Here are just some ideas that could be tested to help generate incremental sales, attract new shoppers, increase penetration at stores, change the way Airport Duty Free is perceived and in the process, also provide an Experience to remember for passengers to become shoppers…
For the current background on the Airport Duty Free challenges – please click here for the Inside the Cask blog post on: ‘The Trouble with Airport Duty Free’.
OPPORTUNITY: Improve Penetration for Retail via the Airline Lounge
Airline Lounges, such as the typical example below, present a unique opportunity to target frequent flyers, those travellers who are likely to have a higher disposable income than average and visit the airport regularly (although most likely not visiting the Duty Free store frequently and probably spending the least amount of time possible at the airport prior to their flight’s departure).
THE 1ST IDEA: Enhance the Airline Lounge Experience with Brands
Brand relationships can enhance the Airline Lounge experience through value-added products and services. There is an inherent opportunity to drive trial and experiences (such as the below example outside of GTR, for Loch Lomond scotch whisky at The Open 2018). However, airline lounges should also be working in partnership with the airport duty free stores in closing the loop on the call to action, by selling products there and then to travellers. Ideally this would also involve delivery to the lounge within a pre-specified time and a service guarantee (i.e. an example could be ‘if your order not delivered in 20mins to the lounge, you will receive double the money back!’). This call to action is usually missed by most airport lounges to follow up from the brand experience already in place and is important to most brands.
OPPORTUNITY: Deliver on Convenience and Increase Diversity of Offer
Passengers are unwilling to carry more items and also may fear the drastic implementation of onboard restrictions by some airlines. One current service that looks to deliver on this need is ‘Click & Collect’ (i.e. purchase on departure and collect on return, such as Reserve & Collect by World Duty Free pictured below). However, take up of this service is typically very limited, usually representing a small share of the overall sales for Airport Duty Free stores.
This is possibly due to low awareness and it may also suffer from a misunderstanding of the value proposition. Additionally the service is mostly not integrated into the airport’s pre-flight bundle offer mechanics (i.e. linked to car parking, airline lounge access, etc).
THE 2ND IDEA: Introduce Click & Collect 2.0 Service
Combine Convenience and Relevance. Provide a unique offering, including products only available exclusively through this service to enhance awareness and improved value perception, as these products would not require space instore, thus could be managed through a different commercial agreement with the airport
Introduce exclusive promotions through Click & Collect 2.0 and take full advantage of the removal of travel restrictions on volumes to be purchased, through mixed case deals for example (or full cases as per picture below). Potential to also link the service up to bundle deals with other pre-ordered services (such as car parking). Aim should be to enhance the consumer understanding of convenience on offer at airport duty free via increased awareness of the service. This proposition is aligned with the growing consumer trend for pre-travel purchase planning ahead of impulse (in-store).
THE 3RD IDEA: Monetise the High Footfall of Travellers at Airports
Introduce subscription service at airports to capture a larger share of the passengers’ wallet. One potential idea is to offer a special promotion to passengers who buy certain products whilst travelling, to then have the 2nd and subsequent purchases automatically delivered to their door at a lower price (i.e. no airport space required). This is only likely to work in certain categories and on a limited range of products. For example, if we say a skin care tub lasts on average 4-6 weeks due to their usual consumption pattern, this is unlikely to be purchased again at an Airport Duty Free store, as most passengers do not travel as frequently as every 4-6 weeks. Therefore this could be an interesting service to offer if the value proposition was right.
Another idea which may be simpler to implement, is to work with existing Subscription companies to offer their service at the airport and delivery to the door of the home of the passenger (thus offering an enhanced and new proposition in the airport) e.g. Gin clubs, Beauty box, etc such as the examples pictured below. In exchange, the operator would receive a share of the business generated through the Duty Free channel.
OPPORTUNITY: Introduce Experiences and surprise the Passenger
A lack of experiential retail in duty free is apparently keeping shoppers away, according to the Duty Free World Council (DFWC). Thus, the opportunity at hand is to facilitate and provide the platform for not only more experiences to be created, but also, to increase the number of brands involved at the airport.
The typical passenger travelling through an airport currently tends to visit more frequently food and beverage (F&B) outlets, than duty free stores. They also tend to spend more time in F&B than retail outlets. The proposition on offer at most airports in general is consistent and clearly segmented between airport duty free stores, F&B and other stores (such as RELAY or WH Smith for example).
THE 4TH IDEA: Encourage Pop-Up Shops as a means to drive experience
Increase the diversity on offer and surprise passengers by bringing in new brands to the airport environment, whether local brands and/or brands new to the Duty Free channel. The idea here would be to provide the Pop-Up platform at a low barrier of entry to encourage interest from brand owners (in terms of cost for the space, which would need to be minimal cost to none). This would allow new brands to enter the channel or airport in question and test their proposition with the creation of new temporary experiences for passengers. One such example of an experiential pop-up shop is The Barbershop by AirCommerce pictured below. Another pop-up example from them is SnapFly pictured below also. For more information on these, please visit the AirCommerce website.
THE 5TH IDEA: Break down the F&B and DF silos and allow for 5 senses
We should be aiming to create discovery and a sense of surprise in the mind of the passenger, for a memorable experience to occur. Online/ e-Commerce retailers cannot (yet at least!) reach all of our senses, such as taste, touch and smell, so airports need to take advantage and reach out to the passenger’s 5 senses to improve their experience.
Breaking down the barriers between Airport Duty Free stores and F&B outlets could help create the opportunity to trial a combined approach with new concepts for the passenger to discover. Sharing stories (whilst educating passengers) to make them recall the experience with others may encourage them to want to come back again. One such possible example is the concept pictured below, of a Whisky Retail/ F&B hybrid store enticing all 5 senses of the passenger and delivering it with great service.
“Failure isn’t fatal, but failure to change might be” John Wooden
At the moment, Airport Duty Free has the potential to improve and compete through experiential retail against online retailers, helped by the ability to reach all of our 5 senses….however this may not always be the case as highlighted by Jo Malone below.
“It’s coming, we’ll be able to switch on our computer or phone and be able to smell a fragrance. It’s there…it’s just how it is interpreted” Jo Malone