For a while now, we have noticed how UK airport retail is shifting further away from conventional high street retail, as it continues to evolve its own identity that is both experiential and tech-driven and is showing no signs of slowing down.
According to Fortune Business Insight, the travel retail market is projected to soar to $145.6bn by 2032. In particular, the luxury retail sector is experiencing significant growth in the airport industry, with high-end brands capitalising on their long-standing relationship with air travellers and a wider interest in luxury goods.
From a psychological perspective, the average airport shopper is in a different frame of mind and the usual barriers around being cautious about spending are shifted, as they are in “holiday mode” and tend to be more spontaneous. This creates opportunities for brands to capture this mindset to their advantage. There are other changes influencing consumer behaviour when it comes to travel retail, which are being driven by several factors.
A leaning towards Luxury
Airports are increasingly becoming luxury retail hubs, offering exclusive collections, personalised services, and immersive brand environments that blend duty-free with premium lifestyle shopping, and cater for high-spending travellers.
The importance of technological integration
Technology is increasingly being used to create less “friction” such as the use of self-checkouts, “just-walk-out” systems, and even robots to help reduce queues and to give choice to those customers who are in a hurry. Technology is also being used to utilise passenger data such as origin, destination and time of travel, to personalise products and promotions that are relevant to a specific audience.
Delivering an experience
The pop-up comes into its own at airports, giving brands the opportunity to experiment with customer interaction in many exciting ways. When executed well, they become interactive concepts that engage and entertain passengers and turn dwell time into a positive experience.
Combining E-commerce & Blended Retail
The integration of online shopping with physical airport stores, through services such as click-and-collect, is providing more choice and convenience to customers. In addition, offering exclusive items that are only available at airports is helping to drive interest and allow retailers to beta-test certain products to assess their popularity.
What are the challenges to overcome
All of this comes with its own set of challenges. For a start, operations are tied to flight schedules, often requiring 24/7 service in major hubs like Heathrow, to cater to all flights. These require staffing, and the need for higher pay to attract staff to work unsociable hours. There may be difficulty in finding staff with the specialised skills for managing modern retail technology and complex airport environments, and additional training may be required. Strict security requirements can also add extra complexity with longer onboarding for staff.
When it comes to physical retail stores at airports, these often require creative and compact interior designs and efficient layout solutions to maximise these spaces. There are also limitations on when construction and fit-out works can take place, and there tends to be a very small window in a 24-hour period for deliveries of materials. Strict security requirements also need to be adhered to in terms of screening of contractors, suppliers and build materials.
The Supply Chain for stock is also more complex in airports than the high street, making replenishment a challenge and slowing down returns, which can impact customer satisfaction.
This is when support services come into their own. Having a network of businesses with the correct experience and knowledge of airport operations is essential. Whether it is staff services, security screening, logistics, construction support and stock management, collaboration and efficiency helps to ensure a frictionless process for travel retailers and brands to capitalise on high passenger volumes and to make the most of this unique, captive and growing consumer environment.
How Aviation Supply Chain supports travel retail
Aviation Supply Chain (ASC) is the digital portal that is a reliable route into airport projects and procurement and serves as a centralised hub in which business can engage and to collaborate.
ASC registered members looking to be part of the solution for airport retail, can easily promote their products and services to the existing airport network, as well as receiving airport updates, information about events and opportunities. They will get to be part of an important network that is built on collaboration, not competition.
