Security is a state of Mind

As I always say and believe, Security (and insecurity) is a state of mind. The recent security alert issued by the US about an impending threat at New Delhi proved to be wrong timing; within hours of such a statement, Times Square at New York was in the News for all the wrong news. An unidentified car was found at the corner, security was alerted, a bomb was found and diffused, which was later pronounced by the officials as an amateurish attempt. All said and done, it did spread some scare all across. And the US once again bore the brunt of its lax security, while always preaching nobility to others. WSJ interviewed some tourists at Times Square if they would continue their trip and the answer was obvious – Yes! Life has been very different for all of us around the world since 9/11 and 26/11 (in India at the Taj) was the scariest that we have come close to. Yet, life moves on. The Ball Room of The Taj and some parts of The Oberoi at Mumbai that were closed in Nov. 2008 were reopened a few days back although the memories of those “48 hours” still haunt us a lot. Airport security has been apparently beefed up ever since, but honestly I don’t see much difference, atleast in India. At several Indian Airports, many of the security counters are not deployed even during peak hours and the guards who are overloaded as their colleagues who are busy chewing peanuts and engaged in busier conversations, one could imagine the vigilant security of the officers in charge. Those who frisk passengers do not bend until the feet of passengers – either they have back pain or think it is below their dignity. Whichever way, laxity at its best!

Last Thursday while on a trip to Delhi, I was awaiting someone around 7pm at the busy Connaught Place near Palika Bazaar where a bomb exploded a few years ago. There were atleast 500 people moving around rapidly (there is a metro railway station underground and from here, one can reach almost all corners of the city in just a few minutes). An hour back, I had walked two prominent parts of the CP Shopping area – large cutouts and scaffoldings disrupted walkers; I was told that this was an attempt by Delhi Municipal Corporation (MCD) to beautify the CP Blocks ahead of the Commonwealth Games later this year to impress the visitors and the world. A few hundreds of workers are sweating it out day and night to finish the civil and paining works in time. Amidst all the chaos, people were on the move – to pursue their routine work. I went to a nearby dustbin to stash my water bottle and suddenly, i could sense a panic – what if? What if there was something in this bin like it’s been always! It took me less than 30 seconds to come back to normalcy. And life moved on. It was the same at the newest Mantri Mall in Bangalore where I was on Saturday evening on a routine Retail study. And the scene was the same. A few thousand shoppers criss-crossing the busy Malleshwaram area and the Mall, unaware of the security alert issued by the US...

So, would such security alerts deter shoppers? What should the Shopping Centres, Malls and Retailers do to counter such situations? The least one can do is to maintain vigil. What’s required today is to be aware of what’s happening around. This could have averted an incident such as the one that happened at The German Bakery in Pune. Malls and Retailers today have deployed security staff at their entrance – to frisk and check visitors, but this is again a joke. No one really knows what these detectors can find. However, this is atleast a beginning. With summer holidays already in place and shopping & recreation coupled with vacations being planned, I sincerely doubt if these “alerts” would really hold us back. After all, Insecurity is a state of mind and one has to conquer it from within.

Duty Free in India – a fiasco or a success story in the making?

“Nuance Group (India) to exit Hyderabad Airport Travel Retail as new Tender looms” read the headline on The Moodie Report – the most respected and authentic Travel Retail news site that never sleeps. Even though the Publisher Martin Moodie, Deputy Editor Dermott David and many other senior people were stranded over the past 10 days due the flight disruptions caused by E15 (that’s the short code for the Icelandic Volcano), the news website kept going. Such is the commitment of the people behind. Back to the headline, which also appeared in a leading Indian newspaper a few days ago, it was indeed a surprise for many of us in the Industry. Or should we say was it a surprise that the news came so late! Well. 

The Nuance Group that operates over 400 shops across 60 airports and 20 countries worldwide and which is among the largest Duty Free operators in the world entered India in the year 2006, with a JV with Shoppers Stop, India’s leading retailer. The JV was specifically formed for the Duty Free tenders that were coming up then, at Bangalore and Hyderabad for the two new Greenfield airports. It was quite a surprise to see this JV and so were many other partnerships – The Oberoi Group with Heinemann, for example. It was the first time that international players were setting their eyes in India. It was initially India Tourism Development Corporation (ITDC), a Govt. Of India undertaking which was the monopoly operator across Indian airports over the past 3-4 decades. And then came in the private monopoly of Flemingo since the turn of the 21^st century. This was challenged by the International players in 2006 when the top five Duty Free operators of the world including Nuance, DFS, Dufry, Heinemann and Alpha participated in the tender process of BIAL. The line-up and interest in the Indian Duty Free was so impressive that many in the industry were hoping for better days ahead, guessing that the international players with their global exposure and best practices would mark a change in the country. Wish dreams were horses!

