How do airport commercial offerings maintain competitiveness in the era of E-Commerce?

Jessica YimManager, Retail Portfolio

Retail & Advertising Department Airport Authority Hong Kong

27 November 2017

Content

Introduction

Airport commercial offerings and E-Commerce – Friends or Foes?

Driving towards O2OReinforcing anchor licences

Airport City SensationLocal CultureCollaboration with Terminal Operations

Online ShoppingE-Customer Relationship Management & Smart dataProgrammatic shopping advice

Car ParkingFood and BeverageCargo

1. Redefining Airport Retail

2. A Total Travel Experience

3. Digitalise, Personalise, Revitalise

4. Advancing Other Revenue Sources

Conclusion

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Introduction

AIRPORT COMMERCIAL OFFERINGS AND E-COMMERCE –FRIENDS OR FOES?A shifting business model throughout the decades has endowed airports with the opportunity to become superlativecommercial hubs that operate beyond an aeronautical scope. However, while favourable factors such as duty freepropositions, reliable footfall and captive audience have for years sheltered airport retailers from downtowncompetition, the rise of E-Commerce is now pushing airport non-aeronautical offerings to yet another newdimension. Airports, as the centre of these commercial activities, now strive to make revolutionary changes to staycompetitive and to grow amidst all the digital innovation that forces airports to revisit their traditional frame ofmind. In light of this, this paper aims to analyse the ways in which airport commercial offerings could effectivelyremain competitive in anticipation of the challenges and opportunities brought about by the emergence of E-Commerce to airports worldwide.

With faster, easier and more informative purchase channels, consumers have less demand to make purchases at brick-and-mortar stores while operators also benefit from lower operating costs. In order to maintain a robust commercialdevelopment, airports must use E-Commerce to their advantage and continue to differentiate from ordinary points ofsale.

Firstly, with the right business model, for instance through an O2O strategy and reinforcing anchor licences, airportscould doubtlessly remain a unique platform for retailers to establish their brand presence and interact with customers.

Secondly, it is also for airports to stimulate spending by reinforcing their inherent advantage to create a total travelexperience that cannot be otherwise enjoyed in a regular shopping mall by closely collaborating with terminaloperations, embodying local culture and creating an ‘airport city’ experience.

Thirdly, airports must embrace the advantages of E-Commerce and smart data to digitalise and personalise theircommercial offerings. Last but not least, with the diverse sources of revenue, other non-aeronautical businessopportunities such as catering, cargo, car parking and advertising ought to be diligently explored.

All in all, as much as E-Commerce challenges the status quo, the digital era opens up immense opportunities forairports to dynamise their non-aeronautical scope of business. It is now for the airports to take the wheel and make E-Commerce a powerful ally.

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REDEFINING AIRPORT RETAIL

1. Leveraging Inherent Characteristics

Airports – “the Formula 1 of Retail”In the Economist’s article Airport Shopping - The Sixth Continent, airport sales are dubbed as“the Formula 1 of retail”, accentuating the continuous, robust growth despite the difficult salesenvironment faced by downtown retailers. Consultancy Verdict Retail even predicts that sales atairports will increase by 73% from 2013 to 2019. Therefore, in spite of the advantages of onlinetransactions over traditional sales, brick-and-mortar stores at the airport are undoubtedly stillvaluable assets for retailers to showcase their brands as well as to engage with the customers.

Driving towards O2OOffline-to-Online (“O2O”) strategic showcasescould be airports’ next Grand Prix destination. Inview of the growing prevalence of E-Commerce, alot of brick-and-mortar retailers have taken a stepfurther to begin omni-retailing. This results in theconsolidation of the number of physical stores, butoperating stores in prime locations is still crucial asweb-rooming and showrooming are equallypopular. Physical stores play an important role inshowcasing newly launched products, conductingproduct trial and fitting, performing post-purchaseservice, brand building as well as interacting andengaging customers in the forms of workshops andbrand-relevant experience. In other words, physicalstores at the airport could turn from merely anotherpoint of purchase into a showroom thatcomplements the retailers’ online stores and in turnmake the customer experience whole.

Airports, with the edge lying with the sizeable,affluent and diverse footfall, are the desirabledestination for retailers to showcase their brands andproducts. Instead of being a channel purely for salestransactions, airports need to build up as a place forlifestyle inspiration to create an indulgent andunique experience to passengers and allow them tokeep abreast of the latest retail trends in a tastefulenvironment. Sales transaction is no longer thesingle indicator of business performance forphysical stores. Instead, they showcase the latestcollection of products, reach out to new customersand those who researched about the brand onlinebefore the visit, and contributes to the finaltransactions which may happen in any omni-retailchannels.

