To adapt to shifting commercial realities, Helsinki Airport operator Finavia is investing €1 billion to put the customer at the heart of everything it is doing. Jason Holland travelled to Finland to see the airport’s latest impressive extension – Aukio – and to speak to Finavia executives Joni Sundelin and Katja Siberg.
Adaptation. Change. Evolution. These are all concepts in which Mother Nature is expert, and continually demonstrates in elegant ways. For humans though, it is not always so easy.
In the duty free and travel retail industry, for example, airport operators such as Finavia are facing up to a troubling trend; that the traditional retail model is declining, and sales per passenger are flattening out, if not falling. Change will therefore be necessary to survive and thrive.
Aukio visual: The spectacular event plaza uses the latest technologies to immerse passengers in Finnish culture and nature.
According to Helsinki Airport [the largest airport operated by Finavia] Director Joni Sundelin, there are many ways to adapt to fight this trend and ensure a promising future, of which focusing on the total customer experience is one of the most significant.
It is appropriate, then, that Finavia’s latest attempt to enhance the customer journey puts the beauty of the natural world at its heart.
As well as eleven compelling new commercial units, including a World Duty Free store, the airport’s recently-opened ‘Aukio’ extension features a spectacular event plaza that uses the latest technologies to immerse passengers “in the middle of Finnish nature”.
The central element of the forest-inspired plaza is a LED screen that is seventy-five metres in width and two metres in height, and which projects 360-degree Finnish landscapes from various locations across the country [Koli, Olos, Luosto, Yövesi in Saimaa, and the Kalevankangas nature reserve in Mikkeli]. Highlights include visualisations of the Aurora Borealis, vibrant autumn colours, a rippling stream and the whistling wind, according to Finavia.
Finavia Senior Vice President, Marketing, Corporate Communication and Customer Experience Katja Siberg: “Memorable experiences get people into the shopping mood.”
Helsinki Airport Director Joni Sundelin: “We need to adjust concepts and develop the duty free retail experience. We have to adapt to changing customer behaviour.”
For Sundelin, “tightening” international competition is pushing Finavia to come up with ways to stand out among other large airports, and the event plaza is an example of this.
“It provides an immersive experience. How many airports around the world are memorable?” he asks.
And it is not just other airports that Finavia must compete with; there is also the entire world of online retail. “The thinking is that we are competing with online retailers. Chinese travellers are very important to us, but they can also shop with companies such as Alibaba. But experiences [such as the event plaza] are where we can compete [and offer differentiation].”
The entire Aukio project is part of a wider shift in mentality and focus that will inform the commercial landscape at Helsinki Airport in upcoming years. “It was a long project, and we did a lot of planning and preparation for it,” says Sundelin. “There was a hard debate. What kind of experience should we offer? What should the focus be?
“It took a big investment and it will require a lot from us to change how we do things at the airport. It is about utilising these experiences more, but also commercially, how do we monetise it? You have to look at the whole customer journey; you can’t look at it separately.”
“If you think of all the successful companies out there, they don’t build their business on sales per head, they build on understanding their customers.”
Helsinki Airport Director Joni Sundelin
Aukio provides passengers with a “refreshing moment of rest and relaxation before their next flight”.
“Memorable experiences get people into the shopping mood, and prepare them for shopping,” points out Finavia Senior Vice President, Marketing, Corporate Communication and Customer Experience Katja Siberg.
Sense of Place is particularly key, and this is why the event plaza showcases Finland. “It allows us to differentiate ourselves from other airports,” says Siberg. “It leaves travellers with a memory and invites them to come and stay a bit longer. People are becoming increasingly interested in local products and storytelling.”
Sundelin believes it is vital to make passengers feel more comfortable and less stressed, and says there are many ways to achieve this throughout the passenger journey.
“It is not only about immersive experiences, we have also implemented ultra-modern security facilities, so the efficiency of the security process is on a totally different level,” he adds. That efficiency leads to more dwell time, and therefore more opportunity to attract passengers to commercial units.
