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  1. 1. MORE+ Vision n°5 April 2012 Vision byevery 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-up Retail in Motion © Alexander GatsenkoRetail is no longer consigned to shopping centres and high streets but canbe anywhere, from the home at the click of a mouse to on the move betweencities or even continents. This second model of Retail in Motion recognises Insidethat beyond their traditional transport services, airports and train stations • The trend briefingcan evolve a range of new functions and revenue drivers, from developing • Interviews:their real estate into commercial assets, transforming their terminals into LS Travel Retailshopping malls and expanding their logistics and distribution chains. Network RailWith airports typically surrounded by undeveloped land, many are sitting on Polish Airportsa potential goldmine of real estate opportunities. Office blocks, hotels, The Circle at Zurich Airportconvention centres, medical facilities, casinos, free trade zones and evenentertainment and theme parks can be built within or just beyond the airportperimeter to generate new sources of revenue and encourage the perceptionof the airport as a business or tourism destination.By contrast, many rail stations are at the heart of major cities, with high footfall,central locations welcoming a mix of locals, commuters and travellers.We’ve talked to four of you who shared with ‘MORE Vision’ their view inexclusive interviews - Together with key data, useful links and must-seevideo, it makes the fifth issue of MORE Vision. Follow us on
  2. 2. Vision by Follow us onevery 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-up The trend briefing Where does the trend come from ?* Interest in retailing within transport hubs has been generated by some impressive growth figures for the retail offers which currently exist. Retail sales at airports are predicted to grow by more than 60% between 2010 and 2015 to a value of circa $44.1 billion. Much of this growth is expected to come from emerging economies, especially in Asia Pacific, which is forecast to grow by 76.2%, and the Middle East and Africa which is forecast to grow by 40.0%. Between 2001 and 2010, duty free sales at airport shops rose steadily from $8.9 billion to $23.3 billion – a 162% increase – and retail has become an important source of revenue for the airports, representing up to 60% of non-aeronautical income. As a result a new phenomenon has emerged as more and more aviation-oriented businesses are being drawn to airport cities and along transportation corridors radiating from them, a new urban form is emerging—the Aerotropolis—stretching up to 30 kilometres outward from some airports. In addition, Europe’s major rail hubs are becoming fully functioning retail destinations, attacting both travellers and the local catchment in these urban locations. © woewchikyury We’ve chosen four drivers behind RETAIL IN MOTION: 1. EDUTAINMENT: How retail can blend with services and location 2. TECH-SPEC: Bringing the virtual world to the travelling environment 3. INSTANT-NEEDS FIX: Helping consumers on the move 4. TRAVEL HUB CITIES: The travel environment as branded destination*Source: a London-based, independent trend firm, scans the globe for the most promising consumer trends, insightsand related hands-on business ideas. Its free monthly Trend Briefings get sent to more than 160,000 business professionals in 180+ countries.”
  3. 3. Vision by Follow us onevery 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-up Selected links Sales at Indianapolis InternationalOpportunity 1: In November 2011, Finnish airline jumped sharply during the first two weeks of February as sports fans operator Finnair launched the QualityEdutainment Hunters programme for a second descended for the Super Bowl. Sales per passenger rose from an average year in partnership with Helsinki $10-11 to a peak on Super Bowl Airport. The initiative offered seven Monday of $30, when pop-up sports people a five-week world tour, where stores made $350,000 in sales. they went in search of ways of improving the travel experience 4More links on trendwatching across themed topics. The ideas were presented back in December and the Selected video public voted on the best. Target modelless show, Grand Central When the new Berlin Brandenburg Airport goes into operation, 150 shops, restaurants and service facilities will be offered across 20,000 sq m. Besides well-known internationalWhether it is just a few moments passing by or hours brands, BER will primarily presentto be killed preparing to travel or in transit, transport high-class regional concepts from thehubs provide travellers with a chance to consider retail, gastronomy and service sector,and consume things that they might otherwise not reflecting the best of the region’s products and merchandise. How do you see it?encounter. These features can also give transport lo- Share your view and join incations an opportunity to create a sense of identity Lego unveiled a giant Christmas tree the discussion! at London’s Kings Cross St Pancrasand occasion, and to give something back to their rail station in November last year. The What could you add to a busy travel hubcustomers, which provide further benefits to the 10m tree took two months and to entertain and educate customers?brands. Examples are the giant Lego tree at King’s 600,000 Lego bricks to build. Some of Are all the opportunities to engageCross St Pancras station in London, which provided the hanging bauble had QR codes on them that either directed people brands being taken?a unique showcase for the toys retailer, or the holo-graphic fashion show US retailer Target organised at to a site with information on the Post your answer project or the start of a Harry Potter-Grand Central Station, New York. 4here themed treasure hunt. Selected