February 27, 2004


Borders to Capitalize on Airport Retail Sites

By Greta Guest, Detroit Free Press

Feb. 27--CINCINNATI -- Borders Group Inc. plans to expand its airport retail presence this year, as more airports invest in upscale mall-like shopping for travelers.

Borders and other retailers are going where the customers are. And airports attract millions of people a year who have longer waits in terminals since 9/11.

For example, the Cincinnati airport has about 21 million travelers a year and recently spent $25 million to upgrade its SkyShops. The shops attracted $58 million in sales last year, said Michael Mullaney, manager for commercial and business development at the Cincinnati/Northern Kentucky International Airport.

Tony Camilletti, senior vice president of JGA Inc., a retail design firm in Southfield, said Borders is primed to capitalize on airport retail locations.

"I think it opens up a huge opportunity for a company like Borders with this built-in expertise and notoriety for this niche to just come in and really blanket the earth with their airport presence," Camilletti said.

The Ann Arbor-based retailer, with $3.7 billion in annual sales, opened a temporary store at Cincinnati airport a year ago. It moved into its permanent location two months ago.

The store has the same look as a typical Borders Books and Music, but on a smaller scale without the music, cafe or cushy chairs. Instead, the 1,700-square-foot store focuses mostly on best-sellers, business, travel, children's and regional categories. It also sells a few magazines and gifts.

The layout has roomy aisles for people pulling luggage, good lighting and two paperback kiosks out front to draw shoppers in.

Ressy Layton of York, Pa., was passing through Cincinnati on her way to a workshop in Boulder, Colo. She saw the bright, white Borders sign that juts out into the terminal and made a beeline for it.

"Oh, I love Borders," said Layton, who had 2 1/2 hours between flights. "I'm coming in here versus one of the newsstands because I expect a lot more variety. If I see something, I'll get it for the plane."

Retailing in an airport environment has its challenges. Besides being smaller, it takes more planning. Deliveries, getting employees through security each day and storage are all different from a store elsewhere.

And the biggest challenge is that people are in a hurry. If the merchandise doesn't grab their attention immediately, they will pass by, said Fred Marx, a Farmington Hills-based retail expert.

"People are busy. They have more credit cards than time," Marx said. "Unless their flight is delayed, they don't want to hang out in a store. They aren't buying eight books, they are buying one book. . . and it had better be in stock."

Terry Bell, Borders senior manager for the airport program, said the airport stores are really taking off, but are still a small part of the Borders operation.

The nation's second-largest bookseller opened its first airport store in 1997, a Waldenbooks at Reagan National Airport in Washington, D.C. It operates five Waldenbooks locations in airports, but they will all convert to the Borders name this year, he said.

The first Borders airport store opened in Cincinnati in September 2002. The company now has six such stores, including those in Newark, Boston, Houston and Orlando. Borders plans to open its seventh airport store in Las Vegas next month and the eighth at Dulles in Washington, D.C., this summer. Another five to 10 locations are planned this year, Bell said.

There are no current plans for a store at Detroit Metropolitan Airport, but like any expanding retailer the company continually evaluates new locations.

Meanwhile, Borders Group continues to leave American malls as more consumers prefer to shop at off-mall stores. Borders will close as many as 40 of its Waldenbooks locations in malls this year.

Doug Hope, show director for GlobalShop, an annual store design and visual merchandising conference, said more retailers are looking at airport stores because they are more profitable with a steady stream of customers throughout the year and more items sold at full price. Traditional stores make a bulk of their revenue during the holidays.

"There is enormous opportunity to propel your brand to millions and millions of people," Hope said. "I don't think it's a good idea to be a major retailer in this country without having some way to touch those millions of people."

Still, even if Borders operates the only bookstore in an airport, it must grab the attention of people walking by with luggage. The store discounts the top 10 books on the New York Times best-seller list by 15 percent in its airport stores.

Regular Borders Books shoppers will notice some differences when they visit the airport stores. They are, by nature, smaller operations. While a typical Borders store is 25,000 feet, the airport stores range from 600 to 3,500 square feet. They carry an average of 8,000 titles, versus over 110,000 in a Borders superstore.

Airport stores focus on the top 10-50 best-sellers, said Sue Dasse, vice president of Waldenbooks.

"We can offer the things they are seeing in the news or on a recent TV program. That is where we focus. Something that is topical that they can read and take on the plane with them," she said. "They are a good demographic for us. There are a lot of readers who go through airports."

Delta pilot Chuck Hughes is the kind of reader Borders loves. He said he stops at every bookstore in every airport he visits and "spends more time packing books than clothes."

Hughes said he thinks the selection at Borders is better than at other airport bookstores. "It's a welcome addition. I wish they were in every airport," he said.

Borders was recognized last week by industry publication Airport Revenue News, based in Palm Beach Garden, Fla., as the best retail specialty brand operator.

"Borders is the perfect match for what the customer in airports want. Book buying is the second activity after eating at airports," said Pauline Armbrust, publisher of Airport Revenue News.

She said the improved retail environment at airports began in 1992 when Airmall opened at the Pittsburgh airport. Since then, many well-known retailers opened stores. Some thrived and some failed. Recently, the Gap, Victoria's Secret and Staples have all exited the airport retail environment, she said.

"It's not a destination kind of situation. People go to the mall to go shopping," Armbrust said. "People aren't at the airport to shop. But people are becoming more educated about the fact that you can really enjoy your time in the airport with entertainment and shopping choices."

Posted by Craig at February 27, 2004 04:08 PM