How different is it to operate retail operations
in airports and hotels versus traditional malls?
PN: It’s a very different world from the mall, where you just pay the rent on the space and you more or less have it. Whereas for airports, all space is typically tendered competitively. And in the U.S., it’s done in a particular way that’s different from many other parts of the world. There’s a master concessionaire who sublets space to other retailers. So in bringing InMotion and MRG together, we’re now an effective master concessionaire bidder, whereas WH Smith, by itself, is not. We realized that we needed to be bidding at the level to achieve the level of success we want.
It’s also more difficult, logistically, than running a store in a mall or any kind of traditional big-box store. The customer mode is the most important thing, because their reason for being there is to get on a plane, not to visit shops. On one level, it’s great because we’re presented with customer traffic, and those customers waiting for their flights have time to kill, but we still need to get it across the threshold. And the space also tends to be very small when compared to big-box retailing, so we don’t have a lot of stock space and have to get stock to airside locations. We really have to think about what’s on the customer’s agenda, what products are going to solve their problems and meet their needs, what will inspire them to buy something that they weren’t planning to buy. With big-box retailing, you’re able to present the entire breadth of the category, whereas we really need to narrow down items.
The other challenge is that costs can be very high, since rent is based on a percentage of sales.
And then, in terms of the people we hire, we’re not only looking for exceptional sales people who can empathize with the customer as they’re going through the airport and identify what their needs are, but also people that we can easily get planeside, since it takes time to get them accredited.
What do you do to get customers across that threshold?
EG: People have that mindset of their destination, and not always their journey, so utilizing airport retail as a convenience factor is only part of the formula. We have to find the right solutions that don’t just help a consumer get from A to B, but actually get them to want to use it well beyond their arrival, so that it’s a qualified purchase, a qualified need. Sometimes there’s more of a perceived need — what happens if my phone dies, for example; it’s not quite life or death, but for some of us, it is. How do I make sure that I can still be in touch with my family, friends, and office? How can I make the most out of my trip by capturing the experiences that much more? How do I not only watch and binge my show that I’ve downloaded for my trip, but also use these two wireless earbuds when I work out at the hotel gym, and this charger or Bluetooth adapter? We’re here to provide a full solution and help enable that travel experience.
As you mentioned, once travelers are through security and planeside, they have time to kill — does this mean airport retail has a bright future?
PN: Well, relative to other retail sectors, that could be right, but only if, as Eden just said, we continue to make sure that we’re relevant for the journeys that those passengers are on. We’re very good at turning a need into a want. In other words, if your need is a pair of earbuds to listen to music or watch a movie on your flight, we can facilitate that for you for $20 alright, but it will not be as good of an experience as more premium wireless noise-canceling products that might have a retail price of $200. We’re very good at walking people through the features and benefits of, say, noise-canceling versus non-noise-canceling, and what that’s going to mean for the entertainment experience on their flight. And then we’ll make sure they know that they’ll need a Bluetooth transmitter if they want to watch any movies that are part of the airline’s in-flight entertainment. The success of our business model is the ability to take the need for enough to consumers and turn it into a want that they become so satisfied by.
EG: It’s not just turning the need into the want; it’s also turning that need into a solution and supplementing that with another solution. And making sure that their products can be used in multiple scenarios.
PN: One of the ways we do this is by offering bundles, where for a bit more money, we will add on two products that are relevant to the initial product. So if you’re buying headphones, you might opt for a bundle that also includes a power bank and a Bluetooth transmitter.
What kinds of products are InMotion staples?
Headphones make up the biggest part of our business. Those would be followed by what we’d classify as consumer electronics accessories — cables, powerbanks, adapters, and cases. Then we’ll also have travel accessories like pillows, luggage, and other types of airport-relevant items. We carry different health and wellness accessories like FitBits and Garmins. And we sell GoPro cameras, though it varies by airport. Resorts airports, for example, sell many more action cameras than what I’d call classic transit hub or departure airports. It’s fascinating because the people who are buying these items have already been on their vacations. They might decide to buy an underwater camera on their way home because they’re buying it for their next trip.
How has the assortment of products at InMotion changed since the pandemic started?
EG: Our product assortment has adjusted to focus more on the leisure or work-from-anywhere traveler, versus the business traveler in which we had a great presentation of work accessories. So besides mice, Bluetooth keyboards, and laser pointers, travelers today are also looking for portable air purifiers, percussive massagers, and wearables for smart health.
PN: The consumer demographic has changed post-COVID. We’re seeing a younger, more gender-balanced traveler that’s more interested in personalization and fashion than spending $300 on a great pair of headphones, so we’re evolving to meet that more prevalent passenger. We don’t know if this is a permanent change or just temporary.
EG: We want to serve and offer the most cutting-edge electronics, but only if they’re ready for a traveler to use on their journey. So many of the products we carry are unboxed, charged up, and ready to be used. If we sell you a tablet or an Apple Watch, we’ll set it up for you with the right band and charger and insert a SIM card for you. If you buy a GoPro, let us at least teach you the 101 so that you don’t have to sit there with the instruction guide and hope you can figure it out on your tray table. That’s also part of the solution-based concept we offer.
It’s also a part of our DNA. Smartphones have changed everything, but even more than two decades ago, when we started our business, we would provide you the Sony Walkman, the disc, the headphone, and the batteries. When rent-tailing was a true part of our fabric, we’d rent you a DVD player in a carrying case with an exterior battery, two headphones, a Y splitter, and two DVDs, so you were truly solution-based for an entire journey. At the time, people weren’t of the mindset to buy a $1,000 DVD player. That was just mind-blowing, but now everyone’s carrying a $1,000 mobile device in their pocket.