Client situation
- Client was the operator of the UK’s busiest airport serving over 80m passengers pa
- Retail was a vital engine of its commercial performance with sales of >£2bn
Challenge
- It was vital for our client to be able to project Retail sales by terminal and category for 5 years out, for two reasons:
- To support the commercial planning of the Retail offer (mix, which Brands etc)
- To support economic submissions to the regulator (CAA)
- There are many complex internal, macro economic, passenger mix and interacting drivers of retail spend per passenger including marketing making forecasting very challenging
What we did
- Conducted multiple, complex regression modelling of all drivers of passenger spend to identify and quantify the drivers of Retail spend (down to Category/Terminal level)
- Generated 5 year projections of Retail sales per passenger
- Measured the actual outcomes compared to forecast: they were +/- 1% for the first 18 months
We identified and quantified all key drivers of sales.
Impacts
“The RRI work contributed significantly to multi-million £ revenue benefits and is a key platform for shaping our planning… gives us confidence to identify growth levers and refocus marketing spend.”
– D Ellis, Head of Research and Insight
“The RRI model provides a comprehensive rationale for drivers of sales and a plausible set of projections.”
– Regulator