links developing in-store/in-situ paymentOpportunity 2: Woolworths in Australia has become the systems which will enable travellers and commuters to buy products and latest retailer to unveil a virtualTech-spec supermarket at a train station in services from their smartphones without having a credit card or bank Melbourne. The temporary billboard, card. Business travel airport hotel chain which looks like a real supermarket shelf Yotel has already signed up, as have with images of 120 key grocery items, Home Depot and Pizza Express. enables commuters to purchase products by scanning the barcodes with their 4More links on trendwatching smartphones. The barcodes take users to Woolworths mobile phone app where Selected video the stores full range of 40,000 products can be purchased and delivered to ASICS, Columbus Circus homes and offices within hours. In September the New York Transit subway system introduced its first wireless locations around the city’s subway system, using a neutralTechnology has enabled retailers and brand to turn platform supplier. The programmepublic realm into ‘digital space’ and this has been will see all 271 stations converted toenacted better at transport locations than almost wireless within four years, with six now in operation and 30 more to be How do you see it?anywhere else. Tesco Homeplus’ experiment with completed by the end of the year. Share your view and join ina QR code store has been copied around the world the discussion! Via a partnership between internationaland there are now numerous examples of digital FMCG group Proctor & Gamble and Could your environment be made morestores. Tesco itself is expanding its experiment. Czech retailer set up a virtual digitally accessible and how wouldSuch applications of technology are a great grocery store in four Prague subway this benefit you?distraction for time-poor commuters or time-rich stations during October 2011, allowing commuters to buy via QR codes on Is there a digital offer which could betravellers and can be constantly updated and customised to your location? their smartphones. Tesco pioneered aenriched, providing an ever-changing space of similar scheme in South Korea and is Post your answerexpectation which meets the consumers’ rolling this out to 20 bus stops in Seoul.requirement for excitement and unpredictability. 4here PayPal, Boku and Google Wallet are all*Source: a London-based, independent trend firm, scans the globe for the most promising consumer trends, insightsand related hands-on business ideas. Its free monthly Trend Briefings get sent to more than 160,000 business professionals in 180+ countries.”
  4. 4. Vision by Follow us onevery 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-up Selected videoOpportunity 3: Selected links France-based railway company SNCF launched a Apple store, Grand CentralInstant-needs fix scooter hire scheme with French car manufacturer Peugeot in September. Commuters to the Paris Montparnasse station can rent an electric scooter from one of several outlets and use it to complete their journey home or to the office. Launched in July, US-based bike maintenance firm Bike Fixation is a company producing self- service vending machines for bicycle tools and parts. The bike repair stations include free air compressors, a universal work stand and tools for small adjustments and minor repairs. The How do you see it? first vending station was installed in the Uptown Share your view and join in Transit Station in Minneapolis and is free to use. the discussion! Anystop is a free mobile application for Android Can you provide something both phones that not only helps users find bus routes useful and which enhances the retail offer? and bust stops but also predicts when the next bus will arrive by combining real-time data from Can you monetise interaction in a wayTravellers often have instant needs and few options with the GPS devices on buses and scheduled transit that benefits the consumer?which to fulfil them. Increasingly, transports hubs are be- information. Anystop can be used in various Post your answercoming locations where those requirements - and some cities in the US, Canada and Australia. 4hereneeds which passengers may not even know they had The Delhi Airport Metro Express is to develop- can be met. From the Barclays-sponsored ‘Boris Bikes’ two Metro stations as ‘mini-airports’ within fourfor hire scheme in London through to punch bags in the to five months. Over 100 retail outlets will beShanghai subway system, transport can provide the opened at these stations. Domestic check-ins, flight updates and information kiosks are alreadyplatform for offers meeting the material, practical and available. Shops, spas, internet lounges, vendingsocial elements of a traveller’s needs. Many of these re- machines and restaurants will be added, givingtail or services offers may also provide a sense of ‘gi- travellers the option of spending time at theving’, providing customers with good value and help, stations instead of waiting at the airport.providing an enhanced brand connection. 