According to the latest ACI Airport Economics Survey, non-aeronautical revenue currently accounts for more than 46% of revenue at airports worldwide and this figure is steadily increasing.
Amongst other things, this tells us that managing commercial activities 'effectively' is becoming a strategic issue for airports. Indeed, this focus on commercial activities is best illustrated by the ever-increasing number of airports that are integrating their commercial offering seamlessly into the airport experience – a sharp contrast to the adhoc collection of shops in the past.
Passengers are certainly becoming more aware of the various commercial opportunities available during their journey (not only in their departing airport but also while connecting and on arrival), and this effectively means that in order to attract passengers into its commercial outlets an airport cannot view its retail offering in isolation, but must understand its role as part of a complex journey.
In light of this, and to maximise the potential of their retail offering, commercial managers need a new set of tools to work with and we believe the answer is ASQ Retail. Passengers define airport service by comparing the experiences they have at one gateway with those at another, so airports need to compare themselves with other airports in order to understand their true level of performance.
ACI's Airport Service Quality (ASQ) initiative – the world leader in airport service benchmarking – has been helping managers raise the levels of service provided to passengers for years.
At the core of the ASQ initiative is the ASQ Survey, a global benchmark of passenger satisfaction levels. It is used by over 230 airports around the world, which include more than two thirds of the world's 100 largest airports in terms of passenger traffic.
Now the initiative is being expanded with the launch of ASQ Retail, a new benchmarking service focused specifically on commercial activities.
It covers the three most important categories – F&B, retail (non-duty free) and duty free – and provides a benchmark of satisfaction ratings, sales performance (planned vs impulse purchase, total amount spent, etc) and consumer profiles and behaviour.
So how does benchmarking help airports improve their sales performance and what insights have been learned so far from ASQ?The ASQ programme is built around sharing information. All participating airports have access to the data and results of all other airports in the programme.
By putting an airport's retail performance into a global perspective, ASQ Retail helps commercial managers gain a better understanding of their airport's retail/F&B offerings' strengths and weaknesses.
And ASQ statistics show there is still a strong opportunity for development of commercial activities because data from the airports participating in the programme in 2011 indicates that on average only 70% of passengers are even aware of an airport's commercial outlets (restaurants and shops).
Surprisingly, in some of the world's top airports this percentage drops to 30% to 40% for both shopping and restaurants. This just goes to show that having a great airport and great ambience is not always synonymous with great shopping.Great ambience is, however, central to commercial success.
ASQ Retail data indicates that ambience is the factor with the strongest link to passenger satisfaction with an airport's commercial services.
Developing a successful retail operation is also not just a question of installing shops all over the terminal, as the 'retail experience' has to be conceived as and seen to be an integral part of the airport's ambience. Where both work together, the result is a maximisation of the commercial potential.
A good example is Singapore Changi, one of the top performing airports in the ASQ Survey, which also achieves very high recognition rates for its commercial services, reaching
80% to 90% of passengers.
Not only does ASQ Retail provide managers with an overview of their airport's performance, but it puts this into context by showing how each aspect of the airport's offering is performing compared to other airports in the world.
Managers are thus able to quickly identify best practices from around the world and see which airports are performing best.
Imagine being able to directly compare your airport's retail performance with the world's best such as Dubai or Incheon.
With a good understanding of best practice, it is possible to become more effective in planning future improvements.
ASQ Retail provides managers with a deep knowledge of global airport shopper profiles.
Understanding how key passenger groups behave in other airports around the world gives a clear indication of whether the airport's commercial offering is reaching its full potential.
Motivating staff to provide outstanding customer service is another essential factor for success.
One of the strengths of the ASQ initiative is providing airport management with a clear understanding of what great service really means. And this understanding is used to unite and motivate staff throughout the organisation towards the common goal.
Top performing ASQ airports realise that staff devoted to providing great service to passengers also provide great service to colleagues, making the airport as a whole more efficient and effective.
One of the key challenges of managing the commercial services is making sure that concessionaires are meeting the standards the airport has set for them. ASQ Retail facilitates this by providing an impartial measure of service levels.
Indeed, an ever-increasing number of airports are using ASQ results in their service level agreements with service providers.
However, experience with the 230 ASQ airports around the world shows that there is no single way to achieve success with commercial services. It is clear that there are a number of basic tenets or ground rules for success, but simply copying another airport's approach rarely works well.
The best airports understand and integrate their own personality and local culture into the passenger experience both from an overall perspective and a retail perspective.
Airports around the world are exploring new and innovative ways of attracting passengers into their commercial outlets and ASQ can help by providing a platform for informed and open discussion and helping airports learn from each other.
At the end of the day, however, the true measure of whether an airport has achieved success in managing its retail offering remains sales performance and customer satisfaction levels.