This paper examines the evolving landscape of airport retail and proposes a mixed-methods research plan to guide global marketing strategy development for Dufry AG, one of the world's leading travel retailers. Drawing on industry benchmarking studies, market research from airside retail management firms, and revenue trend data spanning 1999 to 2009, the paper outlines five core research questions addressing global marketing capacity, competitive strategy, and cultural adaptation. The proposed methodology combines in-vivo traveler surveys with secondary document analysis, using CADA and SPSS platforms for data analysis. The paper also identifies key limitations, including sample size constraints and the absence of randomization in the sampling plan.
Flight View, the company behind mobile applications that track real-time flight information, polled 2,600 travelers on what they want on-the-go while shopping in airports (Rogers, 2014). Market research anthropologists who track cultural trends have identified extensive changes to non-aeronautical services located in airport terminals (Mattlin & Currie, 2011). Airport retail shopping has changed dramatically over the past decade, morphing into airport cities or airport town squares (Clifford, 2011). The range of retail shops has expanded to encompass a wide array of services, and — as airlines curtailed catering on flights — food-to-go became a central element of the customer experience (Mattlin & Currie, 2011).
The mall company Westfield Group manages airside retail sites at airports located in Boston, Miami, and Newark. Their market research studies indicate that travelers on domestic flights spend an average of more than one hour waiting in airports after passing through security (Rogers, 2014).
MarketPlace Development, a company that manages and leases retail space at Philadelphia International Airport and at LaGuardia Airport, reports that the relationship between airlines and airports has changed dramatically. The costs of operating an airport can no longer be borne by the airlines alone. Airports must be self-sustaining, going enterprises in which retail functions as a robust source of revenue. According to aviation industry consultants MAC Consulting and Intervistas, the airlines themselves account for as much as 41% of overall airport revenue, while retail operations — including food and beverages — account for 19% of total revenue. The remaining percentages of total airport revenue come from car rental companies and airport parking.
Airside retail management companies will need to articulate business operational and marketing plans that are responsive to emerging customer expectations and to the increased potential for revenue generation through airside retail services. On average, airports with modern retail management and configuration earn roughly 80% of their retail food and beverage revenue from airside operations (Mattlin & Currie, 2011). In order to maximize non-aeronautical revenue, a company must engage in comprehensive business planning, programming, and implementation, and must navigate a business model shift from an infrastructure approach to a market approach (Mattlin & Currie, 2011).
A comprehensive industry outlook study and expertise in travel retail strategy consulting provided the basis for a study conducted by the Arthur D. Little firm, which examined best practices in top-performing airports (Bamberger et al., 2008). The study confirmed that airports' efforts to develop non-aeronautical revenue sources have been the key driver of robust growth in the airport retail sector (Bamberger et al., 2008). Should air traffic continue to decline, airports will be all the more strategic — and likely more dependent — upon alternate sources of revenue, which will increase pressure on airside retail establishments (Bamberger et al., 2008). According to the study, airports are not finding it easy to improve performance and optimize the management of retail food, beverage, and concessionary businesses on their premises (Bamberger et al., 2008). In addition, retail operators are sandwiched between the new expectations of airports and of consumers, and the need to reconfigure their operations and facilities to accommodate the different sort of transactions that airport shopping entails (Bamberger et al., 2008).
Non-aeronautical revenue sources show the greatest growth potential of all sources of airport revenue, and they are among the most important to an airport because of changing consumer expectations (Mattlin & Currie, 2011). Food, beverage, and concession revenue in airports grew by 30% over the ten-year period from 1999 to 2009, rising from $1.0 billion to $1.3 billion (Mattlin & Currie, 2011). At 32.9%, medium hub airports had the greatest increase in sales over that period. Small hub airports increased by 31.1% and large hub airports increased by 29.2% (Mattlin & Currie, 2011).
A shift from main street marketing to local branding is consistent with the airport functioning as a gateway to the market (Mattlin & Currie, 2011). According to the 2010 AIC-NA Benchmarking Study, the origin of brands in retail outlets located in airports reflected the following percentages: 25% were airport brands, 25% were local and regional brands, and 50% were national and international brands (Mattlin & Currie, 2011).
Dufry AG is one of the world's leading global travel retailers, serving travelers in 45 countries with over 1,200 shops. Dufry duty-free and duty-paid shops are located within 157 airports, as well as in travel retail channels such as seaports and on-board cruise liners. The company has its global head office in Basel, Switzerland.
Dufry is poised to conduct an analysis of its strengths, weaknesses, and other constraints, and to develop specific actions that will address expected profit, sales targets, and budgets as the company transitions to a more globally oriented marketing plan and competitive strategies. In view of this, a research objective is to determine the cultural constraints imposed by uncontrollable elements of the environment that will require adjustments to priorities and transformation of the current marketing plan.
The FlightView survey outcomes provide a foundation for further market research activity specific to Dufry's business and marketing interests (Rogers, 2014). This paper proposes to explore the fit between the changed non-aeronautical retail landscape and the marketing, sales, and growth performance of Dufry AG operations. A fundamental objective is to identify promising marketing strategies and salient opportunities.
As this research is both exploratory and descriptive in nature, a mixed-methods approach to data collection and data analysis will be used. Phenomenological philosophy and an inductive approach undergird this research; as such, the individual accounts of study participants are considered important and valid sources of data.
Several forms of data collection will be employed in this study, including primary research in the form of survey questionnaires administered to currently traveling individuals, and secondary research in the form of document and content review that will encompass a broad range of print and digital resources.
In a mixed-methods inductive approach, inquiry is guided through the use of research questions derived from a review of the literature and expert understanding of the context and field of study. The research topic is global marketing strategies within the travel retail industry. The literature review includes research in the areas of customer-focused organizations, international and global retailing, and strategic marketing.
The research questions represent key areas of consideration against a backdrop of developing strategy that equally serves domestic and international marketing initiatives. Triangulation of data will assist with reliability, enable the researchers to identify emerging themes, and foster the development of actionable insights.
The following research questions have emerged from the literature search.
Research Question #1: What capacity is required of an airside retail management and service provider to engage in global marketing?
"Five questions on global marketing strategy"
"Survey design, CADA, SPSS, and competitor analysis"
"Sample constraints and twelve-step project schedule"
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