At Passenger Terminal CONFERENCE 2023, London Heathrow retail director Fraser Brown spoke about the motivations and key considerations behind the airport’s concessionary strategy.
As part of his talk, ‘The airport’s evolving retail proposition and opportunities’, Brown highlighted the airport’s four retail pillars – space, offer (range and price), experience and digital – that it always considers before entering into business with any retail partners. As an example, he pointed to Vagabond – an F&B unit where you can pour your own wine, which the executive asserted is very engaging for the consumer and still accessible. He also underlined the importance of maintaining good relationships not only between brands, retailers and airports but also with media displays to elevate featured brands and increase revenue.
Within his talk Brown said, “We talk about dwell time a lot, but there’s also a whole lot of digital time that we have available with our passengers. We need to monetize this. We need to create a good twin digital retail and F&B experience with our physical one. If you get the digital bit right, you can unlock the potential of your secondary spaces (such as satellite terminals).”
Alongside this, Brown spoke about the key challenges faced by the industry in 2023, such as economic recession, cost of living crisis, labor shortages, energy and fuel prices, industrial action, VAT, sustainability and customer behaviors. He highlighted that the challenges faced by the industry are being faced by high-street/major chain retailers and our colleagues in their home lives. In turn, this economic pressure on colleagues is driving other operational difficulties.
“Because the UK government has enforced VAT and made a taxed environment, our luxury items are less attractive,” continued Brown. “Colleagues [in Europe]will be enjoying the benefit of having British travelers coming through their airports and spending money. Getting the offer right in that environment means we have tweaked our luxury offerings a little bit. We’ve added in more mid-market offerings like JD Sport and removed more aspirational luxury brands like Mulberry. We do have the passenger numbers coming back and we have the environment that brands are happy to play in so we’re working to capitalize on this in the right way for the current challenges.”