Retailing an extensive portfolio of products exclusively to visiting cruise liners and ships at the Jebel Ali Port and Dubai Cruise Terminal, Duty Free Dubai Ports (DFDP) is owned and run by Maritime and Mercantile International (MMI), a subsidiary of the Emirates Group.
Ranging from a brand new state-of-the-art travel retail store at the Jebel Ali port to two unique mobile shops which can transport its range to customers right on the dock, DFDP operates seven retail outlets at Dubai Ports. The mobile outlets are specially modified trucks hosting a 40-feet long air-conditioned shopping area, stocked with shelves of duty free products.
Alcohol rules the business
From electronics, gold, personal care and toiletries to liquor and tobacco, DFDP’s product mix can aptly cater to its customers’ diverse tastes and preferences.
"[However], following feedback from our customers, alcoh olic beverages form the bedrock of our range. We stock familiar brands in the beers, wines and spirits category and boast very strong ties with the biggest names," says Chris Riley, Business Manager, DFDP.
In the scotch whisky category, its portfolio includes brands such as Famous Grouse, Cutty Sark, John Dewars White Label and Ballantine’s Finest — recently named the best Scottish standard blended whisky in the 2009 Whisky Bible, while in beer, its range boasts names such as Amstel, Budweiser and Bulmers.
Though DFDP stocks a wide range of alcoholic beverages at its outlets, beer and spirits mainly drive its business. "Our customers are mostly in the port working, and have little downtime. A cold can of beer or a dram of whisky is much more of a treat at the end of a shift than a glass of wine, which is usually drunk while dining," explains Riley. "Often, the crewmen don’t have the luxury of a sit-down meal while savouring a quality vintage. This is reflected in the mix of beverages that we sell. We, however, expect that white and dark spirits with new and varied flavour profiles will be of interest to our customers in the future," he adds.
Tobacco also plays a crucial part of its product mix, but it’s the electronics category that generates a significant chunk of its total sales. "Constant innovation keeps categories fresh for our customers and we have our ear to the ground for products which we know will capture their interest and needs. As our customers are extremely hard pressed for time — sometimes they are in ports for only a few hours — we try to cover their more mundane needs as well, selling toiletries, soft drinks and impulse confectionery, for instance" adds Riley.
Though the vast majority of its customers are merchant seamen from South East Asia, working on containers and cargo ships that visit the Port of Jebel Ali, crew of large military vessels, which often come to Jebel Ali port, also form a crucial part of DFDP’s customer base.
DFDP has created a walk-in humidor in one of its shops to specially cater to the US military, who have a strong tradition and affinity for Cuban cigars. It adds value to its customers’ shopping experience by recruiting trained and knowledgeable staff, apart from offering free accessories and hosting whisky and cigar evenings for them.
"As we are based in a marine location and our customers frequently work in rugged and harsh environments, we encompass this in our offering. Waterproof electronics, divers, watches and pocket tools, as well as beverages that have a strong maritime tradition are of particular interest at our shops, rum and navy strength gin, for example," points out Riley.
American beers are particularly popular and white spirits, including rum and vodka, also enjoys strong growth along with personal electronics, such as tablets, cameras and mobile phones, at the duty free outlets at Dubai Ports.
DFDP also runs monthly campaigns to push sales, which highlight its attractive offers and new products. "Our supply partners understand that we know our customers well and work with us to develop enticing promotions. For instance, we organised cigar evenings for US Navy officers at the Seafarers Club in Jebel Ali Free Zone in conjunction with Baqer Mohebi and Habanos cigars," says Riley. He says that business was strong for DFDP in 2011, surpassing its records of past years. Riley is confident of revenue growth opportunity in the future.
However, the biggest challenge for DFDP’s business is the restriction in customer’s mobility at seaports. "Getting the customers to the shops or getting the shops to the customers can mean that we have to allocate a large amount of resources. When we do get to the customers, they may not be available; a ship’s engineer who is up to his elbows in engine oil can’t drop everything and leave the ship to buy a bottle of spiced rum to enjoy later that evening. We are reliant on either his co-workers shopping on his behalf or our vehicle returning when he finishes his shift, possibly denying another customer a duty free shopping opportunity at the other side
of the port," Riley explains.
Another issue that concerns duty free operators at ports is how to capture the attention of customers who are always on the go. "Airports have a captive market and comparatively air passengers have more time to leisurely browse products than customers at duty free shops in seaports. Travel retail operators at ports have to grab their customers’ attention quickly and that’s why they need to be very precise in their selection of product mix and promotions," he says.
Customers at ports are, however, not restricted in terms of what and how much weight they can carry on-board and it offers duty free operators some flexibility while developing their SKUs. "In theory, the crewmen may never leave the duty free or bonded areas of the ports they visit, consuming everything they buy on the ship. This means we can allocate more space to large products, pack formats and full cases, particularly with beer."
Finding opportunities for growth, DFDP has plans for expansion in the future. He says: "DFDP is part of the MMI group and the company is expanding its operations to areas within the Gulf region and beyond. DFDP is also looking at any opportunity that is commercially viable and strategically relevant and assessing it accordingly."