Interview: How Swedavia is creating the ‘Marketplace of the future’ at Stockholm Arlanda Airport

Swedish Airport company Swedavia is making the biggest commercial investment in its history with a hugely ambitious, multi-phase transformation of the retail and food & beverage offering at Stockholm Arlanda Airport.

By the end of this summer, the first phase of the new Marketplace in Terminal 5 will be complete, while the retailer line-up for what Swedavia calls the shopping experience of the future at Sweden’s largest airport is now being determined.

The tender process for ten new shops is under way and will be completed towards the end of the year but businesses still have an opportunity to take part in one of the airport world’s most exciting developments.

Swedavia Director Retail, Food & Beverage, and Aviation Pricing Marie Ullmark talked to The Moodie Davitt Report Founder & Chairman Martin Moodie about the ambition and strategy that underpins the development {Look out for our further coverage in coming days with more details of the project}.

{Click on the YouTube icon to view edited highlights of the interveiw with Marie Ullmark}

Martin Moodie: Marie, the new Marketplace is Swedavia’s biggest-ever commercial investment, one that will deliver a host of new passenger experiences. You have dubbed it ‘The Marketplace of the future’, so it’s highly ambitious. Tell us about the philosophy that underpins the development and how you’ve set about curating the final selection and the balance of concepts.

Marie Ullmark: What’s happening now at Stockholm Arlanda is something quite huge. As you noted, we’re building a whole new Marketplace. But we also just recently launched a new security control and together these two projects will give the passengers a brand new experience of our airport. So we find this super exciting.

We started a few years back with a new commercial strategy, which was driven by two things. One was that we were building the new Marketplace, so we had 11,500sq m of new space that we wished to fill with something with purpose.

At the same time we had 120 rental agreements that we had to transform into concession agreements, meaning that we had to do a tender process. We were basically looking at renewing the space across Swedavia’s ten airports at the same time. This was the starting point of creating a new commercial strategy.

So we were sitting with a blank piece of paper. What a fantastic opportunity to really create something new from the ground up.

We started to look at the feedback that we had received from our passengers. What did they think about Stockholm Arlanda and our other airports and the offer that we currently had? Then we also spoke to our partners. What kind of opportunities did they see within their market space? What had they learned from other countries and what did they think was important in the future?

We also took on external advice from a company that is expert on airport development as well as the retail and food & beverage offering. With all that blended together we tried to formulate the key aspects going forward. We identified a few elements that are a kind of red thread in everything that we do now.

Nurturing a Sense of Place and championing Local Heroes

The first thing is that we wanted to create a Sense of Place. Airports in general have a tendency of being quite similar but we want you to feel that you are in Sweden, and you are in Stockholm when you visit Arlanda Airport. That’s one of the first things that we focused on, and that counts for our public spaces as well as the commercial design of the individual units, the menus, and the type of products that are being offered.

We’re supporting all this with international flair and international kitchens but the main point is the Sense of Place and the local aspect of being in Sweden.

We also saw that we needed a larger variety both in terms of a bigger range but also when it comes to price. Here we speak about there being something for all wallets, and that’s something we are also trying to do with our new concepts.

Price worthiness, I think, is something that maybe all airports are struggling with. There is a general feeling that it’s quite expensive being at an airport. And so this is something that we have taken onboard. That means you should feel what you’re buying should be worth the money you put in.

So, for instance, if you buy a bake-off cinnamon bun that could be at a cheaper price point. But if you compare it with an artisan-baked bun with ecological ingredients they can have different price points. But regardless of which product you buy, you should feel it is worth the money and therefore we have introduced a price ceiling in our contracts. This price ceiling means that with a comparable concept you are only allowed to be +10% more expensive than the same product in Stockholm downtown.

Returning to the Sense of Place, we have also focused on something which we call Local Heroes – brands known in Sweden to the Swedish people. Or it could also be, for instance, menus which have been created by well-known Swedish chefs. So there we are also trying to introduce the local element.

We’re coming from a period where we had a quite static offering at our airports. So renewal is something that we’re trying to make happen going forward and we are doing that through three main aspects.

