Will Harrods Business Take Off From British Airports?
Travelers know time has to be allowed between check-in and boarding. Airport managers know retail therapy can soothe the soul. Luxury — especially fashion — items can tempt.
Unsurprisingly, Harrods’ director for international and airports, quoted on the Travel News website, was said to be "delighted to see another Harrods Airport store open, following the success of sites at Gatwick and Heathrow." He added that the new store follows "Harrods’ dedication to the best in luxury fashion and accessories." With 6,000 square feet+, the so-called "mini-store of premium shopping" in Gatwick’s South Terminal departure lounge is filled with luxury fashion, accessories and jewelry, plus food and gift sections featuring high-profile designers.
Gatwick’s retail head, Spencer Sheen, expanded on the airport plans, explaining that some £21m would be spent this year "to enhance our retail offering and ensure we deliver a world-class experience for our passengers."
American travelers can enjoy luxury shopping worldwide. Heathrow’s Terminal 2, due to open in June 2014, will service all 27 Star Alliance airlines, including US Airways. Retail space, it is claimed, has been so competitive that an average of five businesses have applied for each of the available 52 retail sites.
Heathrow already sees some 70 million passengers each year spending an hour or more in stores that The Guardian describes as "one of the most productive shopping destinations in the country." Average spend per shopper has climbed by 57 per cent since 2002, The Guardian says; retail sales through the airport have increased 47 percent in the period, totaling £1.7bn last year.
An additional objective is enticing overseas customers. John Lewis’ director of commercial operations, Sean Allam, hopes its first airport store, at Heathrow, "will raise the profile of the brand abroad. … We expect the venture to build awareness of the John Lewis brand to target customers in a number of overseas territories, supporting both our online and wholesale business." Ray Kelvin of Ted Baker, agrees, claiming airport stores have "helped us to export our brand internationally."
The Guardian likened Terminal 5 to Rodeo Drive with its high-end designer stores. Captivating the captives, cynics might say.
Discussion Questions
Considering the apparent success of Harrods airport shops, do you think it is time for the chain to expand outside of England? If yes, should that expansion be solely limited to other airport shops or should the iconic retailer open another department store outside its home country?
Can they be successful elsewhere? Probably. But I wonder if they would lose some of the mystique if Harrods existed outside of England (perhaps with the exception of some of the Commonwealth countries).
Maybe they should expand a little more inside England as well. I really only know of one store. Also perhaps smaller stores in the British Territories such as Bermuda, Caymans and Virgin Islands.
Some concepts work perfectly in a specific context. Skyline Chili, for totally understandable reasons, won’t work outside of Ohio. Poutine, thank goodness, is not likely to work outside of Canada. If you’re going to shop at Harrods, you’ve got to do it in England, that’s just part of the experience even if it does happen at the airport.
Honestly, I just can’t imagine spending significant sums of money buying clothes or anything else at an airport. The only exception is picking up a T-shirt or toy because the kids will want to know what you brought them or you forgot your charger and you have no choice. Admittedly, I am way too frugal for Harrods!
My goal is to minimize my time in an airport. I want to get there as late as I can, minimize the time between flights, etc. Admittedly much easier to do with domestic flights than international ones. For that reason I am always amazed that airport shopping has become as successful as it has.
Can Harrods work elsewhere? Yes. Will it be as successful? Depends on where it goes. Harrods is an English experience. As others have noted, were Harrods to elect to expand, I would expect that it could do best in other Commonwealth countries.
A retailer must always keep its objective straight!
Harrods should expand outside of England only if such exposure to new cultures can conceivably increase its sales and profits to greater heights than its prestige. Remember Tesco.
I think that Harrods should expand to both airports and major cities around the world. New York, L.A. and Chicago in the US and other major cities in Europe and Asia.
If Harrods can be successful in the most avoided airports in the world, certainly they can be successful elsewhere.
Las Vegas on the Strip. Perfect fit. Or Rodeo Drive in Beverly Hills.
Echoing what others have said—and at the risk of stating the obvious—how, exactly, does the fact that an icon of London retailing has found success in two of London’s airports lead to the proposition that they should expand…not just beyond London, but beyond England as well?
The secret of wildly successful airport luxury retailing for brands is relevance. You start with having the quantity of passengers who are likely buyers of luxury brands—this usually does not include Americans. The best are Chinese, Russians, Koreans, and Japanese. Internationally desired brands like Gucci and Coach will do well anywhere. But something like Harrod’s requires the location to be a place you’d expect a quintessentially British brand to be present.
So no, it won’t work everywhere, but in the Queen’s former colonies (minus America) it could do quite well. e.g. Australia.
As for opening another department store? Maybe in the UAE. America certainly doesn’t need another luxury department store.