NEW ZEALAND. In August 2017, Auckland Airport became the second major international gateway (after Frankfurt Airport) to choose German company AOE’s OM³ Suite as the platform for an omnichannel customer shopping experience.

“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 at the time.

So what’s happened since? How far has that consumer journey been advanced? In this case study, we present an update on the alliance’s latest innovation; the full integration of tax free downtown shopping into the customer journey.

Retailers that are not located at the airport can sell their products off-airport and have them tracked, monitored, delivered and collected to the on-airport collection points. This is potentially a game-changer from an airport retailing perspective, in terms of both product range and consumer proposition.

[“For the first time ever, airports can empower downtown retailers to offer direct tax free shopping while generating significant additional non-aviation revenues and passing on much bigger savings to its passengers.” Click on the YouTube icon to see how the new AOE downtown tax free shopping solutions inside the OM³ Suite work.]

Introduction

At the time of the August 2017 announcement, Auckland Airport and global technology service provider AOE spoke of their ambitions to create a ‘multi-retailer mall’. The planned offer would enable international travellers to purchase airport products and services via mobile devices and online.

The Auckland project followed the OM³ Suite platform’s successful initial deployment at Frankfurt Airport. As one of the newest additions to  the solution for New Zealand’s main international gateway, the OM³ downtown tax free shopping logistics solution was designed to create what AOE calls “a true omnichannel connected customer experience” for more than 19 million passengers, seamlessly interconnecting on- and off-airport shopping and services”.

THE CHALLENGE

Many airports, airlines and travel retailers worldwide are facing the challenge of declining spend per passenger impacting their non-aviation revenue. To confront this challenge, Auckland Airport chose to provide customers with its promised downtown tax free shopping logistics solution. This combined off-airport retail and on-airport fulfilment into one convenient solution for retailers, customers and the airport.

To achieve this, the solution needed to be integrated with the numerous existing retailer systems, sales channels and Auckland Airport’s physical collection points.

THE SOLUTION

Uniquely, the solution provides passengers with the option of shopping at over 60 participating retailers in downtown Auckland, while simultaneously being able to save 15% New Zealand Goods and Services Tax (GST) plus additional duty on selected products.

Whereas OM³ typically powers e-commerce solutions for all on-airport retailers, the new solution additionally provides customers with the possibility of purchasing items at any participating off-airport retailer and conveniently picking up all purchases at on-airport collection points. To benefit from the significant tax and duty free savings, passengers must be travelling internationally; the goods are always collected airside.

Retailers and Auckland Airport benefit from the solution in equal measure. Retailers that are not located at the airport can sell their products off-airport and have them tracked, monitored, delivered and collected to the on-airport collection points. This is potentially a game-changer from an airport retailing perspective, in terms of both product range and consumer proposition.

The airport creates new revenue streams and expands its retail footprint without having to create additional physical space for stores and warehousing.

The new solution meets three main criteria, AOE says:

1. Convenient duty and tax free shopping, both off-airport and online
2. Highly efficient and convenient, both for retailers and for customers
3. Easy to use, allowing for a rapid onboarding of additional retailers and sales channels

“We are excited to partner with AOE and excited that Auckland Airport’s introduction of the technology will be a first for any airport in Australasia. It will ensure that we deliver one of the most advanced online airport retail experiences in the world and that we can significantly expand the range and type of products and services we offer to our customers.” – Richard Barker, General Manager Retail and Commercial, Auckland Airport

Solution as part of AOE’s OM³ Suite

As reported, the downtown tax free shopping logistics solution is part of AOE’s OM³ Suite, a powerful online marketplace that connects retailers and customers across all channels. With solution, Auckland Airport combines off-airport shopping with on-airport fulfilment, making the airport digital-ready and creating sustainable non-aviation revenue streams.

 

POSITIVE PROGRESS

By introducing the OM³ platform, Auckland Airport aims to increase its non-aviation revenue streams and make its business model digital-ready. The intention is that customers benefit from a service that makes shopping quick, convenient and enjoyable, while benefiting from significant savings for them. The partners say that early customer reaction, first numbers and industry acceptance are combined proof that the Logistics Portal will contribute significantly to the future economic success of the airport, while creating happy, loyal customers.

The Moodie Davitt Report will continue to monitor progress.