Sydney Airport’s first-ever supermarkets open the door to the local retail market

Sydney Airport plans to open Australia’s first supermarket-style retail outlets at its two domestic terminals next year in partnership with the hub’s primary duty-free concessionaire, Algebra. Heinemann. This gives the German retailer a foothold in the home market, initially with home delivery.

Together, the new stores in terminals two and three will span an area of ​​24,500 square feet and the first store is scheduled to open in July 2023. They will sell the typical categories found in international duty-free stores ranging from fashion, accessories, watches and jewellery, to perfumes, cosmetics and skincare, as well as sweets. And wine and spirits.

T2 will feature the largest unit spanning 19,000 square feet, with a much smaller 5,500 square foot space reserved for T3. According to a statement from Sydney Airport, a mix of “well-known Australian brands” and bestsellers will be available at both terminals, with the retail mix tailored to each passenger’s profile.

For example, the T2 store will source heavily from streetwear brands and sports brands, as well as in-demand product categories such as niche fragrances and Clean beauty. The aim is to provide a more fun retail environment catering mainly to a leisure-oriented traveler who is younger and more aware of current trends.

The smaller T3 store aims to offer high-end and luxury design with a retail offering focused on luxury and high-end fashion, accessories and beauty brands that will appeal to more savvy business travelers and high-spending shoppers.

Five-year franchise and home delivery

The decision to go for a one-stop-shopping concept is a huge win for Heinemann who will run the two new stores as franchise for five years. The deal means the travel retailer can expand to all three terminals at Sydney Airport, expanding its existing duty-free concession at T1 International Terminal, which runs until 2029.

Sydney Airport Executive General Manager – Commercial, Mark Zaouq, commented: “Heinemann provided a strong vision of what we wanted to achieve, and it was only natural to expand our partnership to T2 and T3 to provide a cohesive shopping experience across the airport.”

Heinemann Asia Pacific’s CEO Marvin von Plato described the new domestic franchise at Australia’s busiest airport as “a step change in our regional business model”. “It’s a great opportunity to connect with customers before and after they actually travel,” he added.

This engagement will create a closer relationship with Australian consumers as well as new brand partnerships thanks to the retailer’s broader category competence. “We are now able to offer more brands and value-added services such as home delivery (Australia),” said George Tsoukalas, Managing Director of Heinemann Australia.

The retailer’s full domestic terminal product suite will be available for purchase through its online store and it will also deploy the Heinemann & Me loyalty program in its airport stores to enable it to build datasets and shopping profiles for individual customers.

The decision to take the supermarket approach comes as flagship retail offering T1 is also undergoing A major shift in the luxury sectorthe last opening was Louis Vuitton’s largest independent travel retail store, First announced last summer. Sydney Airport seems to want to recreate the T1 atmosphere in its other terminal buildings. “The retail experience on our international terminal is among the best in the world and I am excited that we are now able to offer a similar experience to local travelers,” said Zouk.

Additionally, due to the slow return of air travel in the broader Asia Pacific region, domestic travel in Australia is busier than international travel at the moment. October year-to-date, the 17 million domestic passengers far exceeded the six million international passengers. Even if proportions return to 2019 levels next year, a more targeted retail plan for domestic travelers makes sense as they make up the largest number of passengers at Sydney Airport in normal, non-pandemic times.

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