Delivering Value, With Options

Retailers explore the changing complexion of the passenger experience

DALLAS — The buzzwords at the Airport Revenue News 2008 Conference and Exhibition held here in late February were experience and value, as in giving customers an experience they value as the quickest way to their hearts — and wallets. While generational shifts make meeting the needs of passengers a greater challenge, one analyst advises that the Baby Boomers still rule. At the same time, airports themselves are changing as developers recognize the value of being near-airport. The meeting also featured some insights from a leading television travel editor, who offered his travel experience dos and don’ts.

Retail is tough, says Jim Dion, founder and president of Dionco Inc., a retail consulting and training firm based in Chicago. And there are various reasons for that, from conditioning customers to wait for big ‘X percent off’ sales to simply the amount of retail already out there -— 40 square feet of retail for every person in North America, to be exact.

Dion says the consumers are just getting harder to reach.

“They’re increasingly time poor,” Dion says. “All our labor-saving devices have simply added labor to us. And we’re all seeing in America today, unfortunately, a lot of our productivity increases are not only coming from technology but … multi-tasking on the job site. And so people are stressed out today.”

He says consumer expectations are constantly being raised. He points to photo development as one example — what once took three days evolved into one day, then one hour, and now it’s instantaneous.

“[Customers] are better educated. And there is nothing worse than an educated customer. Give me a good stupid customer any day. These educated customers are skeptical, they’re cynical, they’re demanding.
“The bar is getting raised every year.”

Plus, the markets have fragmented. “There is no kind of mass market out there anymore.”

Generationally, Dion says America is aging. “We are changing in America,” He says. “We are getting older. But Baby Boomers still rule.

“So many marketers today are going after Gen-X and Gen-Y. Duh. [Boomers] is where the money is. This is where the money is going to be for the next 25 years.”

Dion says that within two years, Boomers will spend $2 trillion more than all people younger than age 45. And he notes that Boomers are staying ‘younger’ longer.

“We’re not going to be heading for our rocking chairs at 65 years old,” Dion says. “And we love to try new stuff.”

Dion says seniors are a good market, in that they have more free time and therefore spend more on travel and leisure. Plus, they have much more brand loyalty than younger generations.

Of Gen Xers, Dion says, “It’s too bad they don’t have a heck of a lot of money, but when they do have money and as they earn it, they spend very aggressively.” He notes that authenticity really matters to people in this age group.

And generation Y?

“These are Madison Avenue advertising people’s worst nightmare, because they don’t believe in advertising,” Dion says. “The only people they trust is each other.”

With nearly 38 million immigrants in the United States, Dion says the growing Hispanic population will be another market to target. But he warns against assuming it’s a homogenous population, citing a Cinco De Mayo promotion one company recently ran in Miami. Unfortunately for that company, they were promoting a Mexican holiday to a predominantly Cuban market.

“We’re really looking at 20 different markets,” Dion says. “There is no single Hispanic market.”

Dion notes that there are two ways to go right now in retail. “Customers want it fast and now, or an incredible experience. We’re seeing retail developing into that dichotomy.”

He says delivering experience — driven by the simple fact that most customers don’t need more ‘stuff’ - comes in many forms. For example, Starbucks is successful based on a home away from home experience, while Apple store’s success comes from being highly interactive for customers. Meanwhile, Costco is thriving on a ‘treasure hunt’ feel, something for which he says people are willing to pay extra.

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