externalities, and some favored specific product categories as “values” or other product categories. A small segment of consumers stated that the prices were no better than what they might find on sale a local store, arguing that the prices at duty free stores were generally higher than the domestic averages, with nearly a dozen respondents exclaiming that it was all just a “global scam”, “rip-off”, “gimmick” or “ploy”. This was especially true within duty free shops of major American airports including LAX and Hartsfield-Jackson Atlanta International Airport.

As with the business shopper in Abu Dhabi, many other consumers of all types pulled out his or her smartphones or tablets to investigate the savings of the duty free merchandise compared with the deals on Amazon and other similar online merchants and price comparison services. Many Americans in particular made the argument that the deals on Amazon were much better than duty free shopping or even traditional retail shopping – and also tax free in most cases. Price was a major disincentive for those who said they were just looking around due to wait times, and had not expressly planned on shopping. More of those fliers who had expressed that they intended to shop from the beginning were less surprised by the deals or lack thereof (Swartz P., 2012).However, the notion of cost does not merely reflect the price of the product, but also the other costs of owning that product that the consumer must bear. For duty free shops, this is substantial and meaningful difference. Many people stated that one added cost was that it was significantly more risky to buy duty free than to buy in store, because of the possibility that goods would be stolen in luggage, confiscated in the transit process at a layover airport, or otherwise fail to make it back with them.

One veteran international flier simply noted that these added factors were just “part of the game”, extra costs that many consumers end up bearing in the end. Additionally, there is the factor of the overhead costs for the consumers that even allow duty free purchasing to begin with. Consumers must purchase tickets for costly international flights to even have the chance to buy products in duty free shops, at least for airline passengers. One of the complications stressed by those flying to and from Britain and the EU was the issues with the special tax free rules and rebates process, which many found comparatively more confusing than rules in other countries. The quotas and other restrictions were variously referred to as a “nightmare”, “disaster”, and “fiasco” by newer duty free shoppers as well as some experienced fliers – for them, the appeals of the duty free offers were minimized by the added externalities accumulated before even having the chance to consume the products.Overall, it seems that the costs are largely not favorable to consumers in many American, European and Middle East locations, although fliers noted that the deals in general were better in Asia and African duty free shops. However, just because the prices in general were comparable or even higher than some domestic sale prices, this does not mean that bargains were not to be found.

Given the vast number of shops, many consumers who were complaining about the expensive prices still walked around with bags in their hands, because even with that factor they were able to find at least one deal that fitted them, or in some cases they were enticed by the exclusivity and uniqueness of a particular product.Even though customers may not have favored the prices in many cases, they did find the value of the goods to be more favorable. This means that the intangible aspects of being in the airport, whether for convenience or for the experience of the situation, helped motivate the buying decisions. One woman interviewed at Dubai International Airport stated that she bought an exclusive handbag just so she could give it as a gift to a friend and say that it was from the exclusive Dubai duty free shop. Many other such statements also centered on this theme of prestigious that the products would imbue upon one’s self, family or friends.4.

2 Duty Free Spaces & Visual MarketingEven though the customer flow is predictable through aligning it with the flights schedules (Warschun and Stolze, 2011), but the flow of customers in shops can be a huge operations problem even under the ideal forecasted schedule of the airlines; if potential customers see that a place is too crowded or cramped during peak hours, then they may decide to bypass that buying opportunity and wait to purchase elsewhere (Nash 2012). The departure area at Dubai International Airport is a good example of how this is a most complicated consideration. There is a largely open design where customers can free flow into different shopping areas, but this may also invoke an element of agoraphobia, because there are so many people whizzing by and so much occurring in the space. A good way to address this from a customer flow perspective is to have a discrete area where customers can partition themselves off, or else have such a huge walking area that there is no traffic getting in the way of – and potentially dissuading – kiosk purchaser.

In terms of the shop designs at some of the airports, the open space concept can present a problem with the customers spilling out into the walking area. One on fragrance kiosk in Dubai international airport, a group of young travelers all stopped to discuss a particular scent and cause a disruption of some of the other passersby, causing a slight incident where the group admiring the scents ended up leaving. Some of the larger stores even have portions of the checkout areas basically hanging out into the broader terminal space where people are walking – sometimes running to make their flights – so this could be a reason why some people to avoid those areas and forgo those buying opportunities.In some airports all of the major stores are either open and in the floor area, or sequestered off as if it were a discrete retail location. In other words, the duty free shopping areas in many airports mirror the experience one might find in a typical American shopping mall. From the consumer perspective, shoppers indicated that they preferred the compromised design in places like Dubai, where many large shops were not entirely closed off or open. In such venues it is possible to walk through some stores but then venture further into them if they wanted, and many are basically hanging or jutting out into the open space and feature outward curving walls to give an inviting feel.

