[RETHINK Retail] — As consumers become increasingly more convenience-driven, luxury retailers who want to catch new customers should look to the sky—or at least toward the terminal.
Airport shopping is no longer just about periodicals and duty-free beauty products: It’s about adding a new Cartier watch to your collection or picking up that Charles and Keith bag you’ve been eyeing since Camille Charriere debuted hers on Instagram.
Taking off in metropolitan cities across the world, premium retail spaces have moved in and made over Rome’s Leonardo da Vinci–Fiumicino, London’s Heathrow and Dubai’s international namesake, with luxury brands like Chanel, Louis Vuitton and Hermes bringing high-fashion glamour and niche shopping experiences to formerly featureless travel terminals.
Leveraging Delays
2018 saw a record number of global flight delays, with some countries reporting triple the number of travel disruptions compared to the previous year. In the United States, the Bureau of Transportation revealed that 21 percent of all flights were delayed by inclement weather and other aviation system and security issues last year, leaving more travelers stranded with time to kill and money to spend.
And they certainly are spending: Capital expenditures at U.S. airports grew by nearly 24 percent to $12.7 billion in 2017 from the previous year and, according to analysts
at Credence Research, the global airport retail market is expected to reach $90 billion by 2023.
In 2017, Pittsburgh International was the first airport in the country to reopen its boarding terminals to the public after years of demand by shoppers.
Home to high-end boutiques not found elsewhere in the city, PIT’s Fraport USA is the largest airport shopping complex in the United States. Non-flying shoppers must still pass through a security checkpoint but, for those looking to try on a new pair of Armani jeans or grab a drink at Bar Symon, the lines are well worth the wait.
While PIT is finding success by becoming a more inclusive retail space, other transportation hubs are leveraging their exclusivity.
To accompany the dozens of luxury boutiques popping up in its terminals, London Heathrow piloted its complimentary Personal Shopper service in 2014, where more than a million travelers have put an experienced shopping assistant to work while kicking back in the airport’s multiple private lounges.
But, as any well-traveled shopper will tell you, nobody does retail quite like Dubai.
Destination shopping
Travel retailers, take note: With premium retail spaces that include VR playgrounds and aquariums, Dubai draws in millions of annual tourists who come just for the shopping alone—so it only makes sense that Dubai’s airport would cash in on the Gulf nation’s most bankable attraction.
Last year, Dubai Duty Free (DDF) renovated 6,235 sqm of retail space in its B and C Concourses and added new retail areas for luxury fashion, gold, perfume, cosmetics, electronics and gifts. And if reaching sky travelers wasn’t enough, DDF also opened a retail shop on the Queen Elizabeth II (QE II)—the first floating hotel in the Middle East.
Hermes bags and floating boutiques aside, Dubai Duty Free is currently undertaking a multi-million dollar investment in upgrading and enhancing its online ‘Click and Collect’ offer, which generated around US$ 21.7 million (Dhs79 million) in sales in 2018, and has also launched a major customer engagement initiative as part of its ‘Road to $3 billion’ project.
In an interview with RETHINK Retail, Dubai Duty Free’s Executive Vice Chairman & CEO, Colm McLoughlin, revealed that the airport’s recent digital innovation projects come as part of the operation’s cardinal commitment to better engage global travelers.
“We consistently looked at ways of improving our retail offer to an increasingly diverse passenger mix,” McLoughlin told RETHINK Retail. “We have collaborated more with our suppliers to ensure that we are delivering the right products at the right prices in the right location.”
“This combined with a series of strategic promotions, both in the physical stores and online, has seen an increase in sales in core categories. In 2018, we have rolled out over 6,000 promotions across Dubai International and Al Maktoum International airports.”
DDF has also introduced a variety of mobile payment solutions such as Apple Pay and Samsung Pay and, most recently, Alipay and WeChat pay—two of China’s most widely- used cashless payment providers.
“While we continue to improve the in-store experience and assortment, we also know that it is important to be relevant by providing an omnichannel experience and frictionless payments, which make shopping a pleasant experience,” McLoughlin said.
“Especially in this part of the world where visiting the mall and shopping serves as a part of social and leisure activity for most adults and children alike.”
This article first appeared in the Aug 2019 edition of RETHINK Retail Magazine.
