Oslo Gardermoen International Airport – Photo: Getty Images
Why is the U.S. so bad at airport retailing?
For the eighth year in a row, London’s Heathrow Airport won the “Best Airport for Shopping” in the Skytrax’s annual World Airport Survey. No U.S. airports ranked in the top 10.
Skytrax highlighted the quality and diverse choice of Heathrow’s shops across its four terminals. In 2016, the airport opened personal shopping lounges in terminals two and five, as well as a Harry Potter shop and a blow dry bar in terminal five. Heathrow now has over 400 luxury brands, along with two restaurants run by Michelin-starred chefs.
The remaining nine top airports for shopping were:
Seoul Incheon, Hong Kong, Singapore Changi, Doha Hamad, Dubai, Amsterdam Schiphol, Paris, Frankfurt and Zurich.
Globally, airport retailing is expected to generate high single-digit growth rates in the years ahead due to a rising number of air travelers and terminals, a rising middle class from emerging countries and the expansion of multinational retailers, according to numerous reports.
Airports have seen gains over the last few decades by upgrading the experience for well-heeled travelers. Stores Magazine’s February/March cover article details how airports have moved beyond “kitschy souvenirs and fast-food burger joints to full-blown shopping experiences with upscale dining, spa services and luxury retail.”
International airports, however, have more aggressively capitalized on opportunities around beauty and fashion. A study by Verdict finds spend per passenger in the U.S. around half that of passengers in the rest of the world.
In its report on U.S. airport retailing, Javelin Group said it believes the U.S. is underperforming because its market is mature and dominated by domestic traffic. However, the consultancy sees infrastructure upgrades at LAX and La Guardia as signs that U.S. airports are looking for higher revenue contributions from retail. Globally, airports are also turning to data and analytics to better address travelers’ retail needs. Javelin wrote, “True digital integration, innovation, flexibility and a focus on being meaningful could well start in the USA, as it jumps a retail generation.”
- The World’s Best Airports for Shopping – Skytrax World Airport Awards
- The World’s Top 100 Airports – 2017 – Skytrax World Airport Awards
- Airport Retailing Market Dominated by Europe and Growing at 8.5% CAGR to 2021 – ReportsnReports.com/PR Newswire
- Is USA airport retailing about to be revolutionized? – Javelin Group
Discussion Questions
DISCUSSION QUESTIONS: Do you agree that the U.S. is subpar at airport retailing? Should U.S. airports emulate the successful high-end strategies being used by international airports or should the U.S. market be treated differently?
Poll
BrainTrust
Mark Ryski
Founder, CEO & Author, HeadCount Corporation
Scott Magids
CEO, Motista
I believe that U.S airport retailing is a huge missed opportunity. In general, retail shops in airports are not run like typical retail stores, but rather more like product showrooms operated by staff who appear to have very little interest in the product or delivering a great service experience. In some airports this is because the retail store is not actually run by the retailer, but rather by a management group that operates all shops in the airport. Given the captive and significant shopper traffic opportunity airports enjoy, I believe the offering could be and should be significantly better.
Last I checked, airports exist to fly passengers from one destination to another. Heathrow and Frankfurt seem to exist for shopping, with scant attention paid to flying passengers. It’s annoying to be forced to traverse duty free shops when trying to catch a flight. Should American airports be upgraded? Yes, but not with an endless parade of shops.
I agree that airport retailing is subpar. Many of my connections are less than a hour so there isn’t much time for shopping. If I have a longer connection I’m usually parked at the Delta Sky Club which most have been significantly upgraded. No need to go shopping or dining. All the years I have passed the Montblanc shop at the Atlanta airport I have yet to see one customer in there shopping for a $5000 watch.
Airports are set up for browsing rather than buying, and as consumers move away from impulse purchases it does not bode well for most airport retail. Selection and pricing are commonly prohibitive and so the role of the airport store serves as a showcase more than facilitating the transaction element of retail. Frequent travelers do learn to shop the airport, but it is a developed skill.
