Create flexible strategies that
deliver new revenue
Airport coffee concepts like Briggo at San Francisco International Airport are also now leveraging robotic technologies to offer a full assortment of caffeinated beverages, not simply stale coffee from a vending machine.
While coffee has always been a high revenue-producing concept, space constraints and queuing have become problematic in holdroom environments. Even during a pandemic, people are still willing to wait in line for coffee without much social distancing.
However, solutions now exist that shrink traditional requirements of 500–1,000 square feet of space into a 100–200 square foot footprint and allow for pre-ordering to disperse busy queues. Such coffee units can already be found at airports in the Bay Area in California or Austin, TX.
While there is understandable sensitivity to eliminating or reducing staffing costs, if the use of robotics or other technologies can increase store profitability, then that increased profitability can be shifted to the airport via higher rents paid.
National concessionaires within the U.S. have already started to leverage such technologies, such as Amazon’s Just Walk Out platform. Passengers simply swipe or “tap in” with their credit card and walk through an access control turnstile, pick from an assortment of merchandise on offer, and leave passing through another turnstile.
No contact with any cashier is required. Such technology has already been leveraged in select convenience retail such as W.H. Smith at Heathrow and walkaway units at Newark Liberty International Airport Terminal C. It’s coming soon to Dallas Love Field, with likely many more to follow.
Automated contactless retail
Planning concessions have historically been a physical layer to an airport’s architectural plans, but airports need to now start constructing their own “digital layer” in the post-COVID world.
This had already started to emerge pre-COVID. Passengers are spending through mobile engagement with apps such as Grab at Philadelphia International and At Your Gate at Dallas Ft. Worth, which provide concessions pick-up and delivery. Historically these apps enabled passenger discovery of concession units beyond direct exposure.
These mobile platforms allow passengers to pre-order before clearing security or making their connecting flight, as well as access the wide assortment of F&B options regardless of their location within the airport.
On-demand delivery options
QR code walls
Robotics
In the out-of-home advertising arena, there are some strong internationally recognizable brands that want to leverage dynamic digital technologies to express their brand voice. Not only will this enhance the passenger experience at multiple touch points in airports, but it will also generate significant revenues. LED displays, web/mobile applications, LCD kiosks, and pop-up event activations are just some of the promotional platforms available to brands.
Airport partners (e.g., advertisers) – screened for values and voice complementary to the airport culture, terminal character, and aesthetic – can offer passenger engagement with major and emergent brand presence. A program of creative and transactional content curated to align with airport objectives, featured across video and motion graphics loops and luminous graphic displays, and a coordinated mobile presence forms an integral dimension of the terminal experience.
Airport revenues from this business opportunity can be substantial.
While this paradigm has started to make inroads in the F&B airport concessions market, it has yet to spread fully to other non-aeronautical revenue generating lines of business in retail, duty free, and passenger services within the U.S. In the post-COVID era, airports need to make it just as easy to have a book or souvenir delivered to their gate as it is to order a cappuccino for pickup or delivery. Instead of having a disparate ecosystem of mobile applications and websites for passengers to navigate, airports need to take action to harmonize such ecosystems.
Airports need to connect with the digital world more fully and be present on mobile devices just like their passengers. Airports and their retail concessionaires are no longer competing simply within the terminal, they are now competing with e-commerce giants like Amazon on price and convenience. If a passenger walks by an apparel shop and instead buys the same product on Amazon, that’s a wholly lost sale simply because it is more convenient for the passenger.
Imagine a passenger’s peace of mind after clearing through health and security procedures that their sandwich is waiting for them in a contactless locker to pick up airside along with anything else they might need like ibuprofen or headphones. Shipping options, gate delivery, contactless pickup, and an improved mobile ecosystem are paramount. Not solely based on price, but because things need to be made easier to buy. The “how” in buying such products has simply changed.
Gone might be the days of the spontaneous purchase of a watch at a duty-free store or sunglasses from a concourse kiosk. Instead, passengers are more likely to first determine if the price is right by comparing prices online before buying. Instant gratification must once again become key to regaining those lost passenger sales by becoming omnipresent in passenger terminals to compete with e-commerce.
Airports can remedy this issue by bringing the retail experience to passengers through shopping walls plastered with images of merchandise with adjacent QR codes to complete transactions on mobile devices.
These shopping walls do not require giving up precious square footage in constrained terminals or require passengers to seek out such retail options if they have already “hunkered down” by their gate. Shopping walls can be placed in holdrooms, airline lounges, or other areas where passengers tend to dwell.
The retail experience for passengers can come to them, with the benefits of instant gratification via delivery to their location in the airport.
What are the cornerstones of new, innovative strategies to deliver new revenue? The answer lies in making it easier to buy.
Brand voice and naming rights
Alexandre Monteiro,
Chief Executive Officer at RIOgaleão – Tom Jobim International Airport
“To maximize commercial opportunities, airports need to implement a digital layer that leverages their existing brick and mortar retail offering”
