As the dynamics of the retail world change and engagement between consumer, brand, and product evolve, what are the implications for the future planning of airport commercial space and airport terminal design?
The retail component within the airside departures lounge has,in too many instances, become a predictable mix of brands and facilities similar in offer to other airports when the opposite wasthe original intention.
The original idea and purpose was to use the retail as a differentiator to attract airlines and passengers as much as a revenue generator to fill the coffers; so, what do airports need to do to bring back the difference?
The tried and tested airport retail format is still, in many instances, a long way from where it should be given the quality and quantity of passenger exposure. We seem to have hit a glass ceiling in terms of penetration and spend which means airports need to ramp up their offer.
Doing this requires innovation in the creation of the place and how it is laid out and inspiration in terms of how it is mixed, the brands it contains and the proposition and experience it offers.
The terminal is never going to be able to compete with themall or the high street as a comprehensive place to shop but whatit can do really well is offer a snapshot of luxury, or lifestyle, orvalue, or a place depending upon its location and passenger profiles.But it needs to do this in a new, creative and intelligent waywithout compromise.
Flagships for brands and customer experience
Global brands are increasingly recognising the importance of airports as presenting opportunities for flagship stores, creating new demands on the type and function of commercial space requirements.
Where once leading luxury brands were reluctant to open airport units, discouraged by the low quality commercial spaces and uninspired tenant mix, a flagship unit in a modern terminal of a leading capital city is now becoming a jewel in the crown of the retail portfolio.
Global brands are keen to make a statement, and in order to do so, are looking for units situated in prime locations, with generous store footprints, and double height space, allowing them to be more innovative with their merchandising and to act as a focal point within the core commercial area of the airside departure lounge.
The challenge for design teams is in creating an environment and concept that simultaneously makes an architectural statement, whilst also providing a space for the retailers and their operational needs to flourish – not forgetting the need for efficient processing of the passengers.
Much of the growth in high street retail in mature economies is stagnating, as operators adjust to an oversupply of space, declining high street footfall, and the structural adjustment to an omni-channel offer.
Whilst the slowing rate of growth of online sales as a proportion of total sales suggests that traditional bricks and mortar will have a longer lifespan than many once feared, airports have the distinct advantage of a guaranteed captive audience, which until an alternative to aviation is invented, presents retailers with a long-term safe haven for capturing store footfall and physical interaction with the product.
As such, the airport store becomes a key place to capture a physical interaction between customer, brand, product, and service.
The future of airport transactions
So as the appeal of airport retailing increases, to what extent will advances in technology and systems change the role of the airport retailer?
Whilst initiatives such as ‘click and collect’ and ‘buy before you fly’, have been implemented with limited success, the main appeal of the airport commercial proposition revolves around offering convenience for the consumer.
Airport retailers have been slow to capitalise on the opportunity afforded by home delivery, especially for those travellers with little time to go high street shopping.
A business traveller on a short-haul two-day trip, for example, will often shop at an airport because of the convenience but avoid buying anything because they don’t want the hassle of the additional luggage.
This might be very different if items could be shipped to their homes or be waiting for them to collect upon their return.
Indeed, the home delivery scenario opens up an opportunity for airport commercial spaces to move more towards a showroom proposition – with consumers benefitting from the tactile store based experience, with the convenience of the product being delivered home.
The shoe retailer Dune has recently refurbished its store at London Gatwick, installing iPads in the seating areas, allowing customers to order from the full catalogue, and offering a home delivery service. The move has been a great success, with a fantastic response from customers, and significant uplift to retail sales.
This has significant implications for the category mix, width and depth of range that commercial operators could potentially offer in an airport environment. White goods? Flatscreen TVs? Homewares?
The recent announcement of the impending arrival of the UK’s most trusted brand and leading department store – John Lewis – into the airport world through Heathrow’s Terminal 2, signals an innovative move for a non-travel retail specialist. It will be fascinating to see what product assortment and category mix the retailer chooses to present in its first airport store.
This could open the window for a whole host of retailers to operate in airports – traditionally prevented by restrictions on carry-on luggage and the practicality of products. Airlines may face an increasingly difficult task of pulling people out of the airport shops and onto their planes!
The planning of flexible space
In order to keep the offer fresh, respond to fast moving tastes, and changes in passenger profiles, there is an increasing demand to incorporate flexible space into the airside departures area of the terminal.
