With the UK, seemingly on course to extricate itself from the EU, will domestic airport operators take advantage of the changes in the status quo to develop new retail sales channels including the offers to passengers of duty free on arrival and buy pre-flight, collect on arrival?
Traditionally, as an EU member there has been a prohibition on UK airports offering duty free sales on arrival even though many countries outside the EU have been offering inbound passengers this option for years. Similar restrictions have prevented retailers from taking payment from passengers travelling within the EU at any time other than in the airport store on the travel day. This has hampered the abilities of the airport retail strategists to conceive and develop new sales channels for their passengers by limiting the options available to them.
The potential for greater freedom to develop through innovation and collaboration in this area is highly topical now as airport retail is facing some significant challenges to its offering specifically from emerging ecommerce channels.
With the opportunities that are about to present themselves to airports with an exit from Europe could this open a door to enable them to consider similar routes to selling to their passengers. One travel retailer described this as “a sort of Amazonlite for airports where shoppers buy before they fly and retrieve their purchases when they arrive back at the airport from smart collection points operating 24/7/365”.
With passengers able to browse their preferred brands online before their travel days they can make broader and more informed decisions on value, choice and convenience with easier price comparisons and purchases available for collection on arrival or even direct to their homes.
To be clear there is no suggestion that this will be a replacement for physical airport shopping as this is as much a part of the travel experience as a lunchtime Sangria or a slightly delicate second day sunburn. It will simply augment the existing arrangements and present new benefits where every party stands to gain.
The airport operators gain a new sales channel that enables them to start their conversation with the passengers long before they arrive at the airport and so take greater ownership of them as their potential long term customers.
They innovate a virtual as well as a physical shopping space for their retailers to optimise sales and deliver a network of collection points for the fulfilment and retrieval of passenger orders.
Additionally, they create an opportunity to commercialise the services to collaborative partners, stakeholders and passengers leveraging ancillary revenues from service charges and facilities management fees.
Moreover, the passengers gain extended choice, demonstrable value and greater convenience from their shopping experience whilst airlines are presented with the opportunity to consider an option to their existing sales arrangements in-flight through collaboration with the airport for mutual sales benefit.
It seems evident that the UK will return to its historical default setting of splendid isolation post-Brexit. It is equally clear that this position will result in changes that will create new opportunities for airport operators and their commercial partners and associates. This will certainly require a change of thinking and a willingness to explore new relationships between parties who may have traditionally considered themselves as competitors. But with the challenges to sales profitability that are now faced by all the members of this community from the online shopping channels the time to start this discussion appears to be now.
Ian Kay is a Director of Wand Technology and specialises in the conception and development of innovative products and services for airport operators that stimulate non-aviation ancillary revenues and enhance the customer experience.