Here’s the next part of Tara Prabhakar’s take on the sixth sense of retail. Read on.
The last few weeks have been hectic and spent in hotels and airports. As a result the topic that’s top of mind is dwell time – the time spent waiting while traveling. Dwell time is the goldmine that all airport retail is targeting. But first, let us look at some statistics on the business of domestic air travel in India. Domestic air travel in India has shown steady double-digit growth for 16 consecutive months till Dec 2011 (when it recorded an 8% growth). India’s domestic passenger numbers increased 16.6% to 60.7 million passengers in 2011, averaging out at 5.1 million passengers per month. LCC (Low Cost Carriers) held 50% of the market in Dec 2011 and their penetration has almost doubled over the last five years. These numbers mean that domestic air travel is growing exponentially and will continue so till 2020 (despite rising air travel prices). This also means that more new flyers are added every year and will continue so (given the poor road and rail infrastructure in the country and the rising migration for employment). This presents a potentially audience for retailers but the offering at the domestic airports leaves a lot to be desired. No doubt airport commerce is growing but it is still not capitalizing on the huge potential on display. A recent survey of passengers at the Delhi airport revealed that only 50% of them had spent money at the airport! I believe that this is because the method behind designing the retail mix at a domestic airport needs a relook. International airports can be influenced by Changi or other successful models but for the domestic airports we need to develop a customized model; one that is designed for the peculiarities of Indian aviation. While designing retail options to target dwell time at airports it is useful to understand, debate and be inspired by the following framework: Look beyond the standard profiling parameters (age, disposable income or occupation) - these parameters can help design a retail mix that generates the maximum revenue per square foot in domestic airports. Experience is about travel history – has the person flown before, how often, and when last. This has an impact on how much time the traveler spends at the airport (novices prefer to budget time conservatively and spend more time at the airport), comfort with navigation around the airport (awareness of the available services and confidence to move around the airport as opposed to congregating in front of departure screens or boarding gates) and a preference for browsing over buying (unless it is a familiar or functional need such as F&B, magazines, apparel brands). Purpose of travel is not just business or leisure; there are finer nuances in both business and leisure. When there is an urgency driving travel, the mindset and resulting behavior at the airport is very different. The hours at the airport in this case can become idle time spent waiting for the next step towards the travel goal and there is no attempt to browse or shop proactively. Spending is focused on goal-oriented activities. For example, spending at a restaurant to get a quiet space to conduct a phone call or meeting or access to a charging point. Group profile is about profiling the travel group – colleagues, couples, families (with elders / kids / women), size of the group, gender ratio in the group (men to women). This impacts how the individual behaves at the airport and can be the subject of several columns. For example, you can still see signs of tribal behavior when groups travel together – herding the flock, hunting, guarding… This is the mentality that I urge my retail clients to understand and service via the merchandise they decide to stock, how they price and promote it and where they locate it at the airport. Gratification is the final element in this mix and has tremendous influence on how people spend their time and money at airports. An individual or a group chooses to indulge in an activity or a purchase for purely utilitarian reasons (such as buying a bottle of water / medicines) or with a certain emotional pay-off in mind. This could range from stimulation to relaxation to affiliation to self-expression. The gratification sought could change on every trip or if the dwell time is long enough, it could even change during the trip. Gratifications could differ in manifestation by life-stage and purpose of the trip. For example, what is relaxing when you are traveling on business or with family or alone is not the same.
When designing the retail mix at the airport, it is useful to see if all dominant gratifications are catered to or whether certain gratifications are being overserviced. A casual look at any of the domestic airports would reveal that over-servicing is the norm today. Overservicing typically means more choice to the shopper but fewer returns to the retailers. Looking at the unmet gratifications help allocate retail space efficiently and improve conversions for each outlet. This framework imbues airport retail design with a native intelligence – designing for the Who, What and Why of travel. Following this approach, we would not have book stores in Bangalore and Pune airports sell the same merchandise. We would have more non-English content in both airports (Kannada, Tamil and Malayalam in Bangalore and Marathi, Hindi and Malayalam in Pune). We would have a Café Coffee Day or Barista closing off a small area in their seating space, soundproofing it and offering it as a business lounge at a small premium. We might even have a Handicrafts Emporium stall in Madurai or a Dilli Haat store in (you-guessed-it) Delhi. The Croma store would not be selling just tech; it could be selling songs to load on your MP3 player / phone and there could even be a version of Big Bazaar selling packaged Ragi puttu flour, Holige, Priya pickles that you could carry as a gift from Bangalore to your relatives in Lucknow (All views expressed here are the author’s alone and not that of TNS or any affiliated companies. To contact Tara Prabhakar you can either call +919731860033 or email her at tara. email@example.com)
When designing the retail mix at the airport, it is useful to see if all dominant gratifications are catered to or whether certain gratifications are being over-serviced. A casual look at any of the domestic airports would reveal that over-servicing is the norm today. Overservicing typically means more choice to the shopper but fewer returns to the retailers. Looking at the unmet gratifications help allocate retail space efficiently and improve conversions for each outlet.
Tara Prabhakar, Development Director, TNS Retail & Shopper APAC