It gave the semblance of a dynamic and unusual shopping space where the customer could basically decide what areas they felt comfortable in and wanted to go into. This clearly has the potential to cause and exacerbate logistical problems of flows of people trying to meet their departing flights, but this type of design was well-received by all customers who discussed it.Dubai International Airport, London Heathrow International, and Suvarnabhumi Airport (or Bangkok International Airport) is good examples of duty free shopping spaces that embrace this theory of customer flows with the open walkthrough design featured prominently.

Other large airports such as Incheon International in Seoul feature the same kiosks and open spaced shops but favor a more discrete space for more of its larger duty free stores. From the customer perception, the experience at the walkthrough-dominated shops was much less like a traditional mall experience and more like a surreal type of futuristic bazar, for new American buyers especially. Some smaller duty free shopping spaces in airports like Bandaranaike International airport in Sri Lanka are hardly distinguishable from a typical humble American mall, given that most of the major brand stores for the two duty free operators, Autogrill Lanka and Flamingo, feature narrow horizontal entries with dedicated spaces. This is a dramatic contrast to the consumer experience in Dubai or Heathrow, where sweeping horizontal entryways welcome in passing customers to stop by and have a look at the merchandise.The actual atmospheres of duty free shops can in part be seen through the lens of Rowley and Slack’s (1999) argument that the retail airport experience is one of “timelessness and placelessness”. Many consumers stated that different shopping areas of international airports all had a similar “feel” or “ambiance”, with relatively similar arrangements of products and visual merchandizing. For many frequently fliers, they noted that the modern offerings of the multi-airport operators such as World Duty Free and Nuance invoked a very similar consumer experience from airport to airport, with the differences being minimal. The walk-though and walk by stores were cited as common factors, as was the general level of customer service and multilingual promotional materials.

This has the effective of minimizing feelings of discomfort or buying hesitation that may normally be associated with shopping at a new foreign destination. This suggests that in one way, being similar is a way to encourage sales and make the global buyer feel at home, in essence. However, consumers also responded very positively to the individual offerings of airports and the ways they atmospherically distinguished themselves from the others. A good example of such an effort is the case of the Dubai Duty Free shopping area. First-time visitors almost approached the massive space with a sense of awe, and were universally impressed with the unique visual atmosphere of the airport. Even though the space was intensely crowded during many hours of the day, the vertical orientation and sweeping, high ceilings had the effect of making it seem much more open. Many other airports have ceilings and structures that are more akin to traditional high-end malls, rather than fantastic structures and architecture that people perceive in the same light as museums, theaters, or galleries.Open Spaces ; Buying HabitsOne manager working in Dubai expressed his view that the open space design was a key element to the duty free zone’s success in terminal three, because it encouraged more foot traffic and gave more opportunities to optimize visual marketing of the merchandise.

In order for the customer to purchase an item, they must be able to see it and recognized it, and it must be presented in an appealing manner. He stated that conversion rates for transit passengers were higher than other airports because there were more opportunities to purchase goods due to the open design and strategic placement of best-selling goods and promotional displays encouraged sales from those who might not have otherwise bought goods. This type of impulsive buying behavior is arguably correlated with the design of the airport duty free shops and how this easily enables customers to see and desire products. Previous research indicates that a substantial segment of duty free shoppers could be categorized as impulse buyers (Geuens, Vantomme and Brengman, 2004; Meng and Xu, 2012). Clearly impulse buyers do in fact represent a large segment of the market, and this was confirmed through discussions with staff and shoppers. Both leisure shoppers and transit passengers confirmed that some of their purchases were made because of seeing a product displayed prominently in the open spaces of the terminal, where they were easily able to see and purchase the item. Even some transit passengers who were time-restricted due to racing towards departing flights were able to purchase in-store goods (rather than kiosk shop) without actually going inside a discrete store space because of the layout of the store and products, which was largely characterized as enticing and able to be purchased quickly.

Geuens, Vantomme and Brengman’s (2004) argued that impulse buying was most directly correlated to the spatial appeal of the airport atmospherics itself, and this seemed to hold true throughout the participant observation process, particularly in places such as Dubai where staff explicitly emphasized the open configurations and architecture as one factor motivating consumer behavior. Duty free shop spaces have an inherent visual merchandising advantage; the consumers must pass through the area in order to get to their departing flight, or must walk through it upon arrival in the case of smaller duty free shops for arrivals. This has the effect of reducing the traditional problems associated with attracting customers, because the customers are already there as part of the flying process.

In a mall, someone can simply walk out or choose not to enter – this is not possible in the case of duty free shops and international travel. This is a large competitive advantage in this context and leaves greater room for the shops to focus on motivating and engaging the automatic thousands of daily passersby to become shoppers at their stores.One manager at an Abu Dhabi DFS-based store said that it was routine practice to move the most commercially popular items to the forefront of the store, along the horizontal entryways that reaches out into the main walking space. This is a targeted method for catching the best attention and getting the most potential sales.

