From Travel Retail to

Transit Retail

These are not great times for travel retail, and many eyes are turning to mass transit, wondering whether it could become the new eldorado of retail. With hundreds of millions of passengers and significant retail areas, there is certainly a massive opportunity.

As a matter of fact, a regular commuter will spend around $20 a year in metro retail in a city like Paris or NY. Yes, it takes 200 trips to spend slightly more than they would do in their city’s airport in one trip ($15 in JFK, $20 in CDG). However, the annual spending per person is comparable, even though the retail offering is much more sophisticated in airports.

That being said, untapping this potential will require to take into account the specifics of transit retail versus travel retail.

It’s a distributed network

Total retail surface area across a metro network rarely exceeds 20,000 square meters (except in Asia, where transit retail is more developed), and is split among dozens, if not hundreds, of stations. Consequently, the retail offering in one station typically averages 2 to 3 stores or 200 square metres.

At the scale of each individual station, this pales in comparison to large commercial developments in airports or mainline stations, where travelers can shop and eat at dozens of stores and restaurants.

Why it matters: it forces developers to consider the experience at the scale of the network, instead of trying to reach a critical mass in one location to slow down traffic and increase capture and cross-conversion rates. Thinking at the scale of the network implies thinking at the scale of each customer’s entire journey, a whole new world of challenges and opportunities.

Short dwell time

People usually stay just a few minutes in a metro station, not 30 to 75’ like they would in a mainline station or an airport.

Why it matters: transit users are not a captive audience at all. Retailers need to give commuters a good reason to stop.

High frequency

Over a half of traffic in airports and mainline stations is generated by very infrequent travelers. Mass transit stations are radically different, with 70 to 80% of traffic generated by commutters, people who come in the station several times a week, at different times of the day. Less individuals frequently pass in front of a limited number of stores.

Why it matters: it is much easier to create predictability and awareness of the commercial offering in this context than in an airport or a mainline station.

Everyday moods

Long distance travel by itself is stressful, especially for infrequent travelers (not even mentioning fear of flying). In addition, the reasons why people travel (important business meetings, a family reunion…) come with their own stress load.

That’s not the case with mass transit. Commuting is a much more mundane form of travel, and it doesn’t take so much room in travelers’ mind -- except in times of disrupted operations. There is a continuity between the mood of the moment and the mood while traveling.

Why it matters: people do not react to the same emotional stimuli when they commute than when they go long-distance.

Everyday needs

When people travel once a year and are stressed, they can skip their healthy eating habits for a day or indulge in fancy shopping. However, when they travel everyday, their eating and shopping habits in the metro restaurants & stores must be compatible with their lifestyle choices and their resources.

Why it matters: shopping or eating while commuting is not exceptional, by nature. It must fit with users' shopping (and eating) habits, providing additional convenience (and even experience) without sacrificing on key motivations.

Bottom line

Transit retail has great potential but requires a new approach: at network scale, leveraging frequency of use, and focusing on users’ circumstances and mood to better satisfy their motivations.

With this in mind, operators and retailers can elevate the entire mass transit experience, improve satisfaction and increase spend per traveller from $0.05/0.15 to $0,50 and above.

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