Responding to the Rapidly Changing Retail Landscape and New Passenger Demands

Guest Author by Guest Author | Dec 6, 2022
By Ibrahim Ibrahim, Managing Director, Portland Design, and Author of Future Ready Retail

Our mantra at Portland Design is “People and Places, not Buildings and Spaces.” This is important because it gives us a clear focus on the “Transumer,” (travelling consumer) and what is unique about their behaviour and expectations.

Many of the challenges faced by airports were present before the pandemic, but have since been magnified. The challenges that airports face present a unique opportunity for innovation with the permission to be radical. The “do as before” strategy is no longer an option; the pandemic has led to the death of precedent, where what has gone before is no longer necessarily a reliable guide.

Retail has always been, and perhaps will always be, about four things: (customer) recruitment, transaction, fulfilment, and retention. However, transaction and fulfilment are gradually shifting away from the physical store, which is increasingly focusing on customer recruitment and retention.

Of course, there will always be stores for transaction and fulfilment, but a portion of the commercial space in airports is increasingly behaving less like a distribution channel and more like a media platform to recruit and retain customers, whereby transactions are done on-line on e-commerce and social platforms. The store as a media platform will greatly impact the customer experience, service proposition, design of space, its location within a master plan of the terminal, CAPEX AND OPEX, and revenue and rent models.

In essence we will see a gradual shift of emphasis from “stores > shelves > products for sale” to “stages > stories > experiences to share.”

Physical stores in airports have the potential to be the most powerful media platforms available to a brand, where the opportunity is to monetize not only the experiences but the data that these experiences generate. We must therefore plan to deliver data-responsive environments and experiences. The key challenge will be to capture the data that demonstrates the value of the physical space to a brand in generating media impressions, social media engagement, and online sales. We refer to this as “Media Impact Value.”

In my recent book Future Ready Retail: How to Reimagine the Customer Experience, Rebuild Retail Spaces and Reignite, I refer to the four pillars of “future readiness” in retail. These apply as much to airports as they do to shopping centres and high streets.

Re-invent convenience

In a complex and stressful airport environment, convenience and ease are at the heart of passenger expectations. People live increasingly transient and complex lives and they demand experiences that are fast, intuitive, and seamless. Convenience is about simplicity, ease, and “nowness.” In fact, 63% of global consumers are willing to pay more for simpler brand experiences, according to research by Siegel + Gale, so we must strip out complexity at all touch points of the passenger journey.

Re-connect with community

Airports have the opportunity to host brands that attract communities of interest. Focussing on experiences that drive participation, learning, and entertainment that engages passengers’ interests and passions is a strategic way of increasing interest and sales.

We must consider how to shift the emphasis from a functional “super-market” model that passengers are finding increasingly boring, to an inspiring experiential model that drives engagement, sharing, and serendipity.

Re-imagine place

It is no longer sufficient to tick the “sense of place” box. We must shift from airport theming to imbuing every touchpoint of the airport experience with an authentic “spirit of place.” It must run through the DNA of the airport, through its architecture, commercial offers, communications tone of voice, all the senses, and most critically, customer service.  

An airport’s commercial offering should no longer be understood as just channels of distribution, but rather as moments of experience. We call this S.W.E.L.C.H. A data driven curated approach that blends Shopping, co-Working, Entertainment, Learning, Culture, and Hospitality.

The explosion of remote work represents a great opportunity for airports. Airports could develop a compelling co-working facility which activates the departure lounge and blends with food & beverage, retail, entertainment, and physical and mental wellness. Passengers could arrive at the airport very early to work. If the facilities are attractive enough and fit for purpose, passengers may prefer to arrive early to work from the airport instead of from home, whereby the airport lounge experience is akin to being in a town square for the day.

Re-position value

We need to re-think what value means to passengers beyond price. In the post-COVID-19 environment, consumers are seeking experiences that put wellness at the front and centre of their experiences. The pandemic has also accelerated the demand for tranquil spaces. We must design airports to be more human in scale and ‘softer’, less ‘machine-like’, and develop biophilia strategies to connect passengers to nature.

Value is also about creating truly authentic airport experiences. In this, localism becomes key. The challenge however, is to blend local and independent brands with national and international brands.

Consumers also value personalized experiences and have an increasing thirst for knowledge and learning and they are happy to have these experiences in-store. A recent URW survey found that one third of people are interested in attending lifestyle classes in-store.

Consumers are also turning their attention to brands and airports that prioritize Environmental, Social and Governance (ESG) reporting. Research by Accenture found that 40% of consumers have stopped using a brand due to the way it behaves.

In working with our airport clients, our aim is to help develop commercial strategies and designs that bring together a mix of experiences, both retail and non-retail, ephemeral and permanent, and international and local. It is essential to have diverse occupiers and revenue models and to build in flexibility in the design, masterplan and mix to allow airports to respond to rapidly changing passenger expectations and an increasingly disrupted consumer landscape.

For the airport commercial experience to be “future ready,” it must speak like a magazine, change like a gallery, build loyalty like a club, connect like a community, share like an app, seed like an incubator, and entertain like a show.

Serendipity is the most powerful consumer emotion that drives footfall, surprise, engagement, sharing, and spend. Our aim in airports is to help create “serendipity machines.”

Ibrahim is the Managing Director of Portland Design. Ibrahim originally trained as an aeronautical engineer
and is a post graduate of the Royal College of Art
and Imperial College London and a Fellow of the
Royal Society of Arts. He is a regular speaker at
conferences and a frequent contributor to journals
and trade press. He has written regular pieces for
The Economist ‘Insights’. He is also a published
author with his book, ‘Future Ready Retail’ which
explores the future of retail and it’s impact on
brands, the customer experience, our high streets
and town centres.

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