Special Feature – Travel Retail

Future Ready Retail

Portland Design is a global place branding and retail strategy and design business specialising in airports. Their projects are varied in scope and they partner with airport investors, operators and retail, F&B and vendor brands. In this article, their Managing Director Ibrahim Ibrahim discusses how the travel retail sector is responding to the new passenger demands and the rapidly changing consumer landscape.

Our approach is driven by a deep understanding of passengers and place, where we focus on the trends that drive passenger and consumer behaviour and that imbue airports with truly authentic experiences. Our mantra at Portland is ‘People and Places not Buildings and Spaces’. This is really important to us as it gives us a brutal focus on what we refer to as the ‘Transumer’, the travelling consumer and what is unique about their behaviour and expectations.

Expectations have shifted as a consequence of Covid-19. However, many of the challenges faced by airports were already present before the pandemic, but they have been magnified. This presents airports with a unique opportunity and one that gives permission to be radical. The ‘do as before’ strategy is no longer an option, the pandemic has led to the death of precedent, and what has gone before is no longer necessarily a reliable guide.

Retail has always been, and will always be, about four things: (customer) recruitment, transaction, fulfilment and retention. But transaction and fulfilment are gradually shifting away from the physical store, which will increasingly focus on customer recruitment and retention. Therefore, the physical store will behave less like a distribution channel and more like a media platform to recruit and retain customers. This will greatly impact the customer experience, the service proposition, design of the space, its location within a master plan of the terminal, the CAPEX AND OPEX and the revenue and rent models.

In essence we will see a gradual shift of emphasis from ‘stores > shelves > sales’ to ‘stages > stories > shares’.

Physical stores in airports have the potential to be the most powerful media platforms available to a brand, where the opportunity is to monetise not only the experiences but the data that these experiences generate. We must therefore plan to deliver data responsive environments and experiences. The key challenge will be to capture the data that demonstrates the value of the physical space to a brand in generating media impressions, social media engagement and online sales. We refer to this as ‘Media Impact Value’.

In my recent book, Future Ready Retail, I refer to the four pillars of ‘future readiness’ in retail – these apply as much to airports as they do to shopping centres and high streets.

Re-Invent Convenience
Convenience is at the heart of consumer expectations, who live increasingly transient and complex lives and they demand experiences that are fast and seamless. Convenience is about simplicity, ease and ‘nowness’ – 63 per cent of global consumers are willing to pay more for simpler brand experiences, according to research by Siegel + Gale. This trend has been magnified by the pandemic. So we must strip out complexity at all touch points of the passenger journey.

Re-Connect to Community
Airports have the opportunity to host brands that attract ‘communities of interest’. Focussing on experiences that drive participation, sociability and entertainment will engage passengers’ interests and passions and will get them flocking back!

We must consider how to shift the emphasis from a functional ‘super-market’ model that passengers are finding increasingly boring to an inspiring experiential model that drives engagement, sharing and serendipity.

Re-Imagine Place
It is no longer sufficient to tick the ‘sense of place’ box. We must shift from ‘theming’ to imbuing every touchpoint of the airport experience with an authentic ‘Spirit of Place’. It must run through the DNA of the airport, through its architecture, commercial offers, communications, tone of voice, the five senses of experience and most critically, how passengers are served.

When considering specifically the airport commercial offer, this can no longer be seen just as channels of distribution, but as moments of experience. We call this S.W.E.L.C.H – a data-driven curatorial approach that blends Shopping, Co-Working, Entertainment, Learning, Culture and Hospitality.

Covid-19 has accelerated ‘working from home’. This represents a great opportunity for airports. As part of the commercial offer, airports could develop a compelling co-working facility which activates the IDL and blends with F&B, retail, entertainment and physical and mental wellness. Passengers could arrive at the airport very early to work, if the facilities are world class, passengers may prefer this to working from home.

Re-Position Value
We need to re-think what value means to passengers beyond convenience and price. Post-Covid, consumers are seeking experiences that put wellness front and centre. Wellness is no longer a category; it has to run through all aspects of the airport passenger experience. Covid-19 has also accelerated the demand for tranquil spaces. We must develop biophilia strategies to ensure that passengers are connected to nature whilst in our airports, airport environments need to be softer and more ‘human’, more natural, and more human in scale.

Value is also about truly authentic airport experiences, here localism is key. The challenge is to blend local and independent brands with national and international brands.

Consumers also value personalised experiences, and in future DNA levels of personalisation will be commonplace. Consumers also have an increasing thirst for learning and they are happy to have these experiences in-store.