Items most visible in the rotunda area of the duty free shops were almost all ones with high frequencies of purchase, and from different market segments. There were item displays and promotional materials obviously targeting young men such as display windows with premium designer colognes, and similar displays and advertisement for designer handbags and jewelry targeting women. There were also some visual merchandising efforts that targeted different ethnic and religious shoppers as well, such as designer Islamic headscarves and garments for women as well as large advertisements in shops that featured Chinese models and bold Mandarin-language promotional material to entice Chinese shoppers.ConvenienceThe emphasis on visual merchandising through display cases and large juxtapositions of different product offerings allowed shoppers greater choice and selection ability without requiring the devoted input of any store personnel, and also improved the targeting of customers by what the shops chose to display (Corvi ; Bonera, 2006). In duty free shopping areas such as Bandaranaike International airport – a brief venue of research – the visual merchandising efforts were relatively poor, as the retail design of the space precluded many of the effective techniques that were seen elsewhere such as the sweeping, open storefronts and the large creative displays of products. This underscores an important observation: coordination with the actual airport is a critical element of the retail success of the duty free shops, especially in terms of the potential to effectively promote the shops’ products.In Bandaranaike International the airport was in poor condition and not as elegant as other larger ones, and this reflected poorly on the duty free shopping spaces.

The feeling of glamour and luxury was not there because of the tiled ceilings, shoddy and un-creative lighting, and the failure to really distinguish the duty free area from the dingy local shops below. In Dubai or Heathrow travelers are welcomed with oceans of mirrors and glass and creative lighting and eye-catching displays. According to one traveler in Dubai, the atmosphere invoked a feeling of being in a futuristic “art gallery on a space ship” – needless to say the man was in no rush to leave such a marvelous place, and he was not leaving empty-handed either.The airport plays a very important role in the success of the duty free shops in terms of the aforementioned factors, their contribution towards broader marketing efforts, the concession fees and tender, the design and layout of the airport and the course of any proposed changes or additions of new terminals (Rowley & Slack 1999). It is in both entities interest to grow and gain revenue simultaneously, but there are often competing interests been operator(s) and airport that have the potential to hurt sales. The feedback of the customers generally showed that there was a deficiency in providing a sufficiently convenient experience at many airports in terms of the overall process, even those described by staff as “on the cutting edge” of innovation and luxury.

Whether this is because of the long distances transit passengers must travel between flights without any accelerated walkways or the awkward placement of the security areas, these structural airport factors should not be neglected.4.3 Customer Service & CommunicationIn Duty Free shops there are repeat buyers and the occasional observed history between a customer and sales representative, but in general it is a very different economic mileu than normal retail stores; this is because everyone is always on the move in a massive way, with customers flowing in and out constantly.

This presents a huge challenge in leveraging one of the strongest marketing tools to communicate with and sell to customers, which are relational resources. Participant observation and interviews suggested that the duty free shopping experience – compared to domestic retail shopping – was lacking in terms of customer satisfaction, commitment, and trust, which are key relational resource variables (Castaldo, Premazzi and Grosso 2008). This general response applied to shops unique to duty free locations as well as shops of major retail brands which consumers had purchased from domestically. Efforts should be taken to enhance the relationship with the customer in the more dynamic, hypermobile environment of the duty free space, because although there were some positive comments about the luxurious level of service and professionalism, the distribution of positive and negative views on customer service favored the latter.In many contexts, customer service is an important part of the experience of duty free shopping, because it involves not only the sales staff at the individual shopping locations, but also the support staff for the operators and the airport and even the airline employees, and the economic activity is also beholden to the numerous rules and regulations associated with duty free purchasing for travelers. If everyone in the chain of service is working together and providing the same information and level of service to the customers, then this would improve sales given that many are put dissuaded from buying because of poor customer service or the possibility that their goods may be lost or stolen.One unexpected observation from customers and staff was the importance of uniforms and their positive impact on the buying experience, making people more comfortable in the shopping space. Uniforms are a good way to distinguish the staff from other business travelers.

In many airports such as Bandaranaike International, which features two duty free operators, there are no standardized uniforms that distinguish the merchants from the travelers. The same applies to many other airports in Asia, the Mideast and the West. In some cases it is extremely hard to distinguish who the floor staff is for the operators because they dress the same as the hordes of business travelers. The use of bright teal duty free staff uniforms in Dubai is very effective from the consumer perspective because it distinguishes the guests from the staff, and it’s very clear that one can walk up to a person in teal and they will be able to facilitate your needs.

On the issue of trust, many fliers think they might get tricked or deceived by sales staff. This is a huge problem for the airport operators and the shops to mitigate on several levels. Primarily, they must ensure that the hiring process screens out applicants who are untrustworthy. Those who have dubious histories including criminal records or fraud convictions should not be working in such a place. It is important to ensure that the staff does not simply care about the bottom line or meeting sales benchmarks at the expense of the customers. If a consumer is buying goods that will not be able to make it to the traveler’s destination for various reasons, sales staff should be knowledgeable enough to recognize this when such issues come up in discussions with customers, and trustworthy enough to inform the customer that they should select a different item to purchase or wait to buy the item at another time.

