HKIA re-engineers retail for post-covid era

By Charlotte Turner |

Cissy Chan, Executive Director, Commercial, Airport Authority Hong Kong (AAHK)

Cissy Chan, Executive Director, Commercial, Airport Authority Hong Kong (AAHK).

In an exclusive interview, Cissy Chan, Executive Director, Commercial, Airport Authority Hong Kong (AAHK), tells TRBusiness that while the implications of the global pandemic have been severe, the new scenario has ‘stimulated both AAHK and its retail partners to re-engineer its services’.

Since the start of this year, many of Hong Kong International Airport’s (HKIA) retail and catering units have temporarily closed as the number of passengers declined sharply due to the coronavirus (Covid-19) outbreak and the subsequent travel restrictions.

However, Chan says that even during the peak of the crisis, HKIA was able to provide ‘essential services’ to both passengers and airport staff.

“On the positive side, the pandemic has stimulated both the AAHK and our retailers to re-engineer our services,” explained Chan. “Broadening retail opportunities included introducing a new pop-up concept, tapping into the new primary concerns of its customers.

“With health and hygiene being of the utmost priority during the pandemic, a ‘Clean Freak’ pop-up store opened at the Departures Level in July.”

TAPPING INTO NEW PASSENGER CONCERNS AND DEMANDS

Chan continued: “We have introduced a virtual sales trainee (making use of AI); the world’s first four-in-one CLeanTech intelligent disinfection chamber and a wide selection of sanitising products, which have brought in a satisfactory sales return.

The ‘Clean Freak’ pop-up store opened at HKIA on the Departures Level in July of this year.

The ‘Clean Freak’ pop-up store opened at HKIA on the Departures Level in July of this year.

“Moreover, we have been proactively working with the airport tenants to leverage our online shopping platform, ‘HKairport Shop’, to generate sales.

“At the moment, we have over 6,500 skus in beauty, wine, packaged food, lifestyle travel accessories, etc available. We have also enhanced our online shop free delivery service. Together with our on-going promotions, it has been performing exceptionally well.”

“On the positive side, the pandemic has stimulated both the AAHK and our retailers to re-engineer our services,” says Cissy Chan.

Cissy Chan: “On the positive side, the pandemic has stimulated both the AAHK and our retailers to re-engineer our services.”

Chan insists that the challenges represent new business opportunities and that AAHK is planning various promotional initiatives to be launched when air traffic recovers.

NEW LOYALTY PROGRAMME

She said: “For example, we are in the final preparation stages of launching our own loyalty programme under ‘HKairport Rewards’.

“Shoppers and diners will receive rewards for repeated patronage. Through better understanding the preferences of individual passengers, we aim to tailor unique and personalised experiences at every step of the passenger journey.

“All in all, we are dedicated in providing a hassle-free journey and will continue to explore new retail options to cope with the new travelling trends.”

Interestingly, despite the pandemic pulling focus and resources, AAHK remains fully committed to strengthening its sustainability performance and ‘resilience’.

For example, a new Sustainable Management Recognition Scheme has been introduced to promote and encourage wider adoption of sustainability practices across the whole airport community, among others.

At the moment, HKIA has over 6,500 SKUs in beauty, wine, packaged food, lifestyle travel accessories, etc available via its HKairport shop ecommerce platform.

At the moment, HKIA has over 6,500 skus in beauty, wine, packaged food, lifestyle travel accessories and others available via its HKairport shop.

“AAHK is also conducting a climate resilience study to review HKIA’s operational resilience and capacity in adapting to a changing climate, while working on the target for the airport-wide carbon reduction programme for the next five years.”

NEW TOUCHLESS PROCEDURES

Back on the topic of Covid-19, Chan expects it will take two to three years for global air traffic to return to pre-pandemic levels. To support its recovery, she says it is necessary for the aviation industry to put in place robust preventive measures.

“Among other measures adopted at HKIA, we have made it mandatory for all passengers to wear face masks in the restricted area and undergo temperature screening.

“We have stepped up cleaning and disinfection in the terminal. Leveraging advanced technologies to strengthen the preventive measures is a key step in our overall strategy.

“For example, we are introducing facial recognition technology to transform the passenger journey at HKIA into a touchless and seamless process, from passport check before entering the restricted area, through to boarding.”

As reported, transit/transfer services at HKIA have gradually resumed since 1 June, but the pace of air traffic recovery will depend on numerous factors.

HEADWINDS OF ANOTHER NATURE

Chan said: “Travellers’ expectation and preferences may also have changed after the pandemic. The aviation industry will have to respond to changes promptly. We will closely monitor developments and plan our offers and services accordingly.”

"We are in the final preparation stages of launching our own loyalty programme under 'HKairport Rewards',” says Chan.

“We are in the final preparation stages of launching our own loyalty programme under ‘HKairport Rewards’,” according to Chan.

As has been reported by TRBusiness, in the last 18 months HKIA has had to endure headwinds for reasons other than Covid-19.

In the Top 10 Airports report, recently published by TRBusiness magazine, ongoing 2019-20 Hong Kong protests were triggered in June of last year by the government’s introduction of the ‘The Fugitive Offenders and Mutual Legal Assistance in Criminal Matters Legislation (Amendment) Bill’.

The bill was withdrawn in September, but demonstrations continue, albeit much dampened by the coronavirus pandemic.

Knock-on effects included flight cancellations and disruption at HKIA in August 2019, resulting in dislocated passenger flows and delays, which ultimately impacted operations for Gebr. Heinemann, CDF-Lagardère and The Shilla Duty Free.

LUXURY ZONE UPGRADES

During this same period, HKIA admits that operating expenses had to increase in part due to ‘additional retail promotional activities’ necessary to ‘offset the impact brought by social unrest’.

One of the new stores which were introduced at the end of 2019 as part of a major luxury zone renovation.

One of the new stores introduced at the end of 2019 as part of a major luxury zone renovation.

However, despite the challenges, Chan says AAHK is committed to offering passengers ‘an unrivalled retail experience as usual’.

“We completed a transformation of the luxury zone at the restricted area of HKIA at the end of 2019, introducing new luxury brands including Panerai, Breitling, Chloé, Montblanc, Salvatore Ferragamo, Rimowa, Roger Vivier, Saint Laurent and Alexander McQueen.

“The two double-storey ‘Icon Shop’ licences were awarded to Chanel and Louis Vuitton. The Louis Vuitton flagship store marks its first entry into HKIA.”

To upgrade the luxury shopping experience even further, HKIA is currently renovating the public areas of the luxury zone, which will be completed by end of the year. A brand new personalised service, ‘Luxury Reserve’, was also introduced in October 2019.

“Passengers can send in their request 48 hours before departure to reserve their desired products and complete the sales transaction in-store,” explained Chan

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