TR Consumer Forum Day 2 Keynote highlights

By Faye Bartle |

TR Consumer Forum 2022: Day 2 Keynote Session “Curating a Customer Centric Culture - Part 2"

TR Consumer Forum 2022: Day 2 Keynote Session “Curating a Customer Centric Culture – Part 2″.

For the Day 2 keynote session of the TR Consumer Forum 2022, Fraser Brown, Retail Director at London Heathrow Airport and Sammy Patel, Vice President, Commercial, Vantage Airport Group took to the stage to impart knowledge and further spark discussion on the conference theme of ‘Curating A Customer Centric Culture’.
 
Brown provided an in-depth insight into the Heathrow perspective on navigating the Covid-19 pandemic, and the recovery period.

He revealed how Heathrow has recently seen the fastest rise in passenger numbers in the airport’s history.

“As I stand here, we are back up at 2019 levels on a busy day – we’ve seen 40 years worth of growth in four months,” said Brown. (Referring to the period from March to June 2022. For context, nearly six million passengers travelled through the hub in June 2022, totalling 25 million passengers in the first six months of the year, as previously reported.)

“So it’s no surprise that the system is creaking, but let’s be positive,” he continued. “We welcomed six million passengers in July and we will welcome about 16 million passengers between July and end of this month [September] – so we have come a long way”.

The total passenger volume forecast for 2022 is approximately 54 million – up from just under 20 million in 2021 and on an upward trajectory to 81 million handed in 2019, as ‘traditionally Europe’s busiest airport’.

Fraser Brown, Retail & Property Director, London Heathrow Airport.

Fraser Brown, Retail Director, London Heathrow Airport.

“Net retail income was north of GBP£500m in 2019 and we hope it will be back towards GBP£300 million this year with about 54 million passengers,” he said. “So we are absolutely in ramp-up.”

Brown talked about some of the major factors on the radar currently, including: implementing the daily departing passenger cap of 100,000; recruiting 1,300 new colleagues at the hub with security resource now at 2019 levels (queue times at security – a key measure of a world-class airport service – are ‘95% of passengers through security in five minutes’ and ‘99% through in 10 minutes’, said Brown); the successful re-opening of Terminal 4 in June (including 20+ planned airline moves); and an impressive 38 new retail and F&B outlets and pop-up activations opened since the pandemic began.

From a passenger perspective, Brown shared how, for 56% of passengers flying through the hub, it is the first time they have flown since covid.

“To use a footballing analogy, the are not quite ‘match fit’ yet”, he said, in the sense that they are learning to reacquaint themselves with the entire airport experience again, such as navigating security procedures. “That’s not to criticise passengers,” he stressed. “We are all passengers and we can all get it wrong.”

For instance, the hub has seen a 10% greater reject rates at security and 10% more hand baggage as people are ‘worried about losing their hold baggage’

“And our colleagues that we have brought into the business aren’t yet up to full speed, so quelle surprise we have a challenge in terms of the business getting through this”.

Brown explained how Heathrow’s ‘extensive retail estate’ of around 350 retail units across the four terminals (including 40+ high street and fashion, 50+ luxury, 25+ duty free and 50+ essentials and technology retail units), has typically been one of its ‘key competitive advantages’.

He explained that despite many people thinking of Heathrow as a business travel hub, most of its passengers make one or two trips a year, which Brown is heartened by as it shows people are holding onto their annual holidays. However, as he pointed out, less frequency presents commercial challenges regarding how familiar passengers are with the retail offer.

Fraser Brown, Retail & Property Director, London Heathrow Airport.

Fraser Brown, Retail Director, London Heathrow Airport.

“Our passenger mix has changed,” he said. “Previously it was 50/50 UK residents versus non-residents. It’s now about 70/30.”

As a result: “More leisure passengers means that F&B numbers are good and high-street retail doing well, but the UK’s tourism tax (the removal of VAT free shopping as a result of the UK’s policy decisions from leaving the EU) means we are now a VAT paid environment.”

Addressing the room of travel retail stakeholders from around the world, he added: “We will continue to challenge and to fight that.”

On a positive note, the hub has welcomed a number of new retail partners on board during the recovery period, including Saint Laurent (T2), Burberry (T3), Dior (T3), Hugo Boss (T5), Orlebar Brown (T5), and Chanel No. 5 (T5), as well as some “great” new F&B, such as the alcohol-free ­EL&N concept.

Brown also highlighted the Heathrow Reserve & Collect experience, which has been ramped up to include retailers that don’t have a physical store at the hub. Aspinal of London was the off-airport launch partner for this, followed by Calvin Klein and Tommy Hilfiger.

