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APA4 2023 NEWS

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Pragma Consulting’s Katie Hastings looks at some examples of retail/F&B innovation at airports across the globe.

Airports have enjoyed a sudden influx of high passenger numbers since the end of the pandemic. While this is great news, it has had an impact on airport operations, and commercial space capacity has become a major challenge for airports as they try to accommodate the growing demand for F&B and retailing.

Commercial is an important aspect of revenue generation for airports and while operational requirements must take priority, the significance of commercial revenue should not be ignored.

Although there are longer-term infrastructure solutions that airports can undertake to address these challenges, in the shorter-term they need to find innovative approaches to optimise the commercial space.

Integrating F&B and retail

This involves creating seamless transitions between shopping and dining areas, utilising shared spaces to ease passenger flow, and integrating unique concepts that build on many commercial trends, such as experiential and digital.

Singapore Changi (SIN), Rome Fiumicino (FCO) and Copenhagen (CPH) airports have arguably revolutionised the airport experience by seamlessly integrating F&B outlets with retail spaces. This innovative approach creates a harmonious interaction between dining and shopping, ultimately enhancing the customer experience.

One of the key elements of this integration is the airport-owned F&B-friendly seating areas. These dedicated spaces provide passengers with comfortable seating options where they can relax, dine, and engage with their surroundings.

By strategically placing these seating areas near F&B outlets and retail shops, these airports not only optimise their seating capacity but also encourage passengers to spend more time within the airport premises.

The Jewel Changi complex at SIN showcases a best in class approach to F&B and retail integration for the passenger. The complex combines world class retail outlets and dining experiences with a variety of leisure attractions for the passenger to enjoy. By integrating F&B and retail, Jewel Changi offers passengers a comprehensive experience that maximises commercial opportunities within a limited space while supporting the passenger journey.

Optimising operational efficiencies

This is another crucial aspect of mitigating commercial space capacity issues in airports. Efficient processes help reduce congestion and enhance passenger flows while also reducing the stress passengers have during the airport journey. This, in turn, can result in an increase in passenger spend for the airport. Tokyo’s Narita International Airport (NRT) and Miami International Airport (MIA) in the US are two prime examples of building improved operational efficiency.

Narita launched ‘Face Express’, a contactless airport experience for passengers. Through the use of biometric technology, passenger’s facial imagery is captured and verified against their passport, which can then be used throughout the journey, from check in to the boarding gates. Passengers can therefore experience less congestion, have a more seamless experience and ensure additional time for an airport’s retail offering.

MIA’s MIA2GO app allows passengers to order their F&B from any unit available for collection. This innovation not only streamlines the shopping experience but also reduces the need for extensive retail spaces within the terminal. By leveraging technology to optimise operations, airports can alleviate space constraints while enhancing customer satisfaction.

Mobile food ordering apps such as MIA2GO also create the opportunity to increase the quantity of F&B concepts without increasing the commercial space in premium locations, using remote kitchens.

Brand activation and pop-up concepts

These initiatives bring unique and engaging experiences to passengers, build on the impact of commercial retail trends, and attract more passengers within a limited space. Amsterdam’s Schiphol Airport (AMS) exemplifies this approach through its ‘Holland Boulevard’.

This is a dedicated area that showcases the best of Dutch culture, featuring pop-up exhibitions, art installations, and interactive displays. By promoting local brands and cultural experiences, Schiphol is enhancing passenger engagement while creating additional revenue streams.

Such activations enable airports to adapt their commercial offerings dynamically, leveraging temporary spaces and revitalising the passenger experience.

Utilise the ‘dead space’ around the airport

Many airports can further enhance the commercial provision within a limited amount of space by looking to up and coming commercial trends that are being seen in downtown commercial areas.

Commercial trends such as experiential activation is becoming increasing prevalent both downtown and at airports as many passengers have begun wanting to experience an increased level of innovation and excitement on their travels.

Experiential activation can build passenger experience and commercial revenue in airports through the use of small, empty pockets of ‘dead’ space that are unable to house a significant scale of commercial offer but are nevertheless useful in drawing passengers to key commercial zones through the innovative use of space.

Airports such as Schiphol and San Franciso International Airport (SFO) are able to understand how to activate their dead spaces in order to build commercial revenue with experiential activation.

At AMS, the focus is on transforming empty corridors into immersive experiences. The Riiksmuseum, for example, is located between Lounges 2 and 3 and holds regular exhibitions and events throughout the year. SFO builds on the arts and culture of the city through utilising space that was no longer being used for operational purposes such as unused ticket machines as temporary displays.

Embrace digital innovation

Digital innovation is increasingly being used in order to activate a more efficient use of space as passenger awareness and technological usage continues to grow. While digitalisation is primarily focused on the operational aspects, there are many ways and examples of how airport have utilised digitalisation for commercial purposes.

Many commercial brands are taking advantage of the growth in consumer knowledge around digital innovation and technology by utilising various technological initiatives such as mobile apps, online ordering platforms and personalised marketing campaigns.

This can be done through the launch of e-commerce sites which encourage passengers to avail of a seamless travel retail shopping experience like that of Auckland Airport’s ‘The Collection Point’ and Dublin Airport’s ‘Click and Collect’.

Both provide passengers with the ability to collect their purchases in the airport at the beginning or end of their journey. Passengers are therefore able to shop on a tight timeline or travelling with their purchases for the entire journey with airports able to offer additional products online that would not take up additional commercial space.

Other airports are using digital innovation to build on the ‘wow factor’ of the airport and increase the passenger experience. Taoyuan International Airport (TPE) recently ran a digitally immersive pop-up discovery store for the Glenfiddich whiskey brand. Passengers can have their movement captured by a motion sensor which creates an evolving piece of computer-generated art that references the process in which the whiskey is made. Passengers can then personalise their purchases with a written or recorded message by scanning a QR code on their phone.

Commercial space capacity issues pose significant challenges for airports in meeting the growing demands of passengers and consumer trends. However, there are many ways in which airports can ensure a more efficient use of space while also building the passenger experience and increasing commercial revenue.

Through the integration of F&B and retail, operational efficiencies, leveraging brand activation and also utilising ‘dead space’ and digital innovation, airports can enhance the passenger experience while reducing passenger stress, optimise commercial spaces, and maximise revenue potential within a limited space.

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