A recent URW (Unibail-Rodamco-Westfield) survey found that one third of people are interested in attending lifestyle classes in-store.
Consumers are also turning their attention to brands and airports that prioritise ESG (Environmental, Social and Governance), these are becoming priorities that drive preference.

Research by Accenture found that 40 per cent of consumers have stopped using a brand due to the way it behaves.

In working with our airport clients, our aim is to help develop commercial strategies and designs that bring together a mix of experiences, both retail and non-retail, ephemeral and permanent, international and local. It is essential to have diverse occupiers and revenue models to build in flexibility in the design, masterplan and mix to allow airports to respond to rapidly changing passenger expectations and an increasingly disrupted consumer landscape.

For the airport commercial experience to be ‘future-ready’, it must speak like a magazine, change like a gallery, build loyalty like a club, connect like a community, share like an app, seed like an incubator and entertain like a show.

Serendipity is the most powerful consumer emotion that drives footfall, surprise, engagement, sharing and spend. Our aim is to help create ‘serendipity machines’!

Reaching New Heights

Over the past few years, the combined revenue of the Travel Retail market across the world has seen growth that is double that of any other offline retail channel. Over the coming pages, RLI takes a deep dive into the travel sector to explain its exponential growth in recent times, what its key drivers have been and put forward some locations that highlight why the industry has seen such an increase in popularity.

According to Goodflow Global, the Travel Retail market is projected to skyrocket to USD154bn by 2025. The sector presents a tremendous opportunity for brands to substantially increase their visibility, customer loyalty and recruit new customers across different geographies.
The travel industry incorporates airplanes, cruise ships and train station retail and today it is seen as a highly attractive market with more than four billion airline passengers alone annually, a number that is expected to double between 2019 and 2037 according to the International Air Transport Association.

While terminus retail still leads the way, particularly as international travel continues to rebound; train station retail is rapidly becoming the next frontier for retailers as it drives a new type of transit design that is no longer tethered to the commuter consumer. The pandemic is offering a fresh start for transport hubs and it brings with it a new type of customers, the domestic tourist.

This was not always the case, but what started out as duty-free items, souvenirs and basic travel necessities has now become a multi-million-dollar industry. Today, retail is a thriving and growing source of profit for cruise lines. From designer brands to retailtainment, the face of retail is constantly evolving to keep up with passengers’ ever-changing demands, says Eloise Boyd in her article ‘The Changing Face of Retail on Cruise Ships’.

Boyd goes on to explain that retail accounts for a third of consumer dollars spent on board cruise ships. Going far beyond the small shops first seen on cruise, passengers can now visit large shopping spaces and choose from a variety of their favourite land-based brands all in one place. Here they can find unique deals, one-of-a-kind experiences and exclusive items. This, paired with sales staff’s ability to foster relationships with guests throughout the cruise has led to retail’s considerable success.

Airport Retail
The Port Authority of New York and New Jersey (PANYNJ) has announced that 60 regional, national and global brands have been confirmed for the new Terminal A at Newark Liberty International Airport. The one million square foot, US$2.7bn terminal is in the final stages of development and is scheduled to open later this year. New Jersey brands will feature prominently in the food & beverage line-up. Those who have signed agreements include Jersey Mike’s, Smokehouse BBQ, Office Tavern & Grill and W.B. Law Coffee. PANYNJ noted that it has also invested US$3M to build out retail space within the new Terminal A to accommodate the inclusion of local businesses from the cities of Elizabeth and Newark. Replacing the existing Terminal A, the new terminal will have a capacity for approximately 14 million passengers annually and 33 common-use gates.

At the Las Américas International Airport in Santo Domingo, the capital of the Dominican Republic, DUFRY and HMY have teamed up to reinvigorate the site, and the airport concluded the expansion of the central atrium of the passenger terminal and Phase 1 of the DUFRY collaboration in March 2022. The expansion project was 1,523sq m which included the construction of a new shopping plaza, recreational spaces, duty free shops, restaurants, and bars. This new plaza serves as a new retention zone where the commercial and gastronomic offer is concentrated, to benefit the passenger experience. The HMY Group is the preferred Global Supplier for DUFRY Global, withstanding a credible 16 years valued partnership. In 2021 HMY was commissioned to deliver DUFRY´s new concept flagship store at Manchester, UK Airport and based on this success HMY was further commissioned for the Santo Domingo project.