As the landlord, airports have to encourage thetenants to evolve their airport stores into strategicshowcases, with a heavier emphasis on storedesign, assortment width, customer services andengagement activities. For instance, the typicaltravel retail offer of perfume and cosmetics,liquor and tobacco, bags, outwear and smallleather goods can be augmented with a widerarray of apparel and shoes, home decor andappliances or even a wine bar, etc. To enrichcustomers’ browsing and shopping experience,airports’ tenant mix could be further extended tolifestyle categories which are relevant to the well-off clientele such as premium furniture andkitchenware and service offers such as bank withwealth management facilities. Through a matureO2O strategy, airports can offer more attractivestores for the brands to make a bolder and clearerstatement of their equity and derive more valuefrom the airport stores.

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1. Leveraging Inherent Characteristics

Reinforcing anchor licences

While the exact composition of ‘anchor’ concessions depends on a particular airport, Liquor & Tobacco (“L&T”) andPerfume and Cosmetics (“P&C”) are generally the cornerstone of airport retail. Given the importance of theseconcessions, it is vital for airports to reinforce and invigorate these trades by introducing innovative elements thatincreases customer engagement in order to sustain the attractiveness of these commercial offerings and to boost theoverall sales. The importance of customer engagement could not be emphasised enough in this day and age - the sheerfact that customers are empowered and presented with options makes a real difference. Implementing these ideas inanchor concessions make a clear statement about the airport’s strategic positioning in the Age of the Customer.

Virtual Reality (“VR”) is amongst the most popular emerging technologiesthat allow retailers to connect with the new-age buyers. As seen in theprevious section, E-Commerce pushes airports to a turning point wherebrick-and-mortar stores must evolve and bring airport passengers aninteractive shopping experience. At Heathrow Airport, Bacardi gin brandBombay Sapphire launched a pop-up installation in September 2016featuring a VR tour of the gin distillery. Customer engagement wasfurther augmented by having a cocktail bar where a mixologist couldprepare gin cocktail tasters for travellers. By the same token, a pop-uppodium was installed by Yves Saint Laurent at Hong Kong InternationalAirport in 2016, the first of this kind for the brand at Asian airports. Withthe adoption of panorama technology, the podium let travellers experiencea 360° spinning Paris that left many in awe.

Hong Kong International Airport has also grasped the opportunity to add infresh, engaging and experiential elements into the new anchorlicences. The new P&C licence will see a broad range of customerengagement activities, mostly driven by advanced technology. The storeswill feature large digital screens showing new and exclusive products,promotional offers and in-store live events etc. There will also be “magicmirrors” for customers to virtually try on the products. Echoing an O2Ostrategy, the licensee will launch a web-based application, offering a 360-degree visualisation of the stores to the passengers even before they arriveat the airport. Furthermore, the Confectionery licence will bring in multi-sensory customer engagement activities, including 3D projection shows,virtual reality simulators and 3D product packaging printing etc. Alsodriven by customer experience, the new L&T licence will introduce thefirst Hennessy airport boutique in Asia-Pacific as well as an exquisite“whisky library” displaying the products by region. All in all, in the age ofE-Commerce, airports must use their physical stores in ways that involveand empower the travellers. By implementing these initiatives in theairports’ important concessions, airports could effectively accelerate thisstrategic movement and thereby invigorate commercial sales.

Photo source: https://www.dfnionline.com/latest-news/retail/bacardi-launches-bombay-sapphire-virtual-reality-campaign-22-11-2016/

Photo source: https://www.moodiedavittreport.com/ysl-turns-paris-on-its-head-at-hong-kong-airport/

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2. A Total Travel Experience

Airport City Sensation

As passengers’ expectations on an airport continues to grow, a simple shopping mall concept is gradually giving way toan all-encompassing, unique “airport city” experience. As its name suggests, an airport city essentially contains all ofthe commercial functions of a modern metropolitan centre, including retail complexes, entertainment facilities, diningspace, hotels, and office towers, fundamentally changing ‘city’s airports’ to ‘airport cities’. Not only are travellersentertained with a wider variety of goods and services, this emerging model essentially allows airport commercialofferings to stay on top of the game by creating a state-of-the-art aerotropolis that significantly expands the airports’revenue streams.

