The true impact of the digital revolution on the airport business is only now starting to become apparent.
Digitising and automating a wide range of airport processes makes life smoother and faster for the passenger and can cut operating expenses. But who really benefits from faster airport processing times if it just means that passengers dash through the retail areas or simply arrive later at the airport?
And where’s the sustainable competitive advantage for an airport if every other airport adopts similar technology?
In the current competitive airport marketplace, many CEOs are having to spend long hours with their chief technology officers (if they have them) trying to determine the threats and opportunities that digitisation is delivering.
It is certainly causing major disruptions to the traditional European airport business model of generating operating profits from duty free and other commercial revenues.
‘Omni-channel’ retailing means that customers look and touch offline or at several points on their air travel journey, then buy online, using the duty-free retail outlet as little more than a shop window. It is one of the reasons why retail per passenger is down by about 3% to 6% at major European hubs, even as the number of passengers passing through their terminals continues to rise.
And airports are not the only businesses facing the challenge of changing customer behaviour. Town centre and shopping mall retail outlets are under growing pressure worldwide from online retailers such as Amazon.
But in some parts of the world they are starting to fight back, re-inventing the retail experience by using weapons which digital retailers are unable to deploy. Digitisation has its benefits – but does it make the experience more memorable? Does it create delight?
Airports need to exploit a key strategic advantage they have over Amazon and Google, which a new generation of shopping malls are starting to exploit with far-reaching consequences – human contact.
Learning from the new commercial/cultural centres of Asia
The K-11 Art Mall in Hong Kong, Shanghai Village in Shanghai and COEX Mall in Seoul are redefining the retail sector. And they are thriving. Visitors there are treated not just to the usual display of well-worn brands, but also to an elaborate menagerie of art galleries, meeting places, libraries, places to relax and things to enjoy.
Shopping is, of course, available – via tastefully positioned electronic ordering points – but it is only a part of the overall experience. The good news is that lessons learned from these Asian retail examples can be applied to airports around the world.
Of course, the transformational process of taking the concept of a cultural mall and re-ordering it for a confined airport terminal is not a simple one, but the principle of creating an exciting new environment that connects to customers on an emotional level can be transposed to the airport terminal.
To do so successfully, airports will need to gather and exploit their data to create improved experiences that are specific to their customers – one size does not fit all. Success will depend on an airport re-evaluating its relationship with its specific customers.
Airports must view them as more than just units to be processed through the system as quickly and seamlessly as possible (although provision will have to be made for that). That means understanding the emotional journey that people go through when they pass through an airport terminal; for many of them, the airport experience is more than just a connecting point between two transport modes
or a series of queues, it is a place of excitement, trepidation and confusion.
With the right environment, passengers will want to spend more time, not less, at the airport. It will become a destination in its own right. There should be more social and cultural activities for passengers to look forward to and enjoy, so the new technology can be focused on those who want to use it but be kept in the background, or integrated more subtly in the infrastructure, for those who want the more personal approach.
This implies using technology in a more focused way – allowing passengers who want a streamlined passage through the terminal the choice of using the new automated systems, but also providing new facilities for those who want a more leisurely, social, personalised airport experience.
Talking about the Changi Airport Group’s philosophy on technology and customer experience, Dawen Choy, group senior vice president for transformation and enterprise development, says: “We’re the world’s favourite airport, not a bus station! The last thing we would want to do is to automate all customer interactions. Our mission is to engage and excite our customers.”
Understanding the value of personal service and human interaction
The importance of human interaction cannot be understated. Human interaction is becoming a luxury product for society as a whole. In an age of ever-increasing automation and predictive algorithms, human interactions are beginning to acquire the hallmark of a personalised, almost privileged service.
So, to fully exploit the benefits of new technology, human interactions need to be implemented in a focused and intelligent way.
The future airport’s unique selling points will be a combination of high tech and low tech: high tech via apps and virtual reality or cool social media campaigns and low tech by increasing the personal contacts between passengers and airport staff.
This can be done by adding more airport information booths throughout the terminal (a feature of award-winning airports such as Vancouver and Singapore Changi), actively engaging with customers throughout the terminal and using the new technology to help identify where missing passengers are in the terminal and reducing the number of potential human disruptions to flights schedules.
It is often the way passengers interact with staff that lingers in the mind long after they have forgotten what benefits new technology has delivered.
An easy start would be for basic customer service training for all employees at the airport and specially-trained customer service staff to help passengers waiting in line at the gate or border control.
Again, airports can learn from the retail world. The way that Apple trains its staff in engaging customers is part of the business of creating a brand which identifies a different, enhanced relationship between supplier and customer, even in the technology market.
An airport’s secret weapon: Surprise and delight
Google and Amazon are already starting to have a disruptive impact on airport profitability. The best thing an airport can do to keep these players at bay is to make better use of the available data and technology to engage with customers in a meaningful, friendly way that touches people on an emotional level.
For the moment at least, Amazon or Google do not have that physical interaction with customers, so airports need to make this experience a very positive one.
Even in the age of ever-increasing automation and predictive algorithms, happy customers are loyal customers. If airport CEOs can transform their airports into genuinely exciting spaces that surprise and delight, it will do more than help keep the online competitors at bay.
It will serve as a marker to airline and passenger customers – and colleagues – that this airport is different; it is human, and it is truly innovative.