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Maximizing Airport Retail Revenue

April, 2014

Realizing  the  vision  together  

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Focus retail after the security check; convert the passenger to a customer §  Customers do not buy when they feel stressed

or under pressure

§  When they have other priorities

§  When it is difficult to shop as a result of other customers or crowded facilities

§  When they cannot easily find what they want

§  Therefore, selling to customers prior to airline check-in or security procedures generates less revenue due to high stress levels.

§  Following the security check, create a, “re-composure zone,” where passengers can re-pack their lap-top and liquids, and put on their shoes while is sight of the retail offering.

§  At this point, the passenger has completed all of the stressful aspects of travel: arrive at the airport on-time, complete check-in formalities, and clear the security checkpoint, and is now a valuable customer.

§  The view of the retail environment will cue the customer’s brain that it is time to shop.

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Take advantage of natural customer flow tendencies §  Most customers are right handed and drive on

the right side of the road. As a result:

§  Customers look to the right far more than the left, and see more things on the right than the left, and

§  Customers push a cart or pull a suitcase with their right hand, which causes them to walk in a counter-clockwise direction due to the imbalance.

§  As a result, more sales are generated if a walkway curves from right to left with more merchandise and space on the right side because passengers are looking right while (perhaps unconsciously) walking left.

§  The primary retail environment should be placed in the normal path a passenger must travel between the security checkpoint and the gates.

§  Customers should be surrounded by retail options on all sides, thus creating the ambiance of a marketplace that allows for a pin-ball effect between shops.

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Make it easy for the customer to find their favorite items easily

§  Airport retail customers’ shopping priorities are

1.  Duty-free Goods (international passengers)

2.  Food & Beverage

3.  News & Gift

4.  Specialty Retail

§  Therefore, the primary retail area should appear to the customer in that order

§  Duty-free Shops configured in a serpentine walk-through shop achieve sales as much as 60% higher than other configurations because 100% of customers are exposed.

•  Food & Beverage outlets should be configured in a food court following the Duty-free Shops with a range of options: grab-and-go, fast food, and table service.

•  News & Gifts and Specialty retail should be visible from the food court, with some shops adjacent to or within the food court, which creates a marketplace environment.

•  Secondary retail stores for last minute purchases should be adjacent to the gates.

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Use space and fixtures to promote buying §  Customers spend more with space

§  Aisles between fixtures should be wide enough for people and their hand baggage to pass – or they will not shop.

§  Customers will not buy if they are bumped or jostled while shopping

§  Customers need to be able to see merchandise: lighting and proper signage are essential.

§  Fixtures

§  Customers of average height should be able to see over fixtures.

§  Customer vision and arm reach extends between from the shoulders to the knees.

§  Pyramid shaped fixtures enhance the sense of space and the view of merchandise on lower shelves.

§  Should be set diagonally to the main corridor so customers can see more merchandise.

§  End displays should feature popular goods.

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Most customers prefer a quick trip and spend money fast when they arrive §  Most retail customers purchase one or two

items, and want a quick trip. Any aspect of the shopping experience that slows them down risks loss of a sale. Airport customers are no exception.

§  Merchandise should be easy to find with popular items displayed prominently.

§  Sufficient sales staff should be available to answer questions; product information should also be available.

§  Merchandise should be displayed within an arm’s reach.

§  Baskets should be available to carry merchandise.

§  Sufficient cashiers should be available to mitigate queues.

§  Shops should be wide, not deep so more merchandise is visible

§  Customers inclined to shop more intensively will proceed deeper into the retail offering.

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Airport customers are high quality; dwell space should be in the retail area §  Airport customers have excellent attributes

§  They have disposable income – they can afford to fly.

§  They are a captive audience – they have time and no place else to go.

§  They have just completed the stressful experiences of getting to the airport, checking-in, and passing security, and are now in a self-indulgent mood.

§  Seating and dwelling space should be found in the marketplace environment – this is revenue seating.

§  Seating in gate hold-rooms outside the primary retail environment is non-revenue seating.

§  Flight Information Directories should be plentiful and easy to read so that customer stress level remains low and perceives that they are in control.

§  Longer dwell times do NOT equate to higher spend rates

§  Most customers are on a quick trip, and will spend the most money per minute early

§  After customers have shopped and eaten, they will not have a second meal, or buy significantly more.

§  A one-hour dwell time is plenty.

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Create a local sense of place in a marketplace format §  The marketplace should give the customer a

local sense of place

§  Local brands should be prominent to reinforce the sense of place, although global brands should be present to satisfy all tastes.

§  Live music or other performance arts enhance the sense of place, and increase the appeal of the marketplace.

§  People shop with all of their senses, so the ability to touch, smell, and taste goods for sale is important.

§  Services such as spa treatments and business facilities provide other conveniences that add to the customer experience.

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Concepts in practice: Example of a primary retail area

K1 Common Seating

Duty Free

Seating Seating

Common Seating

K2

K3 K

7 K4 K

5 K6

Security

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In Brazil, well-wishers should have access to some retail outlets

Security

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Arriving passengers are duty free customers and meeters and greeters buy refreshments §  Inbound duty free should be between the

baggage carousels and the customs hall/exit (not to the side)

§  Should be configured in a walk-through concept to maximize exposure.

§  The cart check service, which is offered today, should accept carts at the entrance, and transfer them to the exit adjacent to the cashiers.

§  A limited retail program focused on food and beverage should be offered in the arrivals hall with seating.

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FOR MORE INFORMATION:

Kenneth Currie Kenneth.currie@intervistas.com Luciano Nunes luciano.nunes@intervistas.com Rua Casa do Ator, 1.117 sala 44 – Vila Olimpia – Sao Paulo M: +55 11 98205-7957