Retail is the new destination for rail travellers

As investment into rail infrastructure goes up, stations are increasingly becoming destinations in their own right. Chris Madden looks at how stations are becoming more than just gateways.

Eurostar in St Pancras 2

The Eurostar offers something special for rail travellers thanks to its international aspect

The classic image of the railway is of arrivals and departures; people on the platform embarking or disembarking, buying tickets and saying goodbye. They are always going somewhere else.

But that is set to change.

The days of railway stations being places where you just board and leave a train are in the past as new shops and eateries turn railway terminals into places people choose to go to.

Today, high-profile brands and retailers are moving in to stations around the world to create travel retail hubs which serve more than just those passing through on their journeys. Many stations are located in the middle of busy cities, which provides both footfall and access for people who want to eat or shop.

The importance of railways is easy to see if one peruses the headlines in GTR today. Late last year DFS announced a partnership with Chinese company Shenzen Duty Free to bid for the Kowloon MTR Express Rail Link tender. Eurostar and World Duty Free are set to unveil a new store at London St Pancras next year and Britain’s Network Rail is currently pouring millions into upgrading its retail options at stations across the UK, including a £110 million revamp of London Bridge

Investing for success

King's Cross

King’s Cross is one of the stations which has had its retail offering revamped

Business today does not allow for idle speculation and investment and Network Rail are banking on retail to be a big source of income in the future. Since 2010 the company’s retail sales have increased by 32% from £567 million to £749 million.

Network Rail head of retail Daniel Charles explains: “Retail is hugely important to us, it provides choice and convenience for our station users, and also generates valuable income which is reinvested back into the railway.  We work hard to get our retail offer right as part of an overall station experience and we are constantly looking at ways that we can surprise and delight our customers and improve the variety of retail in our managed stations.

“Retail not only serves as a hugely beneficial service for our millions of customers but also generates important funds that take pressure off of the tax payer.”

The 22 quarters of consecutive sales growth for Network Rail shows the potential retail has at the station. Charles believes the experience people get at the station is key to making them a retail destination. The idea, he says, is to create centres which people will visit even when they are not heading for the train.

A good experience

Waterloo balcony

The balcony at Waterloo features a strong F&B offering

“We’re creating great environments, meeting people’s needs in an ever busier world,” he explains.

“We’re pleased that we’ve created retail and F&B offers that are attractive, so much so that people visit them specifically whether they are travelling by train or not.

“But creating great places isn’t only about retail, we know that customers want cleanliness, convenience and safety, and we’re working to ensure that our stations not only meet these expectations but that maintenance levels of our assets and facilities allow stations to give the right impression every day.

“Our free Wi-Fi at Euston station gives a great indication of where we are heading as we embrace technology and continue to make stations places where customers are happy to visit, dwell and browse.”

Like all other markets, it seems, railway stations are enhancing the digital and experiential aspect of the retail industry. To promote the release of the Baywatch film this summer, station users were invited to film the iconic Baywatch slow motion run in front of a green screen. The footage was then broadcast on giant advertising screens.

“It’s just one example of how we are making our stations interesting and engaging places to be,” Charles says.

“We’re working hard to ensure our stations surprise and delight our customers by putting them at the heart of everything we do.”

Infrastructure investment

Creating retail outlets often requires a complete remodeling. London’s King’s Cross station underwent an upgrade for the 2012 Olympics and sales have increased 130% since then. A multi-million pound upgrade at Paddington Lawn station has also led to a sales jump of 40% in the first quarter of this year.

“Many of our managed stations have seen improvements in recent years boosting both our retail offer and helping us to crate stations that are becoming destinations in their own right,” Charles tells Frontier.

“Our investment includes major projects such as those to regenerate Birmingham New Street and London King’s Cross, and smaller but still significant schemes to introduce retail balconies at Waterloo and Euston stations and upgrade Paddington Lawn.

“In the long term we’re focused on our model of station investment which is proving to have a positive effect on retail sales and customer satisfaction by creating great spaces that people want to visit.”

The ongoing £110 million project at London Bridge means it will be the next new-look retail and F&B destination station to be unveiled in the UK. The project will create 8,540sqm of new retail space at the station when it is completed in spring 2018. A project to transform passenger facilities at Liverpool Street Station will finish at the same time.

Rail on the rise

Eurostar

Eurostar is upgrading its offer following its move to St Pancras

Changes are not just taking place at the UK’s domestic terminals. Eurostar has turned its attention to its London base after carrying out an upgrade of its Paris site last year. In early 2018 the London St Pancras site will be upgraded to include a new World Duty Free store, a Pret a Manger and a new departure lounge.

The upgrades reflect the growing importance of rail as a chosen method of travel for passengers, according to Eurostar CEO Nicolas Petrovic.

“With continuing investment in our trains, stations and service, customers are increasingly choosing high-speed rail over plane to a range of destinations,” he explains.

“The move to St Pancras International 10 years ago reduced journey times by over 20 minutes, making Eurostar even more attractive to business and leisure travellers.”

Whereas domestic rail travellers are using the station for a function, international train travel like that provided by Eurostar offers more of a sense of occasion. Eurostar chief customs officer Marc Noaro believes making stations more than just places to arrives and depart is important, but he says the nature of international travel provides a different opportunity.

