Oct. 25 (Bloomberg) -- With 70 million people passing through every year, London’s Heathrow Airport is betting it can better serve those travelers -- and get them to spend more -- by putting a greater emphasis on shopping.
To shore up its retail credentials, Europe’s biggest aviation hub is expanding personal shopping services and adding specialized retail lounges and a data-collection system aimed at understanding passengers’ purchasing trends.
Next June, the airport is scheduled to open its revamped Terminal 2, which will have 135,000 square feet devoted to shops. Heathrow passengers generated 1.7 billion pounds ($2.75 billion) in retail revenue in 2012, almost double what was spent on Bond Street, London’s luxury hub.
Sales of luxury items at the airport have grown 17 percent on average every year since 2008, and average revenue per square meter of retail has increased by almost half since then, to 30,052 pounds in 2012.
“Heathrow Terminal 2 offers us access to one of the most concentrated, valuable and influential markets in the world,” said Sean Allam, commercial operations director for British retailer John Lewis, which will open its first airport store in the new facility.
An added bonus: With so many people passing through, an outlet in Heathrow can help spread word of British brands to shoppers worldwide. Sandwich shop Pret a Manger, leather goods retailer Smythson, and clothing and housewares purveyor Cath Kidston have all opened shops at the airport to help raise their profile internationally.
“Airports are increasingly important,” said Kate Ormrod, an analyst for researcher Verdict. “It’s such an opportunity to showcase the brand.”
Next month, the airport expects to roll out software that will combine retail data with information on passengers and flights. The idea is to help stores alter displays or have staff on hand with the appropriate language skills based on who is passing through the terminal at any given time -- data far more detailed than city center locations glean -- according to Muriel Zingraff-Shariff, the airport’s retail director.
“We’ll be able to know if certain nationalities prefer red bags and others prefer tan,” said Zingraff-Shariff, a former board member at Harrods. “We can really tweak our offer and change right up to the merchandising at the front of the stores based on the big flights.”
Over the past decade, Heathrow has sought to capture the allure of Asian and Middle Eastern hubs, replacing dimly-lit corridors and closed spaces with soaring ceilings, shorter walks and atrium-style departure areas. Terminal 5, which first welcomed travelers in 2008, was voted the world’s best airport facility in the 2012 Skytrax survey.
As retailers rush to claim space at Heathrow -- there were four brands vying for each shop available in Terminal 2 -- they’re trying to recreate the atmosphere of their city-center boutiques. One feature they’re emphasizing is personalized shopping.
About 90 customers a month, mostly from the Middle East and China, have requested the service since it was introduced a year ago, and in September they spent an average of $2,100 each. The airport’s retail assistants have arranged sales ranging from food and toothbrushes to Dolce & Gabbana crocodile-skin handbags. One passenger spent 98,000 pounds ($156,564) on two watches, and another asked for help choosing a Tiffany’s engagement ring.
The team of eight speak a total of 40 languages and are trained by London’s NHJ Style Consultancy and various brands to ensure familiarity with goods, Heathrow personal shopper Maria Lourenco said while browsing Gucci handbags in Terminal 5.
“Men normally have a list of products, while women are looking for the latest trends,” Lourenco said.
This month, the service will be available to all passengers, and next year Heathrow will open personalized shopping lounges in Terminals 2 and 5. Passengers must book in advance and fill out a brief form with details of what they’re looking for, and the biggest spenders may have goods brought to them in private lounges.
“If there is something special a regular traveler wants on their next journey, we can work in the meantime to make sure that we have that special thing there,” said Hazel Catterall, head of luxury and fashion retail at the airport.
Heathrow ranks third on the list of the world’s favored shopping hubs, after Seoul’s Incheon International Airport and Dubai International Airport, according to Travel Retail Business magazine. Rival Paris-Charles de Gaulle is seventh and Frankfurt is eighth.
Though typical airport duty free goods such as liquor, cigarettes, and perfume still make up much of the retail sales at Heathrow, luxury is the airport’s fastest growing category, Zingraff-Shariff said.
“We’ve seen a definite shift in the way the brands consider travel retail,” she said. “It was a little bit of an afterthought, and now it has become a strategic direction.”
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