This would have a long-term impact of improving customer perceptions, given that supposed trickery by sales staff is a common experience among travelers in airports throughout the Middle East and world. Over two dozen international fliers recounted stories of losing products worth over hundreds of dollars, euros and pounds, or even missing flights due to issues related with duty free allowances.Adequate training to ensure understanding and compliance of rules and regulations is a key for the duty free operator management. The duty free staff must be able to answer complicated questions about layovers in the European Union and other potential situations where their alcohol and other duty free goods could be confiscated before being able to board again for their final destination flight.

Based on hearing first-hand complaints from fliers and numerous accounts from airline staff about products that had to be left behind due to miscommunication, it seems this would be an area that is in need of improvement at every level. Better customer service and communication would ease the concerns over duty free shopping problems for new fliers, infrequent fliers, and experience fliers alike.Communication & MarketingCommunication is a very important factor in the marketing mix for operators in several ways.

This goes far beyond the aspect of “promotion” because it emphasizes the feedback dynamic between the customers and the business, whereas promotion suggests a one-way flow of marketing information (Dahlen, Lange & Smith 2010). Based on observations and interviews in several Middle Eastern and Asian Airports, this is one of the more challenging aspects to get right. This is because wherever there is a large degree of cultural and linguistic diversity, there can be serious problems with communication between the staff and the customers, as well as in terms of understanding the marketing messages.

In European and American airports there are a larger number of mutually intelligible speakers based on observations, so there were less apparent issues of communication between staff and customers. In places like Dubai, the diversity of the staff is an asset which helps to prevent the loss of sales due to cultural barriers at this intersection of the world. DDF also provides promotional material and instructions in many different languages, as do many locations run by Nuance and other operators.

In some smaller airports, a person unfamiliar with the language being spoken and the text of the advertisements would not be as willing to shop and buy as someone who did understand and connect with the business staff and marketing message.Effective cross-cultural marketing is critical for the success of firms conducing international or trans-national commerce for a diverse and globalizing body of consumers (Rugimbana and Nwankwo 2003). This is especially relevant for the economic activity in the duty free shops of international airports, where fliers and staff come and go from all corners of the world. Based on observations and interviews, this was an area where some operators and shops excelled in; a good example of such successful marketing efforts were the annual Chinese New Year’s promotions and sales in many duty free shopping spaces, from DFS Abu Dhabi to WDF’s Heathrow shopping area – which were geographically distant from Asian airports where increased buying activity is a staple at that time of year.

These operators recognized the importance of the growing Chinese segment of the market and targeted Chinese travelers and those of Chinese origin living abroad. According to one manager of a brand store in Abu Dhabi, recognition of national holidays is a good way for retailers to promote goods for specific audiences many times per year and as well as promote images of diversity which help sales in general. When asked about emerging demographic trends, the rise of Chinese and Asian fliers came up time after time – this is clearly something that will require consideration across the industry.Cross-cultural CommunicationBeyond the marketing messages, cross-cultural communication in general is important to consider in the duty free context as well. Leveraging cross-cultural communication to facilitate buying within diverse consumer groups can mean the difference between commercial success and failure.

Based on observations and interviews with customers, it seems customer service is an area of potential improvement in several airports and was the reason behind some shoppers choosing not to purchase. From asking store and operator managers about this area, it is clear that this may be one place where the expectations of the customer do fail to align with the view intended goals of the businesses. There are many things that the current duty-free operators and shop personnel are generally doing right, but there are also many areas for improvement across the board.

One of the most basic problems encountered at duty free shops in Asia was linguistic and cultural hindrances and the customer service issues this caused, according to many leisure travelers. One family praised several smaller Southeast Asian airports for the English skills of the local staff which “made all the difference” – compared with much larger, more modern airports in China and South Korea where fliers frequently reported the inability to find someone who spoke English somewhere they wanted to shop. When asked about how to seek and maintain a competitive advantage, one manager of a fashion brand store commented that “improvements in cultures and languages were the most successful element” of stronger earnings for the location in 2012, because of the ability to reach out to more customers; seven languages were spoken among the employees of the store. In airports in the UAE and other Arab countries, there are increasingly efforts to show that national Islamic rules and regulation can co-exist in the context of international business.

Cross-cultural communication and understanding is integral for the success of the duty-free operators. Due to the ongoing process of globalization, operators and businesses must be able to adapt their business operations to work in all different types of cultural contexts, and must be able to sell to a diverse body of potential buyers (Rugimbana and Nwankwo 2003). For consumers, the inability to smoothly mediate commercial exchanges between those of different cultures is a critical part of the duty-free shopping experience and it can make or break a transaction.

