INSIGHT 8 • Duty-Free News International • February 2013 www.DFNIonline.com T he identification and valu- ation of success factors in non-aviation business for German airports’ strategic success factors in non- aviation areas have been analysed empirically and displayed by means of a model within the scope of the benchmark study. According to the study, non-aviation includes not only retail (duty-free, duty-paid and food and beverage), but also parking, car rental, other means of transportation, advertisement, real estate development and management and development of new business areas. The final category implies busi- ness development, identification of potential of non-aviation activities and consideration of new trends with the main focus on future revenues. Success factors The study identified 20 relevant str- ategic factors of success based on detailed interviews with retail managers of key German airports including Frank- furt, Münich, Hamburg and Berlin; the manager of Macquarie Group, responsi- ble for commercial activities at Sydney airport; the German airport association; a marketing company specialising in advertising strategy for airports; and a number of airport retail operators. The study concluded that the fac- tors of success are defined as follows: Number of square metres per one million passengers. This suggests a specifically planned area for non- aviation supply, which is regarded as benchmark and therefore as the best possible way for the investi- gated market. Quality and quantity of non-aviation area. This involves dividing these areas into aviation and non-aviation subdivi- sions regarding percentage. Depending on the type of airport and passenger structure, both qualitative and quanti- tative determinants can vary strongly. Merchandise mix displays an interac- tion between branches, products and special offers, which border on each other. Variation in offer and continuous adjustment for every target group creates a challenge for every airport retail manager. Concept of guidance is crucial for the development of income per passenger in the aviation industry. Fast and optimised passenger han- dling is closely connected to large investments in latest technology. Operator’s model is based on deci- sions by the airport’s management and proves to be essential for the devel- opment of non-aviation businesses. Retail theatre involves social media, e-commerce and m-commerce, digiti- sation, and sharing the airports’ worlds of entertainment with stakeholders. Developing Airport City is identified as a special element at airports. While expanding areas for airport cities the location becomes increasingly signifi- cant, creating an attractive spot for various companies and hotels. Creating the terminal concept first and foremost involves terminal layout and architectonical design. DFNI ’s & m1nd-set’s Question of the Month Twenty non-aeronautical airport success factors Kateryna Hess outlines her benchmark study on the success factors in non-aviation business for the travel- retail industry, which identifies factors of success in German airports Agree: 31% Disagree: 69% Three out of ten international travellers enjoy going to duty-free due to the exclusives and novelties. Interestingly, almost every second international passenger from Brazil and Argentina enjoys duty-free because of novelties and exclusives and has the highest shares in the world, followed by the Russian, Chinese, Indian and UAE travellers with around 40%. Peter Mohn, co-founder and partner of m1nd-set, says: “Our research clearly shows that travellers from the BRIC countries and other emerging markets are the most attracted by novelties and duty-free exclusives, whereas passengers from Europe are the least captivated.” Overall, the younger the travellers are, the more interested they are in duty-free exclusives and novelties, as well as women and less frequent travellers. Source: m1nd-set n=2,004 I enjoy going to the duty-free shops because of novelties and exclusives they offer Group 1 Group 2 Group 3 Must-Have Nice-to-have Less-important Factors of success Factors of success Factors of success Number of square metres per one million Fast & optimised passenger handling Local colour passengers Quality & quantity of non-aviation areas Operator’s model Eventisation Merchandise mix Retail theatre (entertainment through social media, e-commerce & m-commerce, digitalisation) Variation in offer and continuous adjustment Developing Airport City for every target group Creating the terminal concept Fair prices for secondary costumers (not passengers) Market research & questioning costumers Cooperating with airlines (exchange of data) Price strategy/ price distinction Business development Quality of staying and atmosphere of comfort Concept of guidance Consideration of trends and new regulations Passenger volume and mixture Source: Dornier Consulting Non-aviation factors for success