Creating Change
Reproduced with kind permission of The Moodie Davitt Report
Reimagining airports and travel retail. The Future Airports: From Here to Where? webinar advocates a customer-centric, media-led approach and new revenue model
UK company Portland Design and Peter Marshall’s influential travel retail blog Trunblocked.com recently announced a powerful programme and cast for the first in a new series of webinars on 15 and 16 September, aimed at reimagining the future air passenger journey.
The organisers are promising actionable solutions for the industry from every webinar session. Here, The Moodie Davitt Report’s Mark Lane asks Portland Managing Director Ibrahim Ibrahim – who has overseen dozens of major airport design projects globally – if we really need another ‘talking shop’ at a time when many airport stakeholders are fighting for their very existence. In the process, he uncovers a fascinating and much-changed direction that Ibrahim foresees airports and their associated travel retail and F&B operations taking during the post-COVID-19 era.
Mark Lane: You use bold phrases like ‘brave new world’ in relation to airports in your event previews for Future Airports: From Here to Where? Are you saying that it’s time to move away from what has gone before and bring in new thinking to the sector?
Ibrahim Ibrahim: We need to lose the attitude of “I’m only going to do it if I have seen it work somewhere else”.
The retail world is changing so quickly; we have got to innovate. Innovation isn’t a thing you do, it’s the way you are! In this rapidly-changing retail world, it must be part of the DNA of your business. COVID-19 has accelerated the belief that precedent and what has worked in the past is no longer a reliable guide.
We need a people revolution. We need to be curating ideas and the experiences not shelves and gondolas. We need stage managers, we need writers, social media specialists, data scientists – not just people who lease space to be in the conversation.
Portland Design Managing Director Ibrahim Ibrahim: “Airport shops have the potential to be the most powerful and effective form of media available to a brand. The value will be in the halo effect of driving social engagement and online sales.”
When you got together with Peter Marshall to discuss this potential webinar series, what did you want to achieve? There has been a plethora of recent events on the future of airports and travel retail – do we really need another ‘talking shop’?
The whole point of what we want to do is to look forward and to imagine what the new customer experience is going to be. What we are doing will be very much focused on solutions and journeys that make sense for customers; we don’t want to get caught up in the issues that have caused friction between industry stakeholders.
Like every successful commercial organisation, the airport and travel retail industries should be customer-obsessed. So we should prioritise looking at things through the eyes of the customer and what drives their expectations, then engineer or re-engineer our business models and our environments to respond to that.
That is the starting point – it certainly isn’t going to be another talking shop around the same old issues. We want to bring in fresh perspectives and ideas that will help us build commercial platforms fit for the future.
“COVID-19 has accelerated the belief that precedent and what has worked in the past is no longer a reliable guide”
I note your event line-up involves bringing in people who are not directly involved in the airport industry. What have such outsiders got to offer through your event and the conversation about the future of airports generally?
An outside view: Ibrahim Ibrahim says that ideas from the High Street are increasingly relevant in the airport world
It is so important to bring retail and other expert people into the conversation from the ‘outside’, because they are not actually from the outside in my view – they have the same customers, it’s just that we borrow those customers for a couple of hours in the airports. Ok, they behave differently in airports but their behaviours are driven by what they experience in shopping malls and online.
I think we need to absolutely understand how other types of organisations and other retail asset owners are dealing with the new consumer. And the disruption we are seeing in retail is not driven by new business models, or design or architecture, or technology even. The disruption we are seeing in retail is about the changing relationship that consumers have with brands and each other. That’s what is driving everything.
Queuing at the conveyor belt to buy a US$300 box of cigars behind someone who is buying a few KitKats just doesn’t add up. That wouldn’t happen in the High Street.
Given that airports and airlines appear to have made a decent fist of sorting out safety and hygiene issues quickly, is it now time to turn the attention to the business models shared by the quaternity of airports, retailers, brand and airlines? What will we see on this front from your event, for example in regards to discussions around the MAG-based model?
I don’t think the conversation should be driven by the business relationship between the landlord and the tenant, that’s a by-product of what the customer expects to experience. New rent and leasing models are top of the agenda in shopping centres and high streets, as they are in airports. But the conversations are not driven by the changes in the worlds of consumerism, media and retail – that is what will drive the new revenue model.
Event moderator Peter Marshall is seeking to “reduce the time lapse back to a more prosperous airport landscape” though the webinar series
I believe we have to go back to first principles and start the conversation with what’s driving the change. It’s the disruption in media and consumer engagement which should be the key driver of any change. We are seeing a new world where conventional media is less effective. We don’t all watch the same TV programmes, on the same device at the same time – we don’t consume media like we used to.
So with that in mind, and the ever-increasing cost of digital media, we believe that brands will increasingly see physical space as a critical media platform. And so our challenge in physical retail is to capture the considerable media spend of brands. So our position is one of optimism – far from the internet killing shops, it will liberate them to become wonderful places of experience.
How so?
Retail has always been and will always be about four things: recruitment, transaction, fulfilment and retention. So if we accept that the transaction and fulfilment pieces are increasingly moving online, physical spaces will be used for customer recruitment and retention. Of course, there is always going to be a proportion of our physical space that is going to be used for transaction. But the question is, what should be the proportion of transaction space against recruitment space?
If we agree that much of the space will be for recruiting customers, then we have the potential to create a very powerful media platform. That changes everything. It changes the design of shops from shelves with products for sale to stages with experiences to share. It changes the service proposition, the commercial masterplan, technology, importance of date, the technical services, the cost of building the airport, and most critically it changes the revenue model.
“It is so important to bring retail and other expert people into the conversation from the ‘outside’, because they are not actually from the outside in my view – they have the same customers, it’s just that we borrow those customers for a couple of hours in the airports”
Physical airport shops have the potential to be the most powerful and effective form of media available to a brand.The value will be in the halo effect of driving social engagement and online sales.
The challenge will be to measure the impact that the physical space in an airport has on the customer, on social engagement and online sales. The only way to do that is to capture and leverage the data and then create a revenue model based on that data.
What we are saying is that it is no longer only about monetising the experience in a shop; it is also about monetising the data that the experience generates. My argument is that airports more than any other asset, more than the shopping centre, the railway station, the High Street, can be a very valuable media platform for brands. So using the word MAG feels like something from the dark ages.
Let’s move onto F&B, which currently faces numerous challenges. What are your views on the future of airport F&B, one of the key themes of your event?
Huge challenge: The comeback trail for F&B in airports is going to be a tough one and new ideas for the sector will be discussed at the webinar
I think the obvious difficulties brought about by COVID will make what were previously luxury experiences more mainstream. One of the trends we are exploring is what we call the ‘by-appointment economy’. More and more engagement with customers in airports will be by appointment and that will happen in F&B as much as anywhere else. There will be more private, smaller spaces where people who are known to each other will gather.
The response to COVID safety will in effect make the F&B and retail experience more personalised, more premium and more special. I would suggest that has higher value to the customer than what we have seen before. I think we are going to see the mainstreaming of premium experiences.
Another thing we see increasingly is customers turning to more authentic experiences and local food. You are seeing more restaurants growing their own food and only selling produce from the locality. People are going to want more F&B from the country they are visiting, and not just the big brands but also the independents. Bringing these independent brands into airports will be an opportunity and a challenge.
Digital will certainly play a key role in promoting the kind of F&B set-up you describe. What are your thoughts on airports and the digital challenge?
A digital future: Online purchasing platforms will swell in importance in the airport retail industry
My view is that we need to look beyond the normal stuff – what can you buy online, how we connect, deliver product etc – that is all tactical and obvious. Other events have covered that. I want this webinar to discuss what the future holds. Themes such as what is the impact of 5G going to be when most people will be buying online on their mobiles, whilst they are in the physical environment? What is the integration of the digital domain with the physical domain – how do you magnify and augment that experience using digital?
Of course digital has a transactional role, but with 5G and image recognition technology we will see the growth of what we call ‘ambient retail’. Whereby customers will be able to photograph a product and buy it there and then on the same platform. So what is the role of the shop in this scenario? How will we bring together the physical and digital experience? These are the new paradigms.
“For customers who buy well-known brands in airports, do these really need to be on a shelf with a light box?”
Fulfilment is going to be an important part of that. Is it at the gate, inflight or at destination? I suppose the elephant in the ‘zoom’ will be inflight online shopping. Once you’ve got fantastic, fast in-the-air internet and collaborations between airlines and fulfilment companies, what is the role of inflight shopping? How is it going to impact on ground airport shopping?
For customers who buy well-known brands in airports, do these really need to be on a shelf with a light box? Will some of these sales migrate to inflight? So what is the direction for inflight shopping? What is the role of the airlines? How is that going to impact duty free and retail? More importantly, what is the new relationship going to be between the airline, airports and brands? These are significant questions which I want to be debated in the webinar.
What’s your take on the long-term prospects of airport retail? Are we simply trying to get back to where we were in 2019 and build from there?
A new era: Customers and how they interact with airport retail may have changed forever as a result of COVID-19
Our ambition shouldn’t be to go back to where we were. COVID has given the industry an unprecedented jolt. I think ultimately we are going to come out better. I think airports are in a fantastic position to maximise the customer engagement with brands and the visibility of brands – that truism will never go away.
And even if we have fewer passengers, our challenge is to work out how brands can recruit and retain the most valuable customers on earth and how we can provide those customers with a great experience. We need to make those experiences‘other-worldly’ and special so they act as catalysts for further engagement and sales well after the journey.
I think a big part of the challenge ahead is to develop the ‘wellness’ aspects of the airport experience. I think wellbeing is no longer just a category, it has to run through the bloodstream of all airports in all aspects of the customer experience.
“I think airports are in a fantastic position to maximise the customer engagement with brands and the visibility of brands – that truism will never go away.”
What’s your message to potential delegates who might be focused on fighting for their futures and might have other more pressing priorities?
As a business leader, I empathise with our very busy delegates – I am fire-fighting like everybody else in this changing world. But as a business leader, you have to deal not only with the day-to-day tactics, you have to dedicate valuable time for long-term strategy – otherwise you have nowhere to go. You have to create and develop a vision of where you stand on the big issues and what the complexion of your business is going to be for the next five years.
We have got to now shift from being what used to be a great thing, and go from being responsive businesses to being predictive businesses. So we must understand the trends and the insights that will drive customer behaviour and predict the impact of that. Our webinar is designed to help our audience with that.
Attendance to the live broadcast and online event – staged 15 September (14:00-17:00 UTC) and 16 September (14:00-16:30 UTC) – costs £30 (US$38) for each of the two days, and can be booked here. Profits will go to the Duty Free World Council Academy’s online learning programme. The proceeds will help fund bursaries for people with disadvantaged and diverse backgrounds who want to enter the business as well as for those who have just joined.
More details on the webinar series – with all sessions designed to provide solutions for the airport industry – can be accessed on the event’s dedicated website here. A summary of the sessions for the first event in the series appears below.
Day 01
Programme Schedule Day 01 – September 15th 2020
1400 – 1700 (UTC)
Moderator: Peter Marshall, Founder – trunblocked.com
Session 01
Should Airports Reimagine a Different Future?
Ibrahim Ibrahim, Managing Director – Portland Design
Christina Cassotis, CEO – Pittsburgh International Airport
Polly Barnfield, CEO – Maybe*
Dr. Lutz Weisser, Managing Partner – amd Sigma Consulting
Session 02
A Changing Environment.
What IS going to work?
Lewis Allen, Senior Director – Portland Design
Miya Knights, Head of Industry Insight – Eagle Eye Solutions
Rory Sutherland, Vice Chairman – Ogilvy UK
Session 03
Can We Learn from the High Street?
Mary Wallace – IBM Global Business Processes
Kim Gray, Director, Business Development – Airports & Travel Retail Europe – Unibail-Rodamco-Westfield
Session 04
Different Perspectives on the
New Retail and Food & Beverage
Walter Seib, CEO – HMS Host
Kevin Zajax, CEO – Ground Control
Peter Eriksson, Founder – Eriksson & Partner
Session 05
Business Partnership Under Pressure
New Commercial Pillars and Principles
Julian Jäger, Joint CEO – Vienna International Airport
Francois Bourienne, Commercial Director – AGS
Adil Raihani – Adil Raihani Consulting
Martijn Steur, Managing Director – Kinetic Consultancy
*Programme schedule for both days will be regularly updated with additional names still to be announced.
Day 02
Programme Schedule Day 02 – September 16th 2020
1400 – 1630 (UTC)
Moderator: Peter Marshall, Founder – trunblocked.com
Session 06
How Doable is Digital? And What Could it Do?
Stéphanie Metz-Thevenod, Executive Vice President – Lagardère Travel Retail
Michael Raasch, Head of Airline Solutions – AOE
Session 07
Brands and Retail Theatre:
A Bigger or Lesser Choice?
Stewart Dryburgh, General Manager – Nestlé International Travel Retail
Jérôme Le Page, Marketing & Business Development Director – JC Decaux
Heidi Van Roon, Founder & President – Spark Group of Companies
Moyra Race, Founder – Strategic Buying Consulting Services
Rory Sutherland, Vice Chairman – Ogilvy UK
Session 08
How can Travel Retailers Retain their Share?
Learning from the Disruptors
Ibrahim Ibrahim, Managing Director, Portland Design
More panellists TBC
Session 09
What Will Customers Expect?
The Future Passenger Journey Defined
Sally Allington, CEO & Founder – Ethos Farm
Anne Kavanagh, Founder – Kavanagh Communications
Kim Gray, Director, Business Development – Airports & Travel Retail Europe – Unibail-Rodamco-Westfield
Miya Knights, Head of Industry Insight – Eagle Eye Solutions
Session 10
The Future Commercial Platform:
New Metrics, Opportunities and More?
Herculano Rodrigues, Associate Director – Retail and Commercial Spaces – Javelin Group
Peter Eriksson, Founder – Eriksson & Partner
Adil Raihani – Adil Raihani Consulting
Ibrahim Ibrahim, Managing Director – Portland Design
Lewis Allen, Senior Director – Portland Design
*Programme schedule for both days will be regularly updated with additional names still to be announced.
