I got an email this morning from Coresight research that had an intriguing headline; “Global Tourism: Improved Infrastructure and Enhanced Shopping Experiences Are Driving Airport Retail Sales.”
I couldn’t actually read the report because of not wanting to pay for a membership, but it got me thinking about my recent travels and helped me compile all of the retail-related travel behaviors I noticed while traveling last month.
First, I want to talk about my experiences with airport retail. I have been traveling alone since I was 10, and every time that I went to the airport, I bought the same things each time. I started with a bag of Haribo gummy bears and whatever brand of water was available at room-temperature at Hudson News. Once I hit 14, I added in some form of coffee, preferably from Dunkin if I could easily find one. Somewhere between 18 and 19 I started to buy business-related books, too, from whatever kinds of bookstores I could easily find. Last year was the first time that I got to try a vending machine with Benefit Cosmetics in it, and I only purchased a sample primer because I thought it was really cool to get makeup out of a vending machine.
I have the same purchasing routine almost every time that I travel (excluding when I have to lug my dog all over an airport), but flying internationally for the first time this year opened my eyes to airport retail because I actually paid attention to my surroundings. Here are some important points made with my commentary attached:
Between the brief details provided by the free page of the report and some of the notable mentions in this Retail Dive article, here are four of the most important factors of the boom of the airport retail industry:
- Airports have a price advantage and offer ample opportunities for convenience (Coresight). Of course they do! I’m obviously going to spend $4 on my room-temp water because there’s nowhere in an airport to get it cheaper. I’ll pay a ridiculous amount for a soy latte because I’m not going to get any better deals. I’ll even pay some amount for a primer that comes out of a vending machine just because it’s cool and I don’t know what else to do, and there are tons of other people who behave like this. If I feel like I’m carrying too much I can go and buy myself a bigger bag and if I’m bored out of my mind there are tons of places to buy myself a new book. When people travel, they like to do what’s easy, are willing to compromise on food prices, and probably feel like they deserve to treat themselves, which is part of the reason why stores in airports are usually so successful. Travelers tend to forget really important things, too, which definitely doesn’t hurt any retailer.
- Airport retailers have invested in engaging shopping experiences (Coresight). About a month ago I went through the Frankfurt airport, and was amazed with the visuals that I saw in almost every store. From luxury to The Body Shop, it was so hard to not just go into the stores and take pictures because of how amazing they all looked (Step it up, LGA). Below are two pictures that I took of the Hermes store that invoked a pretty deep emotional response from someone who pays attention to visuals with intense detail yet has no connection to the Hermes brand nor can even dream of being able to afford something from Hermes. Retailers of all sorts are capitalizing on the consumer desire for an engaging shopping experience, and it’s relatively easy to grab the attention of a wandering airport dweller trying to kill time.
3. People traveling usually have disposable income (Retail Dive). While this is not always true, it’s true a lot of the time. Your standard airport dweller usually does have the budget to indulge in an airport, and if they have a lot of time on their hands, they will probably be pretty easy to convince to make a purchase. For people who are constantly travelling, the airport can become what a mall is to someone who doesn’t fly often- a place where you can get almost everything you need.
4. The rise of budget airlines (Coresight). I was exposed to the world of budget airlines in Europe last month, traveling in and out of the Bergamo Airport in Milan (basically an airport for Ryanair and other small, budget European airlines). When you get through security at Bergamo, you only have one option of where to walk, and it is down a long and winding hallway of stores of all kinds. The hallways eventually spits you out in an upscale food court with the few gates behind. I walked slower than I ever have down this hall, admiring all of the different shops and thinking about how this airport was very strategically designed to get people to shop it. The majority of people in the airport were only travelling with small bags due to probably only leaving their countries for a day or two, which made it easy for purchasing small goods. From local food and wine to luxury stores to toy stores and more, I had a blast dipping in and out of stores to kill the time. My favorite was a wine and pasta shop that sold Italian wines and bags of pasta that definitely catered to the tourists going through the airport. It took some major self-restraint to not buy a bunch of bags of pasta and multiple single-serve bottles of Prosecco.
Most of what I noticed in terms of airport retail really stood out to me in Europe, but the Retail Dive article above brought up some really great points regarding the future of airport retail in the U.S., and they all revolve around none other than Amazon and its potential impact.
Imagine an AmazonGo store in an airport where you could get essentially any small item that you would need in addition to a plethora of premade meals and ready-to-go snacks that you could then purchase without actually taking your wallet out with the cashier-less checkout technology. Woah. This would eliminate my reason to go to Hudson News for sure, because yanking my wallet out of my backpack is one of my least favorite parts of traveling when I just need a bottle of water so I don’t pass out.
The potential impact that Amazon has on airport retail in the U.S. is almost overwhelming to think about, so we’ll have to see where it goes.