As holiday shopping peaks, traditional brick-and-mortar malls aren’t the only ones raking in the dough.
Continue Reading Below
New data from kiosk maker NCR (NCR) shows 24% of U.S. travelers will buy a gift at the airport this holiday season as last-minute shoppers use the downtime before their flights to top off their Christmas lists.
With half of the multi-billion dollar airport retail market now deriving from non-aeronautical products, the statistic underscores the growing push to turn transportation hubs into flourishing supermalls.
“Retail and concession revenues have become a major revenue source—if not the lifeline—for airports, many of which are morphing into high-end shopping malls,” NCR said in the report, which was compiled using interviews with 1,000 U.S. consumers.
The 'Trapped' Consumer
Seeking to entice the millions of people essentially “stuck” in airports and on flights each year, retailers, airports, airlines and tech companies are now teaming to give travelers more buying opportunities from gate to gate.
Continue Reading Below
One of these partnerships is NCR and onboard store technology provider Guestlogix, which have signed on several not-yet-disclosed airlines to bring an army of self-service kiosks to passengers throughout the airport in an effort to boost ancillary revenues.
“There is a correlation between dwell time and a propensity to buy,” said Tyler Craig, vice president of NCR Travel. “Most airlines see themselves today as retailers as much as carriers.”
The airline ancillary services market is currently worth $36.5 billion annually, and while there are already 7,500 kiosks located in the top 100 airports, that number is estimated to grow by more than 50% over the next three to five years as consumers demand more convenience, according to NCR's data.
Airports, meanwhile, have been making changes to their retail landscape since the Sept. 11 terrorist attacks, which triggered unprecedented security measures requiring fliers to arrive hours before takeoff. The propensity to buy during lag time encouraged them to improve entertainment and restaurant options and bring down prices.
“Security got more intense and time consuming requiring us to get to the airport ahead of time,” said T.J. Schulz, executive vice president of the Airport Consultants Council. “I think airports saw an opportunity to take advantage of that.”
And now, they are teaming with startups to do anything from deliver food to the gate to offer real-time deals for nearby concessions.
'Fries to Gate 8, Please'
Airports overseas have pioneered much of the innovation. However, U.S. hubs, many that have recently faced federal funding cuts, are catching up amid recent interest from startups.
Airside Mobile's B4 You Board app, designed in partnership with airport dining giant HMSHost, allows passengers to order food on mobile devices to be delivered to the gate -- easing the process for passengers and offering concession operators a chance to get revenue they might have otherwise missed.
“There’s a time pressure that’s just natural to the airport -- if you see a long line you’re likely to skip the purchase,” said Airside CEO Hans Miller
It is currently available in just five airports – Phoenix International, Chicago O’Hare, Salt Lake City, Sacramento and Minneapolis – but Miller says the company has “aggressive” expansion plans.
Airside is also hoping to launch an app this spring with the U.S. Customs and Border Protection agency and the Airports Council International North America called Mobile Passport Control that enables incoming travelers to complete customs forms online, expediting the check-in process and helping border control better focus on security.
Another key technology is digital interactive mapping, which does everything from showing travelers the quickest route to their gates to bringing to life the airport's retail, entertainment and dining offerings.
Digital shopping kiosks allow shoppers to ship items bought at the airport directly to their destination, while startups like Sita are working on bringing real-time coupons to passengers for nearby concessions, and the likes of I Love Velvet are hoping mobile point-of-sale products help expedite check-in and general retail lines.
For airports, the innovation is welcome.
While just a quarter of consumers are expected to buy holiday gifts there this season, around half of consumers in the NCR poll said they'd be more enticed to buy at the airport if they had personalized coupons or could ship directly to their destination.