I’ve never spent any time looking at in-airport retailers before, so found this very interesting. I’m actually torn on whether or not I think it’s a good business model. I love the fact that it’s a market leader and can use economies of scale to negotiate the most favorable pricing with suppliers (Marlboro, Estee Lauder, etc.). It’s also incredibly unique to have a customer who is confined to the airport while waiting for the flight and potentially has nothing else to do besides browse the shop. However, it seems to me that most of these duty-free stores are relatively stale and they all offer the same products. I also feel that Dufry is dependent upon a cost-conscious customer who is willing to hassle carrying the purchase from the airport to the destination along with all of the other stuff he or she is traveling with, and as a consumer I never feel that the pricing is particularly compelling even when factoring in the lack of taxes… However, if the results have been compelling thus far, I don’t see any disruptive factors that would cause that to change going forward!
Interesting read, Sebastian. I’m curious as to why other real estate development companies haven’t followed suit with regard to in-sourcing development, leasing, marketing and property management. Perhaps it only makes sense for these high-end “lifestyle” centers which require a more cohesive strategy and full-service offering? Or is it more of a cost-saving strategy since TUC can perform these tasks more cost efficiently in-house? Given that “architecture and design” are the most critical differentiating points that online cannot replicate, I would have expected TUC to focus on this rather than outsourcing such an important aspect of the development. Lots of interesting options to think about!
Great post about a great company – WFM has truly embraced “conscious capitalism” and pioneered the way for others to follow suit. It’s very telling that the company has been listed on FORTUNE’s “100 best companies to work for” for 17 years in a row. Although it may not seem profitable in the short-term, by truly partnering with suppliers and consistently treating employees well it seems to pay off in the long-term. I think the most innovative facet of WFM’s operating model is the education piece (e.g., 5-step ranking). It’s difficult for the average consumer to differentiate, but Whole Foods can probably upsell the customer to higher levels of quality / welfare while furthering its transparency. Whole Foods may be somewhat pricier than other supermarkets, but it does seem like this is the direction the industry is moving!