Situated in Changi, Singapore, Jewel Changi Airport is a nature-themed entertainment and retail complex surrounded by and linked to Changi Airport in one of its passenger terminals. Its centrepiece is the world’s tallest indoor waterfall, the Rain Vortex, that is surrounded by a terraced forest setting. This one-of-a-kind airport attraction may have launched in 2019, but such is its unique nature that people are still discovering new elements and enjoying experiences on-site that you do not find in a regular airport terminal.

Frankfurt Airport Retail (FAR), the operator of all Duty Free and Travel Value shops as well as various mono- and multi-brand brand shops at Frankfurt Airport, opened a 316sq m space dedicated exclusively to the Fashion, Accessories & Watches, Jewellery (FAWJ) categories. It is integrated into the 1,934sq m Duty Free & Travel Value Shop in Terminal 1, Pier A Schengen at Frankfurt Airport. The multi-brand fashion concept, rolled out for the first time in a Duty Free shop in Frankfurt, stands out visually from the rest of the shop area: selected materials such as oiled oak, brass and white marble create a luxurious shopping ambience. The generic furniture concept developed by Gebr. Heinemann and realised by umdasch presents the different brands and product groups from ready-to-wear to sneakers and bags to sunglasses as well as watches and jewellery in a correspondingly high-quality and uniform environment. The design frame brings the design and atmosphere of international department stores to the most important international airports and makes shopping for passengers a special travel experience from now on also in Frankfurt. This is the first time that the multi-brand fashion concept has been implemented in a Duty Free shop under the worldwide umbrella of Gebr. Heinemann.

The new, upcoming King Abdulaziz International Airport three-stage development in Jeddah, Saudi Arabia is designed to increase the airport’s yearly capacity from 13 million to 80 million passengers and with an impressive floor area of 810,000sq m, the new terminal will be considered one of the largest airport terminal buildings of its kind in the world. The airport shops combine a traditional and commercial design and HMY has been entrusted with the mission of designing and executing the exciting new 2,125sq m Shopping Boulevard in the International Terminal. The already developed phase of the Boulevard has seven spaces dedicated to different categories: Confectionery, Sports, Toys, Beauty, Gold, Exclusive Gifts (sunglasses, watches etc.), and the most original Souvenirs Shop in the country. The stores present innovative solutions, but also reflect aspects closely linked to the territory. The commercial offer is complemented by an excellent gastronomic offer, with the aim to turn travel into a unique experience for the passenger.

A popular transit destination for flights connecting from and to Europe, Asia, North America, and beyond – Bahrain International Airport’s new terminal is also home to the magnificent Bahrain Duty Free. An entirely immersive and engaging retail arena has been created to welcome all passengers visiting or travelling via one of the Middle East’s most important traffic hubs, Bahrain International Airport. Set across more than 4,500sq m, the outstanding Bahrain Duty Free is a space that truly offers an elevated shopping experience with thoughtfully crafted areas that cater to the new era of travel. The Store Makers from umdasch have helped to create an extraordinary world of travel retail at Bahrain International Airport. umdasch has worked on The Pearl Lounge as well as a number of other stores throughout the duty-free space. The spacious terminal has been transformed into an exciting, and enticing, shopping destination. The goal was also to give premium brands a fitting platform on which to showcase their offerings.

Al Maktoum International (DWC) will not only meet Dubai’s growing passenger traffic projections, but will also be the base for global aviation innovation. It will showcase a new era of smart airport systems and passenger-centric facilities, taking travellers to worldwide destinations in the most awe-inspiring and comfortable way possible when it opens its first phase in 2030. Intuitive way-finding will guide all transfers, while an abundance of offerings, including retail, food and beverage, relaxation and entertainment, will provide travellers an unparalleled experience. In its final configuration, the platform is designed to handle 260 million passengers per year and 15 million tonnes of cargo. The multi-modal cargo hub will enable air, land and sea connection with dedicated freight storage space on the airside, land-side and by the seaport.

Cruise Ship Retail
Shipboard retail used to consist of cramped spaces that offered duty-free merchandise and toiletries. Today’s mega-ships, however, feature big-name stores, high-end items and thousands of eager shoppers ready to buy. Space allocated to retail has been steadily increasing as cruise lines introduce huge vessels each year.

MSC Virtuosa is earning high praise for her food and beverage and onboard entertainment but should also be recognised for her record-breaking retailing facilities. Dubbed ‘the largest shopping area at sea’, MSC Virtuosa’s retail space spans an impressive 1,168sq m and features 250 brands. Its central promenade, Galleria Virtuosa, lies at the heart of the ship. Here, guests can navigate through the vessel’s 11 retail outlets with ease, following temporary one-way systems under an impressive 93-metre LED screen. The two standout venues are the Virtousa Boutique and the Luxury Plaza.

