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"Your Misery at the Airport Is Great for Business"

Thursday, September 7, 2017

Your Misery at the Airport Is Great for Business
Retail in terminals is booming. How else would we soothe our anxiety?
By Daniel Gross 

Yes, there is a brick-and-mortar retail apocalypse afflicting large chunks of 
the industry. Sure, home-improvement stores and dining establishments are doing 
OK, but retail chains are going bankrupt at a furious pace, malls are emptying 
out, Sears is enduring its decadelong calvary, and Manhattan's avenues are 
suddenly pocked with vacant storefronts. But there is one chunk of the vast 
retailing sector that seems to be going strong, with no caveats: stores in 

When was the last time you saw blight in a terminal? Selling electronics, 
books, clothes, food, and services in U.S. airports is a booming business. 
Globally, airport retail sales rose 4 percent in 2016.  According to 
Micromarket Monitor, revenues from U.S. and Canadian airport retailing should 
rise from about $4.2 billion in 2015 to nearly $10 billion by 2020-an 
impressive compound annual growth rate of nearly 20 percent. Entrepreneurs are 
having success building chains that exist only in America's great in-between 
spaces. Avila Retail has nearly two dozen specialty stores based in airports, 
including its Earth Spirit folk-art emporia and the awkwardly named Indigenous, 
which peddles Native American crafts at the Phoenix Sky Harbor International 

It shouldn't be surprising. Airport-based retail, which underwent a 
transformation in the 1990s as an effort to improve the travel experience, has 
some significant advantages over its non-airport-based counterpart. As much as 
traditional brick-and-mortar operations are suffering due to 
mega-trends-millennials' preference for experience over stuff, the relentless 
onslaught of e-commerce in general and Amazon in particular-physical retail in 
airports seems to be thriving in part due to them. What's more, many of the 
factors that have made air travel a miserable experience are weighing in favor 
of airport retail.

Airports supply the greatest desideratum of physical retail: foot traffic. 
Outside them, people can easily go through their days without having to pass a 
shop window. But in airports every passenger has to walk past dozens of them. 
And foot traffic is increasing. The number of passengers flying has risen in 
every year since 2009. In 2016, according to the U.S. government, U.S.-based 
airlines carried a record 823 million passengers, up from 700 million in 2009. 
And these are good customers. While air travel is mass transit, flyers tend to 
be wealthier than typical Americans, and thus have more money to spend.

Another advantage: Physical retail tends to see activity concentrated in a 
small number of hours and often sees business drop off sharply on weekends and 
holidays. But airports are busy starting at 6 a.m. and don't start to empty out 
until about 10 p.m. Which means a lease on a few thousand feet of airport space 
gets you a solid 16 hours per day of operations. It's not quite 24/7, but it is 
365 days a year. Indeed, weekends and holidays are among the busiest times at 

Then there are delays, which make air travelers crankier but which actually 
work in favor of airport retail. When bad weather or missed connections or 
general crappiness strands passengers for hours-out of the reach of 
e-commerce-one of the things they do is walk around and buy stuff. Or relieve 
stress by getting a massage. XpresSpa, a chain of spas based solely in 
airports, was acquired for $40 million last year.

If you've left the house without headphones and are about to board a nine-hour 
flight, Amazon Prime is worthless.

There's another way in which the immiseration of flyers brings joy to airport 
retailers. On many coach flights, the airline now supplies you with virtually 
nothing to eat or drink. Worse, the Transportation Security Administration will 
confiscate any liquids greater than 3.4 ounces you bring with you through 
security. That means there is a category of necessities that you might need on 
the plane but that you can only buy in the terminal. Cha-ching!

In addition, people who travel routinely forget to pack things they will need 
while traveling. Plans change, as well-you're on vacation and have to go to a 
business meeting, say. And in these instances, e-commerce can't be of help. If 
you've left the house without headphones and are about to board a nine-hour 
flight, or if you realize that you need a tie but are 4,000 miles from your 
closet, Amazon Prime is worthless. Here are some of the things I've purchased 
at airport retail over the years that I already owned but were inaccessible 
because they were in my house: inflatable pillows, eyemasks, shampoo, saline 
solution, contact lens cases, sunglasses, reading glasses, 17 toothbrushes, 14 
containers of toothpaste, collar stays, a tie, a dress shirt, headphones, 
chargers, extension cords, adapters, a sweatshirt.

Many people who travel through airports are either going to a destination, or 
returning to a one, where they are expected to show up with a gift. For a 
significant percentage of travelers, airport retail is the only thing that 
prevents them from showing up empty-handed. These are some of the gifts I've 
purchased at airport retail in recent years that I would not ordinarily buy 
when at home: Vanderbilt T-shirts, plastic Minnesota Viking helmets, See's 
Candies, mugs, snow globes. Snow globes!

There's more. America's rising snobbishness surrounding food and coffee is 
pushing more people to purchase food and drinks in terminals. It's not just 
that you have to pay for whatever fare is offered onboard; it's that what 
you're offered is likely to be swill (airline coffee) or crap (sandwiches 
wrapped in plastic, wan salads, highly processed protein packs). Fortunately 
chains (Starbucks, Shake Shack) have picked up some of the slack. And celebrity 
chefs and higher-end operations have viewed airports as an expansion 
opportunity. In the past couple of years, here are a few airport meals my 
family and I have devoured: burgers at the Shake Shack at JFK, a choriqueso 
torta from Rick Bayless' Tortas Frontera at Chicago O'Hare, Cubano sandwiches 
at Café Versailles in the Miami airport, a decent brisket sandwich from 
Noshville at the Nashville airport, chicken tacos from Urban Taco at 
Dallas-Fort Worth, and a Blonde Bock at the Gordon Biersch bar in San Francisco.

There's little relief in sight for the woes that contribute to the anxiety and 
depression of frequent flyers. But we've found on old-fashioned way to take the 
edge off as we wait to board: retail therapy.
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