Digital Retailing to Take Off in Airports

Discussion
Apr 27, 2012

The next step for airport retailing may not be connected to solving the drudgery of airport travel. While one view envisions an airport shopping experience fully capitalizing on smartphone-touting consumers, a more futuristic view sees virtual airport stores replacing physical ones.

The milder airport shopping overhaul comes from ATMs and self-service checkout provider, NCR Corp, which commissioned a survey that explored how airport stores could drive more revenue from "today’s time-starved and mobile-enabled travelers," according to a press release.

The survey of travelers in the U.S., U.K., France and Germany found that a wide majority agreed that an alert on their mobile phone letting them know when their plane was boarding would encourage them to shop more. Among U.S. travelers, 35 percent indicated it is difficult to find stores, restaurants and other retail offerings at airports in the limited amount of time they have.

Forty-percent of U.S. travelers listed "Retail or food discount coupons delivered to your mobile device or paper boarding pass" as the top incentive to shop more at airports. Other technologies respondents agreed may tempt them to shop more included self-checkouts and enabling "endless aisle technology" to allow shoppers to browse merchandise not available in the airport store.

Tyler Craig, VP and general manager, NCR Travel, noted that airports receive nearly 50 percent of their revenue from non-aviation sources. He added, "By employing some of the technologies used by today’s retailers such as mobile marketing and interactive, digital signage, airports can more effectively communicate with and make offers to travelers, boosting revenue while making their airports more welcoming, entertaining and user-friendly."

The more futuristic view comes from U.K.-based Research For Travel. The aviation market research and consultancy predicts that over the next 15 years airport travel will see the end of wait lines due to trusted travelers procedures; rapid, high-tech emigration and immigration; the end of check-in desks or check-in luggage; and quicker boarding. The changes are expected to leave more time to shop, eat and drink.

Specifically regarding retailing, Research For Travel predicts showrooms dedicated to online purchases will replace stores. It notes that some airports have introduced "You Shop, We Drop" programs, whereby passengers buy items that are delivered to their homes.

"If companies like Amazon and Taobao were to get involved in airport retailing, then the showroom concept would develop very quickly," said Research For Travel in its press release.

Discussion Questions: What changes in the overall airport travel experience will help or even hurt airport retailing? How do you see emerging mobile and digital technologies reshaping airport retailing?

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11 Comments on "Digital Retailing to Take Off in Airports"

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Joe Nassour
Guest
Joe Nassour
5 years 1 month ago

One of the biggest issues at the airport for me is access to the internet. Airports feel that this is a feature that can be chargeable. Airport retailers can make consumers lives easier if they work with the airport to make internet free. If done correctly they can drive more traffic to the shops with the proper promotions and online incentives.

Look at the experience at the Tampa airport.

Ken Lonyai
BrainTrust
The general points made in this article are good — and also obvious to people who work in the digital realm. The fundamental time management issues are the key to enhancing retail sales during down time in the terminal and part of the build-out and growth of technologies we already have in place. However, I completely disagree with the pundits and industry players with vested interests in convincing airport stores that they will be the beneficiaries. Not that likely for non-food vendors. The only way that non-consumable airport sellers will see benefits is if they choose to compete on discounts — something they cannot sustain. Here’s a scenario in the NEAR future: I’m at the airport, the airline app is giving me fabulous real-time info on the available time I have. I’m tired of reading through my digital magazines, have commented on a bunch of RetailWire posts and am now bored, so I decide to catch up on my shopping. Sure, I can look at an offer from the airport shoe store, but what if I need to make returns and I have to drag my coat and carry-on all the way around the food court to find the place?… Read more »
Kenneth Leung
BrainTrust

The wait time from security checkpoint to boarding is the shopping window for travelers. Retailers moved from the check in area before security to inside the terminal as people plan for more lead time through security. Any changes in security procedure will be the biggest factor on retailing in the airport. I think mobile ordering and integration to real time store pickup or arrival pickup/delivery to hotel will be the next big area for travelers shopping.

Carol Spieckerman
BrainTrust

This is exciting. Oddly enough, I use my restaurant-finding apps quite often in airports and of course, my iPhone is continually out of its holster when traveling — more so than at any other time. In fact, the only time I have used a location-based coupon offer was in an airport (why not? My flight was delayed). I particularly like the shop and drop option since various foodstuffs or anything bigger than a pack of chewing gum can throw that carry-on bag past tilt. Airports are completely unique environments filled with captive, smart-phone-futzing, and often-bored, potential shoppers. Talk about an under-tapped market.