The first International player to win a tender in India was the Nuance-Shoppers Stop JV at Bangalore International Airport. This was followed by a similar success at Hyderabad International Airport. Other players such as Dufry and Heinemann made a quiet exit from India heading back to their strong bases. Alpha, which had been operating in Kochi and Colombo for over 10 years went back to focus on its territories.

A lot was anticipated by the Industry from the Nuance-Shoppers JV since its victory from the tenders at Bangalore and Hyderabad. With their impeccable track record in India, Shoppers Stop was expected to put things into perspective and bring some method to madness in this crazy business. After all, travel retail was, and is still a very nascent industry in India and who would believe me as an Airport Retail Manager a few years ago when I would say passengers would buy not just books and magazines, but also diamonds, watches, t-shirts and perfumes, even in the domestic departures of the airports! Shoppers Stop is doing an excellent job and one can see this at the Bangalore and Hyderabad Airports. And Nuance, with their global experience and success was expected to negotiate the best rates from its suppliers and pass on the discounts to its customers at the International Departures and Arrivals. Needless to say, this is a true story today and the duty free stores in Bangalore and Hyderabad have been the favourite for most International passengers in recent times, surpassing erstwhile favorites such as Dubai, Singapore and Bangkok Duty Free.

So, what really went wrong at Hyderabad? Honestly, I wouldn’t like to speculate. But there are certain points that were evident with their business model, some of which are discussed here. Sure, these are observations of yours truly and a few people around while personal thoughts of some of the readers may differ. To begin with, the size of the market was over-estimated. Going by previous experiences, the incumbent Flemingo who was operating at the erstwhile Begumpet Airport at Hyderabad did not have such a large duty free area. This, in my opinion should have been the first learning. A large airport doesn’t necessarily mean a large Duty Free Store, many of you would agree. Next, the range included high-end premium products including Scotch and Cigars, which was probably not required. The reason for this being over 60% of international passengers are either proceeding towards or returning from the Middle East and are blue-collared workers, whose primary requirements include some inexpensive chocolates to distribute among friends and family, low-cost tobacco products, whisky and rum. And most importantly, over half of all passengers belong to the Muslim community who do not consume any form of alcohol. This, according to many in the industry was the most important point that should have been kept in mind. Indeed, for the reasons mentioned above, it was widely expected that Alpha Duty Free, now a part of the Autogrill Group, which has been operating in Cochin (with similar consumer profiles) could have been a better bet for this airport.

Most recently, middle of 2009, there was an unsavoury incident at Hyderabad Airport where some of the staff of the duty free were allegedly involved in a racket that included illegal smuggling of customs bonded goods. While the words may sound alarming or confusing, what was happening actually was that the staff were taking goods out of the store that were not purchased by passengers, but by illegally using their personal details. This, according to some in the close vicinity of the Operator as well as the Airport Management was the last nail on the coffin. Afterall, the GMR Group which operates and manages the airports in Delhi and Hyderabad was in no mood to continue a situation that would give it disrepute in any form. The new Terminal 3 at New Delhi is nearing completion and once finished would possibly be the best terminal in India and among the best in the world. So, the latest news is that a new tender is being called for and the new operator “may” have a Joint Venture with the GMR Group directly, just like how Aer Rianta has entered in Delhi.

Having said all of that, Nuance has done a commendable job in Bangalore over the last two years and this is also a reflection of their best practices being continued – they are also doing great in Zurich Airport, which happens to be one of the main shareholders in Bangalore Airport. Their achievements in Bangalore include bringing for the first time in India a Formula One Racing Car to many other exciting promotions that have never been tried in the country. While there is wide speculation that they would wind up their India operations  (naturally by the Indian Media coz they love doing it), many in the know are unwilling to believe so. Bangalore Duty Free, if done well in the years to come would be not just among the most profitable to the operator, but has the possibility to be one of the best in the world. Nuance has proven time and again that it is THE BEST Operator at Singapore and Hong Kong and understands the pulse of this market quite much. I am sure the business will flourish well in capable hands and continued mentoring and look forward to its wining accolades in times to come. So, where is the Indian Duty Free heading towards? Just wait until T3 opens - and the new integrated Terminal at Mumbai International Airport. Just a matter of time, when Indian operators will show the world how this business is run best. Cheers. 

