On location: Qatar Duty Free invests for the future in retail improvements during crisis

QATAR. Qatar Duty Free is pushing ahead fast with an ambitious redevelopment of its existing South Node retail zone at Hamad International Airport, turning the COVID-19 crisis into an opportunity to considerably enhance the consumer offer.

The Moodie Davitt Report Chairman Martin Moodie toured the airport late last month with Qatar Duty Free Vice President Operations Thabet Musleh to gain a first-hand view of the work in progress at the Doha gateway.

Changes include a new Hublot boutique (an airport first in the Middle East) opened that day (look out for our full report coming soon); a comprehensive renovation of the duty free offer, including two new concept stores; a vegan café; and the exciting introduction of an ultra-premium beauty boutique.

Musleh and Moodie were also able to assess some of the early entries in The QDF Factor, a competition open to brands, both within or outside the travel retail channel (see panel below). Interest in the initiative has been tremendous, Musleh notes.

Commenting on the extensive retail development that has taken place during the pandemic, Musleh says, “We decided that the crisis was going to impact the industry for six or seven months. We had a lot of projects that we had already budgeted and planned for, that were taking us into quarter one next year. We fast tracked all of them and they will all be ready by 1 September, so we’ve brought them forward seven or eight months.

“They are amazing projects that really highlight that besides the airport expansion, which we’re also working very hard on, the existing South Node is still very important to us. This is our bread and butter at the moment. So while we are investing and building a state of the art airport and retail and F&B offer with the expansion, we don’t forget what we are doing here.

“The aspiration and vision from His Excellency Mr. Al Baker [Chief Executive of Qatar Airways Group, Hamad International Airport and Qatar Duty Free] and Engr. Badr Mohammed Al-Meer [Chief Operating Officer of Hamad International Airport] is that by the time the expansion opens, the South Node is up to that same standard, so it will be a seamless journey for the passenger. We are very happy and proud about what we have created. When we do things here, we don’t do them by halves.”

That is for sure. At the time of The Moodie Davitt Report’s visit, Qatar Duty Free was close to completing a comprehensive 400sq m expansion (to 1,600sq m) and refurbishment of the main duty free store which has been closed through much of the crisis. Opening is set for mid-August. The new-look store is notable for the deployment of extensive digital technology built into the pillars and an extensive array of branded wall bays (we’ll bring you a full pictorial report after opening).

“We’ve tried to create an environment where QDF still owns the architecture, but the brands also express themselves,” says Musleh. “The brands have been amazing with us. When we work with the brands, it’s as partners. It’s not about ‘You’re a supplier, I’m a retailer’. We work together, doing things hand in hand. When we succeed we both succeed, when we suffer we both suffer. That approach has really helped us during COVID.”

Tobacco’s key role

In an important change, tobacco has been moved to the front of the main duty free store (which is dedicated to liquor, tobacco and confectionery) due to its key role in driving penetration. “So the idea is that the customer comes in, picks up their tobacco, walks through the store then picks up chocolates and liquor, pays and then leaves.”

Tobacco’s importance is reinforced by The Cigar Room Doha, a new in-house premium cigar concept that offers a range of rare, vintage and limited-edition cigars. “The cigar business for us is fantastic, so we have really invested in it,” says Musleh.

A second new concept store is called The Connoisseur Room Doha. “This is going to have the finest wines, the finest whiskies, the finest Cognacs that money can buy – limited editions, 50 year-old whiskies, very rare casks, vintage Champagnes and much more.”

Both the level and scope of the investment during a crisis is impressive, a case of putting bad time to good use. “His Excellency Mr Al Baker has really challenged us to continue to maintain our five-star customer offer,” says Musleh. “He is confident that the industry will bounce back. So this is all about a long-term vision – we’re not expecting a return in six months. As I said, it’s all about ensuring that the South Node still feels like a five-star retail offer even once we open the expansion.”

A new fashion and sunglasses boutique will feature an extensive range of brands, including an extensive Abaya collection [stylish, traditional Muslim over-garments for women, ranging in price from US$100 to US$500] and big-name brands such as Longchamp, Furla, MCM, Aigner and others. “We’re trying to create zones [across the whole retail offer] so this is our zone for the female,” said Musleh. “A woman can come in, buy her Abaya, her sunglasses, and her handbag. It’s an open store, so you can pay for anything anywhere. It’s all about trying to increase the spend and create a suitable environment for the customer.”

