DFS GROUP LIMITED

Protecting and Enhancing

Non-Aeronautical Revenue

A Retail Perspective

AUGUST 2015

DFS GROUP LIMITED

DFS GROUP LIMITED

Putting Airport Retail in Perspective

• Retail concessions are the leading source of non-

aeronautical revenue (“NAR”) for airports.

• Airport retailing is the single largest component of

NAR – representing approximately 43%.

Airports and Retailers must become closer partners to enhance Airport

Retail’s contribution to NAR, allowing the airport to seize a larger portion of

the untapped retail potential, while defending existing revenues from a

number of challenges on a global level.

DFS GROUP LIMITED

Protecting existing revenue

from global challenges

Increasing shopping time

Increasing

customer

awareness

More flexible

concession agreement

terms

Maximize NAR potential

Enhancing Airport Retail at the Local Level

The 4 primary areas where collaborative efforts are key to maximize

NAR potential

DFS GROUP LIMITED 4

Involve airport

retailers in the

airport’s retail

marketing

program

planning and

decision-

making

Embrace

technology - enable

collaborative social

media marketing

programs –

including directed

in-airport smart

phone advertising

Continue with

traditional

advertising in

parking garages,

transportation

systems as well as

the ticketing and

pre-security zones

Support

coordinated

promotional/

cross-shopping

opportunities

between

concessionaires

Support and provide

for in-concourse

promotions and Pop-

up retail concepts to

provide stopping

points to slow

shoppers from

heading to their

departure gates

prematurely

Increasing Customer Awareness

Make Airport Retail a key component of a comprehensive Airport

Marketing Program

DFS GROUP LIMITED

Increase Shopping Time

Partner in the effort to provide more time for customers to shop

Enable shopping

opportunities directly in

clubs and lounges

Position the most productive

departure flights in close

proximity to retail operations

Enable quick check-in

and security screening

process

Create “engaging in-store

shopping experiences”

rather than general “terminal

entertainment”

Maximize shopping time

DFS GROUP LIMITED

More Flexible Concession Agreements

Support enhanced retail operations by embracing a more comprehensive

partnership philosophy

• Increase the length of concession terms to enable more

investment in facilities and technology

• Consider “Shared Risk” Concession Formula

• Reduce fixed and variable concession fee rates to support

competitive pricing and enable inclusion of a broader range of

products

Share the risk by enabling or providing for changes to agreements when

circumstances or business conditions warrant – which encourages greater

investment and risk-taking by the airport retailer

DFS GROUP LIMITED

Protecting Existing Revenues

• Many international agencies are promoting regulatory action to curtail sales

of certain consumer products ( i.e. tobacco, liquor and some food items)

• Some Airlines are considering restrictive “carry-on” regulations that may

limit airport shopping or preclude it for those already carrying-on hand

luggage

• Continued pressure from online and domestic channels means airport

retailers must elevate store environments and service levels to stay

competitive

Together we must promote a greater understanding of the unique nature of

the airport retail market and identify and promote creative and innovative

solutions that meet regulatory and market demands while continuing to

preserve revenues and grow the business.

Airports and their retail partners must forge a united front to defend

against global challenges

DFS GROUP LIMITED

DFS Los Angeles International

DFS AT CHANGI TERMINAL 3

DFS GROUP LIMITED

DFS Abu Dhabi International

DFS GROUP LIMITED

DFS Singapore Changi Airport

DFS AT LOS ANGELES – TBIT

DFS AT CHANGI TERMINAL 3

DFS GROUP LIMITED

THANK YOU