Germany’s Leipzig Hauptbahnhof station […] houses the Promenaden, the city’s biggest shopping centre
Rail retail beyond UK borders
Substantial investments in railway retail have also been made outside the UK. A prime example is Germany’s Leipzig Hauptbahnhof station, which houses the Promenaden, the city’s biggest shopping centre with almost 200 shops.
According to Leipzig Promenaden Hauptbahnhof centre manager Thomas Oeheme, the mall, which was built in partnership with Deutsche Bahn over 20 years ago, is proving extremely profitable. “More than 120,000 people a day use the building – twice as much as before,” he says. “With 25 million visitors per year, it is the most frequented building in the federal state of Saxonia.”
Oeheme says retail at railway stations also represents a lucrative move for shop keepers, who “particularly profit from various aspects such as high footfall figures, common marketing and events and a professional management of the centre”.
New York Grand Central Terminal is another example. One of the busiest stations in the US, the hub this year celebrates the 20th anniversary since the Metropolitan Transportation Authority (MTA) decided to integrate shops and restaurants throughout the station. According to MTA’s director of retail leasing management for Grand Central Terminal Leah Bassknight, year-on-year sales are continually rising.
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A new type of transport retail
Shopping in transport hubs is something that air travellers are quite familiar with; frequent flyers typically identify airports with the duty-free stores that offer luxury products, last-minute gifts, as well as food and drinks. But the trend has a rather different profile when it comes to railway stations, which are often located within busy city centres and therefore attract a much more varied type of audience.
Network Rail footfall studies show that 25% of people coming to its stations are not travellers, but actually use them as hubs for shopping and dining, paving the way for more retail opportunities. As Biggs puts it: “The increasing popularity of our managed stations means that we are home to more brands than ever before and we are able to reach more people through our advertising partnerships, generating more money for the railway.”
In New York, Bassknight describes Grand Central as both a railway station and “a comprehensive shopping centre”. “The audience isn’t solely comprised of travellers; therefore our retail mix provides a much more diverse range of products than one would see at an airport duty-free shop,” she explains. “Like a real shopping centre, we have a wide range of customers, with different needs, interests and money to spend and we have to hit all of their interests.”
Oehme adds that retail is a crucial factor for the Leipzig Hauptbahnhof station, which, in the 1990s, “was too big for rail operation alone”.
Moreover, demand differentiates a railway station from an airport’s duty-free area or a traditional shopping centre. Oehme explains: “[A railway shopping mall] is more focused on convenience products, grocery, and travel necessities such as books, presents, drugstore products, as well as food and beverages,” meaning that “both the shopping behaviour and the customer structure is different”.
The search for large-scale demographics
Such a variety of customers suggests that station managers need access to a wide range of data and consumer analytics to better target their services. Here, digital technologies are invaluable.
Paul Hinchy, head of transport at WiFi solutions and analytics provider WiFi SPARK, believes that WiFi could be the answer to operators’ need for large-scale customer analytics. “Through WiFi, what we've seen is that operators have the ability to engage with passengers during dwell time and potentially make them aware of the additional facilities and things that are going on in the stations, whilst being able to promote retail opportunities,” he says.
He adds that train operating companies are investing to regenerate their stations and tailor them to meet travellers’ needs. “Retailers and food and beverage outlets coming into stations [will] get the insight to back up the right demographic of people that are actually using that facility,” Hinchy says.
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Joining forces across transport
As technological advancements continue, Hinchy believes that if operators aim to “innovate and integrate”, they have to combine their own data with the data gathered by other players in the transport industry, such as those involved in the operation of buses, metro and light rail.
“The ability for users to easily navigate between these different modes of transport is a key requirement but I think the future of WiFi in that environment is that it needs to be as integrated as the transport services themselves,” he says.
An integrated WiFi network across potentially whole cities will give train operating companies a “huge insight into how people are moving across these different modes of transport, ultimately for the benefit of the passenger to make sure that there are clear efficiencies being delivered when people are moving between one mode of transport and the next.”
Through WiFi, what we've seen is that operators have the ability to engage with passengers during dwell time