1. Creating an effective retail experience 8-10 November 2010 Riga, Latvia Innovative design and constant reinvention are the two key ingredients to turn travellers into spenders

2. Alan Bork Airport Retail Consultant High Street retailer Copenhagen Airport (privatized in 1994) Brussels Airport (privatized in 2005) Airport clients throughout the world Chairman of Danish Duty Free Association (fight against DF abolition) First chairman of Nordic Travel Retail Group 2000-05

3. Creating an effective retail experience Innovative design and constant reinvention are the two key ingredients to turn travellers into spenders This presentation will take its focus on how organizing and planning the retail experience, can create an effective retail experience For clarification: effective retail experience = maximum spend levels SPEND PER PASSENGER

4. The dynamics of the Retail Business The dynamics of the Retail Business Terminal Planning and Space Allocation Terminal Planning and Space Allocation Getting the Timing Right Conceptual Planning and Retail Lay-Out An effective retail experience 4 elements

5. What are the factors driving retail spending? The formula for SPEND PER PASSENGER Passengers x Penetration (%) x Average Transaction Value () = Spend per pax

6. # pax # pax = Spending Money? How Much Money? Per pax What are the factors driving retail spending? The formula for SPEND PER PASSENGER

7. Volume Nationality Destination Demographics Travel purpose Passengers x Penetration (%) x Average Transaction Value () = Spend per pax.....Footfall (how many in retail zone?) Terminal flows Location Shop Fronts Signage & communication.....Conversion (how many actually spend money?) Accessability Product offer Pricing In-store promotions Transaction Value (how much money do they spend?) Attraction of product & price (Value For Money) Tax regulations & allowances Intra-EU vs. Non-EU AIRPORT OPERATOR AIRPORT & OPERATOR What are the factors driving retail spending? The formula for SPEND PER PASSENGER

8. Understanding the business dynamics…. The business model and the players 4 parties around the negotiation table The role of the airport Understanding and playing the role The success criteria's the airport´s the operators Understanding the business dynamics

9. Landlord = Airport Food & beverage operatorRetail operator Supplier / Brand The business model and the players Understanding the business dynamics

10. Landlord = Airport Food & beverage operatorRetail operator Supplier / Brand The airport owns the customer…..this is very much setting the agenda The business model and the players Understanding the business dynamics

11. But don´t get too arrogant….. the guy blowing the trumpet in the back-seat is equally important to the business Understanding the business dynamics

12. The role of the airport…. quotation from article in Travel Magazine Understanding the business dynamics

13. The operator's success criteria… Location - location - location flows other retail activities food & beverage passenger processing facilities Passenger profile & mix pax profile & yield spending behaviour dwell time Brand exposure shop window The airport´s success criteria… Maximising M2 revenues exploitation of terminal capacity balancing the business lines mix of activities within the business lines short term contracts with high concession fees and high minimum´s Passenger services the need of the traveller the wishes of the travellers Maximising passenger attraction ambience Airports Brand Image Common interest, or..conflict of interest Understanding the business dynamics

14. How long are the queues? When is my flight leaving? Where is my gate? Do I have time for shopping? The passenger mindset Getting the timing right

15. Leaving Office or home Maximum Passenger Receptiveness - The excitement / stress factor Parking Check In Security Check Airside Dwell Time Boarding TIME A I R P O R T E X P E R I E N C E Maximising the passenger journey Excitement Stress Getting the timing right

16. Leaving Office or home Maximum Passenger Receptiveness - The excitement / stress factor Parking Check In Security Check Airside Dwell Time Boarding TIME A I R P O R T E X P E R I E N C E Getting the timing right Maximising the passenger journey

17. Leaving Office or home Maximum Passenger Receptiveness - The excitement / stress factor Parking Check In Security Check Airside Dwell Time Boarding TIME A I R P O R T E X P E R I E N C E Excitement Stress Getting the timing right Maximising the passenger journey

18. Low MarketMid MarketTop end Market High Medium Low Price pointing Appeal Conceptual planning and Retail Lay-Out Mapping the RETAIL

19. ShortMediumLong High Medium Low Price pointing Dwell time Conceptual planning and Retail Lay-Out Mapping FOOD & BEVERAGE

20. Pax in Pax out Terminal Planning & Space Allocation Terminal footprint Objective: to maximise footfall

21. Retail Food & Beverage Seating Pax in Pax out Walk Through Lounges Objective: to maximise footfall Terminal Planning & Space Allocation Terminal footprint 5 simple principles: 1)Retail before F&B 2)Lounges after commercial 3)Maximise exposure 4)Clear overview 5)Simple flows 100% footfall

22. FRA LHR 51 mill.pax 66 mill.pax LufthansaBritish Airways Major HUB airports Function as main HUB for major national airline Western Europe Serving major metropol and financial power centres High share of transfer & long haul High share of business travellers Spend per passenger 8 24 Retail efficiency: Frankfurt versus London Heathrow Different airports deliver different spend levels

23. LHR FRA 8 24 850M2 1.400 M2 Airside sales per departing pax VS. Retail/F&B space per million pax Different airports deliver different spend levels

24. 1200M Landside Airside Frankfurt T1 and T2 Different airports deliver different spend levels

25. Heathrow T3 Retail F & B Services Different airports deliver different spend levels

26. Heathrow T5 Upper Level Departures Services F & B Lounges Retail Different airports deliver different spend levels

27. Heathrow T5 - lower level gate areas Retail F & B Services Different airports deliver different spend levels

28. Heathrow T3

29. Heathrow T3 – orientation zone

30. Heathrow T3 – dynamic flows

31. Heathrow T3 – clever location of toilets

32. Frankfurt – duty free & travel value

33. Frankfurt – branded luxury shop

34. Frankfurt