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Frankfurt Airport Retail Format Opens The Door To Niche Beauty- With €1.8 Million Sales Potential

June 14, 2022
June 14, 2022
Lakrids by Bülow

Frankfurt Airport has launched a new—some would say overdue—concept in travel retail—that gives up-and-coming brands an opportunity to enter the channel without breaking the bank, plus very high sales potential now that traffic is coming back fast.

The operator of the Lufthansa hub, and one of the busiest airports in the world, has developed two (so far) pop-up spaces to bring a bit of variety into its large shopping precincts, which are dominated by retail concessionaire Heinemann in the airside business. For smaller brands, the move enables them to work directly with the airport landlord through a fast-track process.

Using the slogan “Be on top, rent a pop-up shop,” Fraport’s new rental stores have some practical benefits: a fully equipped retail space for six months, so there are no long-term binding agreements; modular shop fittings from Gridstudio that look clean and modern; and locations that are in the main retail thoroughfares.

Birgit Hotzel, Key Account Manager for Retail at Fraport, said, “The new concept allows us to offer brands and operators a flexible short-term rental contract. Without making a big commitment, brands can try out Frankfurt Airport as a retail location.”

Lakrids by Bülow, a Danish licorice brand, was the first to take a space in February. The company, which has recently reported record annual results for 2021, has a presentation in the B transit space at the airport that, on first glance, might be mistaken for an upscale beauty store. “Our goal is to increase our brand awareness. And where better to do that than at an international aviation gateway?” said Lakrids’ Head of Sales for Germany, Austria, and Switzerland, Torben Schmidt.

The promise of high sales per square meter

The pop-up areas are in the landside Shopping Avenue, which is open to the general public (about 80 square meters), and in the airside Concourse B after security and passport control (about 40 square meters). In the Shopping Avenue, Fraport says that, based on 2019 numbers, annual turnover potential could reach €10,000 per square meter. For the airside space, this number quadruples to between €40,000 and €45,000.

Which location will be optimal depends on the target customer. “We work with each brand to find the best location for their market entry,” said Hotzel. Fraport told me that the new pop-up model was not a temporary, post-COVID solution to fill up empty retail spaces, but rather a concept with “already proven success” and “a long-term character.” The airport landlord did not confirm whether beauty houses might take future spaces this year, only that “other tenants will be presented soon.”

Fraport also promised to support brands who sign up with a personalized media package. This includes on-site and online marketing campaigns via Fraport’s digital channels, Instagram (@beforetomatojuice), and WeChat. Brands can also advertise using additional forms of media at the airport, using the marketing agency Media Frankfurt at special rates for pop-up renters.

In terms of traffic, Fraport’s latest results show that a recovery at Frankfurt Airport is underway, with traffic significantly up on last year, but there is still a long way to go to get back to pre-pandemic levels. In the first quarter of 2022, passenger numbers hit 7.3 million, about half of the 14.8 million seen in Q1 2019, though April traffic was just 34% behind April 2019. In line with first-quarter traffic numbers, retail revenue in the period was €24 million versus €49 million in Q1 2019.

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