The second day of the Hong Kong Trinity Forum 2015 began this morning with the initial question, ‘Does a satisfied customer spend more?’ and this was billed as understanding the correlation between consumer satisfaction and airport economics’.

 

Led by Moderator Angela Gittens, Director General, ACI World, it looked at some of the latest research in airport economics and analysis of service quality at airports worldwide, as well as new studies in the pipeline.

 

The panel in this session included Ivy Wong, Senior Vice President Airside Concessions, Changi Airport Group (CAG); Paul Baxter, Senior Vice President Operations & COO, Halifax International Airport Authority; Walter Seib, CEO of HMSHost International; and Gerry Munday, Global Travel Retail Director, Furla.

 

Moderator Angela Gittens began by saying that academic and professional research shows that the higher satisfaction there is, the more people will spend and she noted that a new report is currently being produced on this very subject.

 

Several factors come into play on the satisfaction side, including value for money, ambiance, the location of the airport and the proportional size of total passengers that are international – amongst others.

 

However, Gittens added that in some early findings at ACI, there was only a moderate correlation between concession revenues and satisfaction.

 

She said it is similarly not the case that the more retail area you have necessarily translates into greater sales, although the full report will doubtless shed more light on this when it is published in mid December this year.

 

Commenting, Walter Seib, CEO of HMSHost said that in his experience there is a correlation between customer satisfaction and spending up to the €40 ($45.61) level, but thereafter the customer expectation rises much higher with regard to the purchase after spending this amount.

 

Meanwhile, Gerry Munday, Global Travel Retail Director, Furla said that fashion and accessories is not really a planned purchase and if the environment is right then the customer will spend more. Ivy Wong from Changi Airport added that value for money remains important – as people ‘have the estimate in their heart’ in terms of what they really want to spend.

 

However, Halifax Airport’s Paul Baxter said the more stress free the environment, the better the experience, even if there is no guarantee that one particular aspect will influence things, but more a combination.

 

He said positive handling of security is also a big help to improve dwell times, just as retail sales tend to increase when the weather is actually bad at Halifax. He says the airport also places great importance on friendly and courteous service from staff as a priority, but stressed that a good quality retail offer is still paramount.

 

Asked what the key drivers are that influence airport commercial, Munday agreed with Baxter that it is a combination, with every single dimension working together and this also determines the retail dwell time. She added that the airport also has a role to play here.

 

HMSHost’s Seib said he believes in facts and figures and when the company does its research with 10,,000 responses he said it is evident that happy customers do generate more money, But he also said that the timings related to when passengers are called to their gates can also have a big influence on sales.

 

He says sometimes people are called too early and just sit there for far longer than they need to and this is a lost opportunity.

 

Interestingly, Changi’s Wong said there are a lot of low-cost carriers working out of the airport now and their flight patterns are very difficult from the olds days, when routes were more predictable. She said this sometimes makes it more difficult from a retail planning aspect, since the customer profile changes.

 

Furla’s Munday concurred, adding that it is also very important to recognise when airlines move, because you can’t move a store and that outlet location may have been selected purposely in the first place. She said this is when Trinity falls apart.

 

Halifax’s Baxter said he would support Munday’s point on this, since his airport has a policy of trying to assign certain carriers with certain gates – because they are closer to the shops – and Changi’s Wong also agreed with Munday.

 

Meanwhile, Seib said that as a food and beverage guy he sees the picture from the kitchen to the consumer, but they need to look at it from the other way round.

 

So what should be the priorities for airports and retailers, asked Gittens?

 

Munday said the model needs to change as the industry is not looking at the problem through consumers eyes. She said the industry needs to get smarter as the airport is the window to the world, but this is not being utilised to the maximum and Munday also pointed to the large amount of data available, saying this was not being used to its best ability.

 

Forthrightly she said that the industry needs to regain its customer confidence and she gave the example where she sometimes goes into Malaga Airport and finds merchandise more expensive than the High Street – so why should these consumers buy?