Airports usually are not solely geared toward handling passengers and baggage. The non-aviation business-including shopping, dining, parking, and advertising-is constantly expanding as being a vital way to obtain revenues.
Non-aviation business refers to everything at all duty-free not directly related to air travel, including retail trade, catering, parking, and advertising. Airports have recognized the opportunity to boost both revenues and profits with the aid of the non-aviation sector and, because of this, have significantly expanded areas dedicated to retailers and restaurants. Even airports not initially designed or designed with retail areas under consideration have since were able to develop a retail presence. For example, Frankfurt Airport presently has 570 square meters of non-aviation area per 1 million passengers, while London Heathrow has 1,050 square meters per 1 million passengers. Both airports intend to expand a lot more
European airports are expanding non-aviation space
The expansion into non-aviation is associated with more diverse retail concepts, especially in fashion, well-ness, and beauty. Within the fashion sector, premium and luxury formats have already been supplemented from the mainstream segment-illustrated through the Accessorize store in Munich and Zara in Barcelona. Wellness and beauty outlets are found at numerous airports and work particularly well at those with a large number of transfer passengers. The Be Relax wellness brand, to mention one, is represented at nine airports in Europe. Beauty items are now available in mono-brand shops in addition to duty-free stores.
The possibilities to establish a presence during these investing arenas are definitely attractive for retailers, brand manufacturers, and caterers. Before jumping in, it is essential to know which business models work most effectively in which situations. Airport retailing is not like high-street retailing. Not just has the number of non-aviation areas risen-airports’ expectations with regards to the professionalism and individuality of shops will also be growing. This is applicable to both retail trade and catering outlets. The subsequent outlines some main expectations for airport retailers and restaurateurs:
Provide clear and efficient routing. Until recently, probably the most widely used type of routing for duty-free walk through shops was meandering, allowing passengers to walk through as wide an array of merchandise as is possible. Now, however, shop layouts provide clear and functionally efficient routing that ensures optimal orientation with a shorter time delay. This creates a more enjoyable environment for stressed passengers, with all the added benefit of increasing their willingness to buy products. A good example is definitely the shop layout planned by Gebr. Heinemann for Berlin Brandenburg Airport.
Airports tend to be criticized for interchangeable retail formats, so that they are always looking for top-notch brands to increase their retail mix-brands which can be either not even represented at other airports or that underpin the airport’s unique profile. To have unique concepts, some airports are willing to take certain risks; for example, Singapore’s Changi Airport developed a young fashion and accessories concept combined with students from Singapore Polytechnic. When airports plan new developments and extensions, they explicitly earmark about 20 percent in the retail mix for regional best performers. What this means is you can find great opportunities for retailers that are not yet within an airport.
Airport locations are doubly valuable for brand manufacturers as they promise profits and provide a prominent location that supports the brand. Successful models might include independently operated shops and concessions allocated to retailers, which in turn could possibly be the traditional duty-free companies. Luxury brands, like Armani, choose different operator models phitjq different locations.
However, merely using a strong logo and a successful business in high-street retailing does not guarantee success. The travel retail segment possesses its own business models and challenges and needs a particular sort of management. Consider, for example, the difficulty in developing retail techniques to attract the a large number of different passengers streaming through airports every single day. While customer flow is predictable (aligned with flight schedules), managing this type of large and diverse customer segment is dependent upon matching specific concepts and merchandise offers with the terminal, destinations, and quantity of low-cost airlines. Furthermore, while floor plans tend to be more compact and it is easy to get an overview of the competitive environment, distribution and logistics are more complicated and costlier.