This service allows passengers to reserve online and collect and pay for their products within 30 minutes. Heathrow’s first physical Reserve & Collect point launched in T5 in 2021 and a second is launching in T2 in September.

Ultimately, he highlighted four simple pillars – digital, the experience, space and the offer – as key components on the radar both now and for the future.

“Meet the customer where they are at. Offer great physical stores but get the digital right – it’s not a choice,” he summarised. ‘Digital can give you offers that you haven’t got physical space for so treat it as as positive.

“Secondly, the experience. Amazon can’t give you a physical experience, in most cases. We’ve got physical footfall – it’s coming back super fast and we can deliver great experiences. That’s great window for brands and retailers to get products in front of consumers.

“Use the space intelligently. This is critical and, equally, digital in-store can help with this.

“Lastly look at the offer, price and range. We need to be all things to all people so getting a balanced offer for all price range is really important.

“That’s where we see the future, leveraging very much on what we have done before.”

His parting message was to “be bold”.

“There was no covid manual and there is certainly no covid recovery manual – this is fantastic time to reset,” he said. “The decisions we make in recovery will be what we are left with and the legacy we give people for the generation. So I would encourage you to be really bold, because there isn’t a manual, you can’t get it wrong.

“People seem to be scared to make the first move. If you are a brand, retailer or airport, make that first step onto the dance floor. If you want to do business at Heathrow, make that first move and come and speak with us.”

TR Consumer Forum 2022: Day 2 Keynote Session “Curating a Customer Centric Culture - Part 2"

Fraser Brown, Retail Director, London Heathrow Airport and Sammy Patel, Vice President, Commercial Vantage Airport Group featured in the TR Consumer Forum 2022 Day 2 Keynote Session “Curating a Customer Centric Culture – Part 2″, joined on stage by moderator Luke Barras-Hill, Managing Editor, TRBusiness.

Sammy Patel joined in the fireside chat style discussion along with the session moderator Luke Barras-Hill, TRBusiness Managing Editor.

Patel spoke about the driving factors for the business encompassing “people, performance and place”.

“It starts with leadership – not only at a corporate level,” said Patel. “We treat our people really well and they, in turn, will treat our customers well. It’s important to have that philosophy all the way down. And we want to find those partners who share the same values.”

He shined a light on the importance of airport design in the passenger experience.

“The days of having a functional experience are gone,” he said. “If we want to drive engagement and inspiration we have to go beyond the bricks and mortar and invest. This brings us onto performance, and we need data and metrics and we need to measure that. We can use information to adapt our offer, making sure we are putting pressure on all those pinch points of the customer journey to get them to the retail area. Also, it’s important to invest in non-commercial areas to encourage dwell in the commercial areas.”

He took the example of LaGuardia Airport, which mostly serves domestic passengers, as a case in point.

“The design is very different to other North American hubs you may know,” he said. “The design puts a lot of emphasis on passenger flows and we have 100% of passengers going through a travel retail convenience store – it is doing fantastically well as it has a lot of eyeballs going through.

“The travel retail environment is changing very fast as brands are falling in and out of fashion, so we are continuing to evolve that store experience,” he added. “For instance, we have created a waterfall in the middle of the terminal building surrounded by retail. We must have an interesting offer to cater to the passenger mix.”

Sammy Patel, Vice President, Commercial Vantage Airport Group.

Sammy Patel, Vice President, Commercial Vantage Airport Group.

In terms of recovering from the pandemic, Patel pointed out that the group’s airports are currently dealing with 100% of passengers with around 50% of colleagues and talked through some of the challenges of that.

“In the US, passenger traffic has probably recovered faster than it has done elsewhere in the world. So penetration is down and revenue is up although what we are finding is that passengers are joining lengthy queues.”

He spoke of the Hudson Nonstop store, featuring Amazon’s Just Walk Out technology, at Chicago Midway International Airport.

“Overnight we found that where we thought we needed less labour we needed more to stock the shelves,” he said. “But it has been very successful.”

Circling back to the issue of passenger caps at Heathrow, Brown said that decisions are shaped by the need to provide passengers with clarity and by looking at the whole picture ‘like a conductor of the orchestra’.

“The travel ecosystem shouldn’t be making promises to passengers that we cannot collectively keep,” he said. “The point of the passenger cap, first and foremost as an airport operator, is that we run a safe airport.

“Safety has to come first,” he said.

“The cap will stay as long as we think it is the right thing to do safety wise.”

Currently, the cap is 100,000 departing passengers and double that for arriving. Brown highlights how this impacts no days, at the moment, in September (as the passenger flow is naturally lighter) and just a few days in October.

“It’s about taking the very top off some of the peaks to make sure the whole system works,” he said.

Photos: Ogival Visuals

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