ADR expecting a retail boost

Working alongside ‘The Design Solution’, AdR is improving 2,000sqm of retail space to focus on creating a more attractive retail environment.

Working alongside ‘The Design Solution’, AdR is improving 2,000sqm of retail space to focus on creating a more attractive retail environment.

“We believe that the retail potential at our airports is extremely attractive and we are confident that we will be able to maintain high growth rates. A further boost in retail sales will be ensured by a number of favourable market and operational conditions, and particularly sustained traffic growth,” said Belardini.

Traffic growth – 9.2% in 2007 – is expected to continue, stimulated by the strength of Rome’s origin and destination market and the potential return of some long-haul flights. To accommodate future growth, AdR has planned a capital expenditure development programme over the next 10 years totalling €1.6 billion, including a number of retail improvements in the coming years.

‘Short-term’ retail improvements

Belardini: “A further boost in retail sales will be ensured by a number of favourable market and operational conditions, and particularly sustained traffic growth.”

Belardini: “A further boost in retail sales will be ensured by a number of favourable market and operational conditions, and particularly sustained traffic growth.”

“During the last three years, we have launched a ‘short-term’ retail improvement programme to create a better shopping environment, ease passenger flows and improve dwell time for passengers. We are also looking to improve the offer and service standards,” said Belardini.

€50 million has been invested so far, by the airport operator and retailers, under the capital expenditure programme, following the complete reshaping of the Terminal A mezzanine and boarding gate area, B11-B21.

“In 2008, we expect a further improvement in the retail offer with some contract renewals and potential substitutions, as well as more space. We aim to improve a total of 2,000sqm in retail, of which 700sqm is new space, and 5,000sqm in F&B. Our new retail areas are being designed with the support of ‘The Design Solution’ and will enable us to create a more attractive and profitable retail environment,” said Belardini.

He believes that the extremely high penetration rate – close to 80% of departing passengers – in F&B makes it an “integral component of the traveller’s experience”. He said: “This presents a great opportunity that enables us to undergo one major contract, which involves 21 outlets and is due to be tendered this year. We will look at improving the quality of the Italian food available, introducing more fresh meals and to further expand our offer within international cuisine.”

Belardini explained that deciding the retail mix can be ‘half luck’. Customer feedback demonstrated a preference for sportswear shops over luxury produce. However, although the sportswear shop was successful, the luxury shops were much bigger sellers.

Belardini explained that deciding the retail mix can be ‘half luck’. Customer feedback demonstrated a preference for sportswear shops over luxury produce. However, although the sportswear shop was successful, the luxury shops were much bigger sellers.

‘Soft initiatives’ to drive sales

According to Belardini, ‘hard initiatives’ include offer and airport layout improvements. To boost revenue, Belardini is trying another strategy by developing ‘soft initiatives’, which involve training and communication.

Belardini said: “We are launching a number of communication initiatives with the objective to improve promotion effectiveness at the airport and to create brand awareness of our ‘Rome’s Airports Shopping Gallery’, reaching the passengers before they even leave for the airport.”

The launch of the CRM (Customer Relationship Management) system, facilitated through a loyalty card, is being developed by the airport and retailers to offer consumers a number of benefits and rewards, as well as giving the staff an opportunity to talk directly to the passengers.

Resisting homogenisation

In an effort to provide customers with niche formats, AdR introduced local shops in the accessories and gifting categories, including Gallo, Sermoneta, and Just Design.

In an effort to provide customers with niche formats, AdR introduced local shops in the accessories and gifting categories, including Gallo, Sermoneta, and Just Design.

“We must try and move away from homogenisation. We tend to have a balanced blend of global, national and local offer. A large size airport has to provide for international passengers. However, airport retail today reflects globalisation, as we tend to find more and more of the same products across airport retail. It is important to find a way of being unique,” said Belardini.

Accordingly, there has been a focus on finding successful niche formats in the accessories and gifting categories, including Gallo, Sermoneta and Just Design – all of which are performing well. Belardini said: “Another way of bringing local flavour is to adapt the global offer. This is what we are going to do with specific space allocated to global Italian fragrances in our duty free shops.”

Belardini has a set of priorities, which he hopes will lift retail in the airports by the end of the year. Other than niche categories, the retail mix is decided by combining internal yield and tender results with market research. “Our priorities today are the continuous development of core categories, development of luxury Italian and international accessories and fashion brands, and need-based offers, such as improvement of the newsagents. We also aim to provide a unique local format in accessories and the gifting category, plus fine Italian food,” he said.

Long-term developments

“The opportunity for long-term developments is huge. The expansion of the Terminal C transit hall is launching this year and is due for completion in 2011-2012,” said Belardini.

The expansion will enable a 5,000sqm increase in retail and will create a consolidated central retail area. The key focus through 2008, alongside Arup and The Design Solution, is to design a layout, which creates a sense of space that is comfortable and stimulates passengers to circulate within the retail area. Belardini said: “The additional retail space will provide an increased offer plus more space for the existing successful formats. A similar redesign effort will be launched next year for the expansion of Terminals A and B and is due for completion in 2013.”


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