Retail Trends: Attention airports: Changing face of airport retail deserves attention

June 8, 2004

Focus on Retail

Retail Trends

Attention airports: Changing face of airport retail deserves attention

By Eric Peterson

June 2004

Eric Peterson, AIA, principal with Architectural Alliance, a Minneapolis-basedretail design firm, says the mix of airport retail is changing andairports must take notice. Customer demands have changed, and oftentimeshave increased well beyond food and beverage.

Things didn’t go well when, a few years ago, Suzanne Letourneau first approached airport concessions managers with a new retail-and-services concept that would help passengers relax. “They looked at me like I was coming from another planet,” the Toronto entrepreneur recalls. “They said, ‘A spa in an airport? And an oxygen bar?’”

But Letourneau persevered. Her company, OraOxygen, now offers fatigued fliers passing through Calgary or Detroit such services as massages, pedicures, facials, and stamina-enhancing sessions in semi-private oxygen “lounges.” Because oxygen levels dip during air travel, airline passengers often deplane feeling physically or mentally out of sorts, says Letourneau, a former flight attendant. “I had one gentleman who came to Calgary from Africa, via London,” she says by way of example. “He said he had a migraine for more than 10 hours of the flight. But after a 15-minute oxygen treatment, he felt great. He said, ‘Where were you 10 hours ago?’”

TOP: Minneapolis-St. Paul International Airport’s Concourse C Food Court.
BOTTOM: OraOxygen at Detroit Wayne Metropolitan Airport offers spa services, including oxygen treatments.
(Photos courtesy of Architectual Alliance.)

A lung full of oxygen may provide relief to weary passengers on a layover, but it’ll take something more to revive airport managers trying to keep up with today’s trends in airport retail and food and beverage offerings. They’re exhausted. No longer skeptical about the financial viability of installing, say, a clothing store or an electronics shop in a terminal the administrators are now scrambling to keep up with fast-paced changes.

As dwell times have lengthened in recent years, due in part to security measures, passenger demand for diversions, services, and shopping opportunities has increased sharply. “I wish I knew how much ‘too much’ was,” says Joe Anderson, manager of concessions for the Metropolitan Airport Commission, which oversees Minneapolis/St. Paul International Airport. “Every time we add more, it seems like the bar has been raised.”

More and more, airports are beginning to resemble lifestyle centers — shopping malls that cater to social and entertainment needs as well as commercial doings. The trend is readily apparent, for example, in the plans for a new 2 million-square-foot terminal at Dallas-Fort Worth International Airport. The new facility will include a 300-room Grand Hyatt hotel as well as two central halls with 72-foot-high ceilings and more than 110,000 square feet devoted to concessions.

“We currently have no areas where people can congregate,” says Patrick Gleason, the airport’s vice president of revenue management. “These halls are designed to function like the old town square, where everybody congregates around the clock and the fountain.” Spread across a grid system, the space features 70 concessions locations, a mix of both large and small spaces. Some are on the perimeter, others in the middle of the room, and still others on the second story. A children’s play area, stages for entertainment, room for art exhibits, and even a two-story duty-free shop will beckon people to the upper level. “We tried to create reasons — other than the view — to get people upstairs,” Gleason says, noting that floor-to-ceiling windows at the end of each hall will give terminal visitors a stunning view of the surrounding Texas landscape.

Proposed Dallas/Ft. Worth International Airport Terminal D retail space. (Photo courtesy of DFW Capital Development Program.)

Dallas isn’t the first airport to put spaces for art and music in its facility. The San Francisco International Airport mounts museum-quality art exhibitions and hosts children’s programs. The airport at Nashville, also known as “Music City USA,” has long welcomed visitors with a taste of its own specialty: country twang. The airport currently has three performance venues for musicians, says Rebecca Ramsey, properties coordinator for the Metropolitan Nashville Airport Authority. She and her colleagues are working with California-based SI Partners to enhance and expand its seating and stage spaces. And though the music can be enjoyed gratis by anyone within earshot, the concept isn’t without retail possibilities. One of the stages at Nashville is currently connected to an Ernest Tubb Record Shop, which does a booming business in music sales, Ramsey says.

