Additional contributions from Brian Horn and Derek Holt

Slowly, very slowly, we are beginning to see international travel return. There has been considerable debate about the longer term impact of the pandemic on business and tourist travel, which will return more quickly and the long-term implications for the travel sector. Recent news reports have focused on wide ranging job cuts and the fortunes of the world’s airlines. But, what does the future hold for retail in airports?

Airport retail pre-crisis was a major industry. Pre-crisis global airport retail sales were expected to rise 6.1% on 2019 levels to US$48.2bn in 2020. With global travel severely curtailed and major international events, such as the 2020 Tokyo Olympics, that would typically stimulate increases in air travel delayed or cancelled, the forecast for 2020 looks considerably more challenging. Our recent survey of airport retail consumers suggests traveller attitudes to airport retail have changed dramatically:

  • 86% of respondents say they will travel less frequently and spend less in airport shops once restrictions are lifted;
  • Three-quarters of respondents felt they would not be comfortable in an environment that did not have health protection measures in place;
  • 43% said that they will avoid interaction with sales staff when in shops; and
  • 38% said they would avoid entering shops altogether.

Significantly reduced consumer footfall is a major concern. Equally worrying is that a sizeable proportion of these ‘captive’ consumers will reduce their spend in several key categories:

Nearly half of respondents said they would be less likely to buy from the categories they used to;

30% will avoid luxury and non-essential goods (30%), 27% will be reluctant to buy perfumes and skincare products, and clothing and accessories purchases could be down by up to 25%.

While the near-term outlook is bleak, we can expect some form of return to air travel, albeit over a longer period than in other sectors (speculation suggests three to five years being a realistic timescale). And, as the travellers return there are a number of interventions airport retailers can make to increase consumer comfort levels.

  • Digital solutions and alternatives to the ‘bricks and mortar’ retail experience commonplace in airports offer some solution; echoing the trend in the wider retail sector;
  • Creative use of technology such as augmented reality will be extremely important in attracting and retaining customers going forward; and
  • Tackling waiting times and allowing for social distancing, for example using ‘click and collect’ solutions seen in other retail sectors, will be key for airport retailers as the market adapts.

These were well received by survey respondents, offering some direction on how airport retailers can address consumers’ priorities and transform their offering for the long-term. In some respects this shift in consumer priorities not only presents an opportunity for airport retailers, but may also open the channel for other retailers longer-term.