How African Airports Can Embrace Data-driven Approaches to Enhance Operations and Retail Management

Airports have become collection and production centers for vast amounts of data; from airline systems, security checkpoints, immigration, retail stores, and other stakeholders. Some of this data is collected manually through forms or a variety of systems like Wi-Fi, Check-in systems, Point of Sale terminals, and Airport Operational Database platforms among others.

To the airport management, this should be valuable data that can be used for decision-making. But just like oil, which is only valuable after it has been processed into usable products, data is also only valuable after it has been processed. And this is where data analysis comes in.

Data analysis is the collection, transformation, and organization of data to conclude, make predictions, and drive informed decision-making. Data analysis allows the airport management to use the data collected and turn it into valuable insights that will not only be used to leverage the airport’s operational capacity and planning; hence improving operations, but will also impact the revenue the airport is generating.

While most of the data process and management in African airports is handled and processed traditionally as statistics within the Corporate Planning department, there is a need to embrace business intelligence analysis and decentralize these tasks to other departments as they are equally needed to drive evidence-based decision-making in their operations.

Evidence-based decision-making relies on quantifiable data that has been examined and synthesized for use. Airport data analytics is key in unleashing key information and knowledge that airport management needs to propel the airports into leading travel hubs in this part of the world.

As African countries have now resolved to pilot the Single Air Transport Market (SAATM), an initiative that is meant to boost travel and travel within the continent, airports in the continent are expected to experience increased traffic of passengers and goods; and embracing a data driven approach in running will prove useful in streamlining the operations and increasing revenue.

A data-driven approach allows the airport management to answer important questions such as, what is the average age range of a typical passenger at the airport? How frequently do they use the airport? Do they normally do online check-in or physical at the counter? How is their shopping experience at the airport? What kind of products and services would they want to interact with at the airport? Among other questions. 

A data-driven approach can be used to transform two key areas in these airports. These are:

Retail Experience

Retail which includes duty-free and other convenient stores within the airport has become an element of the passenger travel experience in airports. It has also become a lucrative source of income for airports, bringing in about 30 per cent of the airport’s total revenue.

But the landscape is changing, more so after the pandemic. There’s a significant increase in the proportion of younger (Gen Y & Z) and less affluent travelers, which has led to declining demand for traditional and luxury airport retail experiences. And this group will make up to 50 per cent of all passengers according to Bain.

How do these airports adapt to the changing landscape and develop a retail experience to keep pace with customer expectations, remain competitive and increase brand reputation? Data. 

Using data collected at both physical and digital points at the airport, the airport can develop an audience persona, which is an accurate representation of the airport’s primary customers who are the passengers.

“Whoever said laughter was the best medicine obviously never tried shopping…at the airport”

The audience persona tends to characterize the kind of customers a company is targeting while being able to reflect a current or historical type of people relevant to the company. This will include appropriate demographic information of the typical customer, including age, gender, marital status, language, and level of education.

And it goes deeper by looking at the customer’s psychographics, including diet, social circles; interests and hobbies, sports, technology, media, and travel. It also includes marketing channels and mediums they mostly interact with, and even the most preferred brands and other affinities.

With such valuable data at its hands, the airport can collaborate with retailers to not only design and provide products and services that are relevant to the passenger’s needs and wants but create a personalized Omni channel experience at every step of their journey. 

A case example is how the Singapore Changi Airport has built an e-commerce platform, iShopChangi, which allows passengers to access products offered by retailers at the airport. Not only does the platform allows passengers the option of shopping in advance and picking up the products on arrival or departure, but it is also open to non-travelers in Singapore enabling retailers to access a wider customer base.

Currently, Changi Airport’s revenue is 50 per cent non-aeronautical and 50 per cent aeronautical. 83 per cent of the non-aeronautical revenue is from concessions which consist of retail – Duty-free shops, F & B and other service offerings.

This is a concept that has equally been replicated at the Kuala Lumpur International Airport with its shop my airports and Toronto Pearson Airport’s The Shop at Pearson among other international airports.

The E-commerce platform is a unit of their retail offerings that serves the needs of passengers using that airport.

Such a digital platform goes further to become a data collection point, providing more insights into the behavior of the shoppers, hence the airport can optimize tenant mix across terminals.

Passenger Experience

This data can be further used to enhance a passenger journey experience at the airport. With more than 3.9 million passengers using Jomo Kenyatta International Airport in 2021 or the 8.2 million who used OR Tambo International Airport in South Africa according to the recent report by ACI Africa, the airport management of these hubs and others have an uphill responsibility to make sure that each of these passengers has a memorable and pleasurable airport experience bound to make them use the airport again.

This airport experience will include and is not limited to the transport system to the airport, security screening, shopping options, food and beverages services available, Wi-Fi access, lounge services available, etc.

According to a report on airport passenger journey by Collinson Group, passengers who enjoy their airport experience spend more at the airport, hence increasing revenue for the airport.

With an audience persona set, the airport management can leverage various data points to understand the customer journey of a typical passenger who uses the airport.

“Airport terminals are the cathedrals of our age – a huge public space where people gather, wait, eat, sometimes sleep, and usually shop.”

Data points can provide answers to questions such as; how do passengers access the airport? Public means or private? If public, what is the distance between the drop-off points and the terminals and how long do they take? Is there a convenient and timely airport shuttle? How long does it take this customer to go from security screening to immigration clearance? How long do they take to access their luggage after landing, etc.?

Insights collected from such data points can be used by airport management to identify pain points passengers have and to recommend well-informed solutions. And this could include reducing security screening time by perhaps having more gates opened during busier times and/or increasing staff, etc. This will increase the time the customer has to explore the retail, food and beverage areas, hence increasing spending at the airport. According to the Airports Council International 2016 Airport Service Quality survey, a 1 per cent increase in global passenger satisfaction generates 1.5% growth, on average, in non-aeronautical revenue.

The insights can also be used for effective allocation of the airport infrastructure for airport operators to avoid over or under-usage of resources, including check-in counters, gates, bridges etc. hence avoiding delays.

Data captured within and around the airports could prove to be of immense significance in transforming the retail and passenger experience once it has been turned into valuable insights.

Data analysis needs to be assimilated into airport operations rather than at the periphery.