Role of Airport Retailing - 2024
Role of Airport Retailing - 2024
254-267
DOI 10.35631/IJIREV.619020
INTERNATIONAL JOURNAL OF
INNOVATION AND
INDUSTRIAL REVOLUTION
(IJIREV)
www.ijirev.com
Article history: Globally, airports are under growing pressure to enhance their resilience, foster
Received date: 21.10.2024 growth, and ensure sustainability. In this context, non-aeronautical revenue has
Revised date: 05.11.2024 become vital in establishing prosperous airport businesses. This revenue
Accepted date: 20.12.2024 encompasses income from activities outside core aviation operations, including
Published date: 31.12.2024 retail activities, parking, and real estate. Through a thematic synthesis, this
research integrates existing airport retailing literature by examining 19 selected
To cite this document:
studies published between 2021 and 2024. The study highlights key themes
Shiyas, K. M. M., Kumar, C., & already explored and identifies areas that require further investigation. It was
Ganguly, A. (2024). The Role of found that current research mainly focuses on food and beverage outlets and
Airport Retailing in Building Resilient duty-free stores as primary retail revenue sources. Future studies should
and Sustainable Airport Businesses. consider the impact of emerging technologies on airport retailing and examine
International Journal of Innovation passenger behaviour. This study aims to provide valuable insights into the
and Industrial Revolution, 6 (19), 254- evolving landscape of airport retailing amidst changing industry trends.
267.
Keywords:
DOI: 10.35631/ IJIREV.619020
This work is licensed under CC BY 4.0 Airport Business, Airport Retailing, Non-Aeronautical Revenue, Resilience,
Sustainability
Introduction
Airports, traditionally perceived as hubs for transportation, have evolved into multifaceted
commercial enterprises, playing a pivotal role in the national economy by generating
significant revenues through both aeronautical and non-aeronautical activities (Uzule &
Kuzmina-Merlino, 2022). While aeronautical revenues stem from activities directly linked to
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air transport, such as passenger charges and landing fees (Freitas et al., 2021; Wu et al., 2024),
non-aeronautical revenues (NAR) have emerged as critical drivers of financial sustainability,
encompassing rental fees for commercial facilities, parking, food and beverage outlets, and
retail stores (Shin & Roh, 2021; Jiang et al., 2024). The growing importance of NAR highlights
the strategic role of airport retailing in fostering resilient and sustainable airport businesses,
particularly in an era marked by economic volatility and evolving passenger preferences.
The dependence of airports on aeronautical revenues has historically made them vulnerable to
external shocks, such as economic downturns and global crises like the COVID-19 pandemic,
which significantly disrupted air travel. Non-aeronautical revenues, particularly from retail
activities, have become a critical buffer against financial vulnerabilities, providing airports with
opportunities for diversification and stability (Han et al., 2021; Saut & song, 2022). Retailing
contributes approximately 33% of non-aeronautical revenues, followed by parking facilities
(23%) and vehicle rentals (8%). However, limited research has explored how specific
passenger touchpoints, such as the "golden hour" following security clearance, influence
spending patterns and passenger satisfaction (Halpern & Mwesiumo, 2021). Additionally,
while technological advancements in retail operations are recognized, their long-term impact
on sustainability and resilience remains uncertain (Yerimou & Themistocleous, 2024). The
dynamics of airport retailing, including passenger behaviour dwell time elasticity, and terminal
design, are still under-researched despite their growing significance (Wu et al., 2024). The
projected expansion of the global airport retail market underscores the need for airports to adopt
innovative and sustainable strategies to maintain competitiveness (Research and Markets,
2024; Mordor Intelligence, 2024).
This paper aims to bridge the identified research gaps by offering practical insights for airport
authorities and stakeholders to enhance retail operations and align with strategic organizational
goals. It examines the key themes explored over the past four years, highlighting their
progression parallel to the airport industry's development. To achieve this, the scope of this
thematic literature review is guided by two central research questions.
RQ1: What are the current practices in airport retail operations and their influence on passenger
behaviour and purchasing decisions?
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RQ2: What challenges and opportunities exist to enhance airport retail operations'
effectiveness, resilience, and sustainability?
