NEW ZEALAND. “One of the most advanced digital airport retail experiences in the world.” That was Auckland Airport’s lofty target when last August it announced a tie-up with German global technology service provider AOE to create a new omni-channel shopping platform. The “multi-retailer mall”, the company pledged, would allow international travellers to purchase products and services online and via mobile platforms at any stage of their journey, from pre-flight to their return home.
“We are excited to partner with AOE to continue the transformation of Auckland Airport into Australasia’s most digital gateway and to provide our global and domestic passengers with a one-of-a-kind personalised journey,” said Auckland Airport CEO Adrian Littlewood when the agreement was struck.
Now that journey has begun. In early July, Auckland Airport soft launched ‘The Mall’ (https://themall.aucklandairport.co.nz/en/) , the name chosen for the ambitiously crafted platform. During the soft launch period, passengers can shop across three airport retailers and pay via a single online basket and collect their items from a single airport collection point.The launch retailers are airport concessionaires Aelia Duty Free and two New Zealand brands, Icebreaker clothing and Walker & Hall jewellery.
The programme deploys AOE’s OM³ suite (Omnichannel Multi-Merchant Marketplace). Following the soft launch, further features and retailers will be added in coming months, including a Chinese language proposition in 2019.
In a Moodie Davitt Report exclusive, Auckland Airport General Manager Retail and Commercial Richard Barker told Martin Moodie about the soft launch and the more ambitious agenda that lies ahead. AOE Founder & CEO Kian Gould also comments on some of the breakthrough elements of the Auckland initiative.
Martin Moodie: Richard, what does the soft launch represent to Auckland Airport?
Richard Barker: It’s two years of work coming together. We’re beginning with a soft launch and then we’ll ramp it up in coming months. The team has been working really hard, including Kian’s team at AOE, to take an idea from two years ago and make it happen. As you know from your own digital platform, what looks really simple for the consumer – which is deliberately so in our case – has a lot of complicated stuff behind the scenes to make it actually work. We’re very pleased with how it’s going.
The consumer interface certainly looks simple and the site is easy to use.
That’s been key because we want to have multiple retailers on there. Also, many of our smaller retailers don’t have the same sort of digital resources that, say, the big duty free operators, such as Aelia, have. We wanted to present a clean look and make it easy to have everybody look really slick and seamless from a customer perspective. We benchmarked ourselves off the best practice in online retail, not just travel retail – because, as you well know, those other places are where our passengers and customers are shopping. So we need to be up with best-in-class online retailers such as [British online fashion and beauty retailer] ASOS (http://www.asos.com/)
You’ve opted to start with three retailers – one anchor store duty free retailer and two specialists. What’s the thinking there?
With duty free, we obviously have the complicated situation of having to have dual duty few retailers [at the airport], and Aelia were very keen to participate. The Loop [ARI] are very involved in some of their own things, but in due course, I expect them to take part.
AOE pushes the boundaries, supported by Kiwi ‘can do’ attitude
AOE Founder & CEO Kian Gould describes Auckland Airport as one of the most “innovative-thinking” airports his company has encountered, something he attributes to the renowned Kiwi ‘can do’ attitude.
“We are excited to be pushing the boundaries of digital engagement with them over the next decade,” he says.
“The digitalised off-airport retailer integration pioneered by Auckland Airport could be an extremely valuable addition to the non-aviation revenues of many high-tax/high-duty metropolitan airports,” he points out.
“[That’s because] it focuses primarily on improving the process for the passengers significantly while generating relevant revenues for all parties involved.
“Removing a painful and lengthy tax-refund process with very high fees from the equation will be welcomed strongly by shoppers all around the globe. “
Commenting on the importance of Auckland Airport’s guarantee of provenance and legitimate products, Gould notes, “We are seeing that one of the main concerns for high-spending Asian travellers is indeed around authenticity of products. While they are quite worried about buying luxury on Alibaba even today, they trust global airports and are using digital shopping primarily to guarantee availability on those premium ranges that are not available everywhere.”
Talking about the eventual addition of off-airport products to The Mall’s range, Gould notes, “Off-airport retailer partnerships with automated fulfilment to the airport is a unique possibility, especially for airports suffering from space constraints and the inability to add more high-end brands and ranges physically at the airport.
“We are seeing major interest for luxury watches, for example, that are not carried typically at airport stores. So this opens huge new potential for brands that couldn’t make an airport store work economically either.”
We wanted to test different categories and also to present customers with a product range that was interesting and different from what they’d normally expect. So by deliberately adding in Icebreaker [a renowned local merino wool outdoor and natural performance outdoor clothing brand -Ed] and some Walker & Hall jewellery, which is a well-established New Zealand chain that features several well-known local designers, we are seeking to make it a compelling shopping proposition.
