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: 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?