The Sky’s the Limit

In the spring of 1976, as a young researcher working for a small nonprofit organization, I was invited to a lunch discussion at the Wenner Gren Foundation for Anthropological Research, which occupied an elegant town house on New York’s Upper East Side, around the corner from the Frick Museum. The elegant Swedish institution, with roots in the Electrolux fortune, had been a sponsor of research, conferences and retreats for decades.

The Sky's the LimitThe centerpiece of the discussion was an on-stage conversation between Jack Fruin, the head engineer for the Port Authority of New York and New Jersey, who was in the middle of designing and building Newark Airport, and Irving Goffman, a distinguished social scientist, author, and University of Pennsylvania professor. The conversation was about the design of public spaces.

Jack was asking Irving for guidance; his design teams were making decisions on the layout of waiting areas. He had questions about the impact of wait times and what criteria he should be using to buy furniture for public seating. He asked for thoughts on how the impact of future technology might be anticipated in the design of check-in stations. Irving spent the entire lunch backing up. He didn’t know; yes, it was a researchable topic, interesting question, but no clear answers. I remember thinking how much more fun and satisfying it would be to work for Jack than to study with Irving. That day was a punctuation point in my career.

Early airports were conceived as variations on the passenger ocean liner terminal. They were meant to be glamorous and exciting. The first commercial airports had soaring ceilings and massive expanses of glass. As the cost of air travel declined in the 1970s, and a broad cross-section of our population was introduced to airports, the terminal, once a dramatic, not unpleasant place, was reduced to bus station levels of madness.

In 2011, there is no question that commercial air travel is in a bad state of disrepair. Thanks to 9/11, flying is a very unpleasant affair. Most airports resemble cold war Berlin, complete with Checkpoint Charlies and unsmiling TSA workers. Add to these security checkpoints, capricious weather and mechanical problems, we never know how long a trip is going to take. Earlier this year I arrived at Orlando Airport at 11 a.m. for a noon flight to Newark and, five cancelled flights later, climbed on a plane after midnight and arrived home at three in the morning. We “road warriors” all have hair-raising stories of being trapped inside airports with hours to kill. Is it any surprise that someone thought retail was the answer?

The Sky's The LimitThe link between transportation and shopping has deep roots in human history. Markets have historically been located at physical crossroads. Walk the Grand Bazaar in Istanbul where Europe meets Asia, and you see the genetic stamp of the world in the faces of shoppers. Why should airports as the crossroad ports of the world be any different? Airport operators have been caught in a dilemma, however. Is airport retail for the entertainment, convenience, and pleasure of the traveler, or is it another source of income for the quasi-public entities that run those facilities? Travelers are a captive audience, as anyone who has had to pay $3.50 for that cold small bottle of purified water that costs $1.00 in a convenience store on the Interstate would admit. At Heathrow and Gatwick, there are signs that promote airport retailing with “High Street” (“Main Street” to us) pricing, thus trying to combat the clear perception that in shopping at the airport you are paying a premium. However, a bottle of my favorite single malt scotch was cheaper at my liquor store on the Jersey side of the Holland Tunnel than it was at the Duty Free Store at Heathrow.

Airport retail has some built-in challenges. First, shoppers are almost invariably encumbered with rolling luggage and backpacks, making the interaction with merchandise clumsier and the transaction process slower. You can only fit two-thirds of the number of people comfortably in the same sized stores as in your local shopping mall.

In general, most airports suffer when retrofitted with retail because the basic design of terminals constructed throughout the twentieth century was about managing airplanes relative to square footage and construction costs, rather than the functionality of retail. You see the difference in the twenty-first century airports like Terminal Five at Heathrow, or better yet in Dubai, where retail was a central function it its planning. However, many more, like Charles De Gaulle in Paris and Terminal C in Newark, are planning retail into their renovation efforts.

At the airport, you can only sell what people can carry, which is why watches, jewelry and fragrance work so well. The Duty Free operation in Brazil has overcome this cliché; there, you have online order access, and can pick up at the airport’s Duty Free either entering or leaving the country. I’ve wondered when someone is going to figure out that the airport might be a perfect place to reinvent that old twentieth-century entity: the catalog showroom. Look, see, and touch, and get it delivered at home.

Three years ago I was part of the team working on the privatization of the retail shopping malls that are built into the Tokyo metro system. You can buy flowers, fashion, fancy cakes and confections, and dine in restaurants. Better yet, you can use your Metro Card to swipe and pay for small purchases on the run. As was carefully explained to me, the retail rents are a subsidy for transit costs. It made me think about my New York City subway system, where riders are screaming about fare increases but underground retail purchases are limited to candy, magazines and soft-core porn.

Paco Underhill About Paco Underhill

Paco Underhill is the CEO and Founder of Envirosell, a behavioral research and consulting firm with 10 offices globally. Paco and Envirosell’s work has been featured in The New York Times, 20/20, National Public Radio, Smithsonian Magazine, Wall Street Journal, and other major news media. Paco is also the author of What Women Want, which was published in soft cover edition by Simon & Schuster in July 2011; Call of the Mall, a walking tour of the American shopping mall; and Why We Buy, the bestselling book about retail in history. In addition, Paco’s columns include regular features in major trade publication DDI Magazine, as well as Goldman Sachs’ in-house publication.