Airport retail: Brace for disruption

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https://en.travel2latam.com/nota/72441-airport-retail-brace-for-disruption
Airport retail: Brace for disruption
Source: JeffreyGroup
January 28, 2022

Bain & Company released a report revealing how traditional shopping at airline terminals will be radically transformed in the coming years


By 2025, the digital technologies that have changed retail across the board will radically transform traditional airport shopping, paving the way for omnichannel sales, the seamless connection between digital platforms and in-store shopping.

The increase in the proportion of younger travelers with fewer resources (Generation Y and Z) has caused a decrease in the demand for traditional airport products and services. By 2025, this group will account for more than 50% of all passengers, while the proportion of business travellers, groups of passengers on long-haul flights, and Chinese passengers - traditional consumers of luxury goods sold at airports - decreases.

Industry forecasts show that an increase in the proportion of younger and poorer passengers is likely to be a long-term trend.

For younger, digitally savvy consumers, airports of the future could have clubs offering short fitness or yoga classes, gastronomy shops offering 30-minute Italian cooking courses, music rooms with quality sound of concert hall, or digital measurement services that guarantee the perfect shoe, which can be delivered anywhere in the world.

Travel retail turnover will remain below pre-pandemic levels through 2030.

Travel retail demand patterns will vary by airport type, geography, and passenger mix, but the overall trends in omnichannel retailing and changing passenger tastes are global, and airport retailers Airports around the world will have to adapt to these changes.

To stay relevant, airport stores must embrace digital commerce. However, an omnichannel approach redefines the role of stores. Instead of being a place to buy products, they become one of several touchpoints in a physical and digital universe designed to spark interest in brands or the experiences linked to them and deepen relationships with customers.

The challenge for travel retailers and airport executives investing in an omnichannel approach is to embrace new ways of working that enable rapid experimentation as customer behavior changes and the role of the store evolves. Bain research shows that omnichannel customers spend twice as much as brick-and-mortar customers and have twice the satisfaction rate.

Successful airport retailers will adapt omnichannel practices and mechanics to the airport environment and increase investment in digital sales platforms and supply chain support capabilities, while reducing the share of capital expenditures in stores physical. Its objective will be to reach a minimum of 20% of total sales through omnichannel in the next three years, in contrast to the current low rates.

Bain's research indicates that aviation revenue could shrink from 60% of total airport revenue to around 45%. Airport management companies will need to increase non-aviation revenue, including retail, to offset lower air capacity utilization and lower aviation revenue.

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