One is with the new tenders and the new contracts. We have a contract duration of approximately five years, so we will have a natural change every five years in our offer. But within that five-year period we also wanted to create renewal, so that our frequent flyers have something that they haven’t seen before and that they find inspiring.

We will create this renewal in three ways. One is with a Food Hall which will have five concepts with two of them exchanged every six months. We’re also creating a single destination for pop-ups.

Creating Instagram moments

We are also having something which is maybe a bit different to other airports in that we are focusing on multi-brand stores. We have approximately 50% multi-brand and 50% bespoke brands. And that is because within the frame of a multi-brand store, you have a bigger chance of creating variety. If you have something that doesn’t sell, you can quite easily replace it with something else.

So those are our key elements – renewal, Sense of Place, Local Heroes, price worthiness and variation. And since we have ten airports, we have also tried to make this strategy scalable. Because our airports are quite different. So [in each case] you will see certain elements depending on the size of the airport.

A fun fact is that in some of the concepts we have asked for something that is memorable and we call that an Instagram moment. We want this to be inspiring for the passengers, and let’s see if you can spot our Instagram moments when you visit the new Marketplace.

Did a lot of consumer research go into this approach?

Yes, we have used consumer research as well as our experts. But everyone doing research has their own legacy and own experience. Our experience is that we had such a stable offering that it kind of became dull at our airports.

The multi-brand approach is something that gives an opportunity, together with our partners, to see what is working. What price points, what brands? And then we can replace anything together. We have had very positive feedback from our partners on this because, of course, it’s easier than to take a chance to go in with a brand that is maybe hot today but what about in three years? Will that still work?

You are well advanced in the whole tender process, but you still have some opportunities to come. How pleased are you with results to date in terms of the philosophy that you’ve told me about?

I’m very happy. I mean, imagine, sitting with a blank piece of paper. You only have the slightest seed of an idea. Now you can start to see that live and that’s a really fantastic feeling. We can also say that the visual pictures that we have been receiving are really looking the same in reality. When you see it live, it’s a really fun thing.

Soft touch tender approach

We started around 2019 with this tender procedure and we had internal discussions about how to do this in the best way. In general, we have kept the tender requirements on a fairly low level. So we have tried to set the basic requirements, such as what type of kitchen should it be. What serving style should it be, and what direction of commercial design should it be. But then we have said to our potential partners, these are our passenger profiles, How can you, our partner, supply what they are looking for?

The brief was quite short and the partners have really taken that into account and made it their own brief. So it really feels like teamwork and it’s really fun to see. It’s great how it has turned out.

We are starting to open up after the summer. This will be the first phase of opening the Marketplace which will be in three phases. The first phase after the summer, the second during winter and then approximately one year afterwards we finish the third phase in early 2025. So we are only at the starting point but already now we are seeing that it’s becoming as we imagine it to be. So that’s fantastic.

You mentioned ‘price worthiness’ – value for money – and offering a wide range of options rather than the focus on luxury which we’ve seen at so many airports. Almost an obsession with luxury. You’ve gone for a much more broad-based approach. What drove that?

Yes. Looking at the customer feedback that we are getting at our airports, there is a general tendency that we are seen as being pricey. And so we see a need in going down in price points rather than going upwards.

There is no demand, I would say, in the Swedish market or at Stockholm Arlanda Airport for having luxury brands. We have those downtown and you can go there when you want to buy them. At the airport it’s rather that we want it to be accessible for everybody, in order to cover our broad range of passengers.

We will have a middle segment and that will be our main focus. But we will also have a mid-lower segment of pricing as well as higher price points. So we will also have fine dining restaurants, for instance, because there is a need for that as well. But the main focus is on the on the middle-price range.

Single-destination pop-up

Going back to the tenders, you are all done on food & beverage but you’re still looking for some shopping concepts and boutiques. What’s the timeline on that? And what kind of mix are you seeking?

All in all, we have a tender value of SKR10 billion (US$937 million) and of that a third goes into the retail area. The retail tenders that we still have open are part of the third phase in the Marketplace, which as I explained will be opening up in in winter 2024.

