Airport retailing is undergoing major developments in terms of ownership and consumer proposition.
Alpha’s parent company, Autogrill, is leading this consolidation surge with its recent acquisition of BAA’s World Duty Free and the completion of its ownership of the Spanish operator Aldeasa, creating a 2 billion (£1.56 billion) turnover travel retail business.
The consumer proposition is shifting too. Heathrow’s Terminal 5 – BAA’s cathedral of steel and glass – opened this week and raises the bar with Europe’s best airport retail offer.
Consolidation is a global issue in travel retail. If you’ve shopped at an airport, then it’s almost certainly been with one of the big eight operators: Aelia, Aer Rianta, Aldeasa, Alpha, DFS, Dufry, Nuance and World Duty Free.
Between them, they have about 1,500 stores at more than 260 airports worldwide, but how many consumers could name one of them? They have annual sales of more than US$8 billion (£4.04 billion) and no one knows their names.
How might they raise their profiles and get their names dropped into a conversation as easily as the big high street names and luxury brands do?
Two things are needed: consolidation of brand names and a strong, coherent store experience.
Autogrill has accelerated consolidation and those jilted by World Duty Free will already be flirting with new targets, with encouragement from the merchant bankers as matchmakers.
To get into the consumer mindset, there has to be a shift to a higher level of experience.
The T5 experience will doubtlessly be amazing and, at£4.3 billion, so it should be. But the typical airport shopping experience is a far cry from this.
The single biggest weakness in UK airport retailing is the homogenous image of the retail offer in many tax and duty-free stores; there simply isn’t enough of an identity to give these stores unique personalities.
Many airport shops become faceless and the customer has no abiding memory or connection to them.
Later this year, Alpha will open its new tax and duty-free concept at Newcastle and East Midlands airports and a 23,000 sq ft flagship store in Manchester.
The store has been designed by HMKM, whose portfolio includes Nike Town and Selfridges, so it understands the needs of major brands and, most importantly, our consumers.
We are pushing the boundaries of airport shopping and reinventing many things. We’re creating a retail experience that incorporates exciting, original design and establishes a unique brand in airport retailing – exactly the characteristics that scores of great brands and high street retailers consider fundamental.
Airports, however, are another world. Achieving all this requires the input of a committed airport owner with the vision to look beyond the status quo and the drive to create something better. At Alpha, we have worked in partnership with our airport customers to develop what we believe will be a consumer experience that makes shopping a real pleasure.
Peter Williams, chief executive, Alpha Group
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