With an airport city model in place, airport retail would no longer solely rely on captive footfall. Rather, airports standa good chance of turning the game around and start to actively attract footfall. With sufficient attractions, the airportcity would give abundant incentive to transit/transfer passengers to spend a few hours on the landside, attract customersfrom downtown and even attract tourists to purposely make the particular airport a stopover destination that they wouldnot otherwise have done. Ultimately, what is important is that airports must recognise and leverage their strengths thatdifferentiate them from other commercial developments, essentially by providing a total travel experience that cannotbe enjoyed anywhere but airports.

Located right next to the airport, Hong Kong International Airport’s SKYCITY aims to become a world-classdestination commercial development set to transform Hong Kong International Airport from a city’s airport into an“Airport City”. With a vision to create a new destination that goes far beyond the traditional notion of a shopping mall,SKYCITY is poised to become the new landmark of Hong Kong and the passenger traffic of Hong Kong InternationalAirport is projected to rise to over 100 million per year by 2030. this airport city development is expected to bringabout tremendous increase in land lease revenue as well as footfall.

A TOTAL TRAVEL EXPERIENCE

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2. A Total Travel Experience

Collaboration with Terminal OperationsPassengers do not merely look for a good shopping experience; they look for an all-encompassing travelexperience. Factors from queuing time, customer service, airport ambience to facilities all play a role incontributing to the passengers’ journey that in turn have an impact on their spending at the airport. Airport retailprofessionals should therefore actively collaborate with other airport operations units to create a more favourableenvironment that allows passenger to enjoy better retail offerings.

Collaboration with terminal operations is one of the important ways that could give way to a fuller travel experiencethat entices spending. For example, reducing security checks queuing time, enhancing passenger flow andimproving directional signage could effectively increase passenger dwell time. Hong Kong International Airport’s“HKG My Flight” mobile application sees strong collaboration between retail, terminal and information technologyunits from app development to establishing supporting facilities in the terminal, resulting in more effectivepromotions, longer dwell time, improved wayfinding and more personalised retail notifications. Such joint effortbetween different airport units thus bring an upgraded experience to passengers, one that is unique to air travellers.

Collaborating with other airport units – Hong Kong International Airport’s “HKG My Flight” Mobile App

Description Impact on airport retail sales

MyTAG Introduction of HKIA RFID bag tags paired with My Flight App. Arrivals passengers will get a notification when their bags arrive at the reclaim belt.

Longer dwell time - passengers do not have to wait around the reclaim belts and thus have more time to visit airport shops.

AR Wayfinding

To display real-time image of the airport on My Flight App to guide travellers using augmented reality technology. Possibly enhanced with multiple languages.

Increased accessibility and longer dwell time - passengers can find their way to the shops more quickly and easily, increasing the chance of spending.

Flight Tracking

Prompts notification of gate information and boarding status.

Reduce the number of ‘gate huggers’ and allow passengers to better manage their shopping and dining time.

The Hong Kong Concept Zone at Hong Kong International Airport gathers a dozen of iconic Hong Kong brandsand offers an extended ranges of products and services from packaged food, confectionery, dried seafood,prestigious tea to optical services. The wide array of local goods offerings, coupled with a rich cultural ambience,allows travellers to discover this metropolis and bring the best of Hong Kong back home with them.

Local Culture“The future of airports, not as an antiseptic non-place, but rooted in the local culture

and integral part of the urban life.” Rafat Ali, Founder and CEO, Skift

Apart from the typical international brands and travel retail offers, passengers also take delight in local elements,especially leisure travellers. As the first and last impression that most people get of a city, pop-up stores by someup-and-coming local brands with changing inventory differentiates an airport and offers travellers a taste of the localculture. Through these iconic brands and featured retail setup, airports could create an authentic identity thatconnects passengers with the local culture and entice spending.

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3. Digitalise, Personalise, Revitalise

DIGITALISE, PERSONALISE, REVITALISE

Online shopping

“Few [airports] have done enough to differentiate their retail offering from everyone else’s. This needs tochange to create a unique customer experience.” Kian Gould, Founder and CEO of AOE (Duty-FreeNews International, October 2017)

The internet has revolutionised the way we shop. However, while domestic retailers have quickly developedsophisticated online shopping platforms, the same development appears to be led at a slower pace by global airports.Needless to say, there are many challenges faced by airport operators compared to downtown retailers, with the vastnumber of brands and regulatory constraints being amongst dozens of other reasons, but in the end this impending trendmust be acknowledged and tackled in time.

