INTERNATIONAL. Kinetic Consultancy, the Dutch high-traffic industry business architect and a consulting firm in the airport commercial space, has revealed the results of an airport non-aeronautical revenues survey and report which analyses trends that will shape future airport commercial strategies.
The report – Building blocks for the future of airport commerce – focuses on what Kinetic considers the big issues faced by commercial stakeholders in the international airport arena, as they adapt to new consumer behaviours and business challenges in the post-COVID world.
The publication is based on the results of an airport industry flash survey conducted in October. Additional input came via one-to-one interviews from senior commercial executives representing several airports (including London Heathrow), Unibail-Rodamco-Westfield, Vantage Airport Group, plus individuals from other key airport stakeholders such as JCDecaux.
Highlights from the survey include:
- Of six major airport commercial trends put to survey respondents, the one deemed most likely to develop significantly further was the ‘digital enhancement of the customer journey’ (93%). This was followed by ‘airports’ stronger dependence on aeronautical revenue’ (79%); ‘increased focus on memorable brand experiences’ (69%); ‘stronger diversification of non-aeronautical revenues’ (65%); ‘introduction of new categories’ (63%); and ‘innovation of non-aeronautical revenue streams’ (57%).
- Of what the report deemed five core duty free categories, only liquor & tobacco {treated by the authors as a single category -Ed}was thought more likely by respondents to decrease in value than remain stable or grow, with 42% backing this assertion.
- Three growing airport sectors were deemed by respondents to have potential to increase significantly. Some 44% believe airport advertising will significantly increase in value; 60% think the same of the airport lounge category; and 79% see leisure & entertainment as likely to see strong growth.
- Of the digitisation trends covered in the survey, the trend respondents believe will influence future non-aeronautical revenues the most is ‘data sharing and analysis across airport stakeholders’. 75.6% of respondents believe this trend will be an important factor in the generation of future revenues.
Among other key content in the report, the authors – Kinetic Consultancy Managing Director Martijn Steur and Head of Research Juriaan van Waalwijk – evaluate the different metrics which they believe will be decisive for shaping the future of airport commerce.
Metrics relating to ‘Co-creation with retailers, brands and other stakeholders’ emerges as the most important in the eyes of survey respondents, ahead of other metrics such as ‘simulation in digital twins’, ‘designer/consultant expertise’, ‘benchmarks’, ‘historical data’ and ‘location-based data’ (see chart below).
The authors also discuss in detail the challenges surrounding the introduction of new categories and other innovations. Kinetic recommends an airport commercial innovation portfolio distribution split 70-20-10 between ‘improvements’, ‘additions’ and ‘disruptions’ respectively, depending on the business dynamics of the airport (see chart below).
Sharing his thoughts on the findings of the report, Steur said: “Unsurprisingly, the experts we spoke to believe enhancing the customer experience is a crucial component of airport commerce in the future. This enhancement will clearly build on top of what is already there – a strong retail and F&B offer.
“The strong belief is that there is a need to diversify sources of income and create room to innovate around customer experience themes.
“We conclude that it will not be the best product or service that is flourishing in the future of airport commerce, but the organisation that is able to connect the complexity behind the scenes and to select the right elements for a streamlined experience for the passenger and a profitable shared business for the airport commerce network of companies.”
Van Waalwijk said: “With this report, we set out to analyse what are the developments shaping the future of airport commerce and how can we implement or deal with these changes.
“I think we have achieved that, gleaning some great insights from commercial stakeholders in the airport space, and from our one-to-one interviews.
“This is a potentially exciting growth phase for the airport commercial sector, and we hope that our report is a useful addition to the discussion of its future direction.”
