September 29, 2016 by CallisonRTKL

DATÜM: Frictionless Airport Retail

Through technological advancements, security measures at airports are becoming more streamlined, and passengers in the future will be able to arrive later, leaving them less time to shop. How can retailers successfully capture the impulse purchase inclinations of this unique audience in the quickly shrinking time before arrival and takeoff?

Influence A world of traveling consumers

Security measures over the years increased the time required to arrive at the airport before your departure. Once passengers have made it through the cattle call, they had more time to grab a bite or browse the shops. This has been great for retailers looking to make sales from travelers stuck waiting at the gates. However, as security measures become more automated and advanced and more private-sector TSA agents are staffed to alleviate long security lines, retailers will need to take advantage of smaller time windows to capture traveling consumers even before they arrive at the airport.

Between 2011 and 2016, airport security checkpoint traffic has surged by 15% [source: International Business Times]
740 million people are expected to go through airport security checkpoints in the U.S. in 2016 [source: International Business Times]
The U.S. airport retail industry is expected to double in the next 15-20 years [source: OTG Management]

INSPIRE future travelers

Look beyond your standard kiosks and tchotchke-cluttered knick-knack shacks to lure consumers. Here are a few examples of retailers that are thinking ahead in terms of arrivals and departures and curating a better shopping experience for travelers:

Hyper-Personalized

Heathrow uses data-driven analysis to know who their passengers are, to what destination they are travelling, in what class and at what time. This provides retailers with granular detail with which to target specific customers. This means rolling out Arabic-speaking sales assistants to coincide with the daily flight to Dubai or to moving socks from the left hand side of the store to the right, because Chinese passengers prefer turning right rather than left. If a flight is delayed, the Heathrow app will provide passengers with special offers, such as complimentary macaroons at Tiffany & Co. or free embossing at Smythson. Mandarin-speaking sales people frequently run duty-free stores when Chinese passengers are expected.

Lead with Local

More than 40% of retail and food and beverage sales at airports are generated by national chains. But while we’re waiting out a flight delay, we’re more willing than ever before to go local. As much as 36% of airport food and beverage sales are racked up at local and regional brands.

Shop Ahead

iShopChangi’s collection-on-arrival service capitalizes on online pre-ordering. Following purchases and payment made online, items are packed for passengers to collect at the respective DFS (for wines & spirits) or The Shilla Duty Free stores (for cosmetics & perfumes) at Changi Airport’s arrival halls. To allow passengers a longer window to finalize their selections, purchases can now be made as early as two weeks to 18 hours before their flights. The duty free product range on iShopChangi boasts more than 6,000 items across seven categories including Beauty, Wines and Spirits, Chocolates and Delicatessen, Fashion, IT and Electronics Timepieces and Home.

Design a better travel experience

Here is a look at how airport and transit retailers can offer more interesting shopping experiences to travelers and triumph over other distractions that passengers bring with them to the airport, such as electronics or books. Personalization, customization and convenience are at the forefront of capturing their attention.

Use Data to Personalize the Experience
- Retailers are winning big by changing their marketing strategies and product placement based on traveler metrics to customize the shopping experience.
Focus on Local Prestige
- 77% of travelers want the airport experience to have a local flavor, and 70% would spend more at the airport if there were local products [source: Mind-Set]. The homogenization of national chain restaurants is losing steam, local popular upscale and healthy on-the-go options are stealing the spotlight.
Offer a Frictionless Digital Porter
- Creative digital solutions offer a different type of concierge service for busy travelers; it saves time and helps to avoid delays at the gate and the hassles of checking and carrying extra bags.
Lead with Beauty vs. Booze
- In travel retail, skin care will represent more than 50% of L’Oréal’s sales in 2020. Cosmetics and skincare have eclipsed alcohol and tobacco as the biggest-selling travel retail category. The key is to offer more than products. Let travelers experience the product—a bourbon tasting, make-up tutorial, quick skincare solutions, etc.

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CallisonRTKL

For more than five decades, Callison and RTKL have created some of the world’s most memorable and successful environments for developers, retailers, investors, institutions and public entities. In 2015, our two practices came together under the Arcadis umbrella, expanding our sphere of influence and the depth and breadth of our resources. Our team is comprised of nearly 2,000 creative, innovative professionals throughout the world who are committed to advancing our client’s businesses and enhancing quality of life.