Airports and e-commerce: Does this make sense?


As I write this at the end of 2017, e-commerce is 9% of total retail. Few forecasters dare say where this growth may end. Retailers and commercial property developers have seen their value plunge. Everyone is scared of Amazon.

Airports replicating e-commerce?

With that, airports are now starting to invest in e-commerce. In similar moves to some shopping malls, large airports are replicating their physical offers into an online world.  If airports were right, then the large shopping malls in the world would now all be very successfully competing with Amazon. They don't.

Airports will become the single place where people will do physical shopping

The unique factor of airport shopping is that a consumer has time to spend at airports. And with air travel still being limited to the more wealthy part of the global population, people will continue to shop at airports. Yes, people do compare prices with online offers. So an airport will increasingly have to be competitive. 

But the good thing: Even with a much higher share of online shopping (think home delivery of groceries): airports could become the single place where people will do physical shopping. So for any goods that you may want to taste, sample, try on, or just get your hands on, an airport will continue to be able to offer a great shopping environment.

This unique competitive advantage (other than being able to offer favourable pricing due to tax regulations) goes away if airports & duty-free retailers are forcing themselves online. Not only does the entire value chain of duty-free not have any competitive advantage over Amazon:  They may shop online while they wait - but why would they go to your offering and not to Amazon? Amazon already knows their preferences, payment methods and has an unlimited choice. The carefully curated airport mall - now replicated online - does not.

The right digital strategy is one that gets people into your shops.

Instead of investing in replicating where they can't win, airports, retailers and travel brands should simply focus on the passenger. What can we do to reduce stress for the passenger? How can we tell her about that great offer we want near Gate B8? This will require some huge effort which is bigger than individual airports. No matter whether you focus on a new CRM, faster security of better POS Systems, or work with FLIO: The goal is to get from their digital device into your shops, not to try and outsmart Amazon at their very own game.