It also enabled us to test different degrees of integration behind the scenes. So a small or less sophisticated retailer could link into the platform with a relatively simple integration, whereas with somebody like Aelia it’s much deeper. For them it’s about checking real-time stock levels and availability etc. so you can then progress to full integration.
With Aelia, how much of their range has been made available?
We have launched with 3,000 skus, of which 1,500 are best sellers from Aelia. We are about to load a lot more skus from them to extend the range, so we’re starting to get a solid representation. Besides the core best sellers, we also want to ensure that we have products that from a consumer perspective are especially interesting and worth exploring. Because then you may find things that you may not have previously discovered.
I did a piece recently on what’s happening with Heathrow Airport [Heathrow Boutique – https://boutique.heathrow.com) in the early days of their online relaunch. There, a lot of the super- and ultra-premium skus are the ones that are really moving. Do you plan a similar emphasis and do you expect a similar pattern?
Having products that simply replicate and actually cannibalise sales within the existing stores is not what we’re looking to do. We’re looking for this platform to not only make it easier for our passengers to shop where and when it’s convenient for them, but also to make products available that might be a more considered purchase. Products that they can browse and take their time over and review before they travel to ensure they’ve got the item secure if there’s scarcities [e.g. limited editions] involved. I certainly see opportunity to add more premium products.
I understand that everything’s fully optimised for mobile. I guess in this age that must have been pivotal to your thinking.
Absolutely. A number of retailers have their own online presence and typically that was built for a desktop kind of environment. But the vast majority of our searches and interactions are on digital devices, either through our app or through a direct search on tablets and mobile phones. Therefore it was critical that we designed everything so it works on these devices.
We were also very mindful of the increasing availability of good quality Wi-Fi in the air. Therefore we wanted to enable people to transact while inflight. So things like the speed with which the images load were designed so that the platform would work in an environment where the capacity to deliver content was potentially constrained. We want people to be able shop where and when it’s suitable for them.
When we talked at The Trinity Forum last year, you mentioned bringing in retailers that aren’t on-airport. Is that still part of the plan?
The overall strategy is to develop an omni-platform to make sure that airport retail remains relevant in a rapidly changing environment. So our primary focus is working with our terminal partners and giving them the opportunity to stay relevant. This is not about cannibalising their business. Our absolute focus is working with our existing partners and any building out of the range will only happen if there are categories where we know there is consumer demand which our existing retailers cannot fill – then we might fill some gaps.
I want to create a compelling virtual mall of the product range that’s represented in the physical terminal and extending those ranges with those retailers is the focus. Only then will we add complementary stuff.
Tell us about your planned Chinese language version. By dint of Chinese travellers’ importance to your passenger mix but also due to their proclivity to shop online, I suspect that’s a must-go area for you.
Oh absolutely. So much of the way the Chinese transact is conducted through the phone. So it’s a no-brainer for us. We also know that they are sophisticated shoppers who understand what they want. They often have a list of the products they seek, and so we want to make it easy for them to be able to buy from us before they travel to New Zealand, during their trip or even when they’ve returned home. Then we can start to offer products with provenance and authenticity, so they can shop with confidence – particularly on some New Zealand destination products, say Manuka honey, where if they were to buy on some of the platforms in their own country, they might not be sure whether or not the product is authentic.
That’s a really important point. Given that there’s been ongoing issues around authenticity with some online shopping platforms, I wonder if the travel retail sector should make more of its ability to guarantee legitimate products. As you say, that is very important for something like wellbeing products.
Absolutely. I think the provenance piece is something we can really play up. It’s a real strength for us, which can be undervalued, particularly if you’re looking at things like cosmetics that somebody puts on their face.
The fact that’s it legitimate product also gives us a way of partnering with airlines. Rather than being disrupted by the airlines, I want to be able to partner with them through a platform that we can heavily influence. That way consumers can know that if they’ve booked with a home carrier that they trust and that carrier is aligned with Auckland Airport, they can in turn have confidence that they’re dealing with [retail] entities that they know and trust.
It’s really important for us to be able to compete with the likes of AirAsia X, which I think is doing some great stuff. I don’t want to be disrupted by airlines, I want to be a partner with them as a way of growing both our businesses.
How would you sum up your ambitions for The Mall?
From our perspective it goes back to one of the things I said earlier, which was the whole idea of developing the Omni-strategy to ensure that airport retail remains relevant. That’s what we’re going to do by giving our passengers the opportunity to shop where and when it’s convenient, whether it’s pre-travel, inflight, or while they’re travelling. It’s around making it easy for our passengers and recognising that they have a choice. So that’s really the strategy.
Regarding the technical delivery of the services and benefits and ranges, we’ll know more over time. We have this great thing called travel retail and we need to keep it relevant, otherwise we risk being disrupted.
Be your own disrupter rather than the disruptee?