In the recent times, the competitive market and rising aspiration of the consumers have given rise to the necessity for innovative retail space. Nowadays, air travel is no longer considered to be a novelty. High traffic at airports has made retailers and airport authorities venture into retail business with putting up regular retail shops. This retail format has shown that duty free shops and food retail outlets are three primary options one can look out for when it comes to travel retail.
Retailers greatly encouraged
The present emergence of consumers with high disposable income and increased business travels are the factors which encourage retailers to focus on airports. There has also been a major transformation in the look of airports which is “upmarket”, offering a great shopping environment.
Mr Sahil Malik, Managing Director, Da Milano shares, “We are opening exclusive brand outlets at airports and our store size varies from 300 sq ft to 1000 sq ft.” Mr Nikhil Ranjan, Managing Director, William Penn-The World Pen Store says, “The usual size of a store is 400 to 500 sq ft. Till now we have stores formats at all the airports, but with the new international airport at Delhi we are creating a specially designed kiosk format.”
At airports people indulge in impulse buying and therefore it is crucial for the layout of the store to be attractive to pull customers. Also, security is one key factor that lends distinguished characteristic to airport retailing.
Mr Ranjan opines, “The airport is a very sensitive area. The company and its directors need to be security-cleared by the BCAS - Bureau of Civil Aviation Security. Further, all staff working at the airport have to go through a rigorous back-ground check and a safety training program.”
The differential traits
Catering to the diverse crowd that walks in at a retail store at an airport is very different from what a retailer receives on a high street outlet. “At malls or high street, shopping is done at leisure. Customers have a lot of time and can shop at their own space and convenience. At the airport, purchases are usually done at the last moment, and are mostly undecided and guilt purchases. Time constraint is one of the major issues for the customers at the airport. Hence it is of the utmost importance for the retailers to ensure that the right products are made available at the store,” says Mr Desai.
Mr Ranjan informs, “We have a specialised training program that consists of training on product-selling and soft selling skills. Apart from this, the airport authority arranges for a detailed training on safety measures to be practiced and things to be careful about.”
Recent initiatives
Another major development which is set to act as a catalyst is the unveiling of T3 - the state-of-the-art integrated terminal of Indira Gandhi International Airport (IGIA) in New Delhi. The terminal is expected to be the world’s third-largest in terms of size (after Dubai in the United Arab Emirates and Beijing in China). Thus, IGIA’s capacity would be increased to 60 million passengers annually (from 23 million) post July 2010, offering 20,000 sq mt of retail space in T3.
Mr Desai comments, “The USP of any of the airports remains the same as any of the top malls and multiplexes. With the upcoming world-class airports, airport authorities are feeling the need for superior services and generating additional revenues from different channels through retailers and other service providers inside the airports, besides the taxes paid by the passengers. Airport retailing will in a way help passengers to avail airport facilities at a stable or reduced cost (rate of taxes) over a period of time.”
Mr Malik affirms, “We have recently opened our exclusive store at Terminal 1B at the domestic airport in Mumbai. By July 2010 we will have 2 stores operational, one each at the Domestic and International terminals in T3 at the Indira Gandhi International Airport in New Delhi. We are also looking at opening stores in Bangalore, Chennai and Hyderabad airports.”
However, Mr Ranjan comments, “This year we will take the World Pen Store Concept international with two more pen stores opening at the new DIAL (Delhi International Airport) T3 in July.”
Cadbury has also recently introduced new travel retail merchandising units designed to increase conversion rates. The initiative is based on research studies that present insights into passenger behaviour and semiotics.
Target group
Mr Malik says, “Our target group at airports is the upwardly mobile consumers who are frequent travellers. Airports are high traffic zones since footfalls are high. Conversions at airports seem to be high as travellers tend to look at making purchases while waiting for flights or in case of flight delays. The store staff needs to convert customers within a short span of time to ensure purchases.”
Mr Desai opines, “The target group is all passengers who travel by air and pass through the terminal in which The Bombay Store has its outlet. Conversion rate is around 60 per cent of the footfalls to our store.”
As understood
An interesting point to be noted is that airports, retailers and suppliers should always take the initiative to interact and communicate with their target audience before they reach the airport. A track of consumers can be tapped via the number of people booking their tickets online, which provides the opportunity for retailers to communicate with them directly.
Airport retail promises to be a wonderful opportunity encapsulating different nations, cultures, religions and ages - all in the same place!
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