The paper begins with an introduction and research questions, followed by a review of the
literature methodology. It then analyzes trends in the selected studies, such as journal types,
geographical distribution, and applied theories. The themes and constructs related to airport
retailing are explored, and a detailed discussion of historical research trends is provided,
offering a basis for future studies. The paper concludes by summarizing the findings and
acknowledging the study's limitations.
Methodology
The research methodology describes the approach researchers should follow in conducting
their studies, including identifying the theoretical and philosophical assumptions that underpin
the research and examining how these assumptions influence the chosen methods (Saunders et
al., 2009). Literature reviews have traditionally been used to summarize and provide an
overview of current and historical knowledge derived from relevant literature (Aromataris &
Pearson, 2014). A literature review investigates existing works in a specific area, often
concentrating on a particular topic or period. The chosen research subject's needs determine
the research approach's selection. Research methods can be mixed, qualitative, or quantitative,
depending on the data collection and analysis required for the study (Mulisa, 2022).
This research requires a thematic analysis of the airport retailing process, trends, and demand
to assess its role in enhancing the resilience and sustainability of airport businesses. Drawing
on the methodology outlined by Perego et al. (2011) for theme identification, our initial
literature review focused on identifying crucial elements of airport retailing based on the
research questions. Subsequently, we structured our analysis around four central themes:
• Retail Operations at Airports
• Passenger Drivers and Buying Intentions in Airport Retail
• Challenges in Airport Retailing
• Future Prospects of Airport Retailing
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Keywords
"Airport retailing," "Airport shopping," and "Non-
aeronautical revenue".
42 papers (English
Language).
Short Listing
Eliminated duplicate papers, those with
inaccessible full texts, conference proceedings,
book reviews, white papers, and similar sources.
29 papers related
to the Airport
retailing subject.
Thematic Analysis
19 papers were
focused on the
identified themes.
Discussion
Analyzed each article based on the identified
themes.
Thematic analysis is a qualitative research technique used to identify, examine, and report
patterns or themes within a dataset. It involves organizing and describing data in detail while
identifying and analyzing recurring themes (Braun & Clarke, 2006). This approach is valuable
for gathering data from various studies conducted across different contexts and periods,
offering a framework based on the identified themes. Given the study objective, which aimed
to thoroughly investigate specific questions about knowledge concealment and integrate
existing literature to help scholars and practitioners better understand this field's historical,
current, and future aspects, a thematic review was considered the most appropriate method.
The study focused on targeted searches using specific keywords within a single database,
Scopus, restricting the selection of research that met predefined criteria. Scopus was chosen
due to its intuitive interface, extensive coverage, and access to STM journal articles and their
references, allowing for both forward and backward searches (Burnham, 2006). By using
Scopus, the authors streamlined the literature selection process. Additionally, applying
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multiple exclusion criteria ensured that the thematic literature review resulted in a
comprehensive and representative collection of research outcomes (see Figures 1 and 2).
Research Objective
To analyze the literature on airport
retailing using thematic analysis.
Exclusion criteria
* Duplicate articles
* Non-English articles
* Conference proceedings, book critiques,
and so on.
* The articles do not address the derived
themes.
The article selection process began by searching for relevant publications through the Scopus
database using carefully chosen keywords. A predefined set of keywords and search phrases
guided the search, forming the core search criteria. Terms like "Airport retailing," "Airport
shopping," and "Non-aeronautical revenue" were applied to identify pertinent articles (refer to
Figure 2).
The authors employed three specific criteria during the article selection process to ensure
comprehensive coverage of relevant literature.
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Table 1: Inclusion /Exclusion Criteria
Inclusion Exclusion
Published between 2021 and Published prior to 2021 and
November 4, 2024. subsequent to November 4,
2024.
Papers published in Journals. Conference proceedings, book
reviews, and similar materials.
Only published in English. Other languages.
After the initial selection of articles, the authors reviewed the abstracts to assess their relevance
to the study's main objectives and inclusion criteria. A comprehensive evaluation of the full
papers followed to confirm their alignment with the research focus. Articles that did not meet
the inclusion criteria were excluded, with each exclusion carefully verified and justified. As a
result of this thorough process, 19 research papers were ultimately included in the final list.
The complete article reviews and selection procedure is illustrated in Figure 2 for the readers'
reference.
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Figure 3 displays the global distribution of articles according to the first author's affiliation,
showcasing contributions from a range of countries.