4More links on trendwatchingOpportunity 4: Selected links scheme will create a new railway station, due to open at the end of 2014, and a Shopping at Zurich airport includesTravel hub cities sightseeing and entertainment: observer mixed-use centre of retail, office and residential buildings. PKP is also working platforms, exhibitions, round-trips and with private investors in Katowice andThe rising importance of the non-travel sector also the organisation of children’s birthday Poznan to combine transport hubs andchanges the concept of the airport: Originally planned parties are offered. The newly built commercial an infrastructural building, the distance from check-in Radisson Hotel has a direct connection to the terminal and offers 23 meeting 4More links on trendwatchingto gate was kept as short as possible. The modern rooms and a conference centre.airport makes the passenger pass by as many shops as Westfield Concession Management has Selected videopossible. The dynamic architecture and the spacious halls been awarded a 17-year lease aimed at Portuguese airport retail opportunitiesare designed to work as shopping malls: a roofed mall, sprucing up the culinary and retail selectionsairy, and flooded with light. But airports aren’t only at the iconic Theme Building and twofocusing on retail and catering: they have also started to terminals at Los Angeles Internationalinvest in recreational facilities, entertainment and real- Airport. The deal is expected to generate $331.1 million in revenue for LAX andestate development. Airports are changing into city-like Westfield will refresh the food andstructures, so called airport cities, such as London beverage and retail offer in time forHeathrow, Amsterdam Zuidas, Las Colinas, Texas, and completion of a $1.5 billion expansion ofSouth Koreas Songdo International Business District. the Bradley terminal in March 2013. How do you see it? The Transbay Transit Center project is a Share your view and join in transportation and housing project which the discussion! is expected will transform San Francisco How do you create a destination out by creating a Gradan Central Station for the west. Expected to complete in 2017, of something which is transitory? the $4bn project will include leisure, food As a destination, how does the offer and is eco-friendly. change? PKP and HB Reavis showcased the Warsaw Zachodnia Station and office Post your answer complex at MAPIC this year. The 4here*Source: a London-based, independent trend firm, scans the globe for the most promising consumer trends, insightsand related hands-on business ideas. Its free monthly Trend Briefings get sent to more than 160,000 business professionals in 180+ countries.”
  5. 5. Vision by Follow us onevery 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-upRetailer: What does the transport location bring to and airport retail. At a station you have lessFin Casey, managing director, the offer? dwell time but potentially far more regular vi-LS Travel Retail UK & Ireland A travel retail specialist needs to have a well sits, so you have the opportunity to build a re- prepared offer specific to the environment, lationship with the customer. For a bookstore although every store will need adjusting for one role is to provide some calm and respite its location and the trading space. But it’s im- from the travel experience, the other is to fulfil portant to reflect more than just the needs an instant requirement for a book before tra- of travellers – major transport hubs are beco- velling, which is what distinguishes a travel lo- ming destinations in themselves. Retailers in cation from a high street or mall store. travel environments need to leverage the lo- cation. At Kings Cross, London for example What happens next? we are next to Harry Potter’s Platform 9 ¾ We believe there is further potential for and soon a Harry Potter store, providing the stores in European transport hubs but any rail potential to work off the continuing energy – or airport – location has to meet a minimum of those books. footfall requirement to provide the right sales potential. Stations are much “leakier” than How have you approached the offer at a airports in terms of sales per passenger and station? so we would be looking for a minimum of As a business [Relay] we started in a Paris sta- around 10 million passengers at an airport, tion around 200 years ago, so entering Europe 40-50 million at a station. Transport locations with a Watermark bookstore feels a little like provide a unique set of elements and they do a romantic arrival home. Obviously there are cater to very specific needs, which is what similarities but also differences between rail makes them attractive.Rail operator: What does the transport location bring to needs to be separated so that it comple-Gavin McKechnie, head of the offer? ments but does not provide an obstacle toretail, Network Rail It’s important to realise that retail hubs do that flow. To provide retailer’s with security I not only serve travellers, with the right offer would advise that leases run to around three they act as destinations in themselves. At Li- to six years and for food outlets to seven to verpool Street 40% of the shoppers are non- eight years. Our rents are base plus turnover travellers, at Euston, which has a very limited but in locations like rail stations flexibility is retail offer, still 18-20% of the shoppers are also needed because some retailers will be non-travellers. So clearly stations in urban lo- new to these environments and no matter cations have the potential to be turned into how hard everyone tries, it will not always destinations, where people arrive earlier or work. leave later, meet friends and dwell longer. As a rail operator it is about defining what the What happens next? catchment requires and how it is delivered. We have a programme of retail opening at UK stations. Our broader strategy is to strip How have you approached the offer at retail out of the main concourses to ease cir- your stations? culation and then generate new areas of re- Last spring we added new restaurants at tail above and below. I think the ultimate goal Manchester Piccadilly; this year further retail for any rail operator would be to attract a space will open at London Waterloo, Birming- brand like Apple because of the strength of @networkrail ham New Street and King’s Cross. For sta- the location on offer, although achieving the tions one of the first jobs is to clear the minimum space requirements would be very concourses of pods and standalone units, difficult. Ultimately flexibility and a pragmatic improving passenger flow. Retail and food approach are vital.
