Airport retailers on different digital plane
Distinguishing between retailers successfully navigating the digital world and those failing to acclimatise to the revolutionary change now taking place around them can be quite tough when you are on the outside.
What might make this task easier is if we took it as a given that retailers who successfully operate airport stores are much more likely to be further advanced along the digital journey.
This is an interesting view put forward by Shane Finlay, head of digital for UK & Ire at SAP, who says such retailers have to be much more in control of their logistics infrastructures as a result of the restrictions imposed on them by the airport authorities.
They need a much greater knowledge of where things are and in doing so they “adopt a different mindset” following the opening of stores in airport hubs that can significantly affect their thinking on how they operate their overall business.
“Anybody in an airport needs to know exactly what goods are coming into their stores and not be sloppy and messy with their stock. They need to know what’s on the shelves, deal with the security issues on goods, handle peak travel periods, and do all this without any backrooms to hold stock,” he explains.
He cites Boots as being extremely adept at changing its store displays during the day dependent on long-haul schedules as these customers require different items than short haul travellers. There will also be peaks in in-coming or out-going flights as well as different cultural mixes of customers passing through the terminals at various times. These all have to be dealt with in order for Boots to maximise the opportunity from its stores that only have modest footprints.
Airport retailers are also getting to grips with complex ordering and stock movements across borders. Finlay points to Burberry, which enables goods to be bought in one airport store and for them to then be collected in another hub (which could be located anywhere in the world) when the customer lands.
Fundamental to these sorts of activities is the quality of the underlying data in the businesses and the capability for retailers to be able to leverage actionable insight from the information.
Sadly, many retailers have not yet developed a satisfactorily high level of data handling and insight generating capabilities that enables them to initially see and to then quickly react to changing circumstances in the marketplace by moving inventory around.
Finlay calculates that only 25% of retailers are best-in-class at using data, another 25% have some (limited) visibility of data from which they can react, while 50% have only a minimal view and cannot react.
This is a serious situation and could put at least half the country’s retailers in a difficult position in the future if they do not address the issue. Thankfully he believes that retailers do now recognise the situation and are taking action.
“There is an acute realisation of this, on the back of the BHS failure. They know they need to invest in order to deliver what customers now expect from them,” says Finlay. Needles to say, BHS did not operate any airport stores.
Glynn Davis, editor, Retail Insider