Music CDs may move in Nashville, but elsewhere it’s digital video discs that are flying off the shelves. The first DVD rental shop opened in the Lindbergh Terminal at MSP International in 1999, just as passengers were beginning to experiment with portable DVD players, Anderson says. Assuming the main market was for rentals, airport managers initially limited outright purchases of DVDs to just 10 percent of overall sales. But fliers carrying laptops or personal DVD players quickly outstripped the stores ability to stock items. Today, Anderson says, the revenue generated from DVD sales is equal to the amount generated by rentals. “That little shop is probably one of the leading DVD retailers in the Midwest,” he says.

CBR’s Radio Road and toto stores in Concourse C of Minneapolis-St. Paul International Airport. (Photo courtesy of Architectural Alliance.)

Indeed, Americans’ appetite for the latest technological innovation seems almost insatiable. In today’s Internet age, even air travelers have come to expect ready access to the World Wide Web. Whereas once only business-class fliers schlepped laptops cross-country, now travelers of every stripe — salesmen, teens, and even the elderly — are apt to carry a computer to use in checking email and surfing the Web. “Do you have wireless access?” is increasingly a refrain in coffee shops, restaurants, and, yes, even airports across America. Nashville is getting on board, says Ramsey. And Minneapolis, too, Anderson says. Like other concessionaires, the vendors providing such services will pay fees that generate airport revenues — a win-win for passengers and airport managers alike.

Technology hasn’t caused any upheavals in the food-and-beverages business in recent years, but tastes have. The long-predicted shift among American consumers toward a healthier diet seems to be coming to fruition, say several airport trend watchers. Don’t dump your burger joints just yet, but do prepare to carve a bigger niche for nutrition-conscious consumers.

Anderson, who is in the midst of developing RFPs for a new North Terminal with 25,000 square feet for concessions at MSP International, has decided to cater to such customers with a buffet — a solution that meets a variety of needs.

“We’re looking for a top-quality buffet where you can load up on veggies if you want,” he says. “Or if you prefer meatloaf and mac-n-cheese, you can pile that on your plate. Or if you really want to just eat dessert, you can pay your $8 and go have that.” Unlike a food court with multiple vendors, a buffet is more efficient in terms of space — and time. “You pay and you can get in and out in a hurry,” Anderson explains. “You don’t have to wait for a bill, and you don’t have to worry about tipping. You can get what you want, when you want it, and as much as you want.”

Specialty retail has made inroads in many airports in recent years. CBR, Inc., for example, has opened franchises of Creative Kidstuff, a toy shop, in several cities. The brightly colored spaces are a far cry from the dull hot-dog-and-newspapers stands that dominated airports as recently as two decades ago. CBR has also launched Bow Wow Meow, a high-end concept that caters to pets and people, in five airports. “People are intense about their animals,” says Carole Howe, CBR’s founder and CEO. “Pets are like family.”

Rendering of proposed expansion of Minneapolis-St. Paul International Airport’s Northstar Crossing. (Image courtesy of Architectural Alliance.)

Meanwhile, retail chains that offer consistent quality and value are likely to continue to succeed, says Mark D. Ashton, concession development manager for the San Diego County Regional Airport Authority. Brooks Brothers has done well in airports, for example, because its clothing is consistently cut to the same fit, Ashton says: “You know you can dash in, and buy a shirt without having to try it on.” Other airport retailers should take note.

Untapped areas remain, say the experts. More airports would benefit from having business-service centers that resemble Kinko’s, say some experts. And when’s the last time you saw an extensive collection of greeting cards for sale in an airport? Anderson says airport users are constantly asking him about services and products that might someday form the basis for a successful airport business.

If the idea is sound, the money will follow. “We average about $1,200 per square foot in annual sales in our concessions area — which is nearly double the average at a successful mall in this area,” Anderson says.

“That doesn’t mean we’ve done something special. It’s just reflective of the demographics of passengers in the terminal. They have spending power. They’re above average as far as their education is concerned and they make smart decisions. And they buy.”

