Travel Retailers Can No Longer Afford to Ignore Digital

Christina Roseler, Manager at Javelin Group, part of Accenture Strategy warns that airports are in danger of getting left behind in a digital battleground dominated by carriers and digital platform providers

Airports are under increasing pressure as two of their main revenue streams are being challenged – landing charges (by airlines) and car parking (by the likes of Uber). As a result, retail is becoming ever more important. Travel retail is a growing market, with global duty-free sales forecast to increase from $45.7bn in 2016 to $67bn by 2020. But while this growth is impressive, there are warning signs that spend per passenger is actually declining. Growth appears to be driven solely by an increase in passenger volume.

Airports and travel retailers have traditionally benefitted from guaranteed footfall, a captive audience and competitive pricing compared to their high-street counterparts. Consequently, many travel retailers have not invested significantly in omnichannel customer experience. However, as digital commerce quickly becomes the preferred buying channel for shoppers, airports can no longer ignore digital, particularly as a virtual battleground has emerged where disruptors (such as global powerhouses like Google and Airbnb) and airlines are trying to get a slice of the cake.

Airports, airlines and travel retailers are recognising the powerful combination of digital commerce and big data analytics, and are beginning to develop more sophisticated retail strategies as a result. Providing a compelling customer proposition hinges on more than just price advantage and putting stores at the right place on the physical customer journey. The challenge is that there is currently no defined way of dealing with digital commerce. The ecosystem is more complex than traditional retail, but airports and travel retailers have limited expertise in capabilities needed to get it right.

Digital opportunity for travel retailers

The opportunity of leveraging digital commerce in an airport environment is plentiful:

  • Wealth of available data: Airports have deep insight into the commercial performance, traffic forecasts, passenger flows and pax research to a degree that many owners of shopping centres would envy. While airlines know the exact date of departure, destination and demographics, and retailers know exact categories purchased, flight number and destination information, each player has a wealth of information that can be tapped into. But no single stakeholder has all the data to create a 360 view of the customer. There is huge potential for secure data sharing as a result.
  • Guaranteed dwell time: Despite declining dwell time in airports (from 150 min in 2012 to 133 in 2016, passengers still have time to engage with the commercial environment. If this could be extended to include the ‘captive’ time spent on the flight itself, the opportunities to provide a value-added service to customers increases even further.
  • Fully controlled environment: Airports can manage the flow of passengers through automation or staffing at check-in, security and border control. NFC, Wifi, Bluetooth, and other related geo-technologies can track pax movement; dynamic signage can influence wayfinding; gate allocation changes the pax profile mix in commercial zones and call-to-gate can optimise IDL dwell and limit gate changes; while contextual rule-based messaging can create a dialogue with the passenger that is relevant and compelling. Although this places a burden on the data gatekeepers to use information in a sensitive way, it creates an opportunity to leverage passenger insight across the customer journey in a way that has never been previously possible.
  • Digitally savvy customers with a premium SEG profile: Travellers tend to be of a higher socio-demographic profile, meaning that they are digitally savvy and frequent users of digital commerce.

However, some key challenges remain:

  • ‘Ownership’ of the customer: Stakeholders are often concerned with owning the customer data rather than collaborating to provide a meaningful proposition, which is key to capturing today’s empowered consumer.
  • Undefined business model: This makes it more challenging for airports to build the necessary organisational structures and capabilities.
  • Politics about detailed questions getting in the way of big picture thinking: Who pays for the required infrastructure? What should turnover rent be based on traffic source? What data do we want to share? Who provides access to the data?

 Competition between stakeholders: Airports, retailers, airlines and third parties are all looking to capture passenger digital commerce spend. Airport sales growth and investment is significant: iShop Changi recorded sales growth year-on-year of more than 76 percent, and Frankfurt Airport invested into its online shopping platform ( (2017). Annual Report 2016). Retailers and airlines also harbour ambitious plans. Ever Rich Duty Free believes that soon more than 50 percent of purchases will involve the online channel.


What should airports do to remain relevant and safeguard a key non-aeronautical income stream?

Investments in sophisticated digital commerce infrastructure – from an IT, operational and organisational standpoint – are significant. Understanding the opportunity and potential for ROI needs to be assessed on a case-by-case basis. A full digital presence that offers a connected passenger journey might only be commercially viable for large or medium-sized airports. However, even for smaller airports, keeping a relevant online presence, capturing data and using analytics to optimise the passenger experience and commercial offering are just as important to not lose the key passenger touchpoint.

When digital commerce is financially viable and aligned with commercial strategy, getting the proposition to be in line with customer expectations is key to success. Customer expectations across the key attributes that define future brand success are fluid and driven by best-in-class exemplars that may come from other industries. To create a fully connected, single-touch customer journey that is compelling and sustainable against this backdrop, stakeholders in the air travel industry need to collaborate, share data and develop new commercial arrangements to create an opportunity that is greater than the sum of its parts.

Jointly agreeing on a common digital commerce strategy, understanding the existing capabilities and particularly the gaps thereof are vital parts to developing a roadmap for a successful rollout.


About the author

Christina Roseler is a Manager at Javelin Group, part of Accenture Strategy, and leads the Travel Retail work, specialising in airport retail consulting. Recent projects include the development of an e-commerce strategy for an airport, with emphasis on creating a connected passenger journey, leveraging the interplay of key stakeholders across the ecosystem, as well as an e-commerce feasibility study and business case for a duty-free retailer operating the inflight retail for a full-service carrier. In recent years, Christina has worked with over 15 airports across the globe.

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1 Comment

  1. Airports need to embrace the concept of buying in their Traffic Acquisition so to enhance their sales. Until now, “paying for traffic” is not a concept Airports understand… until, that is, this traffic get’s taken elsewhere… which is exactly what the airline wifi Operators intend to do. Airports need to start addressing Affiliate activity… otherwise travellers and the revenues will be captured by others.

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