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Biometric technology at airports - a threat or opportunity for airport retail?

March 3, 2019

With biometric technology advancing quickly, it’s predicted that in just in a few years from now, passengers will need only their face to go through all airport processes such as check-in, baggage drop, security and boarding. This technology would make the passenger journey smooth and seamless and the overall customer experience greater than ever. Some airports such as Atlanta, Miami, Bengaluru, Hong Kong and Changi Terminal 4 are already fully deploying this innovative technology. Airports and airlines (e.g. Sydney Airport with Qantas, Schiphol Airport with Cathay Pacific, Miami Airport with Lufthansa, etc.) are working together on facial recognition trials to bring the passenger experience and operational performance to the next level.

 

So, the question then is, would biometric technology be transferable to airport retail processes and help it grow or will it be a reverse development?

 

The travel retail business contributed around $70 billion USD in 2017 to the world economy and has been growing 9% a year during the last 15 years*. In my opinion, there are some undiscovered opportunities for growth of non-aeronautical revenues by applying new biometric technologies. One of them would be to connect passenger data with personalized commercial offers available. Knowing the customer’s needs, wants, preferences and real-time location, solutions to increase non-aeronautical revenues could be developed and customer engagement increased.

 

Advanced biometrics technology enables airports, airlines and retailers the following benefits:

  • knowledge about the exact location of passengers in real time

  • ability to send out push up notifications with special offers directly to the mobile devices of customers advertising special offers and deals based on the personalised preferences

  • enhance the overall passenger experience, from personal greetings of customers in lounges and at checkout points, where the assistants at the welcome desk would already recognise the name and status of each customer without any documents.

 

However, there is potentially also a threat to the retail business. Due to the significant reduction of time needed to go through all airport processes, passengers may arrive as late as possible to airports. The trend and challenge most airports are currently facing is to make the airport a destination so customers would arrive earlier, by choice, and spend time in restaurants, shops, and relaxing in entertainment areas. Perhaps the greater use of biometrics would go against these goals by decreasing dwell time at the facilities.

 

Nevertheless, I see a huge impact of biometrics on all airport processes which means improvement of operational efficiency and increase of overall customer experience, but this should not happen at the cost of commercial business.  Therefore, a future retail business model needs to be reconsidered.

 

Several opportunities have been identified for the future retail market:

  • usage of real-time information to target customers with personalised offers

  • increase of the transaction speed at the point of sale

  • reduction of transaction processing costs for retailers

  • development of individual marketing campaigns

  • generation of more impulse purchases

  • integrated partnerships with technology providers, airlines, brands and retailers, and inclusion of the extended circle of potential stakeholders such as hotels, parking operators, online travel agencies, etc.

 

However, besides the impact of biometrics on retail business, the main uncertainty and threat would be the data protection, regulation and privacy concerns, which have not yet been solved nor harmonised across the industry. It’s a challenge that will need to be overcome.

 

 

*Euromonitor, Generation Research

 

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