Airport Experience® News - Retail Innovation Issue 2024

Left, Below: At Ronald Reagan Washington National Airport, The Goods @ DCA combines a wellness component inside a more traditional retail shop. Developer Fraport USA is looking to expand hybrid concepts at DCA, with its latest RFP including a request for a hybrid travel essentials and coffee shop.

2,000 square feet are usually needed, so these high-productivity concepts require enough enplanements to activate the productivity benefits.” One other potential challenge, as noted by Unison’s Buckner, involves backend complexities. “We’ve seen multiple brands in a hybrid space have issues integrating their specific point-of-sale requirements into a single system.” But these challenges aren’t substantial enough to deter industry professionals from the belief that hybrid concepts will be a bright spot in airport concessions into the future. “With space at a premium and highly competitive to acquire and demand for unique in-terminal options growing, these concepts will likely continue to become more prevalent,” Buckner says. ICFs’ Gluck points out that considering most traditional food and beverage operators today are also retail operators, either on their own or with partners, the hybrid trend has staying power. “Unless one side of the equation is incredibly weak [and somehow negatively impacts the stronger brand], I don’t see any downsides to expanding both food and retail hybrids and convenience and specialty hybrids,” he says. “Internationally, almost all general duty free operations in the U.S. are duty free and duty paid hybrids – it really is almost a norm. So, I believe that hybrids will grow, especially as brands push hard on the fact that they can provide these types of operations and having the entire concession program will bring about great synergies and allow higher rent payments, particularly in a time where rent to the airport is generally shrinking.” Pitman asserts that the future is bright for hybrid concepts in airports, particularly because these types of concepts give concessionaires ample opportunity to create something truly unique. “And that helps us to make a traveler’s journey as exciting as their ultimate destination,” he says. “This combination addresses modern travelers’ needs for convenience, variety and engaging experiences while optimizing operational efficiencies and maximizing revenue potential in this valuable real estate.”

experiences while they travel and they also enjoy being able to purchase everything they need in a single store. “Hybrid concepts can be a one-stop shop – redefining convenience – for a meal and a gift, while also offering travelers a dining and shopping experience they can’t get anywhere else,” he says. “It makes their travels more memorable and reflects the broader consumer preferences seen in urban retail environments. When we combine food and beverage and retail into a hybrid concept, we have the opportunity to create deeper, more immersive experiences that encourage increased dwell time, particularly when it comes to creating a sense of place.” Hybrid locations, like all concessions, are not without their own challenges. “The moment you bring food and beverage into a retail space, there are going to be added operational complexities simply because of the safety and sanitation protocols that need to be followed, particularly if you are cooking in the space,” Pitman notes. “Operators also need to take staffing into consideration. One employee may be able to run a retail store on their own, but in a hybrid concept, it’s very likely that additional staff are needed to handle the added responsibilities of preparing food.” And as Bisset points out, hybrid concepts typically require larger spaces. “Around

A Win-Win All Around From increased sales for operators to efficient use of space for airports to heightened convenience for travelers, hybrid concepts provide benefits for all involved. “Hybrid concepts like Napa Farms Market in SFO are high performers with great customer satisfaction ratings – we’re seeing a lot of airports wanting to add hybrid units like these to their portfolio,” Bisset says. “Travelers are voting with their wallets: hybrid concepts, especially hybrid concepts with coffee and market grab and go food components, are where travelers are spending their dwell time and their money.” Avolta’s Pitman notes that today’s passengers are seeking unique and enhanced

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AX NEWS SEPTEMBER 2024