Airport retail research utilizes a variety of theories (Table 3). Notably, 73.7% of the studies
lack alignment with a distinct guiding theory.
The corresponding author took on this responsibility in this study, offering insights that helped
the research team reach a consensus. The later sections of the paper explore the thematic
analysis results and present final reflections.
Thematic Analysis
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speciality retail, and general services, are pivotal in generating significant airport revenue
streams (Piratla & Singh, 2023; Li et al., 2024). ACI's (2019) data highlights that retail revenue
constitutes over 30.2% of airport income, prompting airports to adopt innovative strategies to
optimize these streams (Lim-u-sanno et al., 2023).
The segmentation of airport retail operations reflects the variety of passenger needs,
encompassing duty-free products, luxury boutiques, gadgets, and food outlets such as
Starbucks and McDonald's. Non-retail services, including lounges, wellness centres, and
speciality facilities like cinemas and golf courses, also contribute to passenger spending. These
activities are strategically located across terminals before and after security checkpoints to
maximize convenience and revenue generation. Non-aeronautical activities account for
approximately 40% of an airport's total revenue, with retail alone contributing over 30% (Yong
et al., 2023; Lim-u-sanno et al., 2023). Duty-free retail remains the most lucrative segment of
airport revenue, followed by F&B, which constitutes around 6% of non-aeronautical income.
Airports like Incheon International exemplify this model, with commercial facility rentals from
duty-free shops, F&B outlets, and other businesses serving as primary non-aeronautical
revenue sources (Freitas et al., 2021; Shin & Roh, 2021).
Both airports and airlines benefit from these revenue streams. Airports derive profits from
terminal retail activities, while airlines gain from onboard retail markets, which include
ancillary services such as food sales, duty-free shopping, and frequent flyer program
partnerships. These integrated revenue strategies underscore the importance of retail in
enhancing financial performance for all stakeholders (Li et al., 2024).
The strategic importance of retail operations is evident in airports' consistent efforts to innovate
and expand their offerings. From traditional retail to experiential services like spas and
wellness centres, these operations cater to passenger preferences and increase spending
potential, solidifying retail as a cornerstone of airport revenue (Lim-u-sanno et al., 2023).
The forced dwell time in terminals positions airports as attractive retail hubs, where shopping
becomes a primary activity for passengers awaiting flights (Li et al., 2024). Studies emphasize
that passenger satisfaction and waiting times are pivotal in enhancing retail revenue. Passengers
with higher satisfaction levels and longer waiting times are more likely to shop (Silva et al.,
2024). Moreover, diverse retail and dining options, including local and authentic offerings,
significantly boost spending by providing cultural experiences and perceived value (Yong et
al., 2023).
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type, travel frequency, and whether passengers are accompanied. Frequent flyers report lower
satisfaction with commercial services, while solo travellers express higher satisfaction with
food and beverage options (Freitas et al., 2021). Additionally, discretionary activities,
including retail and dining, flourish when passengers are afforded extended dwell times. Call-
to-gate strategies that maximize free time and minimize security checkpoint queues
significantly enhance passenger spending (Mekić et al., 2021).
Service quality and combined service attributes also play a substantial role in shaping passenger
buying intentions. Cleanliness, terminal signage, and the quality of food, beverages, and
shopping facilities are integral to positive passenger experiences. However, some service
combinations, such as food and beverages, warrant further exploration due to their negative
impact on recommendations (Alanazi et al., 2024). Failures in airport staff performance and
queue management have the most detrimental effects on passenger promotion while shopping
and Wi-Fi service failures have lesser impacts (Halpern & Mwesiumo, 2021).
Passenger behaviour and airport design play a crucial role in shaping retail revenue. Dwell
time, or the time passengers spend at airports, significantly affects terminal-related revenues,
such as food and beverage sales and retail purchases, although the impact varies depending on
terminal design (Wu et al., 2024). However, disruptions such as the pandemic have altered
consumer habits, reducing reliance on traditional retail and food services due to heightened
concerns about safety and hygiene (Bakır et al., 2022).