“Aukio can rightfully be described as a display window for our country, as millions of international passengers get their first taste of Finland at the airport,” says Sundelin. “Our focus throughout development has been on ensuring that passengers are left with an exceptionally positive impression of Finnish design, smoothness, nature and peace.”
Immersive experience: The event plaza’s 360-degree landscapes take in Finnish locations and a series of natural events. Passengers can learn more using an interactive information system.
The changing of times
Aukio is part of Finavia’s €1 billion development programme which hopes to “secure Helsinki Airport’s position as a leading European airport for travel between Asia and Europe while maintaining excellent flight connections between Finland and the rest of the world”. The expansion will enable Helsinki Airport to serve 30 million passengers annually.
Commercial performance will be vital to the success of these development plans. So how is Finavia doing and what are its expectations for the next year?
“We exceeded our targets, which were high, in both retail and food & beverage in 2018,” says Sundelin. “Sales per head flattened out, where there had been an increase previously. At the beginning of 2019 they have been increasing slightly.”
Finavia believes the duty free retail model must evolve, and it is working with partner World Duty Free to assess and make changes.
Sense of Place: A strong focus has been placed on local Finnish products at Helsinki Airport's duty free stores, differentiating the offer and surprising travellers.
Of particular note is a “levelling” in spend among Chinese travellers. Sundelin says that the expectation of ever-increasing Chinese spend is “just a phrase” and should not be relied on. “Their preferences are changing,” he explains. “You can’t just assume they will bring in the money.”
Siberg adds that Finavia is seeing a shift in attention among Chinese travellers from global to local brands. As well as experiences that capture Sense of Place, she says it is important to get basics right, such as good signage and staff that speak their language, factors “that make them feel welcome”.
Frequent flyers are another big segment for Finavia, Siberg says, and they most appreciate smooth processes that make travel easier, as well as quick-service food & beverage outlets.
Looking ahead, Sundelin says it is hard to predict how these trends will develop, especially on the duty free side, but he notes that F&B and speciality retail are performing well so far this year.
Chinese travellers make up a vital market segment at Helsinki Airport in terms of spend. Finavia has responded by offering a range of services that make them feel welcome. For example, Chinese-speaking guides such as the one pictured above help Chinese travellers who might struggle with the language barrier in navigating the airport, and also encourage them to use its commercial services and assist with airport shopping.
“There are lots of actions we can take to fight against the trend [of declining spend per passenger],” he says. “We need to adjust concepts and develop the duty free retail experience. We are fighting against online sales and have to adapt to changing customer behaviour in general, and to how much they want to buy.
“There are still some price differences and advantages [in duty free], but we see a need to recreate the whole retail experience. The end is nearly here for cheap booze and cigarettes, for example.”
Sundelin says the biggest challenge this year though is simply the fact that so many changes are taking place, and so much rebuilding work is going on at the airport. However, a variety of actions have been taken to minimise the impact as far as possible.
Moomin characters are a symbol of Finland and feature heavily at Helsinki Airport. The animated characters are hugely popular in Japan, which is a growing source market for the airport.
Reflecting on a Life in HEL
As Aukio demonstrates, new developments at Helsinki Airport will offer a finely-tuned mix of the commercial and the experiential.
“The retail experience will blend into the kind of events and experiences we can create,” explains Sundelin. “But it is not an easy bet. Looking at customer segments – Chinese, Japanese, Europeans – all have a different perspective.
“So we need to know how to design for all needs, and there is no crystal ball for it. We are working hard to understand, pilot and experiment.”
Helsinki Airport’s innovative #LIFEINHEL campaign, in which Chinese influencer Ryan Zhu documented 30 days spent living at the airport, provided some vital feedback. It also showcased the overall Helsinki Airport experience, and its virtues as a hub for travel between Asia and Europe, generating an audience estimated at 2.2 billion people.
