This article features an interview with Fraser Brown, the Retail Director of London Heathrow Airport, held at the Passenger Terminal EXPO 2023 in Amsterdam. The conversation delves into the challenges and opportunities Heathrow faces in the ever-evolving retail landscape, particularly in the wake of the COVID-19 pandemic.
The Retail Landscape of Heathrow: From Crisis to Opportunity
Fraser Brown, a seasoned retail expert, has been at the helm of Heathrow’s retail operations for over four years. His team oversees a vast network of 350 retail units, encompassing everything from duty-free shops to luxury brands, spread across the airport’s four terminals.
Brown emphasizes the importance of concession models, where Heathrow collaborates with partners to ensure high-quality food and beverage offerings, creating an exceptional retail experience for passengers. He highlights the ambitious goal of delivering the best retail service in the world, a vision that has been tested by the pandemic’s disruptions.
The Impact of COVID-19 and the Cost-of-Living Crisis
The interview explores the evolving retail landscape in the face of the COVID-19 pandemic and the subsequent cost-of-living crisis. Before the pandemic, travel retail thrived, attracting passengers who were considered “rich” compared to the average high-street shopper. This made the sector a beacon of hope for brands struggling with declining sales.
However, the pandemic brought challenges. Reduced passenger numbers and workforce constraints impacted the airport’s revenue, requiring a strategic approach to navigate the financial implications.
Embracing Digitalization: A Missed Opportunity?
The conversation delves into the impact of digitalization on Heathrow’s retail strategy. While the airport excels in using digital tools for basic passenger information, it has fallen short in translating this competence to the retail sector.
Heathrow has launched Heathrow Boutique, an online reserve and collect service, allowing passengers to browse duty-free items. However, the platform lacks the desired breadth of brands, and the airport is not the direct retailer. Brown believes there’s an opportunity to curate online offerings on behalf of the brands and retailers they work with.
Passenger Behavior in the Post-COVID World
The interview concludes by examining passenger behavior post-COVID-19. While the pandemic has had a significant impact on the travel industry, Heathrow is seeing passengers returning to airports and engaging in retail and food & beverage offerings.
However, the UK government’s decision to remove the VAT-free purchasing scheme has created a “tourism tax” that negatively affects sales of beauty and luxury products. Heathrow continues to advocate for policies that will make UK travel retail more competitive and drive growth.
