Airport Experience® News - Retail Innovation Issue 2024

essentials location will draw customers into the retail environment and provide them with an opportunity to purchase all their needs from coffee, snacks, water, souvenirs, gifts, reading material, electronics and more,” says Alyson Murphy, vice president of operations at DCA and Washington Dulles International Airport (IAD) for Fraport USA. “With the transition in domestic travelers’ specialty retail purchasing habits, we’re seeing more risk in single-concept brand locations. Hybrid specialty retail locations with multiple brand sections and a travel essentials mix provide more diversity in product offerings for the customer and more sales opportunities for an operator.” Murphy adds that the concessions program doesn’t currently have a retail location with a coffee shop component but the company believes “this is the next wave in airport concessions.” She adds that one example of a hybrid model that has seen success is The Goods @ DCA from Paradies Lagardère. “Travelers are utilizing the concept’s innovative robotic manicure machine, in addition to grabbing a novel from a local bookstore specialty wall and a Pepsi on their way to checkout,” she says, adding that a new location of The Goods will begin construction at IAD in the fall. ICF’s Gluck points out that the right balance of retail goods within a food and beverage operation, or vice versa, is key to increasing purchase opportunities. “Knowledge among customers is created when they’re seated within sight of a product that might create an interest in browsing or shopping in the retail portion of the store later,” he says. “A good retail mix that relates to the food offer can be a prime ground for the creation of purchase interest.” “Starbucks does this on a small scale, with related food products, bagged coffee, coffee mugs and travel mugs, and sometimes clothing items are available as the line goes to the ordering counter,” Gluck continues. “This presents a chance to offer more merchandise in a larger area, particularly as Starbucks almost always has excessively long queues at airports. By providing this browsing and shopping opportunity, it may help to distract people from the amount of time they’re in line.” Creating opportunities to increase travelers’ potential dwell time in a given location is a significant priority for airports, Unison’s Buckner notes. “Combining

Left, Above: Paradies Lagardère has had great success with its market concepts, 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.

multiple modes of experience can heighten a passenger’s desire to remain in a space and peruse the buying opportunities presented by operators,” he says. “Well-blended F&B and retail concepts will not only increase the passenger’s length of stay but should also increase visit occasions and conversion by attracting passengers who were not necessarily in the market for an ancillary product purchase – a cup of coffee or a book, for example. Also, particularly from the retail perspective, a hybrid offering can result in a decrease in the idle employee time that can tend to occur in some retail shops.” Buckner adds that these spaces are likely to provide increased return on investment (ROI) because of all the purchasing opportunities created within a single space with just one rent and other related costs. “Operators can carry multiple

brands within a single location without the necessity to execute full brand buildouts and they can also benefit from decreased expenses in the form of savings on labor costs and cost of goods via more efficient deployment and functionality of employees, supplies and more,” he says. Bisset notes that Paradies Lagardère is seeing higher sales and greater profitability from hybrid concepts thanks to their efficient and effective use of concession space. “The two largest synergies are staffing and capital investment,” he adds. “Concessionaires operating a single contiguous space, with a unified investment and staffing plan, experience significant benefits compared to operating multiple smaller units. This results in better service to the customer and higher rental yields for the airport.”

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AX NEWS SEPTEMBER 2024