“As an international high-speed carrier, travel with Eurostar is an exciting experience for a number of our travelers, a large proportion of whom are using our service for the first time,” he explains.

“This creates a sense of occasion compared to other operators, which is reflected in our retail offering. For example, champagne is very popular in our Café Metropole range on board and it’s even possible to pre-order it so that a member of the team will bring it to the customer once the journey begins.

“Another element that the international dimension brings is that it allows us to offer a variety of products to reflect the different tastes and flavours of our destinations. As we look forward to a new service to the Netherlands in 2018, it gives us a great opportunity to try out some new products on board to reflect this.”

Travellers on the train are also not hindered in their shopping by the baggage restrictions which are in place on airplanes. As Noaro explains: “We have a very generous baggage allowance of two cases plus hand luggage, as well as no liquid restrictions.

“This allows customers to shop without the stress of whether they will be able to take their purchases home, and the welcome addition of World Duty Free should provide a great opportunity for our travelers to make the most of this.”

Going digital

Wifi on trains

Rail travellers can now get online with more regularity

Like most travel retail sites, stations are being swept up in the wave of digital and the passenger’s desire for a swift and seamless experience – both for travelling and shopping. Eurostar is now offering onward travel tickets on-board as well as tickets to attractions at their destination.

In America, Amtrak has introduced apps to help passengers navigate the stations. Similar to those used in airports, the app allows travellers to plan their trip with real-time information and locations of shops and restaurants.

The first rollout of this was announced last month, with 400 location beacons set up at New York Penn Station to allow the FindYourWay app to go live.

Amtrak chief commercial officer Stephen Gardner says: “Everyone can benefit from downloading FindYourWay and experiencing the new, digital-friendly New York Penn Station.

“It is more than just an interactive platform; it can also help prevent overcrowding in the station, delivering a measure of customer safety that other communication products and forms of travel cannot provide.”

Amtrak is also keeping pace with the global trend for upgrading stations to be more than just ports of arrival and departure. Last month Penn Station Partners was selected by Amtrak to negotiate the redevelopment of Baltimore Penn Station.

The multi-million-dollar project will include almost 150,000sqm of redevelopment, including new retail outlets and a hotel.

Amtrak vice president of real estate stations and facilities Bart Bush says: “Baltimore Penn Station is the eighth busiest station in our national network and this important step underscores Amtrak’s continued efforts to significantly enhance the station experience and amenities for all travellers.”

Success on the menu

Digital is not the only travel retail trend making itself felt in the rail sector. As passenger demographics shift faster than ever before, food is becoming a big talking point. Favourable exchange rates meant Eurostar experienced a 24% increase in the number of passengers from the United States in the first three quarters of 2017. At the same time, the number of passengers from overseas jumped by 18%.

“The value at the moment of European trips presents a good opportunity for our retail units, with shopping being a key reason to travel,” says Noaro.

Baltimore PEnn

Station revamps, such as this one at Baltimore Penn, is a big deal at the moment

Declarations throughout 2017 that “F&B is the new GTR” certainly ring true at stations. In the UK, the introduction of high-end and big name food brands is central to the company’s aim of creating stations which are destinations in their own right.

“You can already make a strong case that our managed stations are already destinations for F&B.  Our F&B offer has never been better and is now supported by fantastic celebrity brands,” Charles says.

Celebrity chefs Gino D’Acampo, James Martin and Paul Hollywood have all opened restaurants at Network Rail stations, alongside top brand such as Natural Kitchen and Carluccios.

Charles explains: “Our F&B offer provides for customers whether they want to grab food on-the go, sit down for a coffee, or have a great full dining experience.

“As such we’re finding that people who come to stations to eat and drink are no longer just those who are catching a train. Stations have become destinations in their own right where people come to meet, eat, shop and socialise.”

The arrival of Paul Hollywood’s KNEAD at London Euston station, in conjunction with SSP, is a statement of intent from both the F&B sector and the rail sector. The eaterie is the first outlet of Hollywood’s dedicated bakery concept which looks to capitalise on his fame from hit TV show The Great British Bake Off.

SSP UK CEO Simon Smith explains: “We are delighted to be working with one of the country’s most celebrated and recognised bakers to bring a concept that’s new and exciting to the people who travel through or live and work in and around Euston.”

Full steam ahead

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That positivity and intent can be seen at station throughout the world. The announcement by DFS in November that they will partner with Shenzen Duty Free to break into the Chinese rail market shows how important the sector could be going forward.

The West Kowloon MTR Express Rail Link, a part of China’s strategic express rail network, would open up a huge new market for the international travel retail giant. The results of the tender will be announced early in 2018, but the intent from DFS is clear – rail retail is a key market.

Shenzen Duty Free secretary of the party committee and chairman of the board of directors Chen Shao Qun says: “The West Kowloon XRL is an extremely important Sino-Hong Kong infrastructure project, and this potential collaboration between China-based Shenzhen DF and Hong Kong-based DFS is highly symbolic of the bright and prosperous future ahead.”

As western stations become destinations for both travellers and those seeking food and retail outlets and China’s rail market offers new opportunities, retail on the rails could become a destination many people are heading for.