Airport Retail Research Articles

Role of Airports’ Tangible and Intangible Features as Alternate Sources for Retail Revenue Generation – A Study of Karachi Airport in Pakistan

The airline industry is among those industries that deal with a large number of customers for the purpose of travelling. However, COVID-19 impacted the revenue streams of the airline industry as travelling by air observed a significant decline. Since airports are an important element of airline operations, they were more affected than airlines as their revenue streams were mainly generated from different consumer spending and rental services. It was realized during COVID-19 that the diversification of revenue streams played a vital role in airports' sustainability and self-sufficiency. This study aims to determine the role of airports’ tangible and intangible features as alternate or additional sources of revenue and observe the mediating role of customer satisfaction. After a careful literature analysis and flipping over various studies, it appears that a lot of research is done on the contribution of the non-aeronautical revenue towards the financial stability of airports, but no study focuses on the role of airport physical features on airport retail revenue and how it can affect airport revenue streams. Therefore, this research study aims to analyze the mediating impact of Customer Satisfaction on the relationship between Airport Environment factors and Airport retail Revenue. Cronbach’s alpha, Reliability, discriminant validity, SD. analysis is used for analysis. The result shows that airport environment and airport design have a significant positive impact on airport retail revenue, while the result also shows that the airport facility has a weak relation with airport retail revenue. It is evident from the results that airport environment and airport design, with an indirect effect on customer satisfaction, can increase the airport retail revenue.

Relationship between the terminal built environment and airport retail revenue

Non-aeronautical business, including airport retail, is an essential source of airport revenue. The locations of retail stores in an airport terminal building significantly impact their revenue. Based on the retail store-level data from Dalian Zhoushuizi International Airport (DLC), the traditional panel data regression and machine learning methods were employed to explore the relationships between the terminal built environment and airport retail revenue. The results indicate the following: (1) non-linear relationships exist between airport retail store revenue and the terminal built environment. (2) Airport passenger traffic is still the principal factor in retail store revenue. (3) Variables including area, function halls, and per capita spending have different impacts on the revenue of food and beverage (F&B) and specialty retail (SR) stores. The optimal location sites for retail stores are as far away from the nearest washroom as possible while being as close to gates as possible.

Tourists’ perception of airport luxury shopping

ABSTRACT While airport shopping has garnered extensive attention in the literature, the significance of integrating luxury stores within airport environments remains an underexplored facet. In this qualitative study, grounded in established theories of luxury behavior and airport management, we delve into the perceptions of tourists regarding the presence of luxury stores in airports. Drawing on in-depth interviews, we demonstrate that tourists’ favorable reception of luxury stores can be connected to the idea of making luxury more accessible. Our findings also suggest how luxury shopping enhances the overall passenger experience and contributes to the reinforcing of the airport's reputation. This study adds theoretical and empirical depth to the discourse on airport retail, shedding light on the nuanced interplay between luxury commerce, tourist perception, and airport management practices.

MENINGKATKAN KEPUTUSAN PEMBELIAN RETAIL MELALUI KEPUASAN KONSUMEN DI BANDARA SOEKARNO-HATTA; KONTRIBUSI PERSEPSI HARGA DAN STORE LAYOUT

The airport business is a growing and promising business. The increase in the number of trips will automatically have an impact on airport revenues. Currently, airport revenue is still dominated by revenue from the aeronautical sector, while the potential for non-aeronautical revenue is also quite promising. The retail business at the airport is one of non-aeronautical businesses that has big opportunities with potential to be a significant alternative income for the airport. This study was addressed to examine the effect of store layout and price perception on retail purchasing decisions at the airport mediated by consumer satisfaction. It uses a quantitative method, with 100 respondents, where they fill out online questionnaires. The analytical technique used is SEM-PLS. The results showed that the store layout and price perception have a positive and significant influence on purchasing decisions and on consumer satisfaction at the same time, whilst consumer satisfaction also has a positive and significant influence on purchasing decisions. Store layout and price perception have an indirect influence on purchasing decisions through consumer satisfaction. Based on these results, airport managers are expected to pay more attention to marketing strategies that focus on creating attractive store layouts and competitive prices, so that consumers feel satisfied and decide to make a purchase.Keyword: consumer satisfaction, buying decision, price perception, airport retail, store layout

