At Airports, a Bigger Push to Sell Electronics
The New York Times
Sales of electronics and their gear in airports have gone from little more than an afterthought a few years ago to a rapidly growing presence.
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John Van Beekum for The New York Times
A TechShowcase store in the Miami airport. Retailers at airports are increasing the presence of electronics.
Electronics “fit the airport market really well,” said Bruce Boudreau, a director of LeighFisher, airport consultants in Burlingame, Calif. “There are lots of business travelers, lots of tech-savvy people who are looking to try new things or replace things they already have. They might need batteries, want to replace their headphones, kill time or reward themselves for a good idea or a good business trip.”
One retailer, APW Brands, plans to open a new type of store next year where employees will wear electronic nametags with multimedia displays to demonstrate equipment to customers. Next year, too, OTG Management plans to rent iPads to travelers for their tripsand sell downloadable content for the iPads. The Paradies Shops, which operates a variety of branded stores like Brooks Brothers and newsstands at airports, has joined forces with the video game company Electronic Arts on a new retail concept.
Mark Knight, president of Airmall USA, an airport retail developer owned by Prospect Capital, a private equity company, said sales volumes of electronics retailers at airports exceeded sales volumes of retailers specializing in items like clothing or gifts. Electronics are “hot in their sales performance,” he said, “because they have such broad appeal and are constantly changing. They’ve got natural, built-in momentum.”
Mr. Knight also said that electronics retailing was a natural fit for airports because the merchandise, which is usually not large, could be sold in “small, efficient settings,” like carts and shops that are essentially cubbyholes. Although some electronics stores are outside of security checkpoints, most stores are near the gates, thus providing a diversion for travelers waiting for their flights.
Mr. Boudreau said prices charged for electronics at airports were typically equal to or within 10 percent of prices at retailers elsewhere.
The largest retailer of electronics at airports is InMotion Entertainment, which started out renting DVD players in 1999 and now operates 68 stores at 33 airports in the United States. Their stores go under the names of InMotion Entertainment, which sells a wide variety of electronics and accessories; Soundbalance, which offers environmentally friendly products like solar-powered batteries; and BlackBerry Store from Wireless Giant, which sells BlackBerry merchandise.
APW Brands, based in Wellington, Fla., began in 1997 as a cart at Philadelphia International Airport, where the founder, Iris Goldschmidt, sold cellphones. The company now operates 15 TechShowcase and 20 Airport Wireless stores in about 20 airports in the United States. The Airport Wireless stores offer a wider selection of equipment and accessories than TechShowcase. The company has a joint venture with InMotion Entertainment on Soundbalance stores, and also operates Tech in a Sec carts at several airports.
APW Brands’ newest retail concept, Tech Interaction, is scheduled to open at airports in Philadelphia, Pittsburgh and Baltimore early next year. Customers will be able to research their electronics needs on touch screens on store walls, examine merchandise and try out equipment like headphones.
Bluwire, which has been in business since 2007, has 12 outlets in eight airports. Christopher Burden, Bluewire’s co-chief executive, said headphones were his company’s best-selling item. “If you spend $700 on an iPad, you want to enjoy it with a suitable pair of headphones,” he said.
Another electronics retailer, Brookstone, has stores at 50 airports in the United States. Don Eames, Brookstone’s vice president of retail stores, said half the stores’ merchandise was electronics-related. He also said the category was the “fastest-growing part” of Brookstone’s business, with items like iPhone cases and a roll-up keyboard among top sellers.
Zoom Systems, based in San Francisco, operates Best Buy Express vending machines in most of the 50 largest airports. The machines sell 60 to 70 items carried by the retailer, including the Apple iPod Touch and Nano.
Several companies also cater to the current demand for Apple’s iPad and similar devices. OTG Management will open OTG Media Bars at its Cibo Express Gourmet Markets in Delta’s Concourse G in Terminal 1 at Minneapolis-St. Paul International Airport next year.Travelers will be able to rent an iPad or pay to download content for their own iPad; rentals, available for a minimum of one day, will start at $29.95. Virgin America, which offers Wi-Fi on all flights, in July began giving passengers on certain flights the option to try, free, a Google Chromebook at the gate or in flight. This promotion ends Jan. 15.
Even airport newsstand specialists sell electronics and accessories. In September, the Paradies Shops opened an EA Sports Experience store at Charlotte Douglas International Airport in North Carolina where customers could play with and purchase Electronics Arts video games and other merchandise. Two more are scheduled to open this month. In addition, all Hudson Group newsstands carry chargers and other accessories, while the largest offer a wider selection of merchandise. The company also operates three freestanding Tech on the Go electronics stores at airports.
“This is a category that simply did not exist for us even a couple of years ago,” said Michael S. Levy, senior vice president of merchandising for the Hudson Group.
Duty-free stores at major airports worldwide outside the United States — run by companies like DFS Group, Dufry, Nuance Group and World Duty Free — also sell consumer electronics free of local taxes and import duties to departing international passengers. Mr. Boudreau said the decision to buy at these stores should be based on a comparison of prices at the airport and at the traveler’s place of residence, where local taxes could be imposed. Savings can be considerable for travelers from high-tax countries like those in the European Union and Brazil, where local taxes can add as much as 40 percent to some items.
Mr. Knight of Airmall said electronics retailing at airports was somewhat recession-proof because the income level of many travelers was typically higher than that of the general population, which “mitigates some of the impact of general economic conditions.”
But Kerry Moyer, senior director of retail membership for the Consumer Electronics Association, a trade group, cautioned that retailers had to be careful with what they offered. “If it’s an impulse purchase that satisfies an immediate need, people won’t hesitate spending $50 or $100,” he said. “If you have something that’s priced too high, say over $200, then they might hesitate and think about it.”