Johan Schölvinck Article Duty Free EMEA March April 2015

BUSINESS LOUNGE

Airports may begin renting out big spaces to large brands on a long-term basis

What’s in store for

Airport Retail?

Is the end of the traditional method of inflight sales near? Johan SchĂślvinck, Founder and Managing Director, Market Square Consult and Vice-President Commercial, InterVISTAS Consulting Group, suggests there is another way for airlines, operators and retailers to target passengers

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TRAVEL RETAIL

BUSINESS LOUNGE

Green Travel Retail – the concept 3. Airport-Airline-Airport: three retailers offer a choice The new system will require a three-party external clearing

4.

3.

Passenger

1.

2.

Clearing Choice:

1. Pick up on return 2. Take on board 3. Order on board and pick up at destination or return 4. Pick up at destination

I envisage both short- and longterm opportunities for the travel retail industry.

In the short term, it looks like the aviation world is finally ready to take travel retail to the next level: airlines, airports and retailers working together to give the passenger one consistent offer throughout their journey, via multiple channels.

Why do airlines continue to carry products on-board aircraft while the cost of fuel is so high? Can’t airlines and airport retailers offer the same products to the passenger for the same prices, reducing confusion and maximising sales, while at the same time providing more choice and reducing climate concerns?

Of course they can.

Will they go for it? The airlines will, provided they gain more from pooling with airport retailers than the real bottom line of their in-flight retail operations.

The airports and airport retailers

will too. Give passengers three choices: Let them take the product at the departure airport, let them pick it up at their destination or let them pick it up on return.

We can perform pretty much the same process in-flight and upon arrival. Take a look above to see an example of how the Chinese are doing it.

In the long term, the question is whether passengers will still buy physical products at airports.

I think they will, because the emotional aspect of touching and feeling a product remains a big purchasing motivator.

However, airports may also be looking for income security and might start to rent out their space long term to companies that are looking to build brand worlds at important consumer crossroads. Sooner or later will airports become ultra high-end showrooms for superbrands?

Time will tell.

Johan SchĂślvinck feels airlines can benefit by letting passengers pick up duty-free purchases at destination airports

TRAVEL RETAIL

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