The Circular Economy Transformation of Airports: An Alternative Model for Retail Waste Management

Airport terminals worldwide generate approximately 6 million tons of passenger waste annually. Increased awareness of climate change and global interventions for environmental sustainability requires a reassessment of airports’ current methods of waste management. This paper proposes a new design concept solution called circular airport retail waste management (CAWM) for airport terminal retail waste processing, which aims to reduce and ideally eliminate airport waste ending up in landfill or incineration. Given the need for novelty and challenging the status-quo, the double diamond design process was adopted as the research method. The research began by collating the current practices of retail waste processing in airports via a literature review and field observations. Secondly, a critical analysis of the current processes was conducted to identify the intervention points. Thirdly, a concept solution was developed based on the circular economy (CE) 9R framework. Finally, the CAWM concept was delivered to airport waste management personnel for review. CAWM offers a structured way of airport retail waste management practices, including the segregation of nonrecyclable and recyclable waste (i.e., different bin designs, color coding, harmonization of waste colors, improved instructions and signage, various bin locations, training, and installing more liquid disposal and donation stations). Airports can leverage CAWM for greater efficiency and cost-effectiveness regarding airport terminal waste processing, such that more waste can be diverted from incineration and landfill to recovery, which will subsequently help airports achieve net-zero targets. This research contributes to the extant CE literature, especially in the aviation industry context, where the academic discourse surrounding this subject and its peculiarities are limited.

EMERGING SCOPE OF AIRPORT RETAILING IN INDIA

Indian airports are not just limited to the business of flying passengers. After the takeover by private operators Airport infrastructure in India has changed drastically. They are matching the standards of global airports. Along with this airports are being promoted as key retail hubs. There has been a big revamp in most of the airports at metropolitan cities like Delhi, Mumbai, Bangalore etc. The key focus is on making airports more lively and vibrant instead of uninteresting place for passengers. The transformation of dull airports into fascinating shopping lounges has happened due to privatization of airports. The gloomy airport retail areas have been replaced with wonderful retail shops, show cases and boutiques. Moreover,people with high disposable incomes frequently visiting airports promises impressive growth in airport retailing. Few years back Indian airports were considered for doing only duty free shopping of liquor, foreign chocolates, perfumes, cosmetics etc but at present this fact no more holds true as at present traveler every need and want is determined well in advance and airport retailers grabs upon every opportunity to provide delightful shopping experience

The impact of customised mobile marketing on passenger shopping behaviour in the airport terminal

With growing popularity of mobile devices, digital marketing strategies are increasingly important for modern airports. This paper studied context-aware mobile marketing strategies in the airport retail environment. An on-site mobile marketing experiment was conducted at a partner airport to explore how preference and/or location-based mobile coupons could affect passengers’ retail behaviour. Results show that retail shopping became more efficient (less browsing time) with mobile marketing influence, but not necessarily more effective (not higher spending amount). Randomly pushed mobile marketing information is effective in keeping passengers in shops for longer but context-aware mobile marketing is more effective in increasing spending amount.

Exploring passenger and flight characteristics' impacts on airport retail income: Evidence from Incheon International Airport

This study examines passenger and flight characteristics' impacts on airport retail income using transaction data from Incheon Airport (ICN) duty-free. Two indicators, per-flight expenditure and buyer proportion, were introduced to measure the impacts on retail revenue. This study employed the female passenger ratio per flight and the domestic passenger ratio as passenger characteristics. Flight type (LCC or not), transit passenger proportion, and flight delay were introduced as flight characteristics. Unfavorable departure gates and disadvantageous terminal locations were presented as location characteristics. Based on the multiple regression model, this study analyzed the effect of each factor on airport retail revenue. The research findings provide managerial implications to airport operators. It is financially advantageous to avoid allocating flights with many female passengers to favorable departure gates for accessing retail shops. A high frequency of purchases of Korean passengers does not lead to a significant sales amount because of the regulations. Transit passengers are low-yield customers for airlines and airport operators. Flight delay increases the per-flight expenditure and the buyer percentage to a certain level, while excessive delays can reduce the purchase amount. Also, this study identified that the impact of assigning flights to disadvantageous locations varies depending on the type of flight based on the expansion model using an interaction term. The location has a significant influence on passenger shopping behavior. Since FSC passengers have a solid impulsive buying tendency, airport operators should avoid giving FSCs to unfavorable gates. Although ICN kept operation policies to assign LCC flights to a terminal disadvantageous for shopping, this study presents that the commercial revenue contribution of LCCs is not weaker than FSCs when controlled a terminal location. Therefore, it is necessary to reconsider assigning LCCs to a terminal unfavorable for shopping without evaluating purchasing power.

