Airport Experience® News - Retail Innovation Issue 2024

Above: Alan Gluck, principal consultant for the global airports’ commercial service line at ICF, believes hybrid food and beverage and retail concepts are on the rise because they offer a solution to both the lack of space in the airport for concessions and the questionable sustainability of standalone specialty retail given current consumer shopping habits.

Right: ACDBE brand Metropolis Coffee has a location embedded within the Six Points Market operated by WH Smith North America at O’Hare International Airport.

offerings. Ultimately, this benefits customers, operators and airports alike.” He notes that the company has had great success with its Napa Farms Market concept at San Francisco International Airport ( SFO), Berkshire Farms Market at Boston Logan International Airport (BOS) and Pacific Farms Market at Vancouver International Airport (YVR), all of which offer food and beverage-related merchandise and local gifts as well as café counters serving made-to-order hot food items, plus fresh local coffee and baked goods. “With our recent acquisition of Tastes On The Fly , we’re poised to maximize the execution and success of hybrid offerings in airports,” Bisset adds. In the latest RFP from Fraport USA , the contracted landlord on behalf of the Metropolitan Washington Airports Authority (MWAA), there’s a request for a hybrid travel essentials and coffee shop at Ronald Reagan Washington National Airport (DCA). “Adding a coffee concept inside a travel

at ICF , points to a couple reasons why he believes hybrids are on the rise. “I think this is happening first, because of a lack of space in the airport for concessions – when planning a facility, we’re always looking for efficacies, and two concepts sharing one space is one way of doing this,” he says. “And second, it’s getting harder and harder for specialty retail to be sustainable on its own, particularly jewelry, clothing and gift stores. By taking only small selections of specialty retail merchandise in multiple categories, it allows a retailer with adept buyers to be out front of trends. And by combining multiple concepts, a retailer doesn’t need to keep excessive amounts of merchandise to fill a larger store with a specific type of product.” Gluck adds that this model also allows small manufacturers and creators to get their products into airports, where they might not otherwise be able to pull off running a store on their own. “This gets them exposure to the airport’s customers, with a much smaller risk for the creator or

the large operator, which might have in the past chosen to create a store around a particular local product,” he explains. Less Risk, More Reward It’s no secret that concessionaires are still feeling ripple effects from the Covid 19 pandemic and having to adjust their business approaches as a result. “The concessions business model has become significantly more challenging post-Covid, with staff costs rising by 30 percent and capital expenditures increasing by 47 percent,” points out David Bisset, executive vice president and chief development officer for Paradies Lagardère . This is where hybrid concepts present a valuable opportunity. “Hybrid models can potentially triple sales productivity,” Bisset says. “This approach creates a more efficient cost structure by leveraging a single capital investment instead of multiple units to achieve the same sales and product

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AX NEWS SEPTEMBER 2024