Passenger Terminal Expo

Non-aeronautical revenues are vital to the profitability of airports – but relevant commercial trends and technologies continue to develop at a rapid pace, sometimes making it hard to know what the future may hold for airport retail.

In fact Roger Thomas, managing director of Research For Travel Ltd, was bold enough to ponder the demise of the airport shop as we know it in Passenger Terminal World’s 20th anniversary issue, which asked experts to predict the next 20 years: “Airport retailing is changing dramatically, and soon shops in airports will be radically different – some may even have disappeared altogether,” he said. “Although we do not expect retail outlets to actually ‘die’, we do see them changing substantially, and increasingly they will be showrooms rather than shops."

The discussion will continue at the forthcoming Passenger Terminal Conference, taking place on March 10-12 in Paris, France, which will feature a dedicated Commercial Development, Concessions, Retail & Media track running over the full three days of the event.

Digital transformation will play a major role in those discussions, with the subject at the very heart of proceedings from the start. 'Airports 3.0 – how digital transformation will change airport economics' is the title of the first presentation to be delivered, from Mathieu Blondel, principal at leading consultancy, Arthur D. Little.

“Airports are naturally positioned at the forefront of the digital transformation: customers are eager for service innovation, and airports have to deliver a seamless service in a complex operating environment,” said Blondel. “If well conceived, planned and implemented, digital transformation of airports could increase non-aeronautical revenues by more than 10%, reduce OPEX by 20% and optimise capacity by 10%-30%.”

Delegates will also hear from SITA with regard to the potential offered by one particular new digital technology: 'Beacons – gateway to the Internet of Things' is being delivered by Renaud Irminger, a SITA Lab director, at the end of the first day of the conference. “My presentation will explore how Bluetooth beacons can be deployed at an airport to improve the passenger experience and also provide real-time information on the airport environment through light, temperature, movement and audio sensors,” he said. “I will also cover why the industry needs to treat beacons as a common-use technology in the airport, and why we need standards to make the experience interoperable.”

The disruptive effects of e-commerce will be explored in a presentation on the second day, entitled 'Virtual shopping and the need for click and collect at airports', from Peter Louden and Tim Robinson, both senior executives at Doddle Parcel Service Ltd, a new British start-up that has already begun to radically shake up retail in the rail sector. “Our new service enables collecting, returning and sending parcels in handy locations,” explained Robinson. “It will allow greater choice for airport terminal passengers and offer an improved virtual retail experience to space-constrained airport terminal environments.”

The online challenge to duty-free sales will be further explored by Eric Tan, vice-president at Changi Airports International, Singapore, in his presentation entitled 'Online retailing – a double-edged sword for airport commercial activity'. “The rapid growth of online retailing is posing a real and serious threat to bricks and mortar commercial retailers at airports,” he said. “As technology continues to become more deeply entrenched in everyone’s lives, will traditional retailers cease to exist? For those willing to adapt and embrace the new model of online retailing, the threat of elimination can be turned into a new opportunity. How then should airport commercial planners help retail tenants develop their businesses to incorporate the new and old models of retailing?”

The answers to these questions and many more will only be available at the Passenger Terminal Conference – make sure you register now to ensure your future commercial strategies are the best informed possible!