Airports have increasingly become mega retail hubs across the globe and, today, are retail and lifestyle destinations in their own right. Vanessa Ching speaks with Teo Chew Hoon, senior vice-president, airside concessions division, Changi Airport Group, to find out more.
As one of the top three airports for retail sales, Changi Airport has steadily evolved its offerings to ensure travellers look forward to shopping at its three terminals. It is a formula that seems to be working with record sales achieved again last year — growing by 8% to a record-breaking S$2.2 billion (US$1.6 billion).
Changi Airport offers travellers more than 350 retail and services stores across all three terminals, including international and local brands such as Hermès, Gucci, Yves Saint Laurent, Zara, Calvin Klein Jeans, and Charles & Keith, among others.
As travellers’ appetite for shopping continues to grow, travel retailing has become a multi-dimensional experience for consumers in search of entertainment, presenting many opportunities for brands with the airport’s captive audience and consumer receptivity to indulging in their ‘golden hour’ whims and fancies.
While big-name retailers from luxury to high street increasingly make their presence felt at airports, retailers also recognise a rising demand for experiential and personalised shopping experience and concepts, designed to cater to travellers outside the traditional retail landscape.
How does Changi Airport work to achieve record sales?
Teo Chew Hoon: The spirit of continual innovation underpins our retail strategy and drives many of our new ideas and developments. In addition, we refresh our retail offerings regularly to ensure that the range at Changi Airport continues to excite our shoppers.
We have had a few developments on the retail front in recent years. Shilla Beauty Loft, the world’s first airport beauty duplex store, opened its doors to travellers at Terminal 3 last October. Featuring four big beauty brands — Chanel, Dior, SK II and La Prairie — travellers can take their pick from free makeovers and beauty consultations to a plethora of spa services, in addition to a wide selection of luxury beauty products.
Last year, we also saw the opening of the world’s first Zara duplex store in an airport; and most recently, we welcomed Saint Laurent’s first standalone boutique at Changi Airport.
Pricing is another key value proposition and part of our strategy to position Changi as one of the most attractive shopping destinations. At our new beauty stores, prices are up to 40% cheaper than those in downtown Singapore. For other product categories, we also assure our shoppers that the prices at Changi are no higher than comparable downtown stores. In fact, shoppers save on 7% GST when they purchase before departing.
The Changi Millionaire Draw seems to be a successful campaign. Will this campaign evolve over the next few years?
Teo: Our annual ‘Be a Changi Millionaire’ campaign is not a lottery, where passengers have to purchase lottery tickets for a chance to win the grand prize. At Changi, all passengers have to do is spend S$30 in more than 450 participating stores or dining outlets to qualify for the ‘Be a Changi Millionaire’ draw.
The ‘Be a Changi Millionaire’ Draw has been a great success over the years, registering high participation rate in terms of the number of entries received. The 2015 edition attracted nearly two million entries from 229 nationalities globally. We have crowned six millionaires to date, and we look forward to bringing ‘Be a Changi Millionaire’ back for its seventh run this year. More details will follow very soon.
What categories of products and services do the shoppers at Changi Airport spend on the most?
Teo: The most sought-after are liquor & tobacco, cosmetics & perfumes, luxury goods, electronics & gadgets and chocolates & delicatessen.
What are some of the challenges and opportunities in airport retail? What would you like to see more of in the industry?
Teo: Passengers are well-travelled these days, and their needs and wants are constantly evolving. The challenge for both airport retail and Changi is to anticipate their needs and wants ahead of time. This not only applies to the product offerings at Changi, but the shopping experience as well.
In the past year, Changi has seen the launch of a few firsts — first airport duplex in the cosmetics & perfumes, as well as wines & spirits categories. The experiential elements within both duplexes give passengers a multi-dimensional experience while shopping. We are excited to continue working closely with our retail partners to introduce innovative retail concepts and offerings to delight our visitors.
What are your thoughts on e-commerce and Changi Airport’s ventures in this space?
Teo: Online shopping has become part of consumers’ lifestyle in recent years. With our iShopChangi portal, passengers can browse a wide range of products online and make their purchases.
E-commerce provides us with an opportunity to broaden the customer base by leveraging technology and the convenience factor. iShopChangi’s sales have seen strong growth over the years. Since its launch in 2013, the range of products offered has expanded to include seven categories including beauty, wines & spirits, chocolates & delicatessen, fashion, IT and electronics, timepieces and home, offering more than 6,000 items for passengers who prefer to shop online.