The Big Idea
What if Duty Free Retailers opened a premium, first-class lounge above their stores for shoppers who spend over a certain threshold (I.e. Spend over $250 and get free access to the lounge)?
Lounges in airports. To some, they are like a mythical oasis. To others, the lounges represent the only viable destination in an airport that gets you away from the throngs (or “the great unwashed” as I overheard someone say in one lounge). Going into a lounge can make you feel special.
Put it this way. If you were to walk up to someone in departures and offered them access to a premium lounge for free, would they turn it down? Probably not. The fact that people pay to go into lounges (“pay for access”) shows that they have value. Real value.
How Would It Work?
Something of such great value is likely to put some shoppers into search mode. Humans are conditioned hunter gatherers. Instead of roaming the fields and plains searching for food, we now search towns, shops and even the internet to find the things we are looking for. An initiative such as access to a premium lounge is likely to activate this behaviour. They want that personal invitation to an exclusive area.
So, a shopper would select their items, pay for them and be taken to a lift in the store that sends them up to the exclusive lounge.
The shopper is then greeted by a first-class concierge who orientates them and settles them in. I am thinking along the lines of Jonathan Pine at the start of the Night Manager. Superb manners and a confident but understated approach.
The lounge itself would be elegant and have an understated luxurious feel to it. Once in there it is all about the customer. Want a Chanel makeover? No problem madam. Want to know your Cabernet Sauvignon from your Shiraz? Let’s do a 15-minute education session. Want to find out how tips and tricks on your devices, step this way.
Imagine then…. “I am so pleased you enjoyed that and of course, we can have the Chanel make-up / the Merlot / a new case for your device brought to you straight away.”. Yes, they have found themselves spending more.
Quite happy to sit and read instead? Be our guest.
As one commenter put it on my Linkedin post – the ultimate brand engagement. If the retailer creates their own lounge, they can design, curate, deliver and control the entire experience end to end.
An obvious question would be “Do the commercials stack up?”. Why not just send them to one of the lounges?
Well, sending them off would be one option however, I do believe that you need to be in total control of the whole experience. It is the retailer brand after all. Imagine if you (the retailer) had to pay the affiliate lounge $20 for everyone you sent there and when the shopper got there it was busy, the food was awful and the seats were torn etc (yes, I have been in a lounge like this). It is not on-brand from the retailer perspective.
Retailers do not pay a rent for their space. They pay a percentage of sales. Adding a floor to the store gains additional floor space but not always the footfall. There are a whole range of other factors that would be considered when fully evaluating the commercial viability but that will vary according to the airport, retailer and location. As such, a more detailed view is out of scope for this post.
People are inherently lazy. They will opt for the easiest solution 9 out of 10 times. As an example, if you have a trolley bag, are you going to want to go up an escalator to browse? Probably not unless there was something specific up there.
So, one option would be to create a lounge instead of an expensive fit out of fixtures, thousands of dollars in stock and sufficient sales staff to cover the area.
The key to growth is to drive people into the store and get them to spend more. So how would the retailer benefit from this initiative?
- People trading up to get access to the lounge
- People buying additional products and services while in the lounge through makeovers and education sessions
- Investment from brands who want to be part of the exclusive environment
- Introduction of new services
- Improved awareness and encouraging the store to become a destination
Why Would The Customer Want To Do it?
The reasons why I think this would work is that it appeals directly to certain characteristics and behaviours I.e. those who have money, can spend the money and want to show they can:
Space in lounges are at a premium. Not everyone can get in. Scarcity drives people to get something before it disappears or is sold out. Ever seen footage of a black Friday rampage? People want what they cannot have.
Once people are in, they will want to brag about it. They will want to tell their friends about how they have managed to get into this exclusive lounge. This creates…..
Social Currency is a term that refers to stories, something that can be passed on to give social status or kudos. Getting access to a beautiful first-class lounge could be classed as social currency. Stories that they learn about products or fascinating facts can also be forms of social currency. What would happen if you had the option to be delivered from the lounge to the gate in a gold plated buggy or a tesla roadster – something over the top. It is shareable.
Like Minded People
There is a distinction between new and old money. New money they say, speaks louder than old. Those who have come into money or made their money often like to show off about it. Old money, money that has been passed through the family is a little more reserved. Whatever the type of money, people like to be around others in a similar position to themselves.
This is all about how someone want to feel. They may never be lucky enough to fly first-class but they would love that experience of a first-class lounge. Many moons ago I managed to blag myself into the first-class lounge when I should have been in the normal lounge. It was pretty much the same as the normal lounge but a lot less people. It was therefore calm, quiet and overall a nice place to be.
People want to feel special and this is a way retailer’s can deliver that in a meaningful way.
What About Those Who Play The System?
You could argue that people could spend the $250, access the lounge and then send the product back for a refund and they then have access to the lounge for free. This would need to have a clause that states usual price for accessing the lounge is $X (I.e. $125) and would need to be charged if the products were returned. I am sure some smart legal representative could create something.
As an industry we talk a lot about shopper engagement, luxury and finding ways of driving growth. Little has changed really over the last 20 years. Yes, stores are more luxurious, premiumisation has happened but the essentials are still broadly the same.
There is a lot of talk about how digital will now save the day but from everything I have seen, the focus has been on “Opportunities to buy” not the actual experience or even the WHY people buy.
As an industry, we need to remember that we have thousands of people walking through the stores every day. They are physically in the store. If we can deliver a great personal experience to them, they will remember it, they will talk about it, they will come back.
Digital is great, it has a lot going for it but sometimes, you just want someone to say “based on what you have told me… this is the right product for you”. That isn’t an algorithm, that is human to human.
If this idea goes ahead somewhere around the world, it must be a super designed experience. It has to leverage every part of service design from the tangibles (the décor, seating, menu’s etc) through to the intangibles (I.e. empathy, reliability etc). DO NOT leave this to the other lounges to take on and create for you. Rip up the script and design it so that it really is a lifestyle brand engagement / extension.
Could it work? I think so but I would be happy to discuss this more with anyone who is interested.
As ever, thank you for reading and sharing!