This is a potential hindrance to the buying experience and some consequently avoid dealing with duty-free shopping altogether. One misunderstanding, total failure to understand, or even an accidental cultural or religious slight can breech the trust and shatter the relationship between customers and firms, and this should not be discounted by management. I witnessed numerous examples where cross-cultural communication failed in the duty-free zones. For example, a mandarin speaker was trying to buy jewelry items in one of the Abu Dhabi duty free stores, but they were unable to hold any conversation with the clerks. He was unable to find out about the quotas and restrictions, or even inquire about purchasing from the store. The man was trying to ask for an additional number of goods to purchase, but the English and Arabic speaking attendant could not help him.

The man left that particular shop without having bought anything, another lost sale due to cultural blockades. Shoppers of Chinese nationality have visibly increased in a short period of time due to the rising middle class in that country, an observation confirmed and emphasized by staff. One trend in international transportation is the continued growth of Asian economies, which translates to increased international travel for those from the region. This is reflected in the staff members as well. However, there are still problems like the situation that was witnessed.

It is important to note that there were in fact Mandarin speaking members of the DFS staff who were present in the open shopping area, but this did not help the shopper because the shop staff was unable to direct him to where he might be able to get instruction from staff in his own language, and it didn’t seem like they were able to communicate with him at all beyond meaningless hand gesturing that had no apparent impact. Staff of the shops should be on the same page as the service personnel for the operator and the airport, so they can actually utilize the diversity and language resources on staff when this is a possibility. Similar situations were witnessed in Dubai with other foreign shoppers where sales were lost due to obvious linguistic barriers.According to the website for Dubai Duty Free, there are forty-nine national origins and over twenty spoken languages shared among the 5,600 airport staff (Dubai Duty Free – Careers, 2012). Indeed there is much diversity seen in the staff when walking through the shops. However, this strength of cultural and language diversity cannot be effectively utilized if customers cannot be pointed in the right direction or made to feel understood by a knowledgeable staff member. If the merchant and customers do not share a common language, then they need to at least understand proper procedures and customer service techniques for such a situation.

Staff should have basic skills in foreign languages including an understanding of numbers and how to talk about product quantities and currencies, to understand if someone is trying to refer to an item in the terms that are familiar with him or her. This would be a good way to increase understanding without greatly raising overhead because the training would not necessarily have to be costly or lengthy.Because there is already a practice of diversity commitment and employing people of various backgrounds to service an international clientele, workers need only understand how to get the person help. There are multilingual signs throughout many airports including Dubai, and one quick and easy way to improve possible conversions with foreign customers would be to miniaturize these types of multilingual communications into documents for staff.

These sheets or posters could include a matrix of key phrases and numbers that could be involved in the transaction process, juxtaposed with written and phonetic renderings of those key words and phrases for each of the top 5 or 10 languages spoken in the airport with the most frequency. It would not be feasible to train the entire staff in the many languages which may be spoken by the potential travel customers. However, it would be a good investment to insure that the emerging demographics of fliers are considered in the future cross-cultural communications training for staff.Beyond the basic communications there is the important element of cross cultural understanding in relativistic terms. Employees must understand that the way they are used to doing things in their country or region is not the only way things can be done. In general, most staff at airport duty free shops seemed accustomed to dealing with international customers, although there were the aforementioned language barriers and a few other incidents. At one of the registers in the Abu Dhabi duty free shops one employee looked shocked, offended, and possibly scared by the haggling of a buyer from South America. Afterwards the man stated that he was used to the barter system and thought that he might be able to negotiate a lower deal.

However, the staff member said she was new and had never yet had anyone try to argue with her so aggressively about the prices. Bartering is a staple practice through every continent and especially in the Middle East, more widely practiced in some countries and regions more than others, but the woman said she was afraid by the man’s actions not realizing this was normal consumer behavior in many markets. Had she understood that she may have been able to persuade his purchase through offering a sanctioned gift for example, and would have felt more comfortable in doing her job and diffusing the situation?4.

4 Web Presence and New MediaWhat much of the previous research on duty free shopping has neglected is the role of the internet in the shopping process for travelers who are potential duty-free buyers. In today’s world, many prospective fliers turn to the internet and search engines to discover more information about the duty free shopping experience and what products are available and how it all works. However, the results that they get from their searches are not always ideal. Many fliers relayed that they had read “horror stories” online that disincentivized them from shopping for various reasons. A major reason that fliers gave for passing on the chance to buy duty free products because of what they read online is that their items might be seized before they arrive home for because they exceeded the quota on goods such as alcohol and tobacco. In Dubai and Abu Dhabi, some fliers had read that alcohol consumption was illegal and thus thought that this meant the airport did not sell alcohol or that the customers could get arrested for purchasing any liquor. Both assumptions were of course false.However, many fliers encountered who were misguided had actually searched the internet ahead of time but still did not have the accurate picture of what was allowed or not.

