The Business of Design

With offices throughout the Middle East, North America, Asia and Europe, SmartDesign Group’s goal is to help airport authorities increase their non-aeronautical revenue by developing sustainable business models. “It is the success of these spaces that set us apart from traditional commercial design firms,” says Nick Baker, President and CEO of SmartDesign Group. “In short, we design brands that connect people with places.”

Background
Originally a UK citizen and educated at the city of London university, Baker moved to Vancouver BC, Canada in 2000. Initially, the company was set up with a focus to build brands and increase revenue within the transportation, sport and entertainment sectors. After a decade, the company identified a need in the industry to focus on non-aeronautical revenues. “During a period that saw national airlines and carriers enter into chapter 11, albeit in an era that found traffic increasing into double digits in some regions, we realised that the major contributor to the airport economy would be everything apart from the actual source of an aircraft,” says Baker. Design has an effect on all of us — the house we buy, the car we drive and the clothes we wear. We live in brand-centric/conscious times and design does drive commercial spending. Baker points out that in this day and age, consumers are more educated and aware of design than