The ACI EUROPE Airport Trading Conference & Exhibition this year headed to Zurich. Home to many financial institutions and banking giants, the city is one of the world’s biggest financial centres and was an apt location – the airport itself also being a model of commercial excellence.
Attracting over 400 key industry stakeholders, representing airports, retailers, brands, and consultants, the event highlighted the critical importance of commercial revenues to the development of both airport infrastructure and connectivity. Importantly, global travel retail sales grew by 7.5% to US$60 billion (€44bn) in 2013.
The theme, ‘Travel Experience – Operational Excellence vs. Commercial Opportunities’, was a prescient one. Indeed, while the conference covered a broad range of topics, it was widely agreed that without commercial revenues, operational excellence cannot be achieved. The challenges facing airports are prompting an ongoing business transformation – from B2B to B2C businesses – with revenues increasingly coming not from the airlines, but from passengers. This perhaps heralds a new frontier for airports, redefining the relationship between airport and passenger through retail. Above all, this business transformation is about leadership and innovation, and the event highlighted several examples of both.
Next year’s 24th ACI EUROPE Airport Trading Conference & Exhibition takes place in Milan.
Keynote speaker Tyler Brûlé, Editor in Chief, Monocle, and Founder and Chairman, Winkreative, offered a truly unique perspective on the airport retail experience. As a seasoned traveller – Brûlé travels 250 days a year – he has vast experience of aviation and international markets. The Winkreative team helped Brisbane Airport develop its blueprint for the new international terminal, with a vision to create a world-best experience. It also created a strong brand for Canada’s Porter Airlines, which is based at Toronto City Airport. Offering his observations on airport retail, Brûlé commented: “Everyone likes to talk up differentiation, innovation and sense of place, but few are delivering on it.” He called for more originality in the product mix, and more pleasant surprises for travellers. Among those airports getting it right, Brûlé highlighted Helsinki – “The best hub in Europe for buying unique, interesting food and craft products”; Zurich, which is “a model of efficiency”; and Oslo, which “should be admired for its warmth and use of solid materials”.
Thomas E. Kern, Chief Executive Officer, Zurich Airport, stated that “airside, duty free is key”, while “landside, connectivity is key”. He also highlighted the local flavour of the airport’s retail and food & beverage offer. Kern explained that there are three commercial centres at Zurich Airport: the Airside Center, which offers a premium international retail experience; the landside Airport Center, which is heavily frequented and has a mid-market offering; and The Circle, featuring new premium brands.
Patrick Graf, Chairman, ACI EUROPE Commercial Forum, and Senior Vice President Commercial, Zurich Airport, emphasised “that there are many opportunities in airport retail to provide a unique passenger experience”. “We as airports have to find the right answers to passenger needs. We will, in future, be able to individualise and personalise the experience for each traveller,” he added. Graf also raised the potential of loyalty programmes, explaining that airport operators still don’t know much about their passengers – who they are, when and how often they use the airport, and why, business or leisure?
Sarah Branquinho, President, ETRC, delivered a passionate address on the importance of working together to protect airport retail income. ETRC and ACI EUROPE have strengthened their relationship over the past year, working closely on two key issues: LAGs and Air Passenger Rights. Branquinho explained that new LAGs rules are an “opportunity for retailers to sell to international transfer passengers to a greater extent”. On Air Passenger Rights, she said: “Airports and retail partners need to work together to succeed.”
Olivier Jankovec, Director General, ACI EUROPE, explained that Europe saw 2.8% passenger growth in 2013, with a contrasted performance. “There is a two-speed market in Europe,” he said. “EU countries saw 1% growth, while non-EU countries saw more dynamic growth of 9.6% in 2013.” Macro-economic conditions will be a key traffic determinant this year; Jankovec explained that the Eurozone is more stable, the US is performing pretty well, and the emerging markets are not performing as dynamically as in recent years. The full-year forecast for 2014 is 3.2% passenger growth.
Thomas Sevcik, Managing Director, Arthesia AG, gave a provocative presentation, in which he asked: Are we seeing the end of retail? He contended that online retail will be a defining force, and that offline retail must react to that. “Airports need to be innovation leaders, not late adopters. There will always be retail, but with your lead time, you should probably think today about what you will do tomorrow,” Sevcik commented. He added that passenger dwell time provides airports with a key advantage in a networked, social media driven, smartphone world.
Stéphanie Griffiths, Director of Strategic Development, Future Foundation, expanded on how to utilise mobile devices to enhance travellers’ experience and maximise retail opportunities. “Mobile is hot,” she said, with 91% of users keeping their mobile device within arm’s reach 100% of the time. “And mobile in retail is even hotter.” Mobile currently influences 5.8% of shopping trips, and by 2020 that figure will have grown to 50%. Griffiths added that the multiple tailored messaging opportunities presented by iBeacons have the potential to help airports increase revenues from on-site retailers.
Lise Ryevad, Director Airport Sales, Copenhagen Airports, commented that “today’s passengers are just like ‘real’ consumers”. “They shop where they are, pay as they like, with delivery as they wish,” she said. Ryevad also emphasised the importance of meeting passenger expectations, with services such as order from home and pick up on departure or arrival.
The importance of powerful partnerships was explored by a panel featuring: Peter Eriksson, Founder and Managing Director, Eriksson + Partner GmbH; Ute Pohl, Head of Retail, Fraport; Raoul Spanger, Executive Director, Gebr. Heinemann; Patrick Graf, Chairman, ACI EUROPE Commercial Forum, and Senior Vice President Commercial, Zurich Airport; Andrea Belardini, CEO Europe & Global CCO, The Nuance Group; and Francis Gros, Global Travel Retail & Special Channels Director, Luxottica.
The Unconference sessions provided a more interactive, participant driven approach, which encouraged stimulating debate and the sharing of ideas. The sessions focused on two themes: Leveraging technology for commercial gain, and airline, airport, concessionaire and brand cooperation to increase passenger spend.
The exhibition was an excellent showcasing platform for industry suppliers, and provided valuable networking opportunities.
