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Retail success

What are the main trends in the concessions industry?
I am noticing some new trends that are ‘back to the future’ trends. For instance, there is a new beauty company offering upscale beauty products in a pink bus that can be moved from one place to another. This reminds me of the old currency exchange bus-type kiosks that used to move from one place to another in international airports. Many airports are also featuring more pop-up locations. They are a low-risk venture that allow concessionaires (and airports) to try out new ideas without committing to long contracts.

Airports are recognizing that there is a special need for events like the World Cup to have a presence at the airport before, during and after the event. OR Tambo International Airport in Johannesburg created a variety of commercial venues throughout the airport to accommodate the World Cup in 2010, and Phoenix Sky Harbor Airport had special venues for the Super Bowl this year.

We are seeing blended concessions with recognized local ‘super chefs’ creating an upscale food presence in airports throughout the world. Airport travelers have become more aware of what makes good food and frequently reward themselves while on a business trip or vacation. Airports are creating destination-type venues for both food and beverage and retail. 

Brands continue to dominate the retail segment, with luxury duty-paid stores like Pink and Coach in addition to the usual duty-free seen at international airports. Duty-free locations are bigger and grander with all kinds of upscale displays including some tastings.

How have passenger demands changed?
Passengers are demanding better food and retail. They will no longer be satisfied with a news/gift location or only fast or casual food choices, and want fresh food and the latest retail. They also want food that is pleasing in terms of both taste and appearance – and shrinkwrap sandwiches are losing favor. Airport patrons expect to be acknowledged when they enter a concession, expect to be waited on quickly and professionally, and are upset when this doesn’t happen.

How is technology changing the way passengers shop and dine?
Today’s world offers so many choices that it is mind-boggling. At Minneapolis-St. Paul, JFK Terminal 5 and other locations you can order your meal even before you enter the airport and be served or pick it up when you arrive. At some airports food is served in the gatehold areas with seating, a menu and even a socket to plug your computer in so that you can work while eating. Concessionaires and airports are using technology to examine daily receipts to understand their customers’ preferences. Quick ‘how was your experience’ surveys provide information and check on how things seem to be going (although passengers usually only respond to exceptionally good or bad things).

With internet access almost everywhere, passengers can use location apps to find concessions they are interested in and, depending on how much time they have before their flight, can move between terminals (often via automated trains) to eat at a restaurant or shop at a store and return to their gate. 

With texting and tweeting, if something goes wrong in a traveler’s experience, the world will know it very soon and that may influence people’s decision on whether to patronize a concessionaire at an airport.

What can airports do to increase concession sales?
Airports need to rethink spaces and, when possible, expand narrow concourses or negotiate food/beverage spaces in gates. Passengers like to be able to see their gates when dining or shopping and know the gate is not far away. Concessions need to be visible from the gates rather than pre-security or in a large retail hall with gates so far away that passengers are not comfortable shopping.

Airport concession staff need to meet with concessionaires on a regular basis, track sales month on month and comparing them with the past year and traffic trends. Staff need to stay in the loop for any new or upcoming changes in construction or airline flights and communicate them to their tenants. It is important to build relationships between the concessionaires and airport staff because the best information on what is happening in your airport is through the people closest to the customers.

I would also suggest that staff not be tempted to just extend contracts – there are so many new and good concepts that the opportunities for fresh creative concessions will be lost. I know existing concessionaires would like to just stay there, but the airport will not retain a fresh and new atmosphere with stale concepts.

Additionally, liven things up at your airport – have fun with your concessionaires and passengers.  Have a St. Patrick’s day contest, where the concessionaire that decorates the most or offers the best deal wins a prize. Have a panel of staff judging the concessionaires with a form designed to help create objectivity, and then publicize the results. Sales always increase when people are having fun or think they are getting a deal.

Why is it important to combine local, regional and international brands? Is there a formula for creating the best combination of these brands?
It is dangerous to create a formula because airports are so different in their constituencies, traffic, mix of airlines, basic configuration, and passenger demographics and characteristics. It is very important for international airports to have a range brands so that they create a sense of place with local brands yet the international passenger can recognize an international brand. 

Some airports have tried to be ‘all local’ and found that sales were not great. It is difficult for some local restaurants to understand the differences between their non-airport location and an airport location. Adjustments have to be made in the menu, kitchen preparation and cooking, staffing, and speed of service that are not always understood. The same applies to retail – a branded department store would have to change the basic way it does business to survive in an airport. That brand would be terrific because of the loyalty attached to it, but the department store ‘shop’ would need to have restricted merchandise that could be carried in luggage or stored in overhead bin – so even internationally recognized brands may not succeed if they don’t comprehend the difference between their off-airport and on-airport locations and change the way they do business.

What does the future of airport concessions look like?
The future of airport concessions is bright, but concessionaires will have to evolve alongside consumer tastes. You will continue to see duty-free walk through stores. There may be some alliances between brands to create adjacent ‘open’ stores where consumers can shop freely between them, which will make the flow more attractive to consumers. However, this is likely to require new technology as the cash register needs to be able process sales by two or more companies simultaneously. It is being done now, but it is not common.

I think airport concessions will be more dynamic with displays that can be easily changed. Technology will be used to capture the customer’s attention even before they arrive at the store in the airport. For example, through the use of loyalty programs whereby customers are sent promotional emails or coupons depending on their brand preferences, and restaurants may even develop apps where customers can book a table or order their food before they arrive so they spend less time in line at the airport.

How can airports ensure they’re ready for these changes?
Read, read and listen. There is a lot of information available from all kinds of sources. It is good to step outside the airport industry and look at the trends in shopping – whether in a mall or online – to ensure that the airport is keeping up with trends. Do a survey and ask your passengers what they would like to see.

A kiosk program that allows enough room for a sales person to be inside the kiosk is much more preferable than a cart-type kiosk, with sales people sitting beside it. Of course there are exceptions, but wall wraps and small kiosks tend to be junky looking and don’t create the upscale look that most airports would prefer. The airport may have to budget for fixing infrastructure issues so that there is more openness and free flow throughout the airport and improved lines of sight.

Patricia Ryan will present ‘Concessions now and in the future at airports’ on Tuesday, March 10, at 10:10am at Passenger Terminal Conference in Paris, France. To view the conference program and register for the event please click here.

February 12, 2015

 









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