I’d be happy if airports like LaGuardia focus on upgrading their cramped facilities, restrooms, overcrowded TSA checkpoints and even places to eat (hello, Auntie Anne’s) before trying to recreate themselves in the image of Heathrow or the Mall of America. Many of our airports have enough infrastructure challenges on their plates without worrying about whether they are world-class shopping venues.
I flew through Heathrow a few years ago, and the process of transferring from an arriving flight from Madrid to a U.S.-bound connecting flight took far longer than any similar experience in this country. Between the bus ride from the tarmac to the terminal and then going through two separate (and lengthy) security checkpoints (after doing the same thing in Madrid), most of our two-hour layover was wasted with very little time left to shop in the fancy new BA terminal. Maybe things have improved, but you get my point: First things first.
It’s the experience of the entire airport, not just the shopping center. Many of the top international airports work hard to provide a nice customer experience. For example, Hong Kong International Airport had a “Smiles at the Airport” campaign that includes a “Best Smiling Customer Service” competition. It makes a difference. Every guest is welcomed like a potential customer, from check-in through security. As a result, people are a lot more likely to be in a happy shopping mood while waiting for their planes.
In U.S. airports there’s often a feeling that no one wants to be there. Customers and workers are all rushing to get in and out as quickly as possible to their actual destination — not creating the best atmosphere for people to relax and want to spend extra money shopping. I bet even a small upgrade to the happiness and friendliness level of their staff would be enough to make a tangible difference in airport sales.
When you fly weekly, airport time is catch up on work time, not shopping time! Food options for on-the-go healthy eating are mainly non-existent and most apparel/luggage/knick-knack stores have staff that seemingly don’t care to ask if they can help you. My advice for retailers in U.S. airports is to train staff to say “how can I help you, how much time do you have to shop?” — allowing the customer to be in control of the experience from the get-go.
There is a difference between international travelers and domestic travelers. (Note that I did not say airports — I said travelers.)
The U.S. domestic traveler has little time between domestic flights at hubs. Shopping is the last thing on their minds. The entire airline and airport experience is about hurry-up and get it over with.
International travelers often have more time between connecting flights and are looking for different cultural offerings. So they shop. Americans just don’t. Even duty free shops at U.S. airports are less busy than their OUS equivalents.
Over the last 40+ years on the corporate speaking circuit I’ve accumulated over a million miles on at least two airlines. It feels like half my life has been spent in airports. As Trump would say, “sad or sick” which, in my case, is a good point.
In all that time I’ve never understood why anyone would buy anything in an airport besides food, deodorant, a belt, a book or a T-shirt for the kid. Maybe if it’s a long layover a massage or pedicure just to ease the boredom for 20 minutes. Why one would spend hundreds of dollars on airport clothes you can buy at home or online for half the price is beyond me. “High-end” shopping opportunities do nothing for me even if I had the money.
Consumers are already assaulted by ridiculous airline prices, pathetic service and torturous seating so we’re p****d off by the time we arrive. And you want me to spend $150 for a shirt?
Shopping is NOT the key metric for airport quality!
Why is U.S. mobile phone service so poor compared to many foreign countries? Why are European home construction materials and finishes better quality than in the U.S.? The same reason as why airport retailing may be nicer in some ways over there vs. over here. It’s all-around priorities. I believe there are more and more innovative U.S. airports that are doing a great job with retailing. Is there still room for improvement? Sure. However, I don’t think this will last forever, especially as shoppers demand better and improvement efforts become even more of a priority for us.
British author Douglas Adams wrote in one of his books one of my favorite statements about traveling – “no language on Earth has ever produced the phrase, ‘as pretty as an airport’ … ” Having traveled as much as I do both domestically and internationally, I think that’s one of the most accurate statements I’ve ever heard!
Yes, U.S. airports generally have an abysmal retail shopping experience. Both due to product mix and lack of interest on the part of most store associates who clearly don’t want to be there let alone help a weary traveler to shop. Both of these need improvement. And that’s not to say we need more luxury stores selling $1000 fountain pens in our airports. My reason for shopping at an airport store is usually for one of two things — buying a convenience item I lost or forgot to bring with me, or a gift for my kids for when I return home. That’s what should drive the product mix. And no, I don’t want to be in the airport either, so store associates should realize that and act accordingly to make the experience a good one!