It seems that the problem is two-fold; the web presence of duty free operators in general is often curtailed by the much higher-ranking sites that often have old or erroneous data, and furthermore the web presence that they do have is insufficient.Based on lack of knowledge from interviewed consumers and web research, duty free operators should invest in search engine optimization campaigns as well. This is because, with a few exceptions, the web sites for duty free shopping organizations do not rank well on the search engines such as Google for most general searches. Instead, forums, online communities, and Question and Answer sites dominate the listing regarding duty free merchandise, prices, and regulations in general and at specific locations. When fliers are interested in how much alcohol can be transported from one place to another, their web searches would likely produce out-dated and contradictory responses to their inquiry.It cannot be assumed that users will always select the most efficient search query, so it would not be effective to advertise and optimize the content of the site for only one specific keyword. For example, if a potential customer were to preemptively search “duty free tobacco allowances Heathrow” or “Duty free alcohol allowances Dubai”, they would immediately be shown relevant, primary material from the actual airport and operator as the first search results.

However, if someone queries something along the lines of “How much alcohol can I buy in Dubai?”, there is not one authoritative link on the entire first page of results. Many of the results are forums that feature years-old posts where people argue about quantities, mope about prices, or relate horror stories about their duty free purchases being confiscated or stolen. If the operators were to optimize for keywords such as this, then that would greatly reduce the chances that customers would be dissuaded from buying because the customers would have the updated, correct information and be a good way to counter-balance the mass of other material on the subject of prices, allowances, and other rules that are involved with the duty free purchasing experience.None of the managers or staff of the brands or operators mentioned social media by name without being prompted. When prompted, it was not a subject of critical importance to them. Social media is generally viewed as something handled by some other part of the business that the staff is not too familiar with or concerned over. However, it was very important for the customers, especially young adult shoppers.

Viral social media marketing campaigns are a good way to generate buzz without the overhead associated with traditional marketing. Duty free operators would be wise to expand their promotions and presence on networks such as Facebook, Twitter, Linked In, and other Western sites. However, the companies should not only focus on the Western-based sites such as those but also look to service their own domestic and international online communities, especially those communities emerging from countries with growing economies and growing international travel trends. Chinese social networking sites such as Qzone, Sina Weibo, and Renren each have over 150 million users, and Orkut is popular in emerging markets as well.

Vkontakte and Odnoklassniki are two main Russian social networks for the general public that are ranked within the top 100 on the Alexa global page rank charts (Alexa Top 500 2013). The common factor with each of these services is that establishing a presence on them is absolutely free, but with a few exceptions the major duty free operators have not chosen to do so. Advertising costs to promote the page or any special deals would be less than traditional search engine advisement through Google, Bing Search, or the Microsoft Advertising Network. Although advertising on Facebook is technically more expensive that the other services, it is absolutely free to create company pages and eye-catching promotions and sweepstakes.Cross-cultural emphasisNaturally many duty-free operators do advertise on traditional Western search engines and content networks, but there is an apparent lack of cross-cultural focus where they could have a competitive advance by branching out into new digital markets to advertise and inform potential customers.

One of the largest growing customer segments in duty free trade is with Chinese buyers. Baidu, a Chinese search engine, claims to represent over 70% of total queries from China with a global Alexa rating of 5 and a Chinese Alexa rating of 1 (Alexa Top 500 2013). In other words, it’s likely the most popular site in China – but from researching the search engine results there are no foreign duty free operators advertising to this huge market segment on this platform and other search engines besides the dominate Western ones. An added bonus of branching out onto these search engines would be that the investment would be minimal compared with the costs of CPC advertising on the aforementioned western-based web services.The result of better internet marketing would be a substantial increase in the amount of trust potential buyers would have when flying to a new place. For many experienced fliers and long-time duty free shoppers, they confirm that it’s fairly easy to adhere to the rules and they essentially know what they are doing. However, young fliers and those inexperienced with international flying were oftentimes confused and got contradictory answers from the internet, airport staff, duty free sales staff, and other fliers.

For some, the process was admittedly overwhelming. Many who would have otherwise spent much more on goods decided to purchase extremely small quantities or only buy one or two items “just to be safe”. Some of those in the departure zone did not even shop at all even though they wanted to, because the process was just so uncertain and confusing.Another observed customer qualm was the issue of confusion of where to find certain stores and items. For smaller airports with duty-free shops, this was not as important of an issue for consumers. However in Dubai Terminal three there were people who were just lost trying to find what they wanted to get on a tight schedule.

Some transit passengers have such a small window to pass through the shops and get what they want before they have to catch the next flight, and in this case the sprawling ocean of shops is a potential limitation. For the operators, besides maps in the actual store, it would be a good idea to optimize for queries involving where to find a product, store or brand in the shopping area so that those looking for such information ahead of time can more easily find it. Also, it would be an effective strategy to have a “map” link or some dynamic visual index of where to find what the customer is looking for quickly, easily, and ahead of time.