Faced with an increasingly wide variety of commodities being offered on extensive domestic online platforms, airportsmust promptly recognise the importance of digitalising their retail offerings in order to maintain competitiveness -developing airports’ own online shopping platforms might save the day. Instead of having fragmented physical stores ordifferent online sites, an airport online shop would allow passengers to order any time, anywhere and collect all items ata single collection point. Passengers’ actual dwell time at the airport could thus be further utilised, further boostingsales. Retailers would be provided with extra exposure of their products even before passengers arrive at the airportsand would also be able to capture additional sales from those who may not bypass the shop due to time constraints andboarding location.

A successful airport online shop, however, could go far beyond the mere provision of a centralised airport retailplatform. A number of other aspects must also be well planned in advance, such as a flexible returns and refundspolicy, supporting logistics, off-airport delivery services, tax issues, transaction data collection and analysis, onlineexclusive items and promotions, etc. Furthermore, Adobe anticipates in the 2017 Mobile Maturity Report that ‘visit toretail websites on mobile devices will eclipse desktop by Q1 2018’. Hence, airport online shops must be at least mobile-optimised, if not also supported by mobile payments such as Apple Pay, Android Pay and WeChat Pay, so as to make animpactful move towards digitalisation. All in all, airports that are able to grasp the opportunity to digitalise andrevitalise their retail offers in time will earn themselves an important head start in the digital era.

HKairport Shop, a one-stop online shopping platform launched by Hong Kong International Airport in July 2017, aims tobring an unprecedentedly convenient, connected and committed shopping experience to passengers by making a wideselection of products available with the shortest-ever 3-hour pickup lead time, delivery service and customised giftwrapping options. A professional customer services team is also dedicated to answer queries and round the clock viavarious channels from email, hotline to live chat.

Frankfurt Airport has also launched its digitalisation campaign in December 2016 as part of its omnichannel retailinitiatives. Within a year, the platform has attracted support from numerous retailers and the new loyalty scheme has alsobeen successfully tied to the e-shop, allowing customers to redeem rewards such as coupons and free parking.

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3. Digitalise, Personalise, Revitalise

E-Customer Relationship Management & Smart dataBuilding loyalty is not a new topic in customer relationship management (“CRM”), but transformation of data collectedinto meaningful insights is yet to be explored. With the robust traffic and enhanced air connectivity, travel frequency ofair passengers have been unprecedentedly high and the markets airports serving have been significantly extended. It iscrucial for the airports to establish a loyalty programme, not only to acquire new customers, retain and reward existingones, but also to collect data for big data analysis.

In order to enhance the attachment of the frequent travellers and turn them into regular customers, apart from a shoppingreward scheme, more value-added services such as concierge service for reservations and bookings, express check-in,extra baggage allowance and exclusive access to lounges can form a habit of patronizing and enjoying the airport.

The data scope of an airport’s CRM programme can be very extensive, from flight information, navigation in theterminals, browsing and shopping behaviors, usage of airport facilities and lounges, transportation mode to car park, etc.Benefited from the technology, customers’ digital footfall is now largely expanded to pre-consumption behavior such asbrowsing history, product comparison and search of reviews.

The integration of data from various channels with master data management to identify individual portfolio is theprerequisite for a successful loyalty programme, which supports segmentation and creation of customer personas. Bydeveloping a marketing automation platform, airports can deliver more personalized marketing messages with highrelevancy to the travellers, and proximity marketing can prompt geo-specific information to the targeted audience viaibeacons. These data will help paint a much more vivid picture of our passengers’ psychographics and behavior whichwill increase the value of airports to their retail partners.

Real-time and predictive CRM can also be very powerful especially during special occasions. For example, when acrowd in the food court is anticipated due to a number of flight delays, the loyalty programme riding on the app canpush notifications to members and suggest alternative dining options, based on their previous dining behaviors andlocation of their boarding gate.

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Personal shopper service has been introduced in different international airports such as Frankfurt, Heathrow and variousRussian airports. It has been well received and is effective in solving the problem of language barrier of internationalpassengers. Employing well-groomed personal shopping assistants, armed with sound retail knowledge, to circulate inthe shopping area and proactively reach out to passengers who are in need of more retail information could enhancecustomer satisfaction as well as driving sales.

