INSIGHT
Twenty non-aeronautical airport success factors Kateryna Hess outlines Hess outlines her benchmark study on the success factors in non-aviation business for the travelretail industry, which identifies factors of success in German airports
Non-aviation factors for success Group 1 Must-Have Factors of success
Group 2 Nice-to-h ave Nice-to-have Factors of success
Group 3 Less-impor tant Less-important Factors of success
Number of square metres per one million passengers
Fast & optimised passenger handling
Local colour
Quality & quantity of non-aviation areas
Operator’ss model Operator’
Eventisation
Merchandise mix
Retail theatre (entertainment through social media, e-commerce & m-commerce, digitalisation)
Variation in offer and continuous adjustment for every target group
Developing Airport City
Creating the terminal concept
Fair prices for secondary costumers (not passengers)
Market research & questioning costumers
Cooperating with airlines (exchange of data)
Price strategy/ price distinction
Business developmen developmentt
Quality of staying staying and atmosphere of comfort comfort
Concept of guidance guidance
Consideration of trends and new regulations Passenger volume and mixture Source: Dornier Consulting
T
he identification and valuation of success factors in non-aviation business for German airports’ strategic success factors in nonaviation areas have been analysed empirically and displayed by means of
’s & m1nd-set’s Question of the Month DFNI ’s I enjoy going to the duty-free shops because of novelties and exclusives they offer
a model within the scope of the benchmark study. According to the study, non-aviation includes not only retail (duty-free, duty-paid and food and beverage), but also parking, car rental, other means of transportation, advertisement, real estate development and management and development of new business areas. The final category implies business development, identification of potential of non-aviation activities and consideration of new trends with the main focus on future revenues.
Success factors
Disagree: 69% Agree: 31% Three out of of ten international international travellers travellers enjoy going to to duty-free due due to the exclusives and novelties. Interestingly,, almost every second international passenger from Brazil and Interestingly Argentina enjoys duty-free because of novelties and exclusives and has the highest shares in the world, followed by the Russian, Chinese, Indian and UAE travellers with around 40%. Peter Mohn, co-founder and partner of m1nd-set, says: “Our “Our research clearly shows that travellers from the BRIC countries and other emerging markets are the most attracted by novelties and duty-free exclusives, whereas passengers from Europe are the least captivated.” Overall, the younger the travellers are, the more interested they are in duty-free exclusives and novelties, as well as women and less frequent travellers. Source: m1nd-set n=2,004
8 • Duty-Free News Internationa Internationall • February 2013
The study identified 20 relevant strategic factors of success based on detailed interviews with retail managers of key German airports including Frankfurt, Münich, Hamburg and Berlin; the manager of Macquarie Group, responsible for commercial activities at Sydney airport; the German airport associatio association; n; a marketing company specialising in advertising strategy for airports; and a number of airport retail operators. The study conclude concluded d that the factors of success are defined as follows: Number of square metres per one million passengers. This passengers. This suggests a specifically planned area for nonaviation supply, which is regarded as benchmark and therefore as the best possible way for the investigated market. Quality and quantity of non-aviation
area. This involves dividing these areas area. This into aviation and non-aviation subdivisions regarding percentage. Depending on the type of airport and passenger structure, both qualitative and quantitative determinants can vary strongly. s trongly. Merchandise mix displays mix displays an interaction between branches, products and special offers, which border on each other. Variation in offer and continuous adjustment for every target group creates a challenge for every airport retail manager. Concept of guidance is guidance is crucial for the development developme nt of income per passenger in the aviation industry. Fast and optimised passenger handling is closely connected to large dling investments in latest technology technology.. Operator’s model is based on decisions by the airport’s management and proves to be essential for the development of non-aviation businesses. Retail theatre theatre involves social media, e-commerce and m-commerce, digitisation, and sharing the airports’ worlds of entertainment with stakeholder stakeholders. s. Developing Airport City is City is identified as a special element at airports. While expanding areas for airport cities the location becomes increasingly significant, creating an attractive spot for various companies and hotels. Creating the terminal concept first concept first and foremost involves terminal layout and architectonical design.
www.DFNIonline.com
EDITORIAL
Local colour displays the products of various regions in which airports are located. Fair prices for secondary consumers is a principle primarily based on the concept of reasonable prices, especially in respect to gastronomy for employees, residents, visitors and carriers. In addition to gaining a higher income and expanding nonaviation businesses, improving the airport’s image is another important part. As a result, offers are not perceived to be over-priced compared with the equivalent offer downtown. Eventisation is particularly important for airports that feature large nonaviation areas that enable the organisation of events without damaging the commercial premises. Market research and questioning consumers is identified as an ongoing process that primarily takes into consideration the future wishes of passengers when it comes to non-aviation offers. Cooperating with airlines covers the active exchange of data between relevant stakeholders, the outcome of which ought both to support common goals and simplify communication. Price strategy/price distinction involves major strategic decisions on the part of the management in order to achieve price identification for every target group and thus present non-aviation offers as affordable
•
INSIGHT
Maximising sales per passenger The main goal: Maximize sales per passenger Basic requirement: Passenger volume & passenger mix
Market research & customer survey
Quality & quantity of non-aviation-area Friendly staff Rapidness of staff Professionalism
Welcoming atmosphere & comfort
Unique merchandize mix Customer satisfaction
Customer awareness Optimal architecture of non-aviation-area
Short ways Little change of levels
Staff training
Price strategy and competitive capabilities
Product knowledge Extension of area Areal productivity
Know your customers & speak to them
Optimum of square metres per one million passengers
Advertising & social media Boost the product image
Customer services
Source: Dornier Consulting
compared with downtown stores. Quality of dwell time and atmosphere of comfort deals with a stress-free environment for the passenger during the time he or she spends at the airport. This includes areas where passengers can simply linger and those with a variety of non-aviation offers. Consideration of trends and new regulations is crucial when producing business plans and adjusting nonaviation portfolios. Business development indicates new subdivisions that should be developed in addition to the areas that already exist.
Passenger volume and mixture involves predicted passenger growth as well as the constitution of passenger structure. The table on page 8 divides factors of success into three categories according to ranking provided by experts. A number of factors of success identified in the study—notably quality and quantity of non-aviation areas, merchandise mix, market research and questioning costumers, as well as passenger volume and passenger mixture, have become the foundation for any strategic decision and future development of non-aviation businesses.
Actions Promotions Special offers Use of economies of scope Presentation of trends
Finally, the table above displays the interrelation between identified essential factors of success that result from investigating non-aviation areas. Hereby, the maximisation of income per passenger is seen as a superior goal, and thus this paper’s results present the airport’s management with the necessary tools to realise strategic goals. The identified factors of success, as listed in the must-have category could ultimately increase an airport’s core competitiveness. n Dornier Consulting business development consultant Kateryna Hess,
[email protected]
Editorial Bill Lumley
[email protected]
Contents
www.DFNIonline.com
News Insight Product news
1-7 8-9 10-19
Exchange rates report
21-23
China report Western Europe report
25-26 29-33
Airlines report
31-37
Duty-free legends
41-43
Launch pad People & company news
44-45 46
February 2013 • Duty-Free News International • 9
