NPD Travel Retail Logo

Welcome to NPD Travel Retail

(formerly Counter Intelligence Retail)

We specialize in global traveler statistics, data driven insight, and activating against trends for all major categories sold in duty free and travel retail.

Skip to main content
CIR

How an increasingly digitised passenger benefits all

It is true to say that Digital technology has truly revolutionized every stage of the passenger journey, and we are on the first step of a journey that will see Digital become inextricably linked with the passenger themselves.

October 2018 | Lawrence Scott, Insights Manager | 6 minute read

How digital is the digital passenger?

As an industry we need to stress-test the belief that by removing all traditional barriers of stress along the passenger journey we will harbor an environment that returns incremental purchase rate to Duty Free.

The topline figures tell their own tale; in 2018 78% of passengers are travelling with their Smartphone and only 33% are not engaging with a digital interaction within the airport. These numbers are up from the CiR Digital Study 2015 study and are referenced in The Digital Age 2018 report.

In summary, we’ve come a very long way in a short space of time.

PFM benefits both the Operator model and streamlines passenger experience concurrently…

The growth of PAX volume creates a problem that requires a solution, and the Global Airport Passenger Flow Management Market is growing. The saturation of current operating platforms affords the airport suppliers a huge opportunity in supplying a solution, namely by implementing automated handling solutions

The industry has offered a tripartite solution; optimized Passenger Detection, Passenger Tracking (PFM) and Queue Measurement (QMS) and Location-based Service Platforms

 The industry – and its passengers – are already reaping the benefits without even knowing they are doing so. Reports show that Cincinnati airport – when faced with an 80% growth in PAX volumes – implemented a low-level wifi/bluetooth PFM solution. The output, a 33% reduction in queuing times which drove an increase in passenger satisfaction scoring and increased the dwell-time of passengers in the Duty Free zone.

The time-saving opportunity, if optimized, could provide a huge opportunity to TR/DF…

 

Smart Gate implementation is a logical evolution from PFM solutions and has found resonance in many high-traffic airports globally. The benefits are clear; a streamlined process that improves the efficiency of screening, is non-invasive and seamlessly integrates with your current ‘flow’ to improve the passenger experience. Canberra, Rome, Dubai are all using these SmartGates to great effect.

However, with this “increased dwell time” how will passengers use it?

 

The above calculation is purely directional but the opportunity that reduced stress and time at security gates will have on TR/DF may be huge.

Nationality still influences how to engage with the digital passenger…

If a global average of 79% of passengers are travelling with their smartphone, how is this influencing touchpoints along the passenger journey?

iBeacons and waypoint finders have been explored previously and generally see huge uplift in interaction – such as London Heathrow’s implementation but the nature of airports mean different nationalities require a different digital strategy. This was demonstrated in previous CiR segmentation analysis. By analyzing 25 nationalities we can see the difference in engagement between nationalities.

Indian and Norwegian travelers are using their device to board electronically. Conversely Brits are far less inclined to adopt digital throughout their passenger journey. There is also not a direct relationship in use-case, by this we mean that using digital to electronically board the plane does not mean you’re equally likely to use digital to navigate throughout the airport. This may hint at the differences in maturity of the global passenger and which nationalities have traditionally been open to flying more often 

Advances in biometrics is playing a major role in the digitization of the airport environment…

For operators the mission is clear, optimize the efficiency of every aspect of their operations in order to efficiently handle the burgeoning PAX market. For passengers it is equally clear – make [my] life simpler by removing barriers and removing stress. This is an arms-race for which multiple airports are dedicating their strategy through the next 5 years, Bangalore, Dubai, Amsterdam Schiphol and Seoul Incheon to name a few. What is clear is that advances in biometrics testing (irises and fingerprints) is facilitating the change. Dubai and Atlanta have a fingerprint optimized solution at their passport control stage, whilst Bengaluru has a more sophisticated measure that unlocks three gates; at check-in, in security zone of passport control and then at boarding

Bangaluru Airport (BLR)

Bangalore International Airport Limited (BLIA) and Siemens Postal, Parcel and Airport Logistics (SPPAL) have partnered to jointly drive the digital agenda within its airport. Based on a cloud-based IoT (internet of things) Siemens operating system, BLR airport will become one of the most digitally-able airports worldwide. Innovative service methods, such as baggage handling system and predictive maintenance alerts, mean that the passenger flow is managed much more efficiently than previous and benefits both the operators and passengers alike

Seoul Incheon Airport (ICN)

Much like Bangalore and Dubai, Seoul Incheon has a roadmap strategy to become one of the most digitally able airports by 2025. By adopting biometric solutions – such as pre-screening monitors lining a ‘walk-through tunnel’ and the deployment of 14 artificial intelligence robots throughout the terminals - Seoul airport will surely become a destination in its own right.

Facial recognition – an underpinning of the biometric solutions essential to the airports digitization – is particularly fascinating. Passengers boarding international flights by simply preregistering for facial recognition (usurping the need for boarding passes) or being vetted through long corridors of ‘walkthrough’ security systems will truly revolutionize the pre-boarding ritual for many passengers.

What is the collective benefit of all of these minor opportunities along the passenger journey on prospective DF spend?

Ultimately this question needs a much deeper analysis than what the following paragraph can do justice but in our opinion the digitisation of the passenger journey drums up threats and opportunities in equal measure

At each stage of the passenger journey we are unlocking time, time to use within the airport and spend how you want. Will this automatically convert in to incremental Duty Free spend? Will categories with historically low browsing time (think F&A, W&J which have a time-intensive purchasing process) see surging growth from more engaged passengers? The answer to both of these is no…if we as an industry only rest on our laurels and expect a reciprocal relationship between time and DF spend

Manchester Airport is a fine example, it’s remodelling and plans for refurbishment show F&B outlets gaining huge swathes of space within the retail zone. These F&B outlets have also sophisticated beyond simple grab-and-go venues to become destinations in their own right. The unlocked time that we mentioned earlier could well be invested in having an experiential tasting menu rather than looking at a confectionery fixture in DF

There is also some degree of inevitability that the speedier the passenger journey becomes then the later the passengers will leave for the airport, thus nullifying the gains made in unlocked time

However, all passengers are prospective consumers and – with a clearer mind and more engaged persona – the opportunity is clear. Meaningful engagements, earlier in the passenger journey, will reap rewards and may be a saving grace to Airport DF spend