Retail shopping at airports: Making travellers buy again

Airport retail has undergone significant change in the last decade. Today, many airports provide a broad selection of product varieties and an augmented shopping experience. In this study we focus on sequential purchasing which remains an unexplored topic in airport retail. Grounded in shopping momentum, we use real-world purchase data from 279,000 passenger boarding cards to test a conceptual model that examines relationships between first purchase expenditure, walking distances, time available for sequential shopping, crowding, payment type, product involvement, promotions and product type on sequential purchasing in three terminals at Dubai International Airport. Findings offer a significant theoretical contribution to the travel retail and sequential purchasing literature and have important practical implications for airport retail practitioners.

Performance of Retail Stores at Airports and Their Role in Boosting Traveler Satisfaction and Willingness to Repurchase

Despite its criticality for airport business, duty-free shopping at the retail stores of airports has received scant attention. To overcome this difference, this study explains the complex process via which travelers show their willingness to repurchase in the context of airport retail stores. A quantitative process comprising a field survey is conducted for data collection. The measurement quality is assessed and established through the evaluation of a measurement model. As a result of analyzing the structural equation model, it was found that the perceived performance, utilitarian value, hedonic value, and satisfaction evaluation of airport retail stores play a crucial role in determining traveler willingness to repurchase. The conceptual framework encompassing these concepts also adequately accounts for traveler willingness to repurchase. Moreover, our results from the invariance assessment reveal that the moderating impact of shopping engagement on the hypothesized relationship between utilitarian value and satisfaction evaluation is significant. Overall, the proposed direct associations among theoretical constructs within our framework are well supported. Furthermore, the efficacy of the proposed theoretical framework for a clear understanding of airport shoppers’ post-purchase behaviors is successfully identified.

The contribution of airport retail to total airport revenues

The contribution of airport retail to total airport revenues

A Study on Airport Retail Shopping with Focus on Delhi Airport

A Study on Airport Retail Shopping with Focus on Delhi Airport

Determinants of airport retail revenue: a review of literature

ABSTRACTAs the airport retail industry continues to grow due to increasing travel demands, airport operators are increasingly developing their retail revenue potential to ensure financial viability. This study aims to provide a review of airport retail literature and identify the salient factors associated with passenger shopping behaviour. The paper presents a review of contemporary airport retail literature, covering a total of 50 studies from 1998 to 2018. The review identified 26 factors, which could broadly be grouped into five categories: airport/operator related; passengers' demographic related; passengers’ travel related; passengers’ psychological related and passengers’ resources related. In addition to providing a summary of the statistically significant factors across studies, the review identifies and discusses potential approaches for future research. These include the importance of considering both “to spend or not” decision and how much to spend and how most empirical studies focussed on the former; the gap in empirical analysis on the impact of airport terminal design layout on retail performance; and the gap in application of general consumer shopping behavioural models to airport retail problems. The paper concludes with the suggestion that we can build on the existing studies to develop a hybrid approach to solve several of the identified gaps simultaneously.

The moderating role of demographic variables on customer expectations in airport retail patronage intentions of travellers

The international airport retail business is expanding annually, yet most research into traveller’s experience with the aviation industry have centred on aeronautical features. The study gathered information that would guide the understanding of airport customer retail expectations. Specifically, the study examines the effects of product-relevant factors, market-relevant factors, and perceived service quality on retail patronage intentions, taking into account the moderating role of demographic variables. The purposive sample of three hundred and thirty (330) travellers that were selected at the Kotoka International Airport Terminal 1 and 2 (KIA T1&2) in Accra, the capital of Ghana. The findings show that product-relevant factors, market-relevant factors and overall service quality significantly influence airport retail patronage intention. The effect demographic variables was noticeable among older and high-income consumers. Building on previous studies, we find that product-relevant factors, market-relevant factors, and perceived service quality function as viable signals that drives customer expectations.