Based on observations and interviews, this could prove to be a worthwhile investment, particularly if implemented well on mobile platforms.In terms of the websites themselves, it would also be a good idea to introduce more content onto their sites. About half of the fliers spoken with in Dubai and Abu Dhabi had gone to the internet for information within the week before their trip, but less than one-third of them had actually been on the official sites for the duty free operator (DFS and Dubai Duty Free) and stores.

This is surprising given that they have such a strong web presence compared with many of the other operators at other airports.Even Heathrow and Dubai, with two of the best presences, have many ways in which they could become even better. Besides pursuing more effectual online advertising and SEO for the existing content, one way the operators could dramatically improve their web presence is to simply have more content. Currently many of the sites for global operators only have a dozen pages or less on their domain, which leaves much room for improvement. One of the best ways to drive traffic and catch consumer attention is through more multimedia content and pages such as “top 10” “top 5” lists. For example, the operators could have page that features “top 10 favorite products for Heathrow shoppers” or “Top 5 must-see luxury items at Dubai Duty Free”. Along with more content the operators could also welcome more social input on actual sites, not just leaving that element for the social networks and travel forums. This could take the form of a proprietary online community or multilingual forum linked with a points reward system to attract users, or even just a comments section for feedback on some of the new posts, especially the subjective ones such as the “top” lists.

This would be different that the forums because it would be an opportunity to promote constructive input from users, while still being able to moderate out or directly respond to erroneous or angry comments and misinformation because it would be hosted by the organization itself. This would encourage more incoming traffic through links and possible viral traffic, and shoppers could get involved in the comments section and encourage other potential shoppers by suggesting items or shops that weren’t on the list as well. If a prospective customer sees other customers raving about a particular place, then this is akin to word of mouth advertisement and would make the traveler more likely to remember the suggestion and possible buy those products when the time comes to actually shop.

There could be fears from the operators that this abundance of new information could get in the way of communicating core items of information to the fliers. In order to distinguish this content-heavy area from the core site with the official technical information, operators could sequester the new content onto a subdomain of the site or onto affiliated linked-back sites as with the many official Dubai Duty Free promotions pages. This would allow them to excel in the search engine rankings without compromising the communication of the technical regulations and quota information and links to relevant government agencies.

The internet could also play an important role in mitigating consumer fears and frustrations before their trips in countries in the news for unsightly reasons, and thus encourage them to not withhold their money. Many of the transit passengers in the United Arab Emirates were extremely familiar with the negative publicity the country has received in the press; this is particularly true for the ubiquitous British fliers and other Westerners. There have been numerous Brits who have been arrested, allegedly tortured, and even allegedly killed by the authorities for seemingly minor transgressions. In addition to pursuing reform with the own justice system and government, the internet and other media would be a good way to tout the existing rules and regulations to better ensure that fliers aren’t leery about purchasing alcohol or other goods because of the stigma associated with alcohol-involved offenses.In general, social and environmental responsibility statements can help to ease some buyer concerns and are included on the websites of countless large companies; in theory, the effective marketing of such initiatives is correlated with greater competitive advantage (Porter and Kramer 2006). Some American fliers staying and passing through Dubai made comments about global warming, both in jest and in all seriousness.

One woman on a delayed layover exclaimed that she would not be shopping to support “the master polluters” of the world. This means that the sustainable transportation initiative they launched to “educate and encourage the community to play an active role in sustainable transport” largely fell on deaf ears for her. Clearly not everyone will be moved by public advertisements of such programs, but it is at the very least an important symbolic act that can help show concerned travelers that they do care. More online and public in-shop promotion of these initiatives might help to increase sales.Contest ; Social MediaContests and promotions are effective ways that duty free operators can help encourage more traffic through the shops and boost the economic activity for the businesses and airport. A good example of this is the many prizes offered by the Dubai Duty Free contest program (Dubai Duty Free – Win 2012). Some of the possible prizes that travelers could win include a new car, and there is even a prize for one million US dollars. These prizes are only available for duty free shoppers and they can be purchased from within the duty free zone itself, or online where shoppers can come and redeem their drawing entries in person.

According to the Dubai Duty Free website, there have been some winners of the million dollar prize who have won more than once (Dubai Duty Free – Win 2012). The stated odds of the drawings are extremely low compared with commercial lotteries such as the state lottery systems in the United States. This embodies the concept of exclusivity that is found in the duty free shopping areas. The tickets may cost hundreds per try, but there is a much smaller pool of entrants and thus much higher odds to win the grand prize. If you are already expending the funds for international travel and transiting through a place like Dubai, then there is already a predisposition for spending more on exclusively marketed goods or services including the lottery drawings.In every situation, depending on the level of demand, it might not be an economically viable offering currently. However, in the Dubai Duty Free shops this is an effective tactics for that the operators have used, based on the consumer response.

