Travel retail is booming. Busy travelers are buying it all – electronics, books, clothes, food and more at airports around the world.
Globally, travel retail revenues are projected to reach $49 billion by 2021, according to a 2017 report by GlobalData Retail. That’s a 27% increase from 2016.
Travel retail is known as non-aeronautical business, which includes duty-free shops, restaurants, luxury retailers, fashion and accessories, and more. Airport retail accounts for 30% of all non-aeronautical revenues worldwide, according to travel retail firm Pragma Consulting.
In an effort to encourage positive growth in this category, airports are investing in technology, airport design, marketing partnerships, data initiatives and loyalty programs to enhance the customer’s shopping experience.
Technology: Airport Vending Machines
Unique airport vending machines are being highlighted on social media channels and travel blogs all over the world. Shoppers can find everything from freshly made salads to down jackets, according to Tripsavvy.com.
You’ll likely see even more unusual, yet handy, vending machines in the near future as more airports revolutionize speed to purchase for those with only minutes to spare.
Airport Design: Increasing Promotion & Visibility
The airport retail shopping experience begins after you’ve made it through your gate’s security checkpoint, according to global aviation consultant InterVISTAS. As explained in their 2014 report, airport design plays a vital role in creating an environment that sparks spending. “The view of the retail environment will cue the customer’s brain that it is time to shop,” the report states.
Additionally, airports are adding in signage that encourages shopping behavior.
“In many airports the signage has been adapted to show the walking time to the farthest gate, rather than distance, because minutes are much better understood than perhaps in meters. Therefore passengers know how much longer they can spend in the shopping area, before they have to reach their gate,” as explained by aviation customer experience consultant Julian Lukaszewicz in a 2017 interview with Traveller.com.
Marketing Partnerships: Specialty Promotional Events
Airports are partnering with major global brands to create one-of-a-kind experiences – shopping moments that are happening throughout a traveler’s journey. Such promotions can extend from airport tenants to food and beverage manufacturers around the world.
For example, in 2017, the chocolate brand Toblerone unveiled new packaging for its best-selling Milk bar, along with a new digital campaign encouraging airport shoppers to share photos on social media, according to Frontier Magazine.
The products featured four phrases on the packaging: “I Love You,” “Missed You,” “Thinking of You,” and “Superstar.” The campaign launched in more than 40 airports around the world and received honorable mention at the 2017 Frontier Awards for Marketing Campaign of the Year by a Supplier.
Focused marketing campaigns that encourage participation can help travelers connect with brands, spread the word about special promotions and make it easier to swipe their card or hand over some cash.
Customer Data: Personalized Opportunities
Technology is enabling airports, airlines and retailers to collaborate and collect real-time customer data throughout the traveler’s journey.
From in-flight to in-store shopping, transactional data is revealing what passengers are buying and when. That information is being used to create specialized promotions that can appear at optimal shopping times and locations, such as electronic ads right outside of a security gate or virtual notifications on mobile devices.
According to Pragma Consulting, data can be leveraged for travel retail in multiple ways, including demographic profiling, destination spend analysis and even tracking passenger flow with the use of Wi-Fi and beacon-enabled technology.
Reward & Loyalty Programs: Retaining Customers
More than 100 U.S. airports, including major hubs like Chicago O’Hare, LAX and JFK, participate in the Thanks Again loyalty program, which awards miles for shopping, dining and parking at participating airports.
Other airport-specific and retailer-specific programs are being launched around the country and around the globe. Dufry, which operates duty-free shops around the world, has created RED by Dufry, which provides an instant 5% discount on all purchases for new members.
By offering up incentives such as free parking, dining discounts and frequent flier miles, reward programs are helping create loyal customers.