Lisa, how is airport shopping changing?
“First, for a little context, let’s remember that airport retail today is more than duty free bottles of spirits. If you look at Heathrow Terminal Five, Charles de Gaulle or Hong Kong International Airport, they are like town center environments, with a mix of essentials, fashion and specialty and hospitality businesses selling at different price points.
“Just like in the High Street, airport retail is in a state of flux. Demographic change is playing a part, as big spenders from certain countries travel less, business travel is falling due to video calls and Covid-19, and new travelers might be younger or less affluent. Digital and omnichannel retail is also having a big impact; just as in the High Street, airport retailers are working with companies like Flooid to make the switch between digital and in-store shopping more seamless, and to add new types of customer journeys such as click and collect. But airport retailers are also working on new ways to capture the attention and spend of what – in a pre-departure sense – is a captive audience.
“Perhaps the biggest change is that the pre-departure shop is becoming part of a wider experience landscape. The Bain & Company brief Airport Retail: Brace for Disruption, for example suggests the growth of Gen Z and Gen Y travelers means airports may introduce yoga, 30-minute culinary classes, musical listening rooms or even digital measurements for items that can then be delivered anywhere in the world. The challenge for retailers is to work out how they fit into the ever-changing, overall airport experience.”
How do airport retailers do that?
“The same as they’ve always done – stay close to the customer and give the customer what they want. That’s slightly more complex now, as you have a much larger variance in expectations and wants from those people visiting an airport. For every lone early-20s backpacker on a budget, there’s a family of four struggling to make essential sun cream purchases while racing towards check-in. Honeymooning couples might want leisurely champagne breakfasts or to kit themselves out with new swimsuits, while high net worth individuals might look for luxury purchases – and the associated high service levels – before they fly home. Connecting flights can make some shoppers more wary about the speed of transacting… but then there are the more careful customers, who get to the airport many hours in advance, and could do with an experience – possibly a shopping one – to fill their otherwise wasted time in the departure lounge.
“Airport retailers must recognize there are several types of customer to serve, all wanting a different experience and to pay via different channels such as at a till, or via mobile or self-checkout. The trick is to always give the customer the experience they want.”
Can you give us an example?
“I recently shopped at a premium designer store in an airport — picture the kind of mystical retailing world where suddenly it’s perfectly acceptable to pay $8 for a bottle of water. As a pre-holiday treat we browsed round the glass cabinets, oohing and ahhing at the shiny and leather objects of desire. But the store felt a bit clinical, with items either kept in their transparent prison cell or up high on a shelf where inquisitive hands were unable to touch. When I asked to try on a pair of sunglasses the assistant pulled out her mobile phone and checked they had the correct stock very efficiently and then scurried off towards the back of the store. As I glanced around I realized there was the no ‘anchor point’ of a Point of Sale, and consequently, no smiley, chatty member of staff to make you feel special or well-served.
“We decided to buy the glasses, and the transaction was quick and efficient via mobile-only POS. But there was no chit chat, or the engagement of ‘where are you off to?’ The part of the transaction that you can’t deliver with technology, the human interaction, which typically takes place by the till point, was missing. It all felt a bit clinical, as if we didn’t matter, even though it was a luxury purchase at a premium price point. I was excited about going away, and wanted it to feel a little bit more special – let’s not forget Rowan Atkinson packaging up ‘that’ necklace in the film Love Actually. Overall, I felt a bit unloved, and as if I could have done the same purchase online from the lounge.
“The point I’m making is not that mobile-only POS is a poor experience. In fact mobile more than has its place in a high-volume time-precious environment like parts of an airport. But in some luxury environments, we should never let the drive towards lower footprint devices detract from or diminish the customer experience. Retailers should always consider the intangible ‘customer connection’ before making investments in disruptive store technology.”
What about an airport retailer that’s getting it right?
“Hudson is an airport retailer selling newspapers, coffees, confectionary and other items. What Hudson has done well is realize it has a significant proportion of customers that wish to complete their purchase as quickly as possible. At airports including Nashville International and Chicago Midway, Hudson enables customers to shop with checkout-free ‘nonstop’ Just Walk Out technology. Other stores offer self-checkout and mobile purchases powered by a unified commerce platform. Hudson recognize that they can match new technology to customer preferences, while still maintaining more traditional points-of-sale for customers wishing to talk to staff or pay cash.”
And on cash…
“It absolutely still has its part to play. Cash is still a viable payment choice, it is the second most popular payment option, and cash in circulation is actually growing. Airport retailers must remember we are not yet a cashless society… and that travelers often have leftover currency they’d like to put to good use.”
Before you take off, any last thoughts?
“Retail – be it in the airport or elsewhere – may be subject to digital disruption but the fundamentals don’t change. Retailers must focus on convenience, communication and connection with customers, and then make technology choices which support their aims in each of these areas. That’s the way to drive spend, grow loyalty and create a customer experience that delights the consumer.”