24th ACI EUROPE Airport Commercial & Retail Conference & Exhibition, Milan, 21-23 April
The ACI EUROPE Airport Commercial & Retail Conference & Exhibition this year headed to Milan. It was a fitting location – the vibrant new commercial environment in Milan Malpensa’s Terminal 1 showcases the best of a city renowned as an icon of fashion and design. The event attracted a record attendance of over 400 key industry stakeholders, representing airports, retailers, brands, and consultants, which spoke volumes about the importance of commercial and retail revenues to Europe’s airports. Global travel retail sales reached US$62.5 billion in 2014 – a 4.3% year-on-year increase – with the airport channel accounting for 58% or US$36.29 billion of that. The European region accounts for 33% of global sales and grew by 2.5% in 2014. The central theme of this year’s event – ‘Challenging the traditional business model’ – permeated each of the conference sessions. There was a consensus that creative concepts, and a tangible sense of theatre and engagement, are essential to challenge the status quo and maximise the potential of all areas of non-aeronautical revenues.
The 25th ACI EUROPE Airport Commercial & Retail Conference & Exhibition takes place in Helsinki, 12-14 April 2016.
Olivier Jankovec, Director General, ACI EUROPE, presented a detailed briefing on the state of the industry. He said there is “a bright future ahead, with many challenges”. 2014 saw a strong recovery, with 5.4% growth in passenger numbers to a record 1.82 billion in Europe. It is also a less divided Europe – EU traffic grew by 4.9% and non-EU by 7.3% – so the gap is narrowing. “Growth in traffic in 2015 is holding firm – 5% in January-February. This is defying economic conditions and shows the importance of air traffic connectivity in Europe today,” Jankovec commented. “Connectivity is a challenge – last year we released a report that analyses connectivity over a 10-year period.”
Claus Dietrich-Lahrs, CEO & Chairman of the Managing Board, HUGO BOSS, delivered a truly inspirational keynote address entitled ‘HUGO BOSS and its global customer – a 360-degree approach’. He said HUGO BOSS has developed its business nicely in travel retail, with annual revenues of €90 million today – soon to exceed €100 million. Dietrich-Lahrs explained that the company’s ‘Growth Strategy 2020’ is about engaging consumers emotionally; leveraging the brand’s potential in womenswear, shoes and accessories; building omnichannel to drive retail online and offline; and exploiting growth opportunities in underpenetrated markets. He emphasised the importance of an omnichannel approach to guarantee a 360-degree brand experience, both online and offline, to global customers. “Travel retail has to be an integral part of this – the story we tell downtown needs to be reflected and repeated in travel retail. A consistent message across different consumer touchpoints is the most important long-term challenge,” Dietrich-Lahrs explained.
Marc Brissac, Head of Commercial Development & Property Operations Department, Aéroport Toulouse-Blagnac, and Chairman, ACI EUROPE Commercial Forum, highlighted two areas that the Commercial Forum is focusing on – business transformation and real estate development. The next meeting of the ACI EUROPE Commercial Forum takes place in Budapest on 7 September, and many members will participate in the Budapest Airport Runway Run on 5 September.
Sarah Branquinho, Business Relations & External Affairs Director, World Duty Free Group, and President ETRC, emphasised the importance of commercial revenues “contributing to connectivity for citizens in Europe and beyond”. Hers was an impassioned speech entitled ‘Is the Single Market fragmenting duty free & travel retail?’. “Well-intentioned regulation at EU level inevitably fails to take into account trading across Europe,” Branquinho said. “It’s impossible to not have an impact on the choice of products our members can sell. The effect of regulation is the opposite of the EU’s desired aim – an environment that increases choice to consumers and enables business to grow – it does the opposite.”
Pietro Modiano, Chairman, SEA Aeroporti di Milano, provided details of the €30 million revitalisation of the commercial environment in Milan Malpensa’s Terminal 1. The project was completed ahead of Expo Milano 2015 – the major global event taking place from 1 May to 31 October. “We have tried to emphasise the values of design, luxury, taste and fashion, which are all synonymous with Milan,” Modiano explained. At the heart of the redevelopment are two piazzas dedicated to luxury retail and food & beverage – Piazza del Lusso (Luxury Square) and Piazza del Gusto (Taste Square).
Ezio Balarini, Chief Marketing Officer, Autogrill, delivered the keynote address on day two of the conference. He highlighted the F&B leader’s answers to changing customer habits, and Autogrill’s strategy to “promote new consciousness values” and deliver “outstanding new projects” through “best-in-class airport partnerships”.
Patrick Graf, Senior Vice President Commercial, Flughafen Zürich, and Immediate Past Chairman of the ACI EUROPE Commercial Forum, emphasised the importance of a partnership approach and urged brands to place a strong emphasis on creating an experience in the travel retail environment. “Airports are a window to the world, and are becoming commercial centres,” he said.
Kam Jandu, Chief Commercial Officer, Budapest Airport, explained that the SkyCourt terminal opened in 2011 with all fixed retail and F&B units let. He added that new retail tenders are being issued this year, and the airport is looking for expressions of interest. Jandu also outlined the importance of experimentation – Budapest Airport has, for example, successfully introduced pop-up store concepts in previously underutilised parts of the terminal. “New trends, such as pop-up stores, are low hanging fruit, sometimes generating up to 10 times more income per sqm that fixed units,” he said.
Brian Woodhead, Commercial Director, Heathrow Airport, outlined the retail vision in the new Terminal 2, which centres on four elements – new luxury, digital, customisation, and Best of British. He emphasised the importance of collaboration, “part of the key to our success is how we work with our business partners”, and outlined a number of firsts, including John Lewis’ first airport store and Heston Blumenthal’s The Perfectionists’ Café.
Jukka Isomäki, Vice President Helsinki Airport Commercial Services, Finavia Corporation, addressed the subject of: How do you make non-spenders spend? His observations included the fact that frequent flyers are an important source of revenue because of their high visiting frequency. Meanwhile, non-spending is likely to be more attitude-driven. “Non-spending behaviour is not strongly linked to a demographic profile or to a particular segment,” said Isomäki.
The exhibition was an excellent showcasing platform for industry suppliers, and provided valuable networking opportunities.
The conference and exhibition were augmented by two spectacular social events. The Welcome Reception took place in the Palazzo delle Stelline Courtyard, with delegates having the opportunity to visit The Last Supper by Leonardo da Vinci. The Gala Dinner, meanwhile, was held at the sumptuous Palazzo Mezzanotte.
