Trends in airport retailDecember 5, 2017

Marnix (Max) Groot

Manager Business DevelopmentIATA Consulting

Key projects:• Beijing Capital Airport• Seoul Incheon Airport• Shenzhen Bao’an Airport• Tokyo Narita Airport

Johan Schölvinck

ConsultantNon-Aviation BusinessIATA Consulting

Key projects:• Istanbul New Airport• Amsterdam Airport Schiphol• Moscow Domodedovo Airport• Taiwan Taoyuan Airport

Trends in Airport RetailDecember 5, 2017 Consumer

trends

Global spend per head evolution

CAGR 2005-16 2005-10 2010-16

Pax +5.2% +4.1% +6.1%

Sales +8.5% +10.6% +6.8%

SPH +3.1% +6.2% +0.6%

Source: Dufry, ACI, Generation Research

DUTY-FREE

Shifting behavior

In China

LUXURY BRANDS

remain in top demand

AFFORDABLE PRODUCTS are essential

POP-UP stores

CHINESE travelersShare of total retail e-commerce sales, worldwide

Source: Forrester Research

Retail operator trends

Operator-driven trendsEntertainment

Celebrities

Seductive layouts

Memorable experiences

Airport retail…

sunset?

• Non-aviation revenues are falling

• Security checks are increasing

• Duplication of shops

• Frequent travelers spend less

Airport retail…

sunrise?

• Over 3bn people in the middle class

• 140m/year increase of middle class

• 90% of this growth is in Asia

US $60B IN GROSS SALES

- Integration

- Joint ventures

- Abundant threats

RISK REDUCTION

ECONOMIES OF SCALE

DUTY-FREE

Trends in airport F&B

Operator-driven trendsCelebrity chefs

Pop-up restaurants

Knowing customer behavior

Food trucks

Operator-driven trends

Draw attention away from price Duty-free retailers moving into F&B

Consumer-driven trendsControl

Affordability

Low-cost airlines: More F&B

Experiences and trueness

Logistics trends

Tablet ordering

App ordering

Supply management

Waste management

Layout trends

More F&B

space

Vending

machines

Mixed with

retail

Food carts

Innovative passenger

services

Premium services

Fast-Track

Premium

lounges

Personal

shopper

Exclusive

parking

Service innovations

100% Digital

advertising

Valet

parking

Limousine

service

Trolleys with

wayfinding

Copenhagenisthefirst100%digitaladver singairport

Airline-Airport cooperation

B.A.R.T.A. Five players, new revenue, PAX data

The future

of airport

retail?

Brand worlds

Tech giants

Electronics

Sports

Charity

The Future

of Airport

Retail?

DO’s

and

DON’Ts

The AMS example

Retail mixed

with F&B

Genuine

market squares

Icon

features

Sense of

place

The bottom line

21% of revenues

create 47% of

operating result (2016)

The wrong exampleLondon

Luton

Chengdu,

China

München,

Germany

Pyongyang,

North Korea

Do’s and Don’ts

RETAIL

• Address the digital

consumer

• Combine luxury brands

with affordable products

• Increase your commercial

space

• Develop the right

partnership/contract

• Be a very active manager

• When you can measure it,

you can improve it

• Develop an airport

shopping brand

FOOD & BEVERAGE

• Make it the new rock star:

it is a magnet

• Mix grab and go, food

courts and full-service

restaurants

• Don’t put it on a

mezzanine

• Try food trucks and other

experiences

• Develop combined

Retail/F&B concepts

PASSENGER SERVICES

• Map the customer journey

• Serve every passenger

segment

• Exaggerate your sense of

place

• There’s a market for every

premium service

• Learn from the world’s

best

• Airports are in the

hospitality business