The airport is becoming an attractive piece of real estate for shopping centers, malls and even local restaurants. “The airport is really the doorstep of the community,” says Rick Blatstein, CEO of OTG, which develops, owns and operates restaurants in 11 different airports. He finds it crucial to cater to travelers with local tastes and flavors to invoke a local vibe. This is all in response to the demands of Millennial travelers and other fliers who want quality food and unique experiences.
Luxotica, an Italian maker of sunglasses considers airport sales as “the Formula 1 of retail”. According to the New York Times, the sales per square foot are much higher at airports than street locations or shopping malls. Airport retail sales are expected to increase by 73% from 2013 to 2019, predicts Verdict Retail (The Economist). Furthermore, the global airport retail market will grow by more than 60% to $44.1 billion US dollars by the end of 2015.
Airports have usually sold merchandise such as magazines and souvenirs but they are now expanding into luxury goods and major brands. This is happening because audiences are increasingly captivated during time between security, boarding and layovers. With an increase of travelers, more people are wandering shoppers throughout their downtime. Airports are gearing their infrastructure to include shopper-centric elements such as attractive layouts and storage facilities.
In the current mobile digital age, airports are able to bridge the gap between retailers and idle travelers using GPS technology, iBeacons, and review services such as Yelp. Existing retailers such as Starbucks are experiencing the full benefits of proximity-based marketing with American Airlines. As major retailers are pushing for technology, there will be more features to better understand consumer preferences and improve shopping convenience.
Retailers in airports are able to take advantage of the leisure traveler's mindset in creating a memorable experience, by giving them an opportunity to splurge on items that they wouldn't usually buy. According to one survey by DKMA, it showed that an airport with the most satisfied passengers are twice as likely to shop and spend +7% more than the average on retail and +10% more on duty free. Airports are now realizing the strong correlation between travel and retail growth and they are maximizing non-aeronautical revenue opportunities by vastly improving the traveler's experience.