Airports: Safe Haven for Retail

Decline of Retail

It’s no secret the physical retail landscape is experiencing a tough time. In February 2019, e-commerce accounted for 17.6% of total sales and 1 in 10 high street shops were vacant.

Changing consumer behaviour has led to a shift in demand for technology, innovative experiences and convenience to name a few. Brands that are static and being complacent with current consumers are those declining and those at risk.

However, it’s not the ‘end of retail’ as some stories are stating. It’s the end of ‘bad retail’. There are plenty of retailers and shopping centres responding to consumer’s new expectations and driving momentum back into the industry through initiatives such as:

• Mixed-use malls
• Items/offers only available in store
• Marketing for millennials – advertisements on Instagram and Facebook etc.
• Events

How are airports different?

Conversely to the above, airport retail is experiencing a boom!

Airports are experiencing a growing number of passengers, giving brands a captive audience, guaranteed footfall and massive sales potential!

With passengers (on average) arriving 2-3 hours before their flight and procedures being implemented to reduce queues at check-in and security, passengers are left with nothing but time and airports have plenty already in their favour to encourage sales.

Duty free – duty free discounts incentivise passengers to buy while they have the opportunity. Duty free also has a diverse product range offering something for everyone: perfume, cigarettes, alcohol, sweets, toys, sunglasses, and much more.

Passenger demographics – boarding passes are scanned at every purchase delivering detailed data of shoppers including age, gender and where they are travelling too. This produces an accurate consumer profile to consider when choosing stock and implementing visual merchandising strategies.

Last chance purchases – the audience passing through the airport are travelling away from home. So, if they have forgotten anything, now is the time to buy e.g. sun cream, toothbrush, bikini etc.

Airports are capitalising on the opportunity

Airports are being handed high volumes of footfall, ready and willing to spend. However, initiatives are being implemented to ensure this opportunity is being maximised:

• Customer choice – airports are leasing space to a range of retailers to ensure there is something for everyone from Chanel to WHSmith. They are also looking to have similar brands such as Boots and Superdrug, which sell similar products, but allow the consumer to select their favourite brand.
• Reducing queues – the longer consumers spend queuing the less time they have to spend. Also, it has been proven that the longer people wait, the more unhappy they are which reduces their willingness to spend.
• Placement of outlets –coffee shops are being placed near gates to allow and encourage people to spend while they are waiting – massively increasing sales!
• Click and collect – airports are now allowing passengers to use online shopping to order products to collect or plan purchases for their arrival.
• Walk-through shops – many airports are being re-structured to make passengers walk through duty-free in order to get to their gate. Pop-ups and commercialisation units are being placed throughout the walkway to increase viability of promotions and encourage engagement.
• Tracking passenger spend and movements – airports can now see what time passengers arrive at the airport, the average demographic for certain flights and popular products for these flights amongst much more!
• Interchangeable commercialisation units – the information above allows marketing initiatives to be quickly changed for the exact consumer passing through. For example, a party flight to Ibiza may see discounted alcohol on the promotional units however when there is a flight to New York, there might be discounted designer handbags.

Airports are becoming a haven for retail. Without the developed strategies, airport retail would still thrive and has been increasing in conjunction with passenger volumes. However, with the new initiatives, airport retailers can expect a significant increase in revenue and a lucrative future ahead!