The airside space firstly needs to be flexible in its own right; thus of the right size, shape and height so that it can effectively respond to and provide for continual change in retail use and demand. The retail area needs to be a retail area and not a compromised mixture of processing, seating, shopping and gates, but a distinct area and volume fit for purpose just like other areas within the terminal such as the check-in hall or baggage reclaim.
With the correct base building format and suitable structural and services design, different retail concepts, categories, formats, brands, customer experiences, facilities, and information can come and go according to changing tastes, profiles and technologies that can only be achieved in a flexible environment.
The most successful malls in the world are forever remixing their centres in response to ever-changing consumer demand and retail trends. Brands will forever innovate to stay alive. Their formats and propositions will change as the experiences they offer their customers are enriched.
The airport terminal must allow for this and enable this to happen constantly. Duty free anchors, speciality stores, cafes, kiosks, pop-ups, promotions all need to be set in a flexible environment, unconstrained by unnecessary architectural principles.
Incorporating effective digital media campaigns
As brands and retailers are increasingly focusing on multi-channel customer experiences, digital media programmes in the airport play a vital role, both out-of-store and in-store.
Phil Weake, managing director of the airport advertising specialist, Compass International Media, says: “The adoption of digital screens is also driving growth in Out-of-Home (OOH) advertising as brands are recognising the advantages and effectiveness of dynamic, time-specific advertising in order to reach target audiences.
“Furthermore, the ability for brand immersion using POS display advertising that links with mobile and web is increasingly demanded and drives retail sales.”
It is crucial that the planning and designing for an optimised media and advertising programme is considered upfront at terminal concept design phase.
As digital displays and advertising formats become increasingly sophisticated, an effective programme can have a huge influence on the overall look, feel, and dynamism of the airport environment, positively impacting advertising revenues, retail sales, and the brand perception of the airport.
Which brings us on to the power of the brand. Airports have typically lagged far behind their airline partners when it comes to creating globally recognised brands with high appeal and widely understood commercial qualities – what many airports would do to obtain brands with the status and qualities of Virgin or Emirates.
But in the fast growing world of air travel, the race to capture airlines and passengers is becoming increasingly competitive for airport operators, and effective branding is the extremely powerful tool that creates a point of difference, communicates the offer, and promotes a promise to deliver.
Airports need to create a clear brand proposition from theoutset, which is then conveyed and implemented across all aspectsof its operations, from the statements made by terminal designand the commercial mix, to operational considerations andmedia programmes.
Airports as global showrooms
Far from being simply a showroom for retail, primarily, airportsare the first touch point for a visitor to a destination, theyrepresent a statement for the region, and a welcome home for areturning passenger.
The importance of the arrivals experience is often overlookedin terminal planning and seems more of an afterthought relativeto emphasis, planning, and design that is built into check-inhalls and departure lounges. Too often the arrivals experiencefeels like being herded out a back door fire escape, to space constrained environments, with low threshold impact and distinctly unmemorable features.
A great arrivals experience should generate excitement, create anticipation, and make the passenger feel welcome – for the inbound passengers it also presents a great opportunity to make a statement about the airport and its qualities that will encourage the returning passenger to arrive at the airport early for their homebound trip, use the commercial facilities, and ultimately spend more.
Unlocking the processing constraints
Advanced technology in smartphones and use of NFC and RFID has the potential to adjust the space requirements of two of the most space hungry components of the airport terminal – the check-in hall and security zones.
Mobile boarding passes are already enjoying high uptake amongst passengers, and advanced screening with TSA pre-check technology will allow faster security clearance with more space efficient processing. A key question will be whether aircraft can adapt quickly enough to changing passenger demands – evidenced by easyJet’s recent imposition of a two tier baggage sizing policy.
My many years experience in helping airports increase commercial revenues has shown me that time and again the importance of understanding consumer behaviour and how the voice of the customer needs to be at the very centre of terminal design and development, from day one.
The retail world is developing fast, but the consumer is changing even faster: more demanding, higher expectations and an increasing need for stimulation and excitement.
Those airports that take risks and inspire and innovate will bethe winners. The more cautious airports will lose out.
About the author
Alex Avery is divisional director of airports at Pragma Consulting, which specialises in retail and consumer markets.He can be contacted at: