This document discusses 5 ways that airports can drive non-aviation revenue through better understanding passenger identities and personalizing experiences. It describes how airports can use customer data from registration and interactions to improve parking, retail, food/beverage, loyalty programs, and advertising. By managing customer identities across channels, airports can target offers and products more effectively to maximize revenue from non-flight services.
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5 Ways Airports Can Drive
Non-Aviation Revenue
The airport industry has experienced significant economic change over the past several
years, with airlines now accounting for just 38% of average airport revenues. With 69% of
airports worldwide now operating at a loss, maximizing non-aviation revenue streams such
as parking and concessions has become increasingly critical (Capa).
However, as relevant, trusted customer experiences emerge as the market requirement
for business success, turning a profit is proving to be difficult for an industry known for
inconvenient experiences and impersonal interactions. So how can airports create more
personal experiences and become a part of the customer journey, rather than just a
gateway to a destination?
Managing Passengers’ Identities
To begin building more meaningful and engaging experiences for travelers, airports need
to know much more than whether the name on a passenger’s passport matches the one
on her airline ticket. To do this at scale, airports must put a customer identity management
solution in place that enables passengers to identify and share information about
themselves across each touchpoint in their journeys.
Distribution of non-aeronautical income (2013)
Car parking 20%
Real estate
income or rent 18%
Rental car
concessions 5.35%
Food and
beverage 5.35%
Utility recharges 3%
Fuel and oil 1%
Other 16%
Aviation catering
service 0.3%
Advertising 4%
Retail concessions 27%
Source: http://www.airport-world.com/features/economics/4939-big-business.html
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Connect with users by giving them a frictionless way to identify themselves
via traditional or third-party sign in. Leading airports are doing this by
gating Wifi access behind a registration page, creating authentication-re-
quired mobile applications or adding eKiosks to concession stands.
Collect first-party profile data from passengers, including their
demographics, interests and behaviors, as they register and interact
across channels and devices. Of course, this must all be done in a way that
complies with today’s security and privacy regulations.
Convert profile data into more relevant experiences by making it easy for
business decision makers to analyze and understand audience segments.
Pass this information directly into email service providers, ad servers and
other technology platforms to improve services, products and experiences.
Driving Ancillary Revenue
Once these pieces are in place, airports can effectively understand the value of their
customers and drive non-aviation, ancillary revenue across these five key areas:
1. Parking
According to Frost & Sullivan, parking accounts for more than 40% of airports’ non-aeronau-
tical revenue. But with off-site parking offering flyers a less expensive alternative, airports
must find a way to compete beyond price by offering a superior experience compared to
third-party lots.
One company that has effectively transformed on-site parking into a key piece of a much
larger connected experience is Unibail-Rodamco. As the largest commercial real estate
company in Europe, Unibail-Rodamco sought to interact with shoppers in its malls in more
seamless and personal ways. After building a repository of known users through traditional
and social registration, Unibail-Rodamco implemented Smart Park.
With Smart Park, customers’ license plates are scanned and connected to their accounts as
they enter the mall’s parking garage, and recognized vehicles are provided automatic entry.
A user’s parking spot is automatically sent to her via push notification and saved in the app.
At the end of her shopping session, she can use the app to guide her back to her spot.
1. Parking
2. Retail &
Concessions
3. Food &
Beverages
4. Loyalty
Programs
5. Advertising
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A clear understanding of flyers enables airports to increase parking revenue by creating
more personalized and convenient experiences than fast park lots. Similar ideas for identi-
ty-driven parking experiences include directing flyers to where they will find the best spots
based on their departure times and terminals, or estimating the time it will take to get from
their parking spaces to their assigned gates.
2. Retail & Concessions
Anyone who’s ever walked through an airport, particularly one in a major city, knows that the
shopping experience rivals that of a local mall. Every few feet pop-up shops and vendors
offer goods and services ranging from designer handbags and pedicures to sunglasses and
souvenirs. Brands like Benefit Cosmetics have even started setting up automated luxury
kiosks stocked with top products.
Clearly these retail stores and stands offer airports
a huge opportunity to generate and maximize
non-aviation revenue - but how?
With permission-based access to passengers’
identities, airports can begin to understand individual
flyers’ ages, incomes, favorite brands, interests and
more. These detailed data points can then be used
to make personalized recommendations and guide
passengers to visit the stores featuring the brands,
products and price points they want.
What’s more, by understanding this type of
information at scale, airports can make more
educated and strategic decisions about the types of
stores to open and where they should be located. Image Source: http://beautypointofview.com
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For example, perhaps an airport discovers that an inordinate percentage of flyers are dog
lovers; it could install a pet store. Maybe males comprise a larger segment than females,
calling for the replacement of a cosmetics store with a sporting goods retailer. Better yet,
perhaps passengers flying Delta Airlines have a higher median income than those flying
United, so concession stands near the Delta gates could be stocked with more expensive
items than those near United.
These types of detailed insights enable airports to create better customer experiences that
optimize retail revenue streams both through sales and space rentals.
3. Food & Beverage
According to the 2014 ACI-NA Concessions
Benchmarking Survey, flyers have spent more
on food and beverages year-over-year since
2009. This indicates massive potential to
further increase food and beverage revenues
by improving passengers’ dining experiences
and thereby charging these concessions a
premium for rent.
Similarly to retail stores, this can be done by
better understanding the types of flyers passing
through your airport. Consider an airport in a
large metropolitan city with a variety of fast food
options and soda vending machines. Business
is mediocre, with short durations and high
turnarounds for concession rentals.
Now, imagine this airport begins identifying flyers across web and mobile touchpoints, and
comes to learn that the majority of them are middle-age businessmen flying to and from
conferences and client meetings. Given this insight, the airport begins seeking contracts
with higher revenue chains, and replacing soft drink vending machines with coffee shops
and bars that serve wine and spirits. Sales immediately begin to surge, and happy vendors
begin to renew concession contracts at a faster and higher rate.
4. Loyalty Programs
Even more challenging than capturing and converting customers is keeping them invested
long-term. One way leading brands drive lifetime customer value is through loyalty
programs. The ideal airport loyalty program will identify passengers, offer them interactive
experiences across touchpoints and lead to personalized rewards - similar to the program
put into place by hotel and casino giant Boyd Gaming.
Median Gross Food & Beverage
Sales - Per Enplanement
CY2009
$4.43 $4.69 $5.00 $5.27 $5.68
CY2010
CY2011
CY2012
CY2013
Source: 2014 ACI-NA Concessions Benchmarking Survey
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To connect directly with customers and gain deeper insight into their individual preferences,
Boyd Gaming encourages them to register for online access to their B Connected players club
accounts. Participants earn points by taking high-value actions across devices, such as booking
hotel rooms, socially sharing promotions with friends and checking in at any Boyd Casino.
Loyalty points can be exchanged for tangible rewards of players’ choice, like vacations
and slot dollars. Because all actions are tied to unique identities, Boyd not only learns
more about its customer base, but it can also measure the impact specific actions have on
conversions - all while driving customer loyalty.
Consider the following actions and rewards an airport could use to encourage passenger
loyalty and drive long-term revenue:
Of course, being able to reach flyers with these types of rewards depends on the ability to
connect with them across email, social, mobile and other channels. To do this effectively,
airports must invest in a solution that can act as a single source of customer truth by
housing all user identity data, and providing seamless integration across other marketing,
sales and services systems.
5. Advertising
Major brands spend major dollars to have their advertisements seen by the thousands of
travelers passing through airports each day. But what if airports could not only guarantee
advertisers that their billboards will be seen by people, but could also promise that they will
be seen by the right people?
Action Reward
Airport check-ins Free valet parking
Social sharing Priority check-in
Friend referrals Free food/beverages
Online or in-airport purchases Coupons for favorite stores
On-site parking Loyalty lounge access
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As airports identify and learn more about the types of flyers passing through their gates,
they can begin to bucket them into particular segments based on information including their
gender, age, income level, Facebook Likes, interests and more. This level of insight into the
types of consumers they can reach is a huge value add for advertisers, enabling airports to
then charge a much higher premium for ad space.
Success Story
As digital ad inventory increased in volume
and decreased in value, ESI Media saw the
opportunity to grow ad revenue and gain a
competitive advantage by offering segmented
audience targeting. Gigya’s Registration-as-a-Service (RaaS) scales and streamlines
the subscription and data collection process across ESI’s digital properties.
By leveraging profile data, including first-party subscriber demographics, content
searches, shares, Facebook Likes and behavioral patterns, ESI was able to
create forty-five premium audience segments. The ability to reach known users
with precisely targeted placements allows ESI to charge sponsors a premium for
these segmented audience campaigns, with yields more than 2X that of ESI’s
pre-existing campaigns!
Ready for Takeoff
As non-aviation revenue becomes increasingly key for airport success and sustainability,
airports must look for ways to create more trusted and personal experiences for flyers. To
learn about how Gigya can help aiports become a valuable part of the customer journey,
visit www.gigya.com or call 650.353.7230.