CONTENT- AIMS AND OBJECTIVES- SECONDARY RESEARCH: • Travel Retail: The Market In Brief • Airport Travel Synopsis • Retail Concepts- PRIMARY RESEARCH- FINDINGS- PROPOSAL- LOOKING INTO THE FUTURE- SUMMARY
METHODOLOGY Secondary research Primary research- Online databases such as Both quantitative and Mintel and Verdict; qualitative research in the form of interviews, a- Retail industry journals; questionnaire, and- BAA (Heathrow) database observations. The project is based on an analysis and evaluation of the current travel retail market.
AIMS1.Investigation of a potential travel retail scheme.2.Overview of modern airport travel retail, including reviews and evaluations of the existing market and competitor strategies.3.To determine all options for the approach to travel retail and advise on the best model(s) with which to implement it.
OBJECTIVES 1. Research of key airports, passenger statistics and retail statistics. 2. Analysis of existing retail brands that operate successfully in travel retail. 3. Investigate current methods of multi- channel retail and establish new opportunities.
TRAVEL RETAIL MARKET “Airport retailing has beenhighlighted as one of the fastest growing niche retail markets.” Journal of Retail & Leisure Property
• Despite uncertainties in the global economy, airport retailing flourished in 2011 due to increased passenger numbers and spending per passenger. (Verdict., 2011). • Major airport retail sales are up to six times higher per square foot than at shopping centres and stores in towns and cities (Kasada, 2008).“Airport retailing is the largest marketin international travel retail.” • In 2011, Heathrow airport achieved the highest global retail sales of over 2bn Euros - 8.8% increase on 2010 (Verdict, 2011) due largely to an influx of travellers from the BRIC nations (Airport International News, 2012).
Figure 5: Airport retail expenditure by region, 2008 and 2011e (Verdict, 2011) Domestic v. International v. Transit Short haul/Long haul Scheduled/Unscheduled Business/Pleasure
Studies have revealed that consumers aremore likely to make impulse purchases inairports. Retailers can implement strategies inorder to take advantage of impulsivebehaviour by minimising stress, reducingboredom, and reducing or eliminating barriersto purchase. (Crawford & Melewar,2003)
Consumer attitudes to shopping and airport retailing solutions (Verdict, 2011)
Figure 4: Strengths and weaknesses in the airport retailing market (Mintel, 2008) Growing passenger flow Captive „transumer‟ audience with time on their hands Greater security = greater time spent in the airport Duty-free available for long- haul traveller Clash between airport and Tired and non-stimulating consumer pricing environment Insufficient entertainment and No intra-EU duty-free experience facilities
HEATHROW “a shopping centre with a runway attached” (Barrett, 2011) “retail church” (Mintel, 2008) 86 airlines 183 destinations in 90 countries passenger numbers at Heathrow 15.7 million /first quarter of 2012/ annual rolling traffic surpassed 70 million /year to 31 March 2012/ revenue increased by 11.5%
TRAVEL RETAIL CONCEPTSAirports are a major vehicle for brandexposure, with travellers taking products andexperiences with them around the world.Passengers spending time waiting are aready source of revenue, and retailers shouldaim to provide a memorable experience,service, and products to encourage spending.
INNOVATIONS IN RETAIL A key method of attracting customers is by using exciting and unique marketing techniques. Experiential marketing promotes interest by gaining press attention and encouraging a positive word-of mouth spread by consumers. An integrated campaign across social media and outdoor experience. Interactive engagements. Virtual walls and surfaces. Worldwide delivery services; Click & Collect; Mobile point-of-sale devices.
PRIMARY RESEARCH Observationhttp://www.youtube.com/watch?v=gx- 5BgrsVQo&feature=youtu.be
POP-UP STORESPandora pop-up store - Terminal 1 - For 3 months (from March 2012) - Will be moved to another prime UK airport to coincide with the London Olympic Games - Operated by World Duty Free GroupPaco Rabanne pop-up store - Terminal 3 - For 3 months (in 2010) - Cross-category shop - Some products exclusive to the travel retail outlet - Striking visual merchandising
POP-UP STORESTed Baker’s pop-up store - Terminal 5 - 300 sq. ft. - For 3 months (from 13th February) - Shop & Collect - Reserve & Collect - „Sweet Shoppe‟ themeJack Wills pop-up store - Terminal 5 - For 6 moths (from August 2011) - Pop-up led to the brand opening a permanent store - Unique visual merchandising - the focalpoint was a custom Jack Wills Land Rover
PRIMARY RESEARCH Interviews Respondents concluded that they would like more entertainment, nicer relaxation areas and a wider variety of stores at airports Respondents had difficulties to recall specific brands when asked which one they can recall from the airport. Most popular answers: Boots, WHSmith, Hugo Boss, Lacoste, Duty Free shops. Would you be likely to engage, in your own city, with a brand that you experienced at the airport? Yes No Not Sure
PRIMARY RESEARCH Questionnaire What do you do at the What do you purchase at the airport? airport? Books/mags504030 Clothes2010 Food/drinks 0 Forgotten items Souvenirs What would you like to find at the airport? More eateries Lounges More shops 0 10 20 30 40 50
LOOKING INTO THE FUTURE Art galleries, 3D cinemas etc. Partnerships with airlines Mixed reality: „Airport Park‟ at Amsterdam‟s Schiphol Airport – indoor lounge, café, retail shop, outdoor terrace, garden + technology such as projections and audio effects. Railway Travel Retail
CONCLUSIONS • Research shows that the travel retail market is one of few areas of large future growth, with the market set to achieve £39.1bn by 2015. New revenues are coming from higher passenger numbers from the BRIC countries due to their strengthening economies. The categories with the best performance are Fashion & Accessories and Beauty. Furthermore, there is a gap in the market for non-luxury retailers. This creates a perfect opportunity for a premium Fashion and Lifestyle brand such as Diesel. Research of key • Initial testing of the market is recommended for London, due to Heathrow having the highest global airport retail sales. However, key areas to targetairports, passenger are Asia, the Middle East, and Africa, as they are set to surpass the Americas and Europe in terms of passenger volume and spending levels.statistics and retail statistics. • Heathrow airport has become a shopping destination in its own right. Terminal 5 in particular has earned a reputation for introducing new brands and pop-up concepts into the retail market. • Analysis of the current Ted Baker pop-up and standalone stores was performed through an observation of each and assessing the visitor and conversion rates. Findings demonstrate that the pop-up concept was more than twice as successful in comparison with the regular store.Analysis of existing retail brands that • Further investigation into consumer attitudes demonstrated pop-up concepts, a wider retail offering, and improved relaxation spaces as key areas for operate development. successfully in travel retail. • Stimulating concepts need to be introduced to airport environments to reduce boredom, entertain travellers and encourage spending. If Diesel were to introduce something new to the market it would not only increase brand awareness, but it would also generate a lot of interest from consumers and press. • It is important to integrate social platforms, e-commerce and m-commerce technologies to provide a fully developed offer to consumers. Investigate current • The team proposes a pop-up concept with two roles – retail, and relaxation. These could take on themes, as was proved popular (Ted Baker). Smaller concepts for minor airports include vending machines; sleep pods; and gaming stations. These could potentially generate a viral spread of methods of multi- information on the brand. channel retail and • Future expansion will be into larger concepts with new technologies, such as „mixed reality‟ and 3D. marketing, and • Other aspects of the travel retail - railway stations, bus terminals, cruise ships and in-flight retailing. establish new opportunities.