Strong food service increases dwell-time and leads to higher retail sales – it is one profitable opportunity that is fast becoming the center of attention for airport management and connected developers. And if it isn’t yet, it should.
A change in consumer behavior has already made shopping mall retailers, downtown shopping venues and city councils more than a little worried. Instead of still happily spending time and money on downtown shopping, today’s consumers are hugging their iPads and ordering anything and everything online. Today, consumers have all the shops they want at home, so if downtown areas still want shoppers to visit, they should provide better reasons than ‘just’ shops.
Consumers are now looking for new experiences, as outlined by Forbes. Consumers are looking for places and experiences that are surprising, exciting, varied, fun, entertaining and meaningful. It’s all about ‘feel good’ and inspiration, fulfillment and indulgence, involvement and interaction.
This change in behavior has already sparked swift reaction from developers and urban planners to adapt downtown shopping venues to the new reality. In 2012, a study by Nozeman already showed that:
• Urban areas shift from a traditional shopping area toward a more leisure-focused use because a downtown area with ‘just’ shops has become less appealing for visitors to spend time in;
• The attractiveness of an urban shopping area is increased by more consumer-oriented food and beverage experiences, fitting the growing demand for fun and leisure. In the last 10 years, food service operators have doubled the amount of floor space they occupy within shopping centers worldwide from 7% to 15%.
For airports this whole development makes for an even bigger challenge. The scarcest asset at an airport terminal is space. Traditionally the most (commercial) space and the majority of prime locations have always been given to retail. To make room for experience enhancing F&B possibilities within the limited space of an airport, something’s got to give. But the need for better F&B is obvious. Recently, in announcing its 2015 results, Schiphol Group (operator of Amsterdam Airport Schiphol in the Netherlands) noted that commercial revenues from F&B had increased, where retail spending had decreased. Clearly, Schiphol won’t be the only airport to notice this kind of revenue change. At airports around the world, passengers are voting with their wallets and F&B is leading the polls.
The airport eat and drink rethink
So, in a sense, eating is the new shopping. But it is more than that. Adding more and more attractive F&B is not just more profitable for the airports themselves, it is also advantageous for the surrounding retailers as a strong food service generally correlates strongly with above-average retailer sales productivity levels and rental values.
It is not a matter of offering one or the other, but of providing both F&B and retail. The hard part lies in finding the right mix, rethinking the commercial space and implementing the right F&B experiences. This is not an easy thing to do; for instance, you don’t need things like exhausts and drainage for shops, but you do for F&B. A simple example of just one of the technical aspects that brings headaches to whoever is redesigning airport space.
Still, there is nothing you can’t do when you put your mind to it. Having been personally involved in seeing through the expansion of a substantial part of Oslo Airport in Norway’s F&B business, I experienced that first hand. The joint effort of airport management, designing agency, builders and specialized F&B companies has resulted in a concept that now offers consumers a new array of exciting F&B experiences, including a quite stunning food court full of variety, which creates a fresh, lively and inviting customer experience.
Terminal 2 at Los Angeles International Airport in California, USA, had a customer journey makeover that transformed the terminal into a place that breaths LA and California by offering a surprising F&B mix of the food the state has to offer. The effect on the overall airport experience and on its revenue is already showing signs of being on the money (excuse the pun).
Today’s consumers want different things from airports than before. There is still a lot of money being spent in airport shops, but there is no escaping the new reality: greater than the hunger for clothes and stuff is the thirst for great F&B.
About the author
Martijn Steur is an experienced commercial manager, consultant and entrepreneur specialized in strategy development and execution. He currently works for Kinetic Consultancy in the Netherlands. With a background of more than 15 years in developing high traffic locations in as many different countries, he has established a true global view. He is a certified experience professional – a practitioner and consultant on the strategic and tactical ways to help organizations improve their customer experiences and build their business.
April 15, 2016