- October 10th, 2016
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Shopping The Friendly Airports: 3 Ways Technology Can Boost A $32B Industry
Airport retail is expected to grow rapidly in the next 15 years. A look at the trends motoring this growth, and three ways retailers can take advantage of technology to engage travelers.
Think of the last time you walked through an airport. What images come to mind – gate numbers or “on sale” signs?
Odds are a shop of some kind popped into your head. There’s even a good chance that you stopped into that airport shop and bought something, perhaps a gift. This is thanks not only to the convenience of terminal retailers, but also to their growing variety and ability to better engage time-killing customers. Airport retailing is estimated to grow globally to $47.8 billion by 2021 from $31.8 billion in 2016, according to the report Airport Retailing Market.
Several trends, including the quest for retail real estate and airport funding sources, are fueling this growth. But so is traffic. Hartsfield-Jackson Atlanta International Airport, the world’s top-visited airport, counted more than 100 million visitors in 2015. That’s up 5.5% over 2014. The Mall of America, the nation’s top-visited mall, attracts 40 million visitors a year. To get close to the Mall of America’s numbers in airports, we have to scroll down to No. 43 on the traffic chart, to Orlando International, with 38.7 million.
Traffic of course does not guarantee sales, but it is essential to them. As more airports learn to incorporate experience into their retail offerings, the more attractive they will be not just for potential shoppers, but also for tenants.
The key determinant of the industry’s ability to do that may in fact be in the palms of consumers’ hands. Mobile devices, and the apps they enable ranging from loyalty programs to digital wallets, could allow airport retailing to ascend from time killers and souvenir shops to maybe even being planned destinations.
Following are three ways retailers can take advantage of technology to engage travelers.
It goes without thinking that a good number of terminal trotters are enrolled in frequent flyer programs. There are 3.3 billon memberships in various loyalty programs in the United States (averaging 29 per household), according to COLLOQUY. Of these memberships, 356 million are in airline programs.
Many of these programs form partnerships with complementary businesses, such as rental cars, hotels and, increasingly, retailers. Airports, therefore, represent a burgeoning opportunity for airline-retail loyalty collaborations.
More than seven in 10 travelers (71%) rely on their mobile devices to navigate their destination town, and 66% use them to find attractions, according to the recently released Travel and Loyalty report by COLLOQUY. So consider how interesting that could be for a destination that is really temporary, such as your four-hour layover at an airport.
Mobile devices and loyalty apps could help travelers locate desired shops, such as Harley-Davidson, Lush or Sunglass Hut, within the airport. If the airline partners with a retailer that has a large airport presence, it could send its frequent flyers notice of special sales or events that take place when the member is in an airport that is home to that retailer.
Similarly, retailers with rewards programs could use geo-targeting apps to send customized offers, discounts and rewards to travelers while in the same airport terminals, the COLLOQUY report advises.
“A sunglasses kiosk, for example, might text a special discount to the beach-bound vacationer sitting at a nearby gate, or an electronics retailer could remind a business traveler waiting for an international flight that he forgot to snag a country-specific adapter for his devices.”
Level Off The Stress
Mobile tracking also enables airports to better understand the flow of travelers in the airport, which can be used to provide relevant information to travelers so they can make the most of their time in the terminals.
A significant challenge for airport retailers is that many travelers find being in the airport stressful. Getting them to shop means assuring they can leave the gate area without missing the flight. And doing this means providing easy-to-access details about flight information, ideally in conjunction with airport shops and restaurants.
Some airports have installed iPads that enable passengers to order food while waiting at the gate (these iPads also provide flight status information). Possibly better is when airport restaurants offer their diners individual iPads so they can check their flight status at the table, and possibly order that second glass of wine.
At Tampa Bay International Airport, gate displays show not only if the flight is on time or delayed, but also the progress of the aircraft, according to a story in Tnooz. Travelers can estimate how much time they have before their planes arrive, and use it to shop or dine.
The result: Tampa International recorded a 10% increase in airside concession revenue and a 6.8% increase in dollars spent per passenger.
Make the Shop Terminally Different
A key difference between airport retail and traditional shopping malls is that the visitors at malls can carry their purchases into their cars and leave. But sell a coffee table or set of China in an airport? That won’t fit under the seat.
This is such an easy fix, though. The customer can select a china pattern or coffee table from a store’s selection of floor models or its digital catalog, order it via mobile device and have it delivered to home. Or, the store’s employees can do it for him.
The point is to recognize and embrace the fact that airport retail is different from the traditional mall. (That said, some U.S. airports, such as Minneapolis/St. Paul International, offer retail experiences that feel pretty much just like a mall.) There are some limitations, sure, but also terrific opportunities. If I had a layover at Chicago O’Hare and found a shop or even kiosks offering furnishings from Room & Board, there is a chance I would buy a lamp or side table I might not have considered otherwise.
Similarly, my frequent flyer program can alert me, upon arrival, of all the airport merchants that are unique to that particular city, and their locations. Chances are, I can buy those hard-to-find chocolates or coffee beans while cruising from one gate to the other.
And the next time I think of that airport, I am far more likely to remember that shopping experience than the time spent waiting at the gate.
This article originally appeared on Forbes.com, where Bryan serves as a retail contributor. You can view the original story here.