For World Duty Free, understanding the unique environment and customer flow at the UK’s airports is vital to maximise sales. And having the right staff in the right place is key

World Duty Free

Case study

Find out how Kurt Salmon Associates has helped leading retailers reduce labour costs by 7.5% and improve customer service and loyalty by 20%. Read about the tools and techniques — and the results — that can be achieved by reducing the variability of performance between “the best” and the “rest” of the stores in your portfolio.

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Kurt Salmon Associates

The general rule in retail is that stores should be a destination in themselves, but that’s not the case when you’re selling in airports. And having queued at check-in and again at security, the last thing shoppers want when they get through to do their duty free shopping is to queue again.

Airport retailing is a complex business, but it’s a big one too. Market leader World Duty Free accounts for 20% of all the fine fragrance sold in the UK. But understanding the flow of customers and their differing needs is vital for retailing success.

The profile of the customer differs, not only between airports but between terminals within airports. At Heathrow, for example, Terminal 3 remains World Duty Free’s busiest store, ahead of Terminal 5, because the mix of airlines there means a higher proportion of big-spending shoppers from overseas.

Some airports, such as Gatwick, have a higher proportion of leisure travellers, while low-cost airlines have introduced another type of customer dynamic.

But whoever the customer is, they’ll only buy if the service and experience are right. “We need the right people to interact with our international customer base, whether it’s selling malt whisky or whether it is beauty,” says World Duty Free chief executive Mark Riches, who explains that in the past few years the old-school, hard-sell duty free model has changed beyond all recognition.

Key to running the business effectively is matching staffing to flight schedules. But that’s not straightforward because it isn’t just a case of looking at how many planes are taking off, but also where they’re going to.

“A flight to Lagos [Nigeria] is a big flight for us,” says Riches, adding that the schedules need to be analysed by spend per flight, the nationalities the flight will carry and the brands those nationalities tend to buy.

Planning is further complicated by the fact that some staff sit on the payroll of the big beauty brands, while others are paid directly by World Duty Free. Working with Kurt Salmon Associates, the retailer has been trying to optimise the deployment of staff on the shopfloor to maximise sales, at the same time working with the beauty houses to ensure the relationship works to the best effect. “It’s a unique proposition,” says Kurt Salmon Associates UK managing partner Helen Mountney. “You’ve got a captive audience but it’s a pressured environment.”

As well as optimising the manpower in line with customer demand in the stores, the first stage of the project also involved putting in place ‘customer service leaders’ to manage sales teams on the shopfloor. The sales force has been restructured, which Riches says is not cost-driven, although he adds that a bonus might be that “the result may be that it’s more efficient”.

The second stage of the project will involve the introduction of a new scheduling system. “We’re going to need some technology to enable us to capitalise on the work we’ve done,” says Riches.

But outside factors will continue to have an impact. “There are a number of factors out of their control, such as exchange rate fluctuations,” says Mountney.

The weakness of the pound has been good for World Duty Free. This, along with improved promotions and the work done on ensuring the right staff are in place, helped the business record a double-digit percentage increase in spend per passenger passing through the terminals - its key performance metric - during 2009.