Pay online and gain rewards!

Many of us have been transacting online since the last few years and the size of this market has only been increasing. Most International and a few Domestic Banks provide Net-Banking facility at no additional cost to their customers and this means the customers can use their Debit/Credit cards to perform various transactions –to transfer funds to other accounts within and outside the customer’s own bank; to purchase financial products such as Fixed & Recurring Deposits, Insurance, Stocks, etc.; and of course, to shop! When I mean shop, one could buy almost anything that one desires – from groceries to stationery, cars to real estate properties. Needless to say, one needs to use his/her own prudence while shopping online – whether using a Debit or a Credit card as it is a natural tendency to spend as much as possible, given the various exciting promotions and offers that compel us to “consume” more. Internet payment security has been a great concern over the past years but that’s improving day by day with Banks and their payment gateway partners (third-parties who process the transactions on behalf of the bank’s customers) upgrading their back-end continuously, to ensure that the transactions are not spammed by malicious intentions.

Online shopping has been in existence since late 90s – with many Airlines and Online Travel Agents (OTAs) notably starting the trend. For the sellers, it was mere savings in their operating costs – there is no need for precious real estate and manpower to conduct these transactions; for consumers, it was saving time and effort, and of course, a better deal at the touch of a button. In India, Air Deccan (which was later taken over by Kingfisher Airlines) was among the first to popularize this trend. Over the years, many Retailers such as Shoppers Stop, Crossword, The Future Group, PVR Cinemas, etc have been using this potential in their favour. Then there are generic websites such as eBay and Amazon who have been pioneering this concept since the past decade, where one can purchase almost everything under the sun. Having said that, the size of the Online Shopping/transacting market is not yet very big in India. There are various reasons that one could find that deter people from transacting online, security being a major one but most importantly, it is the “habit” or the lack of it. I know many of my friends who have been living in the US or Europe who shop online for as many products – from hand wash liquids to food items to shirts and ties. That’s because of previous experiences and yes, standardization of products (including Quality and Delivery). I remember when I was at my friends’ place in Hong Kong last year we called and ordered full-fledged meals for three days from a small time Indian Restaurant – order placed, payment done instantly online and food delivered in less than 30 minutes. So, if it can work well in HKG, so be it in BLR as well!

While retailers have been encouraging consumers to shop online more often, Banks and credit card issuers have been doing their bit too. One of the most popular ones in recent times is the initiative by Visa. Visa has its own website aptly named visabillpay.com and the Indian version called visabillpay.in. One can register and pay bills online instantly across various service providers such as Regional Electricity Boards, Mobile and Telephone service providers, Insurance companies, etc. using all Banks’ cards which are issued by Visa. Since the payment gateway is managed by Visa, security factors seem to be well in place. Apart from providing the bank login details, one needs to provide the authentication grid details as well – three out of the ten two-digit numbers that are behind every card issued (recently) must be keyed in to complete the process. Visa, on its part takes special initiatives from time to time. When I had registered two years ago, they had a simple yet effective and compulsive scheme – when a bill is paid through the website, the user gets a 5% cash back subject to a maximum of Rs. 50 per transaction. Recently, they have come up with more exciting offers and have been repeatedly announcing this through the Print Media (across various national publications). As a limited period offer, for every five bills that are paid through the website, the user receives a Gift Voucher from PVR Cinemas. And for every bill worth Rs. 800 or more that is paid through the website, the user receives a Gift voucher worth Rs. 150 from Pizza Hut.And there are some other exciting offers too... 

There have been many programs in the past to reward customer loyalty. But this is a bit different. Needless to say, this is among the brilliant campaigns that I have seen in the past few days when Retailers have tried every trick in the book to woo consumers. In this case, a very smart move by PVR and Pizza Hut! While it is bit more cumbersome in the case of the cinema, the pizza idea seems better. The consumption cycle is not just faster, but obviously the upside sales potential is higher. A family of four would order for atleast Rs. 300-400 during one purchase and the upside value is the hook. In case of PVR too, consumers would visit the cinema, redeem tickets against the voucher but buy food and beverage within the auditorium. That’s again a big opportunity.

In both the cases, chances that first-timers would get tempted are high. If someone has never tried paying online, then probably he would, with the comfort of paying bills online, from his desktop or PDA. In case the customer has never visited a PVR or has never ordered a pizza, then that’s again a great attempt to get them acclimatized to a new way of watching movie or dining.

Whichever way, the more you spend, the more you earn rewards. So, go pay! And get rewarded instantly.