This was the position I found myself in one evening last month, returning from a short, but busy, press trip. The airport authority had clearly tried to include some interesting stores, but it was clear the cramped terminal building was never designed with retail in mind – the ceilings were low, the light poor in places and signage terrible.
Above all, what I needed was a cold drink, but finding a bar or restaurant with somewhere to sit down required the tracking skills of Bear Grylls. When I eventually stumbled on what was laughably called a ‘Bistrot’, I was too tired to complain about spending a small fortune on a glass of warm beer and a plate of congealed pasta so dry it would have made the dire school dinners of my youth look like Michelin-starred fare.
But here’s the thing. Despite the stratospheric prices, the below-par food and the dirty tables, the restaurant was packed. In contrast, the shops I’d walked by to get there with their luxury watches, designer fragrances, Swiss chocolate and tins of caviar were mostly empty. Now, to be fair, Geneva is quite a small airport by European standards and it was dinner time. Yet the truth is at many much larger hub airports, spend-per-passenger growth rates on food & beverage (F&B) are beginning to outperform that of retail.
Of course, the issue of declining retail spend is not a problem confined solely to the airport— I am sure your local high street has plenty of empty shop fronts. I know mine does. The oft-repeated explanation – and one that’s hard to dismiss – is that millennials now prefer to do much of their shopping online. The shift in purchasing patterns towards F&B is certainly leading to some soul searching in the travel retail industry at the moment.
Retail has traditionally offered airport authorities significantly higher rental levels than F&B, but the higher growth rate seen in the latter could see airports allocate more space to bars, cafés and restaurants in the future. It’s a trend drinks companies must be aware of. Standards within the airport F&B sector are generally rising and good locations can offer brands fantastic exposure to a wide cross-section of ABC1 travellers.
As an example, just look at the way airport bars and restaurants in the US have tapped into the country’s booming craft brewery scene. Exotic IPAs have largely replaced mass-market lagers – Tampa International has Cigar City Brewing; San Diego has Stone Brewing; LAX has Angel City Brewery and Portland has Rogue Ales. Denver airport in Colorado even has an annual beer festival.
On the retail side the challenge, as ever, is to increase footfall and penetration. A solid, appealing mix of products, including a decent selection of local wines and spirits, is essential, but so is customer service, which includes the chance to pre-order by smartphone and collect items in-store. Another must-have is mobile payment at POS, something many airports are quickly adopting.
A bricks-and-mortar retail revolution is coming. Either here or on the horizon are electronic shelf labels that instantly adjust prices to keep up with the latest offers and avoid out of stocks; smart packaging, which allows travellers to access brand information and cocktail ideas; virtual reality tours of distilleries and vineyards and apps which allow shoppers to pay for items without queueing at the till.
It’s an exciting future, which hopefully might just tempt a few travellers away from their soya lattes and back into the duty free store.