Meanwhile, one of Costa Cruises’ latest vessel’s, Costa Firenze, has a Florence inspired interior that beautifully complements its Italian destinations. This Italian style has also been applied to the vessel’s shops, which serve as a perfect backdrop to Costa Firenze’s authentic, Italian-style shopping experience. Costa Firenze hosts several Italian brands ranging from jewellery to handbags, with shop designs reflecting these brands’ Italian heritage. This immersive retail design allows passengers to enjoy Italy even on sea days. The Galleria Shops onboard span 13 stores offering categories from fine jewellery and apparel to handbags, trip souvenirs and travel essentials. Key features include the ship’s rotating Italian collections, with merchandise refreshed twice on each voyage. These include Florentine keepsakes such as pottery, magnets, miniatures, keyrings and more. The shops also offer a Retail Concierge service, enabling stateroom shopping, private retail appointments and concierge-led store outings.

Harding, the global travel retail and cruise retail specialist, revealed thrilling details last year about its collaborative partnership with Virgin Voyages, creating an innovative approach to cruise retailing, with Scarlet Lady’s maiden voyage from Portsmouth taking place back in August. Set over 550sq m of retail space, the immersive on board experience sets out another radical step-change for Harding within cruise retail including a pioneering approach to sustainability. Harding also aims to make the most of their unrivalled market insight to target an entirely new cruise customer that’s right and relevant for the Virgin Voyages brand. Exclusively targeting a curious and ‘craver’ experience-led demographic, the spaces are unlike any immersive brand solutions that Harding has created before, coming as of a direct result of extensive guest surveys, focus groups and key brand roadshows and partnership discussions.

Train Station Retail
In the last couple of years, as the travel retail sector has gone through some difficult and challenging times, train stations are coming out of the pandemic with a new mind-set and refreshed opportunities as airport retail continues to find its feet again.

In China, where a rise in sustainable mind-sets aligns with a new generation, a record 18.83 million passengers used the country’s railways during the 2021 May Day holiday. In response, Chinese architects are designing future transit hubs to cater to increased demand. Train Station in the Forest is situated in the heart of the Southeast city of Jiaxing. Its design, by MAD Architects, encompasses not just the concourse and commercial plazas, but a renovation of the adjacent people’s park. With the station having reached full capacity – and the surrounding area in decline – the architects saw an opportunity to transform the space into a green space for travellers to share with the city’s citizens.

Architecture firm BIG has updated its plans for a transport hub designed for Swedish city Västerås, which will feature a building with a dramatically sweeping roof. BIG envisions the Västerås Travel Center as a hub that brings together all of the city’s transport infrastructure under one roof and in one continuous landscape. The building will serve as the central station for trains and buses while providing a bridge between the city centre and the nearby Lake Mälaren — areas currently divided by train tracks. BIG first revealed a preliminary plan for the site in 2015. Key to the updated design is a more distinctive, flowing roof that extends beyond the edges of the 17,000sq m building to invite people in from multiple points. The shape is similar to a billowing sail or a sheet attached to a line at multiple points. As well as doubling the size of the current bus terminal, the hub will have a bicycle garage, travel services, commercial areas, restaurants, offices, event areas and exhibition spaces.

A great example of urban regeneration within train stations is the project for the whole Roma Termini station. The refurbishment will comprise of: bringing to light the remaining of Mura Serviane in the historical Atrium; the refurbishment of windows and facades of “Galleria Gommata” and the introduction of two new holes on the floor to improve the connection with the underground floor and facilitate customer journey. The underground floor will be completely redesigned too thanks to the refitting of floor, ceilings, lighting and windows. Set to launch next year by developer Grandi Stazioni Retail, the total GLA will be 47,800sq m and the number of stores and brands will reach 170.

Construction and infrastructure services firm Kier Group has secured a contract from Network Rail for the next stage of a £65M modernisation project at Oxford railway station in the UK. Under the contract, detailed design and enabling works will be carried out by Kier at Oxford railway station under the Oxford Corridor Phase 2 Project. An additional platform and overhead canopy, new western station entrance, ticket office, waiting room, toilets, café and shops will be covered under Phase 2D platform 5 and station improvement works. A subway will also be built to link the western entrance to the new platform.