Twenty years ago airports were expanding duty free shopping and today, Larry Leung, Customer Experience Leader, says he has seen it evolve and discusses where retail in airports could go next.
“We have seen an evolution of store formats at the airport, and now many airports are now thinking about bringing in more local brands to have more of an elevated experience inside the airport instead of offering the same retailers that people can access in the city,” says Leung.
“Airports should have more local and elevated brand experiences to sell”
Leung said Canadian airports should bring more local experiences to passengers, this will support local businesses, bring awareness to travellers, provide unique retail options, and it is fun for tourist and local travellers to see local product offerings instead of the same larger retailers.
Looking at the Toronto Pearson Airport, they currently have retailers such as Chanel, Bvlgari, Gucci, Michael Kors, and the airport even has Genesis, a car retailer where you can book a test drive – but what local retailers are they supporting?
Bringing more local brands into airports that represent the city will bring an elevated experience as it motivates everyone to shop as it is unique and supports local businesses. Airports have millions of travellers every year, so bringing local brands would also help their success as they would be able to expand their customer reach.
Extending Shopping into Arrivals
“Most of the retail is in the department hall, but we don’t really focus on arrivals and I think from a retail shopping experience perspective, more can be done on the arrival side because people are in fact stuck waiting for their baggage, waiting for an Uber or bus, or even waiting for the train – all passengers are waiting.
Leung said airport shopping is only seen as inside the airport, but it does not reflect a traveler’s journey as traveling is going from one destination to another and both sides should offer experiences, something “retailers need to start thinking about.”
“There is actually a lot more to think about when you arrive. In the Toronto Pearson Airport, the luggage area is really dark and gloomy, it is not a fun place where it promotes positivity. I rather have some art of some of the most major iconic landmarks in Toronto and then that is already planting seeds of passengers waiting to go see places. Ideally, it would be a great opportunity to buy things at the airport arrivals for a lower price.”
Selling Experiences
“Traditionally, when we think about brands, we think about only retail brands such as apparel or accessories but I think experience is also a potential brand.”
By selling experiences, Leung is talking about promoting tourism in the arrivals. Right now, tourism in Toronto is not really in the airport so Leung said when you are waiting for your luggage, you can’t go to buy tickets, you can’t buy experiences, and you don’t even know anything about Toronto when you land, and brands need to start thinking of how they can start selling experiences. Leung said this would be a great next step for retailers to be in arrivals as they could motivate travellers to shop while waiting at the airport, to get excited about Toronto, and could be a great opportunity to sell tickets to things like the CN Tower, shows, or other tourism attractions.
New Pop-Up Formats and The Use of Vending Machines
“There are more pop-ups which are going to drive interest because I walk through the airport quite often and I see the same thing over and over again, and then you don’t really have a reason why you need to go check things out, especially for business travelers. If passengers see the same things and don’t see any changes, they are not motivated to look further.”
Leung said pop-ups allow retailers to have flexibility in airports while creating a new experience for travelers. For instance, business travelers would see the same thing at airports, but what if retailers started making pop-up locations for special days.
“Business travelers still have to shop and I don’t think a lot of retailers cater to them because they think they don’t have time, but they still have to buy Valentine’s Day gifts, birthday gifts, and Christmas gifts. If they spend so much time at the airport, why not inspire them to buy those things directly at the airport?”
Leung has also seen more use of vending machines in airports such as Best Buy, The Source, and Cake Boss. These are great for airports as they don’t take up a lot of space, it is easy and accessible to passengers and Leung says he can see Canada using vending machines for three different categories in airports: technology, food, and for phone card plans.
A lot of travelers forget something at home, such as headphones, so why not use vending machines? Leung has also seen food vending machines serving salads, sandwiches, and the Cake Boss; however, also says that Canadian vending machines are a little behind.
“In Japan for example, vending machines can serve you both hot and cold food at the same time with temperature controlled packaging. You are able to buy a hot tea or a cold iced tea from the same vending machine. If you want something hot, you would just pull the little strip on the packaging and then the heating element would be activated, so I see this technology coming into Canada.”
Another idea Leung sees for retailers using vending machines in airports is to coordinate the machine with the destination of the plane. For instance, if there is a plane taking off in winter to a warmer country, then retailers should have a vending machine with items passengers might have forgotten such as bathing suits, phone cards, sunglasses, or accessories.
“There is definitely an opportunity in Canada airports for retailers because traditionally one of the biggest earners would be the parking lot but now, more people are taking Uber or public transit to get to airports. I think the best thing retailers can do is to understand their customers, what their needs are, and where passengers are going and coming from. Airports and retailers need to start thinking about the layout or retail shopping and how they can evolve retail formats, such as the pop-ups, to motivate passengers to shop and to make it easier during their travel.”
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I was a category manager for one of the largest travel retail companies in the world, I bought for all of North America.
There Is much more involved than a typical brick and mortar store that have to be followed.
Firstly there are minimal purchases at arrivals as typically customers want to leave the airport as quickly as possible and to their ongoing destination or home. The exception would be for customers picking up the relatives at the airport and possibly purchase flowers.
Think about this when you go on vacation do you stick around the airport to shop? No do you wanna leave the airport getting your taxi Uber bus whatever to get to your destination. Or when you arrive home a Pearson airport again do you shop ?
No know you want to get home. This would not change if suddenly a local store was placed in arrivals. You get your luggage and get the hell out of there.
Departures people are waiting for their flight , this is where money is spent.
Food beverages purchasing items that they forgot a perfect example or earbuds are used to sell over 1000 pairs of earbuds a week and one brand only. Also people to look at purchasing Canadian souvenirs or a book to read on the plane or on the beach etc.
That is why in departures are very high and airports they are investing money into beautiful restaurants and high and stores for customers to shop while waiting for their flight they do not put this in arrivals they put it in departures or the least they can capture their customer for 2 to 3 hours.
Please note to become a retailer in an airport there is a bidding process and your store must meet all government standards /rules according to that particular airport.
There are five large retail groups for airports in the world and they have contracts that can last 3 to 5 years. It’s not just as simple as putting a local shop inside an airport there is much more involved to it than that.
Another factor the brands that you speak of art also run by those five large retail companies they pay for the licenses to sell those products in the airports. These retail companies also own the majority of all the restaurants in the airports.
I would suggest you do your research before writing an article about airport retail because it’s not as simple as just say let’s put a local store in an airport It is not as simple as that.