ARI: Segmenting Airport Shoppers

Published by: Sinead Mooney

2015.02.13

Driven by challenging market conditions, a new method of segmenting the market proved invaluable to the retail team at Dublin Airport Authority (DAA).  This model was subsequently rolled out to other airports worldwide managed by ARI, the international retailing arm of DAA which operates airport shops in 14 global locations including Canada, Middle East, Cyprus and India.

RED C has been conducting a standalone research study for the DAA retail team since January 2008.  The findings were traditionally structured, i.e. based on the behaviour of passengers at Dublin Airport in terms of purchasing, trip type and their demographic profiles.  While this research had provided many critical insights, it was important in a time of increasing austerity that the research outputs were more strategic in focus.

In 2011 both RED C and DAA felt that a different approach to the review and analysis of retail research data was required. It was argued that to continue to examine the data purely by demographic splits and behaviour at the airport was not sufficient to truly understand passengers’ differing retail needs.  RED C introduced the idea of a value based segmentation model to DAA.  It was proposed that this model would include all original outputs to provide trend and comparison data but supplement this with analysis that looked at how attitudes to shopping shape actual behaviour.

Segmentation modelling was conducted and revealed eight unique shopper segments.  Initial segment profiles were introduced to DAA through a workshop and personalities attributed to each.  An extensive qualitative study followed, involving focus groups with representatives of each of the eight segments, to build the segment profiles and an understanding of the attitude and mindset of each segment. This informed the development of a cohesive strategy for the retail team which would help them to gain the greatest return on investment by targeting specific segments with a tailored proposition.  The merging of the qualitative with the large quantitative data set delivered a robust and highly focussed strategy for the DAA Retail Team.

The eight segments ranged from non-shoppers, who take a blinkered approach to airport shopping and are not inclined to be aware of offers or categories available, to committed shoppers who always shop when they fly.  Committed shoppers, the highest spenders, buy from several categories and purchase across a range of products from food or drink items through to cosmetics/perfume items.  This group further divided into two distinct segments: those who plan their trip with precision through the airport and those who leave plenty of time to allow them to pick up and try new items.   Ultimately, the research allowed the Retail Team to develop focussed strategies to target passengers within different segments and to identify those segments that should be focused on given their greater potential to deliver growth.

Following on from successfully implementing strategies in Dublin, the research is being rolled out internationally.  The model is tailored to allow us identify new or emerging consumer segments specific to each country/airport.  Montreal Trudeau Airport and Delhi were the first to receive their results.  Using this research combined with local and international market knowledge, it is possible to develop specific strategies for each market.  Other markets to be included are: India, Cyprus and the Middle East.

Nicola Wells, Head of Global Customer Strategy at ARI stated the research had several key benefits for the group:   “The model allowed us to move beyond basic demographics and segment our market into key target groups who behave in similar ways.  The real difference with this model, was that we were able to attribute a monetary value to each segment and therefore calculate the size of prize for different strategies and prioritise accordingly.  In addition we are able to compare segments and create global benchmarks to understand where we have differences and similarities.  We can leverage this to build global platforms with suppliers. Finally, the information is invaluable to our airport partners as it enables them to understand what consumer needs they should address to drive their total commercial offer and revenue.”

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