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TRAVEL RETAIL


opportunity to both maintain traditional core category sales as well as drive spend into new areas. As Kim Gray, Head of Retail Strategy at Heathrow says, “Digital inte-


gration in airport retailing has long lagged behind the standards being set by both the major ecommerce players and the conventional high street. It is crucial for airports and operators to invest in enhancing the functionality and quality of their digital platforms, in order to improve ease of access to the product off er, lines of communication with potential customers, and convenience in fulfi lment and delivery.”


( Enhanced data capture 2017 will see online pure players continue to lead the way, through their use of transactional data, driving improved sales performance, enhanced customer experience, and more eff ective range planning. As data capture in airport retail becomes more sophisticated, retailers can optimise this information to encourage sales, be this through greater depth of transactional data, demographic profi ling, or tracking the movement of passenger fl ows around the terminal through beacon and wi-fi enabled technology. Value and return on investment will only be fully realised when airport management teams employ suffi ciently skilled resources, ensuring data insight translates to improved sales and profi tability.


( Exclusivity For high frequency travellers, the perception of an increasingly ho- mogenous retail experience across the airport retail world prevails. The continued consolidation of suppliers in the industry doesn’t help. Looking ahead, airports and retailers need to engage with more innovative strategies, providing exclusivity to their channel, in a way that neither the high street, nor online can compete. Examples of this include unique food and beverage off ers like the world’s fi rst airport gin distillery, The Nicholas Culpeper, which opened at London Gatwick earlier this year. Elsewhere, specifi c travel retail exclusives, such as the recent DFS launch with Burberry work well. The 22 piece capsule collection, BurberryxDFS, references the brand’s heritage and is inspired by key elements from the innovative straight-to-consumer runway show. This shortens the traditional gap between runway show and retail availability, and creates a per- sonal, exclusive collection specifi cally for the travel retail consumer.


( Customer Experience Airport retail needs to major on emphasising in-store experience to increase footfall and in-store conversion, taking inspiration from the excellent new concepts coming out of the high street. Digital can’t compete with the physical experience which is still the most pow- erful way to communicate and convey the essence of a brand and its proposition. Excellent standards of design, customer service, and sensory experience create that point of diff erence. Retailers are becoming increasingly sophisticated in how they deliver their brands’ values through the physical environment. The Store, a hy- brid retail space beneath Soho House in Berlin, combines the best of commerce, hospitality, and lifestyle, in an engaging environment perfect for shopping, socialising, dining, or working.


12 / AF / Nov/Dec 2016 The sustainably focused fashion brand Tom’s fl agship store in LA’s


Abbot Kinney Boulevard seamlessly combines the best elements of a coff ee shop, footwear and optical retailing, creating a relaxing experience that promotes dwell, conversation, socialising, and loyal- ty-driving engagement the brand. There is a strong correlation between customer satisfaction and


spend. Greater focus on the experiential, not just the transactional is what we expect to see in 2017. At a time when consumers are arguably exposed to too much ‘stuff ’, people are keen to seeking out diff erent experiences. Airport retailers are perfectly positioned to make the journey less of a process, and more of an experience.


( Brexit and Macroeconomics We can’t ignore the signifi cant impact that leaving the single market and customs union could have on travel retail in the UK. It could give rise to signifi cant logistical and operational challenge for re- tailers as well as the opportunity of implementing duty free spend. In addition, the macro-economic conditions and high degree of exchange rate volatility continue to make airport sales a challenge amongst the highly lucrative emerging markets of Chinese, Russian, and Brazilian passengers, particularly in the luxury sector. We expect to see airports and retailers looking to mitigate these risks by widening the appeal of the retail off ers beyond the narrow focus at the highest income brackets.


( Creating a winning strategy Where will these trends leave the sector? The airports best posi- tioned to respond have strong and trusted partnerships with each of their key stakeholders – the airlines and the retailers. It’s about pulling in the same direction, and working together to increase the scale of the commercial opportunity, rather than fi ght over the distribution of the opportunity. Airports need to invest in understanding the customer compo- sition and how customer buying behaviours are evolving. We want to see more commitment to improving the customer experience, and recognising the need to invest in high quality design and place making. Closer collaboration and input of brands into the physical store experience will be key. And, while price is always important, good customer service and customer relations are still crucial to delivering good value. Investing in processing and security to increase airside dwell time will still drive penetration and sales. So far, there is limited evidence of moving towards a partnership model. Maybe a greater focus on developing joint venture partner- ships will allow better alignment of incentives and opportunity for stakeholders to share in the commercial opportunity their passen- gers present? 2017 is make or break. Airport retail must invest in creating an


experience that at least matches, if not exceeds, the high street. Focusing on delivering experiences and engagement per square meter, not just income per square meter, should defi ne airport travel in 2017 and beyond.


Alex Avery is Director for Pragma Airports & Commercial Spaces airportfocusinternational.com


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