“We wanted to have a comprehensive insight of how an international transit passenger sees us,” says Siberg. “When we decided to cover Ryan’s experiences with short daily videos, we took a risk. Naturally, we had no control of what he and other key opinion leaders would post on social media.
“We need to know how to design for all needs, and there is no crystal ball for it. We are working hard to understand, pilot and experiment.”
Helsinki Airport Director Joni Sundelin
Chinese actor Ryan Zhu lived inside Helsinki Airport for an entire month. This video tells the story of “the world's longest layover”.
Global reach: In the #LIFEINHEL campaign, Helsinki Airport wanted to challenge misconceptions about the airport travel experience and showcase its own credentials.
“But honest and open communication is our core policy and company value. Moreover, if Ryan had not liked it here, he would have taken the next flight back to China. But it all paid off.”
Some of Zhu’s feedback has already been actioned. Terminal space will be enlarged by 45% by the end of the investment programme, while the food offer continues to expand. Zhu asked for more Asian food outlets, and one of the highlights of the recent Aukio development was the opening of Japanese restaurant Ajisen Ramen, which has 800 outlets in Asia. The Helsinki Airport restaurant is only the brand’s second location in Europe.
Siberg says the campaign was originally targeted at Chinese travellers, but it spread “to more areas than we thought”.
She adds: “It was about brand building, and how Helsinki Airport is seen. It was most surprising that it went viral, not just in China but worldwide. We are very happy that #LIFEINHEL engaged people globally.
“It also united the airport staff; people were knitting socks for Ryan and cooking him dumplings. The campaign really grew a life of its own.”
Finavia's €1 billion development programme at Helsinki Airport will enable it to serve 30 million passengers annually.
Despite the challenging and ever-shifting landscape, Sundelin says the future is extremely bright for Finavia and Helsinki Airport. “Business has been booming and we are experiencing bigger growth than other European transfer airports,” he says.
“Earnings have been developing positively and our brand positioning is totally different on a global scale that it was five years previously.”
All future projects will begin with one thought, he says – how the airport can best serve the customer. While a lot can be learned from developments such as Aukio, there will be no copy and paste jobs. “We will not repeat the same things, we want to further enhance the customer experience,” he explains. “We will also continue to be clear on our principles, such as capturing Sense of Place.”
Partnerships – whether with retailers, brands or airlines – will also be crucial to the airport’s development, he says. Finavia has worked with Finland’s flag carrier Finnair on many occasions, including jointly organising the 2016 ‘Match Made in HEL’ event [a fashion show held on one of Helsinki Airport’s runways].
“Sense of Place leaves travellers with a memory and invites them to come and stay a bit longer. People are becoming increasingly interested in local products and storytelling.”
Finavia Senior Vice President, Marketing, Corporate Communication and Customer Experience Katja Siberg
‘Cinema in HEL’ is another innovative passenger service initiative. Open 24 hours and free of charge, the film only starts when both seats in the cinema are occupied. The aim is to bring travellers together and let them encounter different cultures.
With retailers, a long-term perspective must be shared, Sundelin believes. “The neutral tender process is out of date, it should always be a partnership. We cannot afford to be a passive landlord.
“Instead we are involved in detailed conversations about how customers are developing, and in what kind of concept should be created.
“In the end, we will create a customer experience at Helsinki Airport that will be memorable. We are building up to this; it is about the total experience. Commercial supports this offering, and then the financials will follow.
“If you think of all the successful companies out there, they don’t build their business on sales per head, they build on understanding their customers. The airport is a complex environment but we have to do it this way. We are pragmatic in our approach; we are at the beginning of this journey and we are learning every day.”
Evidence of this can be clearly seen in the range of openings, events, and campaigns that have taken place at the airport in recent times – developments which also demonstrate an ability to adapt, change and evolve to keep pace with new retail realities. For Finavia, it is only natural.
It takes two: Finavia will screen short films in Cinema in HEL, including documentaries and content from international filmmakers.
The Moodie Davitt eZine | Issue 259 | 15 April 2019