AIRPORT RETAILING

Manvi Aggarwal Shruti Aggarwal Hema Sehgal Sheilja Lundia Puneet Aggarwal Ashish Goel

Primary purpose Mall: outing, entertainment, shopping Airport: to travel, to pick up or drop off someone who is travelling, to work at the airport
Higher stress levels due to an unfamiliarity with the airport environment Airport shoppers on average belong to higher socioeconomic group Demographic factor: different nationalities with different habits, mentality and as a consequence different spending patterns Limited time (significant portion of last minute and on impulse purchases)

Limited space (retail should not affect effectiveness of aeronautical activities).

Product sizes and quantities are major concerns for airport shoppers Airport shoppers frequently buy gifts for those at home, so the gift market is the primary product category they seek.

Benefits of airport retail

airports: An expanding revenue stream increasing returns on terminal investment
To airlines: As means of limiting the increase in aeronautical charges To travelers: greater convenience access to more goods at better prices an improved travel experience

Determinants of Airport Retail

Duty Free Shops

Structure of passenger flows

Crowded environment shopping

Impulse purchasing behavior

Airport size

Retail location planning

Appearance and cleanliness Product variety and quality

Started late 1980s with negative characteristic:

Limited- retail outlet, product range Product low quality Concept of in-house brand or unbranded Monopolistic practices- not open to others Poor value of money with high product prices

Airport retailing is a rip-off- inflict financial loss

Airport retailing is a Sensational

Understanding the customer needs and wants

Developing additional space for product and services Using specialist retail designers to improve deco ambience Well known branded retailers/ product Downtown pricing to be shopping destination

Introducing competition among retailers

Improving value for money, product and services Transforming customer perception using communication toolsdemonstration.

The business traveler- the businessman traveling to a destination for business dealings.
The leisure travelers- those who travel for pleasure, vacation holidays, etc. The emergency travelers- travelers because of emergency situation such as visiting sick relatives, sending children overseas, job transfers, etc.

Gift and souvenirs for the business traveler and tourist (leisure traveler)
Duty free goods- take advantage- make use the privileges. Toys, chocolate, perfumes as gift to take away/ take home. Leather and accessories (shoes, bag, etc) high quality branded merchandise for the busy business travelers. All kinds of branded apparel Exotic snacks

Departure terminal- target (the senders- family and friend sending off the traveler) as well as traveler. Transit hall- target (travelers waiting for their air craft or before boarding) Arrival terminal- target at those (family, friends) who come to pick up the travelers as well as travelers buying last minute items to take home.

Selling duty free goods, the most demanded items at the airports
Selling lifestyles product such cosmetics, watches, books etc. as leather, accessories,

Souvenirs and gifts (products of remembrance for the travelers/ friends/ family/ customers)

Chocolates and snacks, easy to carry product for the family.

Latest IT & electronic goods, anew product and not available to most travelers.

A good store presentation and ambiance Having latest product range. Reasonable pricing and packaging. Warmth and friendly customer service. A good store layout, easy to find & fast check out. A lasting impression.

'Renowned brands at Global business travellers The average time spent by average expenditure to discounted prices', 'last business travellers at duty-and duty paid duty-free minute gifts', and 'utilization of airport retail outlets is US$87 free airport retail outlets is and US$49, respectively time' are the most important '25 minutes', compared to motivational factors for 31% of business travellers '20 minutes' at duty paid Two key objectives for airports are to at increase the purchases airport retail declared that 'less than 10%' of outlets. stores. conversion their purchases at duty paid 'food, beverages and tobacco',
'perfumes, cosmetics and personal

rate and to increase time retail spent shopping airport outlets were pre-

planned, while 45% identified care', and 'apparel, accessories and that 'more than 76%' of their luxury goods' are the product categories which occupypurchases maximum at duty paid outlets airport retail space were impulsive.

Position must-buy products

(core business categories)

immediately after security checkpoints to ensure

Develop walk-through

shops, as planned

passengers complete their preplanned buying first and therefore feel more comfortable Capture those passengers that spend less time airside

when entering the second group

of boutiques (diversification Secure time to gate categories). communication to reduce pressure on passengers and maximize time spent shopping (e.g. introduction of flight

(business travellers, for

example) by positioning last-minute offers for

top-selling brands in
core categories near

http://www.heathrowairport.com/shop,-eat,-relax-and-enjoy

http://www.changiairport.com/

www.hongkongairport.com/

With the changing retail scenario the focus of retailer has shifted from malls to Airports.
Airport retail business in India topped $1 billion in revenue during 2011 The shopping business at Indian airports is growing at 17 to 18 per cent annually In 1999-2000, total domestic and international air passenger traffic across India was about 38 million, But in 10 years the figure climbed to 143 million and is on target to hit 450 million by 2020

 Beauty, personal care, alcohol and tobacco emerged as the top three categories in the duty-free section, while food & beverage , books, periodicals and stationery took the top spot within the duty-paid segment. Sustainable retail growth not only offers high profitability but also the opportunity for increasing the commercial viability of the sector and enhancing the travel experience of the customers. The newness of the concept - airport shopping - is one of the key drivers as it is a recent phenomenon in India Duty free shops is not only main reason for increase in Airport retail but the fact that domestic flights in India are often delayed, so people have extra free time at airports

Airport wise Sales

Source: The Centre for Asia Pacific Aviation (CAPA)

Product wise Sales

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3.
4. 5. 6. 7. 8. 9.

10.
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Delhi International Airport Bengaluru International Airport Hyderabad International Airport The Rajiv Gandhi International Airport(RGIA) Mumbai International Airport Chennai International Airport Kolkata International Airport Cochin International Airport Ahmedabad International Airport Goa International Airport Trivandrum International Airport (TIA)

For a brand like Hidesign where customers are constantly travelling, it's a great opportunity to be present at the airports.

Brands like Mont Blanc, Cartier, and Tag Heuer have come to tap the Indian Market via Airport outlets.
Subway opened its first airport restaurant way back in 2002 and now has presence at six airports in India. Cookie Man kiosks/stores at airports has percent of their sales from these outlets. around 18

The business is growing at 17-18 % annually, emerging as a viable platform for retailers and operators of the new airports.

Duty free shops is not only main reason for increase in Airport retail but the fact that domestic flights in India are often delayed, so people have extra free time at airports. Modernisation of airports, Increase in passenger traffic and increase in the disposable income of passengers has been the key drivers of this segment. Airport stores are twice as productive for the retailers as compared to stores outside, in terms of sales per sq ft.

Value- Successful retailers need to develop strategies that offer customers greater value over their rival. Being Innovative- Retailers must continuously implement new ideas or else their customers will definitely prefer the other brands or other outlets. Visibility and availability of the products shouldnt be an issue. Cost Control- The retailers need to control their prices a bit at the airport outlets. The operating cost is too high. Even the rentals paid for the outlets are high.

Thank You