How important is an airport’s retail/F&B offering to customer service/passenger satisfaction levels?
Passenger surveys have shown repeatedly that retail and F&B are among the most important influencers on an airport’s customer satisfaction level.
Many travellers see terminal dwell time as ‘dead time’ or as an interruption of their journey; we turn that perception on its head by making the retail and F&B experiences strong enough for the traveller to truly enjoy their time in the terminal.
The right retail and F&B experiences – integrated within a fantastic 'whole airport' experience – shift the traveller’s mindset to view that dwell time in a whole new way.
To achieve that, every element of the airport experience (from security procedures and washrooms to retail and F&B) needs to be world-class and their impact on the travellers’ behaviour and satisfaction level is extraordinary.
What do passengers want when it comes to an airport’s retail/duty free offering?
Choice, quality and value are often cited as the traveller’s fundamental needs, but actually a good supermarket can provide them. Travel retail needs to go much further.
What travellers really want is an experience that engages and excites them, backed by outstanding personal service, and a feeling that the whole personalised experience not only went way beyond their expectations but also gave them great memories to take away from that airport.
It’s vitally important that every aspect of the experience should be perfected, including exciting activations and promotions in the stores and a range of exclusive items that they can’t find anywhere else.
How important are brands?
Brand power is a vital element in appealing to the passenger, but the brand name is not the only element; there are many ingredients that we combine to create a great brand experience in the stores.
The imperative is having the right brand in the right place and utilising that brand power as part of a high quality experience that truly resonates with the traveller. Brand power is a powerful magnet to attract the curious shopper and we work very closely with many leading brands to ensure we create a unique offer at each airport that engages and excites.
What is your take on ‘sense of place’ in the retail environment?
At LS travel retail we operate at over 130 airports worldwide and we see ‘sense of place’ as a huge element in the airport experience and retail can be one of the most powerful influences in making that happen.
We tailor the retail experience to the location and the passenger profile to drive a strong commercial performance, but we ensure that it also reflects the location, such as through cultural themes within the store design and local/regional preferences in brands in the retail offer.
We also develop our own specialist brands to support this sense of place, such as through our Discover stores (showcasing local/national flavours, culture, souvenirs etc) and our own F&B concepts.
At many airports, a generic retail experience simply kills the travellers’ interest in shopping and also reflects badly in their assessment of the whole airport experience. The service aspect is an especially important influence on a sense of place at airports and is an issue that we focus on very strongly.
At the Trinity Forum you called for the introduction of a new training/education platform based on fostering greater co-operation between airports, retailers and suppliers. Why?
I made that call because I share the frustration of many in the travel retail industry – retailers, suppliers and airports alike – at the slow pace of evolution of our operating model.
Time and again, we hear at industry events how everyone appears to agree on the principles of new ways of working together, especially in adopting shared approaches, but we now need to see these strategies put into practice.
In particular, I think the inflexibility of the Minimum Annual Guarantee model is stifling the true potential for the airport, retailer and supplier to deliver the best possible passenger experience and simultaneously optimise commercial returns.
A better experience really does encourage more people to use a particular airport and it’s only by sharing the strategy that we can create the optimal experience for the traveller.
What is your expansion policy, and can we expect more acquisitions this year?
We are already in the top three operators in travel retail (2012 total sales €2.5 billion, +12% year-on-year) and we are fully committed to establishing top-five positions in every category, including F&B, so we’re very committed to continued growth.
Acquisition is one of the tools we use for growth, and we are always working on possibilities as you can never know when the right opportunity will be there.
Our priority is to grow by consistently delivering the right quality of performance both for our airport partners and for our own operations and we do that through retail strategies delivering higher sales and a stronger experience for the customer.
We truly believe that the smartest route to our own success as a company is by first delivering success for our airport partners and we certainly have the expertise and experience to achieve that aim across all aspects of travel retail.
We have consistently delivered our performance promises to our airport partners and, with our growth strategy well established, we look forward to sharing further success with them in the future.
In general, do airports do retail well?
I’d give a qualified ‘yes’ to that! Most airport managers are fully aware of the importance of retail, both as part of the traveller’s experience and as a vital and powerful non-aeronautical revenue source, so the retail experience is certainly improving at most airports.
However, it does very much depend on the quality of the appointed retailer and also the degree of co-operation, trust and shared commitment between the airport, the retailer and the brands.
We’ve found that wherever we have taken up new contracts and have shared that type of positive relationship with the airport, we have been able to drive significantly higher levels of spending (up to 50% higher in some cases) and have also raised customer satisfaction levels significantly.
We must never forget that the passenger doesn’t perceive the retail experience and the airport experience as separate issues – to them, it’s all part of the same and (for better or worse) a single aspect can dictate their perception of the whole airport experience.
That’s why great retail really is the most effective way to boost the traveller’s perception of an airport.
How is your customer service philosophy reflected in terms of staff training, management leadership and in the retail experience?
I’m glad you asked this question because I love to talk about customer service! It is actually one of our proudest achievements at LS travel retail, so much so, that we believe that we make more commitment to service quality than any other retailer.
We never forget the old saying – ‘people buy from people’ – and we have found that the sustained commitment and investment we make in training our people drives much stronger performance. For example, we recently took up a new contract at Rome’s airports and devoted 3,000 hours to training in the first month alone; this has already delivered major increases in spend per passenger, well above even our ambitious expectations.
Our in-store teams provide a range of services to the traveller and we have developed specialist training for them in addressing the needs of high-spending passenger profiles. The focus is all about delivering great service as part of a more personalised experience, and this certainly surprises and delights the customer with a quality of experience they simply don’t expect at an airport.
Their assessment reflects on the whole airport experience too; satisfied shoppers take away a highly positive image of the airport. For example, at Warsaw Chopin we have developed an in-store service programme called ‘The Club’, whereby our staff in the Liquor department give specialist support to shoppers, such as when selecting a whisky for example.
The staff can answer questions and guide the shopper through a tasting session and this expertise almost always persuades the shopper to trade up to a higher premium product.
How successful are arrivals duty free shops?
Within the EU there is, unfortunately, no tax advantage for Arrivals duty free so its commercial potential has not been developed to the depth achieved in other regions, such as Asia.
For many airports, Arrivals shopping is a very useful service for the passenger and a valuable additional revenue driver for the airport and retailer. As such, Arrivals shopping is a welcome additional service for many airports but the important issue is to ensure that the facility is actually the most effective use of both space and resources and that it truly addresses the needs of the passenger profile.
Of course, even when those two criteria are met, it is the skill of the retailer and the quality of the retail experience that will determine if the commercial return is truly optimised. We operate a number of Arrivals locations and these are usually much smaller than the main stores but they enable the airport to drive revenue through a very effective use of limited space.