They will be tendered during this autumn and when it comes to the product ranges we’re looking for fashion, beauty, accessories, design and gifting. There will be a mix of single brand stores and multi-brand. So in the retail space, we’re looking at approximately 50% multi-brand and 50% bespoke brands.

One thing that internally we find very, very exciting is a pop-up concept – a single-destination pop-up. So there we will have this renewable aspect, so that something is happening all the time. But it’s happening under one group within one store. And so that is also being tendered.

And typically how long would you keep one pop-up concept in place? A three-month timing or more frequently?

There will be one operator, who within their range will change the concept approximately every three to six months. It could also be longer depending on how successful it is.

Returning to the concept of Sense of Place that is so important to food & beverage, what will you offer your passengers that’s so different to what they have seen before?

What is different for Stockholm Arlanda is that we have new brands that we haven’t had before. So I think, even if I mentioned them, you would not know them because there is a focus on the Local Heroes – brands from downtown Stockholm or menus created by famous Swedish chefs.

As you might then also notice, we are not really focusing on international power brands. We rather have a focus on the Local Heroes when it comes to food & beverage. Also, the Food Hall will have those five concepts, where two are exchanged every six months to create renewal.

The Food Hall will also have an international design. To create a balance between Scandinavian design and international elements.

We will also have a big variation of kitchens. So, of course, we will see the Swedish local food and cafes, but we will also have Middle East Asian, Italian, and much more to create variety and something for everybody.

We will also cover the full range from quick service restaurants to fine dining and everything in between. Another fun fact is there will be a wine bar with self-service where you can take wine by the glass. These wines are in different price ranges, so you will be able to buy quite expensive wine that you cannot really purchase by the glass anywhere else.

During the pandemic in particular we saw the rapid acceleration of digital usage among all demographics. Where does digital fit into your plans?

We see digital as a tool to enable speed of service. Service should be easy for the passengers… so that, for instance, you don’t have to wait to get your food. We are encouraging our partners to work with pre-ordering, for instance. And also to work with self-check-out kiosks. Many of our partners already have stations where you order the food, and you pick it up when it’s ready, or it’s even ready by the time you come to the pick-up counter.

We think digital is a means of easing speed of service so you can relax and know that you will get your food on time.

We also want to have an inspiring Marketplace. And we think that digital as well as social elements like the Instagram moments that I spoke about are part of that.

This must be really exciting personally Marie, helping to drive a transformation on this scale.

Yes, of course, it is super exciting to be part of Stockholm Arlanda making such a huge development step as an airport. Internally with my team, we sometimes make a joke and say that we will probably not experience something like this again before retirement.

That’s because such step changes at Arlanda don’t happen every ten years. This is really something unique that we think we will only experience once. And we are quite a small team. We are a core team of four people, and we are managing the tenders and the strategic planning and also being the key account managers with partners that we have been working with.

We are the ones, together with the rest of Swedavia as well as our partners, who are making this commercial shift happen, and we really think it will be a shift. It has been a journey and we are also proud. I think in 2025 when we are ready we will really exhale, take a deep breath, and say, “Look at what we achieved”, and that feels really good.

We feel that it’s extra fun that our partners are also taking the opportunity because we’re doing something brand new with the Marketplace. They are also coming up with concepts that are brand new. So if we, for instance, take our tax free operator, which is Dufry, they are building a new walk-through store, which will be the first thing you see after the new security control.

They are developing a brand new concept that they don’t have anywhere else in the world. Stockholm Arlanda will be the first place where this concept will be taken out to the market. And it’s being tailored to the specific needs of Stockholm Arlanda passengers.

So we can see that everybody is really putting in an extra effort into what is happening at Stockholm Arlanda and that’s a really fun experience.

Any final message to the travel retail and food & beverage community and indeed any travellers that might read this?

Yes. As you said, this is the largest commercial development that we have ever done at Stockholm Arlanda Airport. With the Marketplace, together with the new security control, we hope that our passengers will see and enjoy the new experience of Terminal 5, and you will meet more local brands and products which cannot be found at any other airport. The experience at the commercial offer at Stockholm Arlanda Airport will be unique.

There is still a chance to join our retailers, and if you’re interested you can just reach out to us {etableringretail@swedavia.se} ✈

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