Post on 11-Oct-2020
DFS GROUP LIMITED
Protecting and Enhancing
Non-Aeronautical Revenue
A Retail Perspective
AUGUST 2015
DFS GROUP LIMITED
DFS GROUP LIMITED
Putting Airport Retail in Perspective
• Retail concessions are the leading source of non-
aeronautical revenue (“NAR”) for airports.
• Airport retailing is the single largest component of
NAR – representing approximately 43%.
Airports and Retailers must become closer partners to enhance Airport
Retail’s contribution to NAR, allowing the airport to seize a larger portion of
the untapped retail potential, while defending existing revenues from a
number of challenges on a global level.
DFS GROUP LIMITED
Protecting existing revenue
from global challenges
Increasing shopping time
Increasing
customer
awareness
More flexible
concession agreement
terms
Maximize NAR potential
Enhancing Airport Retail at the Local Level
The 4 primary areas where collaborative efforts are key to maximize
NAR potential
DFS GROUP LIMITED 4
Involve airport
retailers in the
airport’s retail
marketing
program
planning and
decision-
making
Embrace
technology - enable
collaborative social
media marketing
programs –
including directed
in-airport smart
phone advertising
Continue with
traditional
advertising in
parking garages,
transportation
systems as well as
the ticketing and
pre-security zones
Support
coordinated
promotional/
cross-shopping
opportunities
between
concessionaires
Support and provide
for in-concourse
promotions and Pop-
up retail concepts to
provide stopping
points to slow
shoppers from
heading to their
departure gates
prematurely
Increasing Customer Awareness
Make Airport Retail a key component of a comprehensive Airport
Marketing Program
DFS GROUP LIMITED
Increase Shopping Time
Partner in the effort to provide more time for customers to shop
Enable shopping
opportunities directly in
clubs and lounges
Position the most productive
departure flights in close
proximity to retail operations
Enable quick check-in
and security screening
process
Create “engaging in-store
shopping experiences”
rather than general “terminal
entertainment”
Maximize shopping time
DFS GROUP LIMITED
More Flexible Concession Agreements
Support enhanced retail operations by embracing a more comprehensive
partnership philosophy
• Increase the length of concession terms to enable more
investment in facilities and technology
• Consider “Shared Risk” Concession Formula
• Reduce fixed and variable concession fee rates to support
competitive pricing and enable inclusion of a broader range of
products
Share the risk by enabling or providing for changes to agreements when
circumstances or business conditions warrant – which encourages greater
investment and risk-taking by the airport retailer
DFS GROUP LIMITED
Protecting Existing Revenues
• Many international agencies are promoting regulatory action to curtail sales
of certain consumer products ( i.e. tobacco, liquor and some food items)
• Some Airlines are considering restrictive “carry-on” regulations that may
limit airport shopping or preclude it for those already carrying-on hand
luggage
• Continued pressure from online and domestic channels means airport
retailers must elevate store environments and service levels to stay
competitive
Together we must promote a greater understanding of the unique nature of
the airport retail market and identify and promote creative and innovative
solutions that meet regulatory and market demands while continuing to
preserve revenues and grow the business.
Airports and their retail partners must forge a united front to defend
against global challenges
DFS GROUP LIMITED
DFS Los Angeles International
DFS AT CHANGI TERMINAL 3
DFS GROUP LIMITED
DFS Abu Dhabi International
DFS GROUP LIMITED
DFS Singapore Changi Airport
DFS AT LOS ANGELES – TBIT
DFS AT CHANGI TERMINAL 3
DFS GROUP LIMITED
THANK YOU