Does a reward program affect customers’ behavioural intention of visiting the airport? A case study of Singapore Changi Airport

An understanding of the behavioural intentions of customers in visiting airports may help airport management to boost airport retail revenue (i.e. non-aeronautical revenue) by increasing customer spending at the airports. This study aims to examine the connection between airport reward programs and customers' behavioural intentions of visiting the airport, attempting to bring some benefits and credits for implementing reward programs in the airport sector by using Singapore Changi Airport as a case study. Two types of customer behavioural intentions (i.e. time spent at the airport and various purposes of visiting the airport) were investigated in the study to examine the effects of Changi Airport's reward program (i.e. Changi Rewards). An on-line survey was conducted, and the participants' responses were analysed via a structural equation modelling approach. The results showed that the attractive benefits of Changi Rewards could have a positive influence on arousing customers' intentions to engage with the programme. In addition, customers' intentions to engage with the programme can have a positive effect on increasing passengers' time spent at the airport and inducing customers to visit the airport for leisure purposes. Managerial implications to the airport sector are discussed.

Effects of passenger characteristics and terminal layout on airport retail revenue: an agent-based simulation approach

ABSTRACTThis paper examines the effect of passenger characteristics and terminal layout on airport retail revenue using an agent-based simulation approach. Simulation results show that passenger mix (that is, the mix of shopper types according to a typology of airport shoppers) has a profound effect on airport retail revenue; the larger the number of ‘shopping lovers’ there are among passengers, the higher the airport retail revenue. Results also reveal that group travel can lead to negative effects on retail in certain terminal layouts, and that the amount of free dwell time that a passenger has can affect spending due to less retail engagement. This paper shows a combined effect of passenger characteristics and terminal layout on airport retail revenue, and discusses the implications of these results for future airport terminal design that aims to maximise retail potential.

The Effect of Retail Mix on Passengers’ Motivation to Shop at Airport Terminal Outlets

Retailing represents one of the commercial activities contributing to the non-aeronautical source of revenue to most airport operators. In this research, Kuala Lumpur International Airport 2 or better known as KLIA2 represents the focus of the study. KLIA2 is built to cater to low-cost carriers and the airport is built on the concept of ‘a mall in the airport'. There are two commercial areas designated for passengers to shop: gateway@KLIA2 and terminal outlets. These create more choices for passengers to shop and at the same time increase competition among the retailers. Focusing on the terminal outlets, this study aims to examine the influence of airport retail mix elements on passengers’ motivation to shop. The factors examined were the location of the outlets, promotion, personnel, atmosphere of the outlets, product mix and price. The study utilized survey method and questionnaire was designed to gather data from departing passengers for both domestic and international sectors. The self-administered questionnaires generated a total of 307 usable responses. Data were analyzed using SPSS. The result of multiple regression analysis showed that the key airport retail mix element which motivates passengers to shop is the location of the outlet, followed by promotion and product mix. Recommended strategies for airport retailing were highlighted

The future of airport retail in a carbon constrained world: Setting the agenda for research

The future of airport retail in a carbon constrained world: Setting the agenda for research

Air passengers' shopping motivation and information seeking behaviour

This study investigates the motivations of shoppers at Taiwan's Taoyuan International Airport. From a sample of over 500 individuals, we find that motivations are similar to in-store shoppers elsewhere, with travel and airport motivations being a special factor depending on the airport shopping environment and local shopping cultures. While decision convenience is the main factor concerning air passengers' information seeking in a terminal, other factors such as free time before boarding, involvement, and group travelling exercise differential effects on the information seeking behaviour of air passenger groups. This result suggests the heterogeneous information seeking behaviour patterns and implies the importance of using various strategies in providing airport retail information.

Building retail practices for the New Lisbon Airport

Nowadays, airport retail is a key component of any airport business model and plays a key role as an enhancer of the passenger experience and airport profitability. Airport managers are innovating and introducing new practices in order to achieve higher levels of performance in this area. To ensure the success of these initiatives, collaboration with airlines is critical and it is essential that the interests of both parties are aligned. In this context, this paper describes how Aeroportos de Portugal, SA (ANA) is building state-of-the-art retail practices for the New Lisbon Airport in order to improve the passenger experience, benefit airlines and increase airport profitability and competitiveness.