13 August 2012 by Shaun McDougall
Generating Better Intelligence Within Airport Retail
At the start of 2012, Airports Council International (ACI) World Director General Angela Gittens presented the Airport Economics Survey results for 2010 (at the time of writing, the 2011 figures were not available). The report detailed the key role of commercial and non-aviation revenues within the overall airport revenue profile.
The 16th edition of the survey outlined non-aeronautical revenue to account for 46.5% of airport revenue worldwide. Indeed, ACI themselves state that non-aviation targets should account for at least 50% of the overall airport revenue make-up.
Gittens stated “Non-aeronautical revenues critically determine the financial viability of an airport as they tend to generate higher profit margins than aeronautical activities, the latter frequently representing a zero sum game or producing a deficit.”
Needless to say, if the global trade association is underlining the criticality of non-aviation revenue, airports not proactively working towards generating the maximum return from their non-aeronautical operations must change track, and do so rapidly.
Number one amongst the contributors to non-aviation revenue generation, often representing 40% of the overall total, is retail. Without doubt, retail not only contributes the largest portion of revenue, it also offers up the most extensive possibilities for growth. It is widely acknowledged that an increased airside dwell time will lead to increased retail spend - but how can this be measured? What data can be mined and used to make improvements to the passenger experience in the retail area and related processes?
How do airports measure and interpret the broad range of business intelligence available across such a vast array of stores, in dispersed terminal layouts? When shopping, food and beverage is not the passenger’s primary concern, how can we entice them in to that non-essential purchase?
The lack of intelligence on dwell time and increased demand on airport processes makes it challenging to create an environment conducive to passenger expenditure. It is essential that we examine what lessons can be learned from traditional retail environments in terms of revenue improvement, framed in the context of the airport environment.
This whitepaper will outline 5 key areas in which airports can utilise specific technologies and systems to generate an improvement in retail earnings.