In the future, airports can make use of robotics and cognitive automation to provide personalised recommendations tocustomers, taking advantages of the advancements in machine learning, deep analytics and artificial intelligence fromCRM data. It offers a more cost and operational-efficient solution to create sales leads and no doubt in providing instanttranslation service to shoppers no matter what language or dialect they speak.

Moreover, the evolution of conversational commerce such as the adoption of Chatbots and Voice User Interface toprovide customers with smart shopping advices via airports’ website, app or in-terminal facilities will be the next trendin driving sales, benefiting the on-the-go passengers with limited time to shop around the airports.

Programmatic shopping advicePhoto source: http://blog.davidjones.com.au/-/media/Images/Corporate/Store%20Sevices/_MG_Personal%20Shopper.ashx

Photo source: https://www.queensplaza.com.au/centre-info/personal-shopper/

4. Advancing other revenue sources

While the sources of aeronautical revenue have been relatively steady, the components of non-aeronautical revenueare more diverse and getting more complex over the years. Additionally, given different business models andregional characteristics, the distribution of non-aeronautical revenue varies across regions. According to the ACIEconomics Report 2017:

• The Middle East recorded the highest proportion of non-aeronautical revenue in retail and catering concessions,representing 59.6% of revenue.

• North American airports’ car parking and rental car concessions constituted 59.2% of non-aeronautical revenue,in spite of the relatively low revenue from retail concessions of 16.7%

• In Asia-Pacific airports, property and real estate revenue was at 25.4%, compared with 5.8% in North Americaand 6.6% in Latin America-Caribbean.

ADVANCING OTHER REVENUE SOURCES

Thus, airports must individually assess the importance ofeach source of non-aeronautical revenue and hence thepotential of growth in the relevant categories. In general,however, retail concessions (26.5%) and car parking(22.9%) are the leading sources of global non-aeronauticalrevenues, together accounting for almost half of the totalnon-aeronautical revenue of global airports; whileproperty and real-estate revenues (14.4%), rental carconcessions (7.5%), food and beverage (6.1%),advertising (3.1%) and other non-aeronautical revenue(14.2%) contribute to other half.

Car Parking

Car park revenue is one of the key components of non-aeronautical revenue to manyairports, especially in North America. However, airports are facing challenges inmaximising car park revenues due to the unique industry characteristics and atmosphere:• Dynamic and fluctuating demand depending on airport passengers volume• Diverse customer segments unlike shopping malls• Improved airport connectivity, e.g. rail system and land transportation, giving

passengers alternatives to driving.

To optimise car park revenues, airports could now incorporate digital solutions thatsophistically integrate car park business and operation variables to maximise utilisationand profitability. These automated, self-learning software could then forecast, manageand determine optimised rates based on capacity and demand. Airports’ car park revenuecould thus be maximised by adopting solutions that essentially suggest the most profitablecharging rates depending on passengers’ arrival date, length of stay, demand fluctuationand market dynamics. These solutions have already been applied by Heathrow, Sydneyand Auckland airports to maximise car park income. Furthermore, from a passenger’sperspective, such a parking system could provide value-added functions that facilitatetheir advance planning, thereby attracting them to drive to the airport, including real-timeparking slots availability and a smart pre-booking system.

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4. Advancing other revenue sources

Food and Beverage

E-commerce brings about an excellentopportunity for airports to create a smart andhassle-free dining experience. To enrichcustomers’ dining experience, airports couldnow go beyond menu diversity to incorporateleading technology and innovation into diningservices. Smart devices, such as the use of iPadsand mobile applications in airport restaurantsand boarding gate areas, allow passengers toorder and pay without locational constraints,thereby also increasing their shopping dwelltime and enhancing their relaxation time. Thistype of smart dining service could be furtherenhanced by incorporating gate delivery toincrease spending by ‘gate huggers’ who wouldhave otherwise missed out on the dining andshopping experience. The increasing popularityof low-cost carriers also sets a favourable sceneto the development of food pre-ordering andgate delivery services as more passengers tendto dine before their flight.