Eric Peterson is a principal with Architect-ural Alliance, an airport and airport retail design firm based in Minneapolis. Contact him at 612-874-4102 or [email protected]

New Options at CVG

Anton Airfood, Inc. opens three flagship restaurants at Cincinnati/Northern Kentucky International Airport. Located in terminals A and B, the sites are part of a two-year, $130 million package featuring a mix of innovative concepts, regional favorites, and international franchise brands that have been opening in phases since 2003.

The new locations are Max & Erma’s, Wolfgang Puck’s, and Watson Bros. Bistro & Brewery.

Anton Airfood, Inc. operates a total of ten restaurants at CVG.

AIRMALL® Updates

Bijoux Terner and The Greenbrier Boutique, specialty retailers, have opened stores at Pittsburgh International Airport’s AIRMALL®. BAA Pittsburgh, Inc. is the developer and manager of the 100,000-sq.ft retail complex.

Bijoux Terner offers shoppers the latest trends in fashion jewelry, watches, and accessories, including scarves, hats, handbags, and totes. With shops in 25 airports, hotels, and cruise ships, this is the first Pittsburgh location for the Miami-based retailer.

The Greenbrier Boutique in Pittsburgh is the first airport location for this White Sulphur Springs, WV-based retailer. The boutique carries a line of signature gifts and finery including spa essentials, resort wear, and gourmet foods.

In fall 2004, AIRMALL will welcome two more retail additions: L’Occitane En Provence for beauty, skincare, and fragrance products; and Lands’ End clothiers.

The federal government is considering a proposal by Pittsburgh International to allow persons without boarding passes through security checkpoints so they may have access to the shopping complex.

O’Hare Landside

O’Hare International Airport’s commissioner John Roberson has plans to revamp the landside offerings. Currently, Starbucks kiosks are the only landside concessions option for travelers. Changes could include a video game room, a business center with video-conferencing capability, as well as a library.

Schenkelshultz Lleads Orlando Redesign

SchenkelShultz Architecture, which reports it had its best year in 2003, is developing a new master plan and architectural design for the concessions renovation project at Orlando International Airport. The project will incorporate a “Sky, Water, and Landscape” theme.

The first major redevelopment at MCO in 15 years, the 121,975-sq.ft. renovation is being completed in phases. The first phase in the North Retail Corridor was opened last July with new Disney, Sea World, Universal, and Kennedy Space Center anchor stores. Phase 2 was completed last fall, encompassing the main terminal food court and retail corridor. The final phase, slated for completion later this year, will renovate 54,465 square feet of the original portion of the main terminal.

Among the many features of the Orlando redesign:

  • a 205-linear foot garden trellis;
  • a special dome over the food court that hosts colored lights to reflect the colors of the sky at different times of the day;
  • introduction of a 2,820-gallon aquarium in the center of the food court, with some 120 saltwater fish;
  • living room-style seating in the food court, and upholstered wicker, teak chairs and benches in other parts of the airport.

DFW Convenience

Dallas/Ft. Worth International Airport opens the DFW TravelMart in Termainl C, billed as a one-stop convenience store, a joint venture between The Paradies Shops and Two Podners, Inc.

The 1,700-sq.ft. facility features an array of ready-to-travel items, including reading materials, health and beauty aids, and food and beverages.

Corey Airport Services Sues Atlanta

Diane Smith, the president of Corey Airport Services, Inc., is taking on the Atlanta Hartsfield-Jackson Airport after losing a multimillion dollar advertising display contract to Clear Channel.

Smith charges that Clear Channel was recently re-awarded a four-year contract despite the fact tht CAS was the low bidder. According to Corey Airport Services, it offered some 72 percent of its gross revenues to the airport, while Clear Channel bid 61.1 percent.

According to a CAS press advisory, Smith charges that Clear Channel used an ineligible disadvantaged business enterprise partner to secure the bid and has refused to provide tax returns related to the DBE as ordered by a Fulton County Superior Court Judge. CAS filed suit under the Georgia Open Records Act.