  6. 6. Vision by Follow us onevery 2 months: 1 consumer trend briefing • 4 retail real estate player’s viewpoints • online follow-upAirport operator: What does the transport location bring to of interchange will be increasingly important the offer? for airport cities and for us as aviation trafficMichal Marzec, general The idea behind airport cities, which are be- continues to increase at Chopin Airport. Wedirector, Polish Airports coming more and more popular all over the have a 22.5ha site adjacent to the airport which world, is the combination of aviation and non- we will transform into a mixed use, office-led aviation. An additional source of revenues scheme called Chopin Airport City over the from commercial services has a significant next ten years, including a business park with impact on the regions economic growth, retail, entertainment and leisure facilities. through the creation of new jobs and deve- lopment of infrastructure. Good examples What happens next? are similar projects in other European cities, As an airport operator, this is a new expe- such as Düsseldorf, Munich and Amsterdam, rience for us. The first step for any proposed where the non-aviation activity acts as a airport city is to do the research, which we strong driver for economic growth on a carried out with CBRE. We concluded it is im- macro scale. Such venues also enhance the portant to give workers and travellers a com- airports, the citys and the regions reputa- fortable environment. The commercial tion internationally. buildings will be set within a park, with a cen- trally-located plaza providing restaurants, fit- How have you approached the offer at ness centres and retail, and traffic will be Chopin? directed around the perimeter of the site, lea- We want to use the benefits of the location, ving the centre traffic-free. Such an approach @ChopinAirport which is in close proximity to Warsaw city cen- is part of our plan to encourage office workers tre, but is also directly adjacent to the airport, to stay at the end of the work day and to en- the train station and a coach station. This type courage passengers and aviation workers.Polarisation: Boutique What does the transport location bring to own right, developing it from a transportationor big centres? the offer? hub and a commercial centre. That alsoAndrea Joerger, project The role of an airport city is effectively to means providing a recognisably national ex-leader, The Circle at Zurich create a new city on the edge of the city, one perience, which in our case promotes Swit-Airport that is well connected and acts as a magnet zerland and helps us and the city of Zurich. for multinational businesses, conference or- The Circle’s architect is a Japanese company, ganisers and educationalists. It is not about Riken Yamamoto & Field Shop, and a major planning to make money by increasing the requirement is sustainability, which we be- number of passengers through an airport; lieve is crucial to any high quality commercial that is not the point. Instead, it is about in- development. creasing their length of stay and serving de- mand from a new segment of traveller who What happens next? doesn’t currently exist. Retail works at a dif- We are at the point where we are continuing ferent cycle to aviation as well, which can to attract investment, which is why we were protect an operator by running different in- at MIPIM this March, and if we achieve our come streams which will be impacted diffe- full equity requirements, we hope to start on rently by the economy. site in 2013. But it is also important in deve- loping an airport city to look at the wider be- How have you approached the offer at nefits to the region, which is why in the case Zurich? of our development it is being coordinated For businesses, an airport city creates a closely with the adjoining city of Kloten. ‘headquarters with its own airport’ and the Connections between an airport city and idea behind such schemes is to make the air- other towns and cities can provide far broa- port a whole, self-contained destination in its der commercial benefits.
  7. 7. Today’s intelligence for tomorrow’s business is a new initiative by MAPIC, The international market for retail real estate 14 – 16 November 2012, Palais des Festivals, Cannes, France. Vision mipimworldblog New on the MIPIMWorld blog: weekly updates on Every two months, MORE+ Vision introduces a new the topics and trends explored in MORE Vision. trend that is influencing retail property strategy. For regular updates, questions, comments … Join us onMAPIC ® is a registered trademark of Reed MIDEM - All rights reserved - Reed MIDEM, a member of Reed Exhibitions, © 2012 Jan. June 2012 2012 Previous MORE+ Vision: Next MORE+ Vision: What’s in store for 2012? Pop-up retail Would you like to contribute to the MIPIMWorld blog - with an article, a podcast or a video? Or maybe you have Register here suggestions for themes youd like us to discuss? Contact us Read it here if you wish to be notified via Twitter, LinkedIn, Facebook or by email to share your views and ideas! Contacts Credits Contributors: Mark Faithfull • Jean-Marc André Any questions on MORE+ Vision, Acknowledgement: MORE+ Vision wishes to thank the interviewees for their kind participation please contact Editor: Design: Frédéric Beauseigneur – Reed MIDEM Publishing Dept. Want to advertise in MORE+ Vision, Sources: “, a London-based, independent trend firm, scans the globe for the most promising consumer trends, insights and related hands-on business ideas. Its free monthly Trend Brie- please contact fings get sent to more than 160,000 business professionals in 180+ countries”