Bill A.

Matz, The S-A-P Group

Airport Commercial
Benchmarking, Trends, and Targets

The S-A-P Group

Airport terminal
commercial space and
business planners
Terminal retail planning
(shop space amounts,
locations, business terms)
Pax commercial surveys
Est. 2002. Based in Bangkok and San Francisco.

2
Commercial Survey Results
Passengers gate seating location affects pax spending
20% difference for every 200 meters within a single terminal
Can be a 50% difference for gates located on a separate pier

20% sales per pax

50% sales per pax

Retail
Retail

4
Incheon International Airport: Terminal 2

650,000 m2
Phase 1 Opening in 2017
5

Airport Commercial Revenues Study

(ACRS 2012)

6
ACRS 2012 Inputs

Retail
Duty-free and duty-paid
Liquor/tobacco, fragrance/
cosmetics, fashion, electronics
Specialty retail
Food/beverage
Other
Currency exchange
Advertising
Car rental
Car parking

ACRS 2012 Outputs

Metrics Assessed
$ sales per pax Concession structures
$ sales per shop m2 DF, retail, FB, currency
$ income per pax exchange, advertising

$ income per m2 Revenue structures

Yield (%) Terms (years)

Locations Airport financials

Intl, domestic Aero $ revenues per pax
Landside, airside Non-aero $ revenues per pax

8
 Calculating Appropriate Retail Space

1 2
Supportable Space (m2)
Space Analysis per Pax

Duty-free m2
Total retail sales (pax * $ sales) Food/beverage m2
Other retail m2
Optimal (supportable) sales $ per m2 Services m2
=
Optimal space (m2)

3
Judgment
(Historical Successes)

11

High Sales per m2

Overtrading

12
ACRS 2012
Results: Duty-Free Sales per Shop Space m2 (US$)

DUTY-FREE SALES
DUTY-FREE M2 OF
PER SALES PER mSHOP
2 OF SHOPSPACE
SPACE
Select Airports
Select Airports in Europe

US$ 40,000

US$ 25,000

13

Commercial Trends and Targets

14
 Not in airports
Retail Drivers control

Within airports
partial control
Pax
Within airports
Non-travellers Terminal control
(staff, meeters) activity levels
Flight sked Number of
(peak levels) Potential shops
customers
Shop
Shop space (m2)
locations
Gate, seating Shop
$ sales
proximity footfall
Commercial area $ sales Airport
atmosphere per shop income
Flight type, Contract terms,
durations margin
Pax
demographics
Customer
service, pricing
$ sales
Pax dwell
per
time
customer
Opening
hours
Product mix
(variety)

15

Retail Drivers Not in airports

control
Within airports
Number partial control
of Pax Within airports
control
Non-travellers Terminal activity
(staff, meeters) levels

Flight sked
(peak levels) Potential
customers
Shop
locations

Gate, seating Shop

proximity footfall

Commercial area
atmosphere

16
Retail Drivers Not in airports
control
Within airports
Flight type, partial control
durations Within airports
control
Pax
demographics

Customer service,
pricing $ sales
per
Pax dwell customer
time

Opening
hours

Product mix
(variety)
17

Retail Drivers Not in airports

control
Within airports
Number of partial control
shops Within airports
Shop space control
Potential
(m2)
customers
Total
$ sales
$ sales Airport
per shop $ income
Commercial
terms, margin
$ sales
per
customer

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Commercial Survey Results

1 extra minute
=
1% increase in sales

19

Christchurch International Airport (CHC)

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Soft Controls

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Maximizing Airport Retail

1. Footfall (getting pax in the shops)

Consolidated pax flows
All pax within 3~4 m of 100% of shops
Dwell times (minimize anxiety,
perception of time/distance to gates)
Shop differentiation (each shop looks,
feels different from the outside)
2. Conversion (spending when in the shop)
Product variety (mid-price to high-end)
3. Appropriate business terms
Length of term
Ability of operator to amortise fit-out,
refresh shops when appropriate

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Commercial Theme

Reinforce local unique culture, shops

Time Outs Best of Abu Dhabi or Established in 1935
Balance of products
Standard international products and local products
Premium (luxury) products and mid-price, value products
Reinforce the airports characteristics (small/local, global/international)
Customer interaction, free samples
Develop and enforce the airport-wide design standard
Integrate with entire airport, including inside the shops

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San Francisco (SFO) Terminal 2

Trends and Targets

Minimising environmental impacts

Packaging
Recycling bins
Airport-established sustainability targets

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Trends and Targets

Increased promotion of early

arrival at the airport
Increased landside magnets
to attract
Pax (to increase dwell)
Well-wishers and
other non-passengers
Return of the public
observation deck?

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Trends and Targets

Airport-created digital catalogues of all products available

Promotion of these products outside of the shops
Parking lots, toilets, gate areas, mobile devices
Limited time offers
Countdown timers
(eg, special promos
available only for the
next 20 .. 19 ... 18
minutes)

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Trends and Targets

Increased prominence of
airport commercial managers Airport CEO Background
in airport companies
Operations
Shift in airport CEO expertise

Finance

Commercial/
marketing

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Trends and Targets
Primary duty-free shops
1. How large is too large?
2. What is the appropriate
balance between:
Advantages of the
supermarket/
department store
approach (single
shopping basket)
which can conflict with
Desire to differentiate
between low prices
and brand/product
(especially for luxury
products)

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ACRS 2012

Further details or to purchase

Martin Moodie
Moodie International
Martin.Moodie@TheMoodieReport.com
Bill Matz
The S-A-P Group
Bill.Matz@TheSAPGroup.com 30