Retail Update

Activity remains robust at airports As concessionaires compete for requests for proposals and look for opportunities to expand, airports strive to increase revenues. Whether it’s the addition of a proven nationwide food chain to a profit-lagging...


“USA Today is the preferred newspaper for travelers,” says HDS executive VP of business development Gerry Savaria, “moreso for business travelers. It is very user friendly, very visually attractive, and we would think that there is brand equity that can be passed on to the airport environment where travelers are already familiar and comfortable with the brand. We think that this would have a lot of appeal in the sense that there’s strong brand recognition and we could also have a lot of fun with the strong graphic content.”

HDS is investing in the redesign of its stores, featuring a dramatic storefront element. The concept, says Savaria, is particularly interesting in terms of materials being used: quartz countertops, tile on the storefront, etc. “We have very dramatic graphic treatment which allows us to communicate a strong sense of place,” he says.

Using the HDS stores at Toronto Pearson International Airport as prototypes, HDS focused on rethinking its core brand, Relay, and has incorporated it into future redesigns in North America.

Another element HDS will soon introduce is a multimillion dollar point-of-sale system. Partnering with Dallas-based Fujitsu, HDS’s new system has new features that can be activated depending on the store need and location, including a remote checkout using handheld units. “If there is a rush because a flight is delayed or people are coming in droves to the newsstand, we can accelerate the queues at the store,” explains Savaria. The new system will also have the capability to use self-scan kiosks.

The POS program features a database that feeds from the central office to the retail outlets to maintain pricing efficiency and inventory.

Everything is downloaded to update our database at the store level from the central office so we have a 100 percent scanning rate of whatever we sell in our stores, which in turn allows us to optimize the merchandising of our stores individually and drive our revenues,” explains Savaria.

We know what we’re selling and where; we can anticipate sellouts better and keep full in-stock position. At the end of the day it results in higher revenues, and higher revenues result in higher rent for our airport partners.”

The POS is scheduled to be implemented systemwide in the next few months.


Massage Bar, some 13 years in the airport business, adds a tenth client to its portfolio. Sacramento County Airport System unanimously awarded kiosk space in Terminal A, in the central mall area, to provide the new service, with a target opening date of June 2007.

Massage Bar president Cary Cruea emphasizes that kiosk space can be just as valuable as in-line store space. “We started out at kiosks and we have a couple of in-line store spaces; however, we can make just as much money in a kiosk as we can with a store.”

At Massage Bar’s busiest kiosk site — C concourse at Seattle-Tacoma International Airport — the business generated approximately $1 million in revenue out of a 240-square foot space, according to Cruea. Because of the company’s success in Seattle — and repeat business accounting for 80 percent of its business — Massage Bar is scheduled to open a new 1,200-square foot in-line store space to replace the Sea-Tac kiosk in May 2007.

Massage Bar’s latest concept is a twist on the food court: a spa court, or centralized area for services ranging from manicures and pedicures to massages. “When the airport wants you to provide all of these different services — haircuts, manicures, pedicures, massages and more — 1,200 square feet isn’t that large. When you try to throw everything into one store space, you’re really not able to offer equal services,” Cruea says. “Instead of just having one big monster store trying to throw everything in the same store, use a common area, whether it’s reclaimed gate hold space or something of that nature, and put in separate service providers.”

Massage Bar is looking to team up with other spa service businesses to present a united front to airports as a part of a spa court concept. Cruea suggests that “if an airport were to set up a service court, they would get individual providers -- massage, manicure, shoe shine, barber -- in the same general area. Then the airport would have the advantage of having four different leases, each being a [potential] DBE tenant.”

 

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