Apart from smart dining, hybrid dining alsohelps airports retail and catering offerings tostay competitive. Traditionally, cateringoutlets produce nominal rental valuecompared to retail outlets, representing justover 6% of non-aeronautical income inglobal airports. However, as mentioned inthe previous sections, airport stores aregradually turning into airport retailers’prized O2O showcase platforms. In light ofthis trend, airports could remake their diningconcessions with a hybrid concept thatessentially entails incorporating retailmerchandise and/or entertainmentelements. Instead of deliberately walkinginto a showroom, passengers would then becasually exposed to showcase productswhile enjoying their meal inside arestaurant. Hong Kong International Airporthas introduced this dining concept intorecent concessions, such as Caviar House &Prunier and Lady M New York. Forairports, the rental income from food andbeverages concessions could thus beincreased; while for passengers, diningwould continue to be a profound element intheir airport experience, especially fortransfer passengers with a long layover.

Retail

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4. Advancing other revenue sources

CargoAs E-Commerce grows from strength to strength, the globalisation of the retail industry is also pushing the world’s aircargo throughput towards a climax. Buyers are exposed to an increasing variety of commodities, from the usualfashion and accessories to luxury goods and even to perishables; sellers are no longer only depending on sizeablebusiness entities but are also selling to overseas individual end-customers; while buyers could purchase from bothconglomerates and boutique sellers. Seeing that E-Commerce transactions are fast-paced with buyers now expecting toreceive their orders swiftly without a hitch, air cargo is becoming ever more important in facilitating cross-bordertransactions.

In anticipation of the increasing demand from E-Commerce on air cargo, airports must be prepared for handling theexpected load in the coming years. Strong cross-border transactions have bolstered this air freight demand growth,evidenced in number of global export orders that has remained a six-year high in May 2017, according to IATA’s Air

Freight Market Analysis May 2017. Global air freight markets demand, measured in freight tonne kilometres (FTKs),grew 12.7% in May 2017 year-on-year, which is more than three times higher than the five year average growth rate of3.8%. The demand is very much in place, which leaves it to the airports to gear up in order to take advantage of theopportunity. In consideration of the air freight demand growth, airports must address two important issues.

The biggest challenge brought about by the growing volume of cargo is, without a question, capacity in terms of landand handling facilities. It is not to say that every airport ought to expand its cargo facilities, but as the landlord,airports must review its provision of land to the cargo operators when planning ahead for its commercial developmentin light of a changing air freight climate. Hong Kong International Airport, crowned the busiest cargo airport in theworld, sees the expansion of DHL, Air Mail Centre and a new franchisee Kwo Lo Wan E-Commerce Logistics Facilityin preparation for the E-Commerce demand. At Memphis International Airport, the second busiest cargo airport, 34million sqft of airport property is leased out to FedEx, while UPS is also expanding their airport facilities from thepresent 293,000 sqft to 424,000 sqft, which will increase their packing sorting capability to 59,800 packages per hour.

The second issue that airports will encounter is conducting security screening of such an enormous volume ofcargo. As E-Commerce generates more B2C transactions, a greater number of goods are loose-loaded rather thanuniformly ordered in bulk. The effect to that on airports is a lengthened processing time in various handlingphases. Airports must find a way to speed up security screening, which becomes particularly crucial after ICAO’srecent announcement of its new policy direction that seeks to implement 100% screening by 2021 in an attempt to stepup international air cargo security. At Changi Airport, US$15.4M was invested into building an E-Commerce Airhubat Changi Airport, opened in April 2017, To enhance cargo handling facilities and allow faster deliveries to onlineshoppers. The new technology-driven and automated scanning and sorting system now reduces total turnaround timefrom six to three hours. Apart from upgrading handling facilities, Hong Kong International Airport is also exploringother alternatives that do not take up extra land at the airport, including upstream screening and off-airportscreening. All in all, airports must be equipped with adequate infrastructure and facilities so as not to miss out on thisgreat opportunity presented by E-Commerce and to increase franchise and leasing revenue.

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Conclusion

CONCLUSION

Inevitably, airport commercial business faces great challenges brought by consumerbehaviour changes in the era of E-Commerce. In this new commercial landscape,airport operators must embrace these changes by incessantly adjusting and enhancingtheir offerings to remain competitive.

We analysed a few major ways to maintain the competitiveness of airport commercialofferings in this paper. In essence, it is crucial to provide passengers with a morecomplete shopping experience in anticipation of the challenges and opportunitiesbrought by the emergence of E-Commerce. Airports would have to go beyond theconventional trade-mix and promotion strategies, and more proactively engage thepassengers in different ways. It is also very important to conduct passenger research ona regular basis to keep abreast of changes in market trends.

The future of airport commercial business is intriguing in view of the changesmentioned. For those who are able to transform their offerings ahead of the curve,massive opportunities await.

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