Ed Dunn
Guest
5 years 1 month ago

Digital retailing in airports has both a very positive and a very negative effect and is a fish in a barrel study of what is going to happen in the bigger retailing space.

The very positive effect will be the ability to have endless ailses through interactive kiosks and showrooms and self-checkout features. New business models such as the Q-store that South Korea Telecom did last year with QR codes are possible. Another new business model called micro-malls is taking off in Asian airports, the hottest growth market.

The very negative effect will be the physical store airport vendors who have paid a huge sum to stock physical items. Now airport visitors can showroom at one store and what is stopping another airport store at another terminal from undercutting the physical store prices?

What if the airport patrons decide to use their smartphones to get pizza delivery from another terminal versus patronage the deli sandwich shop at the terminal they are currently in?

The damage of showrooming and digital catalog revolution will be front and center in these airport terminals and way more noticeable than what occurs on main street.

Steve Montgomery
BrainTrust

I am looking forward to technology cutting my wait time in the security line as it has when reentering the country through the GOES program. That being said, I am not sure consistently shorter security lines will positively impact the time available for shopping. I expect those taking advantage of faster security procedures will delay their arrival at the airport.

The technology mentioned in the articles and in the comments above can have a positive impact by making travelers aware of what is available and where. As noted, travelers are no different than anyone else. Making them aware of a discount or bargain is always a good way to grab their attention and perhaps, their wallet.

Anne Howe
BrainTrust

I find it very revealing that the discussion here revolves around the conflict between what’s convenient for the shopper and what’s good or bad for the retailer.

My sense is that what’s good for the shopper is what is going to drive the bus. As a very frequent traveler, I would SO LOVE to have a new pair of shoes waiting for me at my hotel in Dallas after a purchase in the airport in Detroit.

But not if I have to do it via a QR code. I want a physical experience on the buying end to result in a convenient delivery on the using end. Retailers that figure that out fast will get the benefit of travelers with enough time on their hands to use it for shopping. Why? Because shopping is fun and social and airports can be very lonely and boring places to hang around in for even one extra hour.

Matt Schmitt
BrainTrust

Self-serve vending retail solutions have obviously gained a lot of traction in airports (Best Buy Express, etc) and part of the appeal is instant gratification with the physical items being available to buy on the fly. Providing digital experiences to promote online, ship-to-consumer sales is a bit trickier. This may be able to show some success if some portion of the physical items are available to try before you buy, touch and feel, etc.

Frank Riso
BrainTrust
I see a lot of opportunity here for travelers, but also for all the enterprises doing business at the airports. In my world there are two kinds of travelers, business and non business. I know some of you may think of pleasure travel as non business but traveling these days is far from pleasure whether you are traveling on business or not, and this initiative may help in that opinion too. Many business travelers are already part of the digital travel program in that they check in online using their smart phones. They also practice good sustainability by using their smart phones to display their boarding pass instead of printing paper. They zip through security and are in an airline club in minutes in order to log on to reply to emails or just to read the paper before their flight. Since the airline and the airport know they are there why not offer them a digital coupon for shopping and if near meal time a coupon for one of the food establishments. I know I would like to get anything resembling the discount airport employees get for food at the airport. Get those people out of the clubs and… Read more »
Ralph Jacobson
BrainTrust

One of the key challenges to travelers in airports is boredom. Find compelling apps that drive travelers to come into the stores and make offers that convert these shoppers to customers.

Mike Osorio
Guest
Mike Osorio
5 years 1 month ago

The changes described in the article are already happening, including shopping online from one shop for all the products in that airport retailer’s entire on-airport inventory. Very exciting stuff.

In order to maximize the revenues which airports get from their agreed percentage of on-airport retailer’s sales, the technology will be used to enable more of that retailers goods – not off-airport retail.

Free Wi-Fi will become the norm and airport retailers will find ever more easy ways for consumers to shop physically or virtually, in the shops, in the lounges, in the F&B areas.

As the government and airports cooperate to simplify the security processes, and more retail moves post-security, this will free up more and more time for shopping physically and virtually. There is a great future ahead for both the consumer and the retailer in airport retail.

Game on!

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