Flying high (and far) during tough times

While Qatar Duty Free and Hamad International Airport are pressing ahead with their ambitious capex investments, one should not downplay the extent of the challenge posed by COVID-19. Qatar Airways has flown more air kilometres than any other carrier during the crisis, articulated by a mission statement to bring passengers home. Even so, the number of flights and passengers has dropped significantly.

“This has been the most difficult and challenging time because every single day a new lockdown happened or an international airport closed,” said Qatar Airways Senior Vice President Marketing & Corporate Communications Salam AlShawa, a dedicated professional who has led an impressive outflow of communication across various media channels, including outstanding social media coverage of the crisis and how Qatar Airways has responded to it.

“We decided to operate to the Philippines and Bangkok, for example, and then all of a sudden they extended their lockdowns and the airports were closed. So what do we do with our passengers? Every single day we have an operational meeting in the morning, another in the afternoon – asking which countries are open for tourism. Very few of them. And yet we’re still operating. According to IATA, we were number one global airline in April and May.

“We have taken almost 2.1 million passengers home – that’s a huge number,” she continues. “We’ve received thank you letters from governments all over the world – the UK, France, Canada, Australia, you name it. We continued flying although the number of aircraft dropped significantly.”

Destination Doha

Next stop is the Qatar Airways Travel Boutique, home to a diverse, often quirky range of destination merchandise, much of it conceived in-house. “We thought for people like you who love travelling, they should find everything related to travel in one place – from handbags to honey, aircraft models to chocolates and t-shirts,” explains Ms AlShawa. “We have even done our own children’s lines, travel pillows and so on. Everything is very affordable; we haven’t applied high margins at all.”

The shop offers an extensive array of football shirts from several big clubs sponsored by Qatar Airways and a range of five in-house superhero plush toys that take inspiration from desert animals such as the Oryx.

“The whole thing is about how we continue the journey for the child,” says Musleh. “So the child gets on a plane, he or she is introduced to the Qatar Airways’ Kid’s Club and then the journey stays with them as they have the backpack when they return to school that reminds them of their holiday. Everything has been designed by Salam’s in-house team, even Qatar Airways-branded original Apple earpods.”

Encouraged by the reaction to date, Qatar Airways may take the destination merchandise concept to downtown Doha and even to overseas airports where the airline enjoys a strong presence.

A new pharmacy, offering three times the size of its predecessor, is close to completion, a vital addition, explains Musleh, in supporting health-focused products that are likely to boom.  “The health sector is going to become more important with the impact of COVID, no question, it will become a very important part of our offer.”

High class from Hublot

The new Hublot boutique is a big coup for Qatar Duty Free and Hamad International. It’s a first for the airport that captures the LVMH-owned brand’s fusion of traditional, modern and pioneering material in a beautifully understated, elegant environment.

Hublot will be joined soon by another LVMH-controlled brand, Loro Piana, the Italian high-end apparel company’s first travel retail store in the Middle East and its Qatar debut.

Beauty gets the space it deserves

High-end beauty is a key category for Qatar Duty Free and the retailer has underscored that importance by converting a coffee shop into a luxury multi-brand boutique featuring Estée Lauder, Tom Ford, Dolce & Gabbana’s new La Casa make-up concept, Gucci Beauty, Dior, YSL and Lancôme. “The beauty business is growing so much but it’s been under-spaced,” says Musleh. “Here we have a real cluster of super high-end, luxury, premium brands.”

The back of the store is all about digital display, offering branded content that passengers can see immediately as they ride down the escalators from above. “I’ve been working personally on this project for the last two years,” says Musleh proudly. The same applies to a new café concept, with an entirely organic, vegan offer for those looking for healthier options.  “That’s going to be more and more people, let’s face it.”

It’s time for my flight onwards to Hong Kong so we close out our whistle-stop tour with a view from the North Node of the huge expansion project that will transform Hamad International when it opens in July 22.

Despite the difficulties faced by Qatar in importing materials during the air blockade imposed by Bahrain, Egypt, Saudi Arabia, and the United Arab Emirates since June 2017, work is not only on schedule but accelerating, with a 24/7 workforce in place to ensure the project is delivered on time. Musleh expects to announce the line-up of retail and F&B brands by year-end and promises plenty of exciting names and concepts.

The global pandemic may have stopped much of the travel retail and aviation sector in its tracks but that has certainly not been the case here in the Qatari capital. Here’s an enterprise so focused on the future that it will take a lot more than a global pandemic to slow it.