Airport Retail, once a small sector of the retail industry, has taken off in the last decade, accounting for 44% of global airport revenues, projected to be worth $47.81 billion by 2021[i].

This exponential growth has been driven by the rapidly expanding middle class and the increasing purchase power in the new, emerging markets in the Asia-Pacific.

From being transit points where the only attractions for captive customers were fast-food outlets, newspaper kiosks and over-rated Duty Free shop, where you could pick up the clichéd chocolate, liquor and perfume, airports are now considered the shopping malls of the 21st century. Physical stores across the world may be feeling the heat of recession and changing consumer behaviour, but airport stores are taking off, as global travel becomes more and more popular.

Frequent flyers no longer restrict themselves to the customary purchase of drinks and something to read on the flight. Airport shopping has expanding over the last decade to include gourmet meals at Michelin starred restaurant outlets, high street fashion and the latest in technology. Louis Vuitton, who opened their first airport store at Incheon in 2011 is set to inaugurate a sparkling new duplex boutique at Changi’s Terminal 3 in 2018[ii]. Leading brands in fashion, technology and even in the automobile sector are now vying for the attention of airports, as it has become an integral part of their retail strategy to have stores at international airports.

The new flyer is younger and more dynamic. Air travel now doesn’t just mean business travel. Leisure travel has been steadily increasing over the last decade

The new flyer is younger and more dynamic. Air travel now doesn’t just mean business travel. Leisure travel has been steadily increasing over the last decade.

This evolution is of course linked directly to the changing face of international airports. Swanky new terminals are popping up everywhere from New Delhi to Singapore in Asia, Brussels in Europe and Calgary in America – all with a single focus of inducing flyers to loosen their purse strings. Airport design now also incorporates retail strategies with an emphasis on exquisite store-front designs and attractive visual merchandising. Airports are investing in understanding the new airport shopper – a younger, more dynamic flyer who is aware of global brands and not as hesitant to spend money as the business traveler of the 20th century.

But the key ingredient to this whole new era high-end experiential shopping is technology. Innovations in technology have enabled airports to up their game by making the shopping experience at airports a comfortable and pleasurable experience.

Taking shopping beyond the walls of stores, airports are now giving passengers the option of digital shopping while they are still in the air or relaxing at the airport lounge, with the option of having their purchases delivered to their boarding gates or even their home! Passengers at Newark can browse the retail outlets on iPads placed in the restaurants across Terminal 3 and have their purchases delivered to their table,[iii] while Frankfurt airport gives travellers the option of having their shopping delivered to their address in the city.[iv]

Passenger data gleaned from iBeacons, airport WiFi and airport data analytics have been helping airports improve their infrastructure and help flyers navigate smoothly through the endless corridors of international airports. This data is now being harnessed by retailers to understand consumer behaviour and tweak their offers. Heathrow, for instance, uses passenger data to change the brands on the digital displays based on brand preferences of different nationalities. [v]

Airports are also using their WiFi networks to promote brands and send personalised offers through their smartphone apps. They can take it one step further by enabling Facebook login for their WiFi network, giving them access to the passengers’ brand preferences, which retailers could then use to improve their offers.

This is just the beginning of a series of transformations and digital solutions being adopted by airports to increase customer satisfaction and boost sales.

(This is a part of a two-part blog series on airport retail.)



Disclaimer: This is a personal weblog. The opinions expressed here represent my own and not those of my employer.