Regarding Heathrow — I know a few Londoners who enjoy shopping at Terminal 2 so much they’d make a trip to the airport just to shop if they could! That says something about the experience.
Based on the posts below, it appears that quality retailing is not at the top of the list of requirements for the average domestic U.S. traveler given the amount of available time between transfers. However I think there is a missed opportunity based on my experience of retailing at the various U.S. international departure terminals I’ve previously visited. Typically, international travelers have a lot of dwell time in airport terminals; needing to arrive around two hours prior to departure what with the heightened security of recent years. If the retailing experience was improved in international departure terminals where there truly is a captive market, this could make a big difference to the sales figures.
Most US airports have a typical set of retailers — fast food, news, candy and magazines — not very appealing or unusual for the traveler. Travelers will spend money during their trips that they would normally not spend at home, and buy items that are not thought about during their normal shopping. “I am on vacation” is always a good excuse to spend on atypical items.
These selling statistics help explain why my home airport, Minneapolis-St. Paul is going through an extensive renovation. It was one of the first airports to bring in shopping and restaurants many years ago. During this major renovation, the lower price item stores are going away and being replaced by luxury stores. The beauty of airports is that they host a collection of consumers with time on their hands and typically money (or credit cards) in their pockets. This is a great combination for luxury retailers to take advantage of.
U.S. retailers make the mistake of assuming that consumers in an “airport mall” are more focused on the “airport” than the “mall.” True, specific segments of consumers purchase items to make their flights easier, but many consumers, particularly frequent flyers (who make up a great percent of the ordinary daily airport traffic), treat shopping at the airport as a substitute for the actual mall. More mainstream stores with more mainstream staff and items will drive more consistent traffic and revenue.
Retailing in U.S. airports is subpar in most regards. One area that really needs help in many airports are the “grab & go” food choices. How about some quality offerings that taste good as opposed to the cardboard bread sandwiches with wilted lettuce and cheese that isn’t cheese. While one can argue whether or not we need more luxury stores in airports, everyone needs to eat!
As a Brit, I never look forward to my time in US airports but I enjoy my time in Heathrow Terminals 2&5 and some of the other airports that were mentioned in this article. Tomorrow I need to fly from London to Norway and my first choice is now always Heathrow, but the schedules don’t suit so I need to fly out of Gatwick. Not as nice as Heathrow, but still much better than JFK earlier this year. I’m relatively happy to be flying out of either Heathrow or Gatwick — so London is not a bad place to fly out of. I can’t say the same for New York. Neither JFK nor Newark are appealing to me or on a similar level as other international airports.
So the airport experience is heavily influencing my route preference now. My stop-over airport on my flights between the UK and Australia is almost as important as the flight itself (but not quite!)
Given their size, airports aren’t like regular retailers as they don’t often run the risk of a competitor opening up shop on their doorstep. Travelers often have little choice about where they flight in or out of. Nonetheless, travelers have money, often have time on their hands and there are lots of them. Airports could be generating more revenues in these frugal times by thinking more like retailers and trying to offer great customer experiences.
Airport retailers could also use newer retail technologies to show different currencies or languages on digital screens depending upon which flights are departing/arriving.
Airport retailing is a great place for food and luxury items. Given the extended time travelers are spending in airports due to security lead times, travelers are a captured audience looking for experiences to pass the time. Why not cater to those with platinum cards burning a hole in their pockets? Airport retailers should explore free shipping to home, gift or destination. People may not want to carry additional bags or weight, so why not provide a service that may simplify the shopping journey. Give the shopper an experience and simplify the purchase.
I don’t fit the typical shopper outside the airport. What I and many others want is a place where I can sit comfortably, charge my phone or iPad, and actually find something healthy to eat, which is difficult. I don’t need a 95 dollar golf shirt I can buy for $25 at Macy’s, and most of the other stores are a waste of my time. Better, healthier food options would be amazing, but I won’t hold my breath.
