Innovation

Six ways digital marketplaces help personalize airport experiences and unlock new revenue streams

CDX-blog

Airports play a central role in shaping the traveler experience, with creative design thinking and investment primarily focused on physical amenities. While great care is given to making the traveler's time at the airport more efficient and pleasant, one area of the experience still screams for attention airport digital channels.

Just because travelers happen to be at the airport doesn't mean they are using onsite amenities and services. As mobile usage continues to rise year on year, travelers are often glued to their devices rather than exploring what the airport has to offer. And this behavior means that airports are missing potential revenue uplift. Sometimes, all travelers need is a proactive nudge and incentive to get off their phones and into the stores. This is where digital channels help blend online and physical experiences to inspire consumption and create seamless, personalized journeys for travelers. Airports also benefit through:

1. Enhanced retailing opportunities

By adopting an integrated retailing strategy that combines physical spaces with digital channels, airports can expand their products and services portfolio to generate innovative offers that extend on-premises experiences beyond their physical locations. By increasing passenger engagement and convenience, digital marketplaces open new revenue streams for airport operators and retailers that can be managed with less personnel, enabling scalable offers and promotions. 

2. Partnerships

Retail-driven technology enables airports to leverage strategic partnerships and optimize the balance between aeronautical and non-aeronautical revenues by collaborating more closely with airlines, local businesses, and tourism organizations. By providing a platform to create tailored experiences and exclusive offers, airports can foster mutually beneficial partnerships that drive revenue growth.

3. Targeted advertising

Digital channels enable more precise observation of consumer patterns. By analyzing behavioral data, preferences, and trends, airports can better curate promotions, influence traffic flows, and boost sales conversion. Behavioral insights combined with a flexible platform allow airports to deliver relevant, targeted offers to different passenger segments across the most appropriate channels, including digital displays, mobile apps, or email marketing campaigns.

4. Ancillary revenue opportunities

Investing in digital technology allows airports to introduce premium services and upgrades, offering enhanced experiences to travelers willing to pay for added comfort and convenience. For instance, airports can provide premium lounges, fast track security lanes and make concierge services seamlessly accessible through digital channels. By offering these value-added services, airports can increase their revenue per passenger and cater to the evolving needs of discerning travelers.

5. Data monetization and analytics

Airports can monetize the vast amount of behavioral and spending data they collect and analyze from travelers through partnerships with third-party vendors, advertisers, and market research firms. By anonymizing and aggregating data, airports can offer valuable insights and trends to these entities, creating new revenue streams while respecting passenger privacy. Additionally, data analytics can help airports optimize operations, improve resource allocation, and drive cost efficiencies.

6. Disruption management

Deploying sophisticated digital capabilities allows airports and their partners to soften the impact of disruptions on traveler morale through innovative compensation strategies. An unexpected and prolonged airport stay opens new opportunities and needs. For example, stranded passengers might be more inclined to purchase lounge access, sit down for a meal, or walk into a shop. A digital marketplace could be the key to influencing passenger behavior, opening new engagement opportunities for the airport while providing relevant, value-added benefits for travelers.

Capturing a larger share of travel spend in a challenging landscape

Despite the resurgence of travel, airports continue to grapple with underlying challenges. Addressing capacity and staffing constraints, stabilizing aeronautical revenue, and dealing with rising security, immigration, and passenger processing costs directly impact airport financials. Furthermore, traditional high-spending business travelers and older tourists, who once formed a significant proportion of airport revenues, aren't growing as fast as students, young professionals, and budget-conscious tourists. The current socio-economic context demands a different kind of interaction with airport facilities.

Within this challenging landscape, airports are increasingly looking at digital marketplaces to increase sales, optimize revenue per passenger, attract premium retail partners, and enhance the traveler experience while minimizing required infrastructural investments. Blending the physical and digital experiences allows airports to amplify and create a new and compelling value proposition to increasingly digitally native generations who expect seamless, omnichannel experiences. Embracing evolution isn´t just a competitive advantage; it´s a strategic imperative for airports to remain competitive, financially resilient, and adaptable in an ever-changing travel landscape.

Author info

Nithin Surendran is a Lead Product Consultant within IBS Software's Airport Operations line of business and has 13 years of experience in air and ocean supply chain and logistics product management. 

In his current role, Nithin assists airports in leveraging modern technologies, digital innovations, and industry best practices to enhance operational efficiency, lower costs, and boost non-aero revenue. Nithin's passion lies in improving the overall airport experience for passengers through travel, retail, and shopping innovation.

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