Dubai Duty Free sets Dh7.7bn sales target with online initiative

Dubai Duty Free (DDF) aims to top Dh7.7 billion in sales this year, helped by its first major push into online retailing.

Part of that growth, which would represent a 10 per cent jump on its 2014 numbers, is expected to form a new sales channel offering more than 3,500 products online.

The move online is intended to save travellers time in Dubai's duty free shopping concourses offering a pay-and-pick-up service before travel. It also adds an additional sales channel where customers can compare prices before travelling.

Dubai will not be the first duty free to go online, with Germany’s Frankfurt, Singapore’s Changi, Sydney, Montreal and Zurich, all in the virtual space already.

DDF announced record-breaking sales of Dh6.99bn for 2014, a 7.36 per cent increase over the previous year.

“The online campaign began as a soft launch in September 2014,” said Colm McLoughlin, the executive chairman of Dubai Duty Free. “DDF has recognised the need to provide customers with information regarding the assortment and prices and also provide the facility for customers to reserve and collect in the event that they do not have much time to shop at the airport. It is early days yet, but we think it is important to make the investment in e-commerce as it becomes increasingly popular.”

He added: “I don’t think that it will ever take over from the in-person retail experience at Dubai Duty Free, where you have trained staff ready and willing to offer advice and to impart product knowledge. We think that this will be a good way to look at incremental sales.”

The airport-based retailer is benefiting from the rapid growth of Emirates Airline, which expects to carry 70 million passengers by 2020.

DDF will continue to enhance its retail operation with the ongoing refurbishment of Concourse C and the opening of a 7,000 square metres shop in Concourse D.

Global duty free and travel retail sales reached a record US$60bn in 2013. More than half of that business comes from airport sales. The strength of Dubai’s tax-free sales will be met with envious glances from the rest of the UAE’s retailers.

“The venture into the online channel is a move motivated by the growth of this segment,” said Nicola Kosutic, a research analyst with Euromonitor International. “Online sales are expected to grow by an average of 30 per cent over the next five years compared with 3 per cent for store-based retailing.”

Last year DDF recorded almost 27 million transactions - or more than 73,000 every day. With sales of Dh1.147bn, perfume – which contributes 17 per cent of the retailer’s total sales – remained the best-selling product category.

ascott@thenational.ae

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