Kian Gould, CEO at AOE, talking at Trinity Forum about Driving and combating disruption – positive and negative – in airport commerce through digital innovation. The digital airport: https://www.aoe.com/en/knowledge-base/the-digital-airport.html Presentation Video: https://www.youtube.com/watch?v=S8Pkkq84axs

1. The Non-Aviation Revenues Disruption
Driving and combating disruption – positive and negative –
in airport commerce through digital innovation
Kian T. Gould
(Founder & CEO)

2. Yesterdays Airport Parking Customers

3. Yesterdays Airport Passengers

4. Yesterdays Airport Advertising

5. 4.8 Bn. mobile devices
but only 4.2 Bn.
toothbrushes worldwide

6. Todays Parking Customers

7. Tomorrows Parking Customers

8. Todays Passengers

9. The disruption has begun - A look at Travel Retail

10. The 63 billion USD global Travel Retail Market is beginning to be disrupted
AMERICAS
17.1% MS
___________
$10.9bn
↓7.5%
SOURCE: TFWA
Asia Pacific growth driven by Down-Town Duty Free +17.7% vs. Airports +1.5%
- Global Airport Shopping +0.4%
- Airlines -6.6%
- Ferries -2.7%
- Other Shops & Sales +7.3%
EUROPE
29.7% MS
___________
$18.8bn
↓7.9%
AFRICA
1.2% MS
__________
$0.8bn
↓2.7%
MIDDLE
EAST
8.9% MS
__________
$5.6bn
↓2.4%
ASIA PACIFIC
43.1% MS
__________
$27.4bn
↑10.4%
Market Share 56.2% vs. 57.3% ↓
Market Share 3.9% vs. 4.3% ↓
Market Share 3.2% vs. 3.3% ↓
Market Share 36.8% vs. 35.1% ↑
2015 - 2016

11. Urban Myth 1: You can‘t sell luxury cars online
Alibaba sold 100 Maserati Levante in 18 seconds on Single‘s Day

12. Urban Myth 2: Some brands will never sell online
Every day hundreds of Chinese shoppers buy luxury bags via WeChat

13. Retail Urban Myth 3: The personal touch is most essential to in-store sales
Only 2% of high value shoppers spend after getting advice from Sales Staff

14. Moments of decision of Duty Free purchase
At home
before Leaving
for the airport
At destination
before leaving
for the airport
On the way to
the airport
At the
Airport
In the Duty
Free Shop
After looking around
After Getting Advice from Sales Staff
(only 2% in high spender category)
Importance of making in-
store experience unique!
After buying another category
Ensuring digital full digital engagement prior to
travel is essential to capture 65% of purchases
35%
6% 14%
10%
26%
7%
2%
SOURCE: m1nd-set Research

15. Planned vs Impulse Purchase
71% 29%
Planned in advance
what they wanted to shop
Bought on impulse
83% 79% 75% 44% 42% 40%
Shopping behavior has changed radically
SOURCE: m1nd-set Research

16. The need for extension of the Golden Hour
SOURCE: m1nd-set Research
PRE-TRIP ONLINE
TOUCH POINTS
AIRPORT ONLINE
TOUCH POINTS
34%
Search for / see information
about DF shopping Online
Make the decision
to buy in DF before
arriving at the
airport
62%
Book their
flight directly
online
83%
Find mobile check-in
to be the most
convenient
70%
Go online while at the airport
(24% search info about DF)
40%
Would like to do online DF
shopping before the trip
On DF visitors visit the
DF shop on impulse
Motivated to visit DF if receive
offers/coupons on their smartphone
53%
47% 62%

17. The new Quaternity of Travel Retail
INTEGRATED ADVERTISING
Via Wifi, Smart-Panels and
InfoTerminals offer unique
abilities
PARTICIPATION
in the international
e-commerce growth
CUSTOMER INFORMATION
Airports/Airlines know much
more about passengers than
most retailers do
CUSTOMER EXCELLENCE
Attractive digital offers
and services form a unique
customer experience
DIGITAL DEVICES
create new transaction
and communication
channels
DIGITALIZATION
of the travel journey
creates new touchpoints

18. Todays and tomorrows passengers expect more!

19. Frankfurt Airport | 1 year later

20. Frankfurt Airport | Some early signs of success
↑ 50 % beyond business plan
Customer Growth Rate
↑ 35 %
Cross- & Up-selling
75 %
Active User Rate
YTD
Plan 300 %
Basket Value Increase

21. Frankfurt Airport | Some early signs of success
↑ 3,6 %
Frankfurt Airport Q1 2017
Per Passenger Spend
14% Conversion
from Webrooming Effect

22. All the research we conducted
over the last two years shows
that what AOE started at
Frankfurt Airport is the future
of Travel Retail!
Peter Mohn, CEO m1nd-set research

23. But why E-Commerce at an airport

24. Why E-Commerce at an airport has a competitive edge
RETURNSPRODUCT
Immediate Product Availability Low Cost of Returns No Traffic Acquisition Cost
TRAFFIC

25. The airport as a true digital marketplace

26. The future of „Unobstrusive E-Commerce“

27. Everything Mobile – Everything at your fingertips
Shopping
Services
Payment
Services Retail / Shopping
Flight Data Hotels
Loyalty
Parking
Valet Services Lounge
Fast Track F&B Ordering
Maps
Rental Cars . . .
Airport Marketplace
Voice
Mobile
API
Touchpoints

28. Key to a great Customer Experience and ongoing loyalty are
DATA SERVICEPRODUCT
Great Product Selection Great Product Data Great Services

29. Michael Madden (59), British
- Travels Business
- Lives in London
- buys his wife Chanel
- wears mainly Ralph Lauren
- has 10,000 loyalty points
- Drinks Double Espresso
Raj Mahindra (49), Indian
- Travels Business
- Lives in Bangalore
- Always uses Uber Black
- Loves BOSE Gadgets
- Buys Hugo Boss hsirts
- No Loyalty member
- Drinks Chai Latte
Pen Liyun (38), Chinese
- Travels First Class
- Lives in Beijing
- Buys 1 handbag each trip
- Ususally orders to lounge
- has 250,000 loyalty points
- Drinks Earl Grey

30. Just in: OM³ is launching at Heathrow Airport early 2018

31. Q&A
More questions? E-Mail me at kian@aoe.com