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Emerging challenges include managing operational inefficiencies and addressing uncertainties
in passenger demand. Gate assignment issues, fluctuating passenger volumes, and evolving
customer preferences demand flexible and data-driven solutions to enhance retail performance
(Silva et al., 2023; Rengarajan et al., 2021). Moreover, consumer habits have shifted post-
pandemic, with diminished reliance on traditional shopping and dining services, necessitating
innovative approaches to maintain passenger satisfaction and engagement (Bakır et al., 2022).
Yong et al. (2023) emphasize the potential of enriching passenger experiences through cultural
and business branding elements that reflect local and regional identities. These initiatives
attract passenger attention and encourage spending, thereby enhancing non-aeronautical
revenues. The study advocates for innovative approaches to creating immersive experiences in
airport retail spaces to capitalize on passenger engagement opportunities fully.
Shin and Roh (2021) argue for a strategic shift in airport management to reduce aeronautical
charges by promoting commercial activities. Establishing and expanding duty-free shops,
parking facilities, and other commercial ventures can enhance financial stability while
maintaining competitive airport charges. This approach aligns with the broader goal of
reinforcing non-aeronautical revenue streams to ensure the economic viability of airports in an
increasingly competitive market (Shin & Roh, 2021).
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waiting for flights, particularly in terminals with optimized layouts. Diverse retail offerings,
including local and authentic experiences, boost spending by adding perceived value.
Looking ahead, the future of airport retailing lies in flexibility, personalization, and the
integration of digital tools. Tailoring retail experiences to passenger preferences and
incorporating local cultural elements can enhance engagement and spending. Strategic shifts
to reduce aeronautical charges by expanding commercial activities are also essential for
financial stability. Ultimately, airports that embrace adaptive, passenger-centric strategies
while balancing environmental impacts will likely unlock significant revenue potential,
ensuring their long-term resilience and sustainability.
Emerging trends in airport retailing indicate that passenger behaviour has shifted towards
digital and contactless shopping experiences. With increased health and safety concerns,
passengers are more inclined to use mobile apps for pre-flight orders, click-and-collect
services, and contactless payment methods. Airports can capitalize on this trend by enhancing
their digital platforms, offering a seamless and safe shopping experience. Future studies should
explore the integration of these technologies and assess their impact on passenger satisfaction
and revenue generation.
Given the dynamic nature of airport retailing, future research should focus on several key areas
to ensure airport businesses' long-term resilience and sustainability. Firstly, integrating
emerging technologies such as AI, IoT, and blockchain should be explored in greater depth,
focusing on how these technologies can enhance operational efficiency, customer experience,
and revenue generation. Additionally, further studies should examine the environmental
implications of airport retailing, specifically regarding resource consumption and waste
generation, and propose strategies for more sustainable retail operations.
Moreover, research should investigate the impact of different terminal layouts on passenger
behaviour and retail revenue, particularly in post-pandemic recovery. Understanding how
terminal designs affect dwell time and purchasing behaviour will help airports optimize their
retail spaces. Similarly, passenger segmentation studies should be expanded to explore how
different passenger profiles (e.g., business vs. leisure travelers) influence buying intentions and
preferences.
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Conclusion and Limitations
In conclusion, airport retailing is essential for fostering resilient and sustainable airport
businesses. The study successfully bridges the identified research gaps by providing actionable
insights for airport authorities and stakeholders to optimize retail operations while aligning
with strategic organizational objectives, addressing the key themes and their progression within
the evolving airport industry. By embracing technological innovations, improving customer
experiences, and diversifying retail offerings, airports can strengthen their financial resilience
and adapt to evolving passenger needs. The role of retailing in airports has significantly
transformed due to factors such as changes in passenger behaviour, advancements in
technology, and the effects of global disruptions like the COVID-19 pandemic.
This literature review covers various aspects of airport retailing, including retail operations,
passenger drivers and buying intentions, challenges faced, and prospects. It highlights that
successful airports take a comprehensive approach to optimize their retail strategies. A deeper
understanding of these elements is vital for stakeholders to overcome challenges and promote
sustainability in the dynamic aviation sector.
However, this study has some limitations. It relies solely on a single scientific publication
database, which limits its scope. Future research could explore additional databases and
incorporate non-English publications, conference papers, and other sources not included in this
review. Furthermore, restricted access to full-text papers hindered the inclusion of some
relevant studies.
Acknowledgement
This research paper did not receive any funding from grants.
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