Kinetic Consultancy, leading consulting firm in the airport commercial space, has published the results of an airport non-aeronautical revenues survey and report which analyzes trends that it believes will shape future airport commercial strategy.
The report, Building blocks for the future of airport commerce, focuses on the big issues faced by commercial stakeholders in the international airport space as they adapt to new consumer behaviors and business challenges in the post-Covid world.
It has been compiled from the results of an airport industry flash survey conducted in October, with input via one-to-one interviews from senior commercial executives representing several airports (including London Heathrow), Unibail-Rodamco-Westfield, Vantage Airport Group, and JCDecaux, plus a host of individuals from other key airport stakeholders.
Some highlights from the survey include:
- Of six major airport commercial trends put to survey respondents, the one deemed most likely to develop significantly further was the ‘digital enhancement of the customer journey’ (93%). This was followed by ‘airports’ stronger dependence on aeronautical revenue’ (79%); ‘increased focus on memorable brand experiences’ (69%); ‘stronger diversification of non-aeronautical revenues’ (65%); ‘introduction of new categories’ (63%); and ‘innovation of non-aeronautical revenue streams’(57%).
- Of the five core duty free categories, only liquor & tobacco was thought more likely to decrease in value than remain stable or grow, with 42% of respondents backing this assertion.
- Three growing categories in the airport space were deemed by respondents to have the potential to grow significantly in the future. Some 44% believe Airport Advertising will significantly increase in value; 60% think the same of the Airport Lounge category; and a very high 79% see Leisure & Entertainment as a banker for major future growth.
- 68% of respondents see e-commerce as an opportunity for airports, with 15% of respondents providing a neutral answer and 17% seeing e-commerce as a threat.
- Of the digitization trends covered in the survey, the one respondents believe will influence future non-aeronautical revenues the most is ‘data sharing and analysis across airport stakeholders’. 75.6% of respondents believe this trend will influence things highly.
Among other key content in the report, the authors – Kinetic Consultancy managing director Martijn Steur and head of research Juriaan van Waalwijk – evaluate the different metrics which they believe will be decisive for shaping the future of airport commerce. Metrics relating to ‘Co-creation with retailers, brands and other stakeholders’ emerges as the most important in the eyes of survey respondents, ahead of other metrics such as ‘simulation in digital twins’, ‘designer/consultant expertise’, ‘benchmarks’, ‘historical data’ and ‘location-based data’.
The authors also discuss in detail the challenges surrounding the introduction of new categories and other innovations. Kinetic recommends an airport commercial innovation portfolio distribution split 70-20-10 between ‘improvements’, ‘additions’ and ‘disruptions’ respectively, depending on the business dynamics of the airport.
Steur commented, “Unsurprisingly, the experts we spoke to believe enhancing the customer experience is a crucial component of airport commerce in the future. This enhancement will clearly build on top what is already there – a strong retail and F&B offer. The strong belief is that there is a need to diversify sources of income and create room to innovate around customer experience themes.
“We conclude that it will not be the best product or service that is flourishing in the future of airport commerce, but the organization that is able to connect the complexity behind the scenes and to select the right elements for a streamlined experience for the passenger and a profitable shared business for the airport commerce network of companies.”
Van Waalwijk added, “With this report, we set out to analyze what are the developments shaping the future of airport commerce and how can we implement or deal with these changes. I think we have achieved that, gleaning some great insights from commercial stakeholders in the airport space, and from our one-to-one interviews.
“This is a potentially exciting growth phase for the airport commercial sector, and we hope that our report is a useful addition to the discussion of its future direction.”
Building blocks for the future of airport commerce can be downloaded free of charge here: https://kineticconsultancy.nl/building-blocks-for-the-future-of-airport-commerce/