The signs and promotional materials generated a lot of buzz and made it seem like a little Las Vegas environment for some of the shoppers who purchased tickets. One man boasted about buying one ticket for his each member of his entire family; even if he didn’t win, it was a status statement that he could enter such an exclusive contest in such a luxurious venue.Even if the shoppers were not buying tickets, it was still generating buzz and making more customers expressly more excited about the shopping experience. The range of various public promotions and contests enhance the excitement level in the atmosphere. It may also have the effect of democratizing the shopping experience and having a positive effect on encouraging fliers to purchase goods, because it promotes the notion that anyone can be a winner, which is a positive message in a place which may be haunted by connotations of extreme wealth inequity and unattainable fortune.The Facebook-based “World Traveler Contest” by Delhi Duty Free is a good example of using social media for even broader potential customer reach. Their contest is open to the general public, not just the customers or future customers of the duty free spaces, and it features the possibility of winning a range of products and free global trips for correctly answering questions about different brands carried by the operator.This is a way to advertise to target demographics, such as those young professionals with growing incomes who are likely to be active on social media.

Within the promotions and advertising backend on the social media platform there is also the ability to micro-target very specific demographic groups by age, race, gender, education level, and other factors. Targeting based on user “likes” and listed interests is also an extremely effective way to attract new eventual buyers through the simple appeal of a game-format contest.The contest itself is based in a game format, asking users “How well do you know your world and its brands?” (Delhi Duty Free 2013). In the contest’s game, players must identify brands from stable duty free products such as The Famous Grouse whisky, Calvin Klein fashion items, Benedicts chocolate bars, and Frescobaldi wine – and then they can be entered into the contest for a chance to win prizes.The Facebook page of Delhi Duty Free also shows a great example of low-overhead marketing that can generate interest in the duty free shop and excitement and recognition of the brands it carries.

It features hundreds of wall posts with rich visual content asking users to post about the brands and products. These include quizzing users to identify what brand of luxury bourbon the page just posted, or what they might rename a certain product. This is successful because it generates more recognition for the brands and the duty free shop, as some posts have hundreds of likes and comments where users go back and forth discussing a product. Naturally all of these comments are on the sanctioned Facebook page for the duty free operator, so it is easy to filter out spam, abuse and negative comments in order to amplify the positive associations potential consumers have.The less popular Facebook page for Duty Free Stores New Zealand (Duty Free Stores New Zealand 2013) takes the collaborative communication with customers and potential customers a step further. It actually presents different products and asks users to tell them which one they would most like to see on sale at the duty free shop in the upcoming week. This is a way to drive traffic to the stores because if someone who is flying soon votes on an item, and then sees that item advertised on sale in the duty free shop, there is a personal connection to it and they might be more inclined to purchase the item.

This is because there would be a feeling of personally contributing to the merchandizing process and it would enhance the connection between the user, the brand, and the responsive duty free operator.It should be noted that the largest duty free operators have not capitalized on this media as well as the aforementioned operators. For example, World Duty-Free’s Facebook page (World Duty Free 2013) advertises contests and product sales, but comparatively fails to generate the user traffic and community engagement from customers and potential customers. For example, many of their postings have no comments and only a handful of “likes”. Also notable is the fact that they present products and prices for users to “check out”, more so than actually engaging users or asking for feedback could help influence in-airport marketing and promotions. This suggests that their message is not reaching and resonating with consumers because of poor SEO and social media marketing and user engagement, as well as a detachment of the web campaign from the promotions in the actual store.One curious finding was that Dubai Duty Free does not maintain an active Facebook page for its shops, but there are official pages for its sponsored events such as the Dubai Duty Free Tennis Championships. This is a huge example of an opportunity for improvement in their online presence.

Even some duty free shops within the shopping area have their own sites with thousands of followers, and a dedicated Facebook site for the actual operator would inevitably attract hundreds of thousands of likes and followers were it maintained and socially promoted as well as the sponsored event pages, which are highly visible and clearly popular among international users.Although Dubai Duty Free does not meet its marketing potential with its Facebook presence, there is a significant presence on YouTube. Many of the other major operators are only on social networks such as Facebook and occasionally Twitter and Pinterest, but there is not a significant presence on YouTube.

The official channel for the Dubai Duty Free sponsored event features tennis stars telling about the airport, country and shopping experience. The videos for many other duty shopping areas in other airports feature user-generated content and walk though reviews of the airport. These can be beneficial for the airport if they are positive and generate publicity, but this leaves a large opportunity to publish their own content, create their own narrative and strategically promote certain shops and brands, while still having the ability to directly promote videos and channels and monitor the comments and feedback that is generated from the video. Potential customers would be more inclined to shop if the benefits of the shopping experience were conveyed by the expert marketing team of the airport operators and not some random user on YouTube. In the coming years the operators and stores alike will likely better utilize these resources, which are typically effective, low-cost, and forward-thinking ways to reach diverse emerging demographic groups worldwide?4.5References Alexa Top 500 Global Sites. 2013. Alexa Top 500 Global Sites.

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