Success with airport concessions requires a focus on customers, marketing, and the business relationship
BY John F. Infanger, Editorial Director
January / February 1999
TUCSON, AZ — The airport retail revolution continues to evolve, and as it does certain key aspects are emerging as critical elements to success. These include new marketing techniques for a changing customer base; new ways of looking at the airport-retail tenant relationship; and, ways of monitoring customer service and retailer performance.
Today's airline passenger may pass through several airports during the same day or week. Generating revenues from that potential customer is the goal of each retailer and airport along the journey. However, if each airport experience is identical, the capture rate will decline, say those in the business. The correct combination, it seems, involves offering "name" national brands interspersed with regional and local novelty specialties that offer a unique experience. Critical, too, is ensuring the customer has a positive experience along the way — which brings into play customer service feedback and retailer monitoring. And, how well airports and their retail tenants get along and conduct their business partnerships can ultimately dictate the end performance of retail at an airport.
That, in essence, is the overriding message of representatives from airports, retail companies, and consulting firms who convened here recently at the 9th annual Airport Concessions Analysis Seminar, hosted by Embry-Riddle Aeronautical University. Their mission: share experiences concerning airport retail — from the airport, tenant, and customer perspectives. Following are select highlights from their presentations.
The ’right blend'
To determine what the potential "right blend" of retail mix works best at an individual airport, realize that the customer can be a key indicator, comments Ruth Crowley-Jacinto, senior vice president for Universal Studios and a former lead retail executive for Host Marriott.
"It isn't all about rent, and you don't bank the highest bid," she advises. The path to increasing revenue retail streams is one laden with demographic details of passengers who use the facility, she says, and the recognition that purchases are being made more on a want than need basis.
"You have to seduce the customer," she explains. Merely adding additional space for retail at an airport doesn't guarantee sales; it also requires creating an environment that attracts customers to it. Rather than being a cloning exercise, says Crowley-Jacinto, airport retail in the ’90s calls for regional customization, and product mix that is both national and regional, and the availability of brand names which offer familiarity and help relieve the concept of over-pricing.
She adds that customers will make a decision to buy in 18-30 seconds, and thus must be quickly sold by being able to easily discern what's being sold. To "complete the experience," she adds, quality service must be in place.
Signage can serve as a facilitating device for airports anxious to lure retail customers, she says, by not only telling what is available but also where it can be found and how long it will take to get there. "Ten seconds away" can sound attractive to the stressed airline passenger.
James Adam with NBBJ Retail Concepts Group echoes the importance of incorporating brand retailers, but offers that building local and regional shops around a national brand such as Starbucks can increase sales "to help expose what's unique."
He also cautions that while airports have captured some of the retail sales in recent years from shopping malls, he fully expects mall marketers to fight back to recapture some of that lost revenue. In particular, malls are redesigning their facilities to be more interesting and fun for customers, adding things such as "street entertainment." Keeping an eye on these new innovative retail techniques should be an ongoing consideration for those responsible for airport retail marketing, says Adam.
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