Rite Aid at Pittsburgh Airport (with the same pricing as outside the airport) is arguably the single most useful and valuable airport shop I’ve encountered in the US.
Stop and think about that for a second: When’s the last time anyone was happy to shop at Rite Aid?!
These discussions tend not to consider the consumer and the consumer’s needs. We need fewer Mont Blanc shops and more PIT RADs.
Correct me if I am wrong, but the Rite Aid at Pittsburgh doesn’t have a pharmacy….
No I don’t think it does — but it does have snacks, drinks, Band-Aids, Tylenol, etc … all at a third of the price of the newsstands.
Airports, retail and lounges are much better at serving guests in international carriers than in domestics.
From a customer experience/user experience standpoint, shopping inside an airport can be tricky for the customer. There is dwell time at the beginning of a trip — the most favorable time for shopping, but the least favorable time for taking away one’s purchases. Customers find themselves considering items not simply for their appeal, but for whether they will fit into a carry on, add bulk to suitcases, etc. Many passengers are avoiding baggage fees by loading up their carry-ons, leaving little room for purchases and making shopping difficult while they lug those suitcases around.
Some customers might consider buying an item on the return trip, but that’s the least favorable time for the retailer to earn their business — after the travel money is spent and the customer wants to get home.
To me, this seems like a good opportunity for BOPIS in reverse — “Buy in store, ship it to me.” Some have tried at this and failed. For that to work, the retailers need a strong store staff to create and execute on an experience designed for the airport customer. To answer the question, I do believe the offerings at U.S airports could be improved, so long as they are backed by the execution of great service inside the retail stores. High-end stores won’t compensate for mediocre service.
Javelin’s comments don’t make much sense (to me): engaging in apples-to-scones comparisons after acknowledging differences in conditions.
I don’t think it’s any mystery that airports (here) long put an emphasis on efficiency — and rightly so — and more recently security, predictably, if not always logically. There’s nothing wrong, per se, with developing retail, but not if it comes at the expense of the first two criteria, or terminals-as-malls will result in higher fees.
US airports definitely need an upgrade in terms of retailing, but also just about everything else. The trend towards airports using more big data and analytics to better understand travelers’ needs will not only improve airport retail, but will also inform airports on how to improve the overall experience, from the moment you walk in until the moment the airplane takes off.
Certainly, people aren’t at the airport to shop. The same holds true for casinos, but casinos go all out to create an indulgent experience outside of the gaming tables, with five-star restaurants and fabulous shopping. Airports could learn a valuable lesson here.
Travel is stressful — what is it that travelers want, besides going from one place to another? Data analytics may reveal some surprising results. Rest and relaxation? Narita Airport in Tokyo features comfortable nap rooms — probably one of the best airport innovations ever. Food? If you have time on your hands, there’s nothing like relaxing over a good meal and maybe a well-prepared martini, and even the American airports are getting in on the act by bringing in restaurants and bars that give travelers something more than your typical fast food airport fare.
And yes, shopping! While it may be less relevant for domestic airports where layover time is short, US-based international airports will do well to improve the overall traveler experience with a combination of more shopping, better restaurants, and innovative amenities.
Both Ian and Tony expressed my thoughts about shopping in US airports before I had a chance: In the US, we have access to just about everything we want — before we even come to the airport — so why buy expensive or unneeded items that you can get outside the airport, and much cheaper? Same isn’t true in foreign airports, be it in England or China. People passing through those airports can avail themselves of many items they can’t find in their own countries or imported from other countries to be sold in Duty-Free shops.
Airports in the USA are less casual, more stressful and domestic based. This means that people are doing anything but shopping during the small window of time that they have before departures. In Europe, there is less stress and an international focus (which requires longer wait times in airports) where the captive airline passenger can more easily become the captive shopper.
I think one of the reasons is that for most of the airports on the top of the list, most of the travel is international, and therefore duty free. International vacations drive more shopping as well. If you are just traveling from NY to LA, the mood to shop at the airport just isn’t there. Most of the airport shopping from my point of view is done in in the Duty Free area, and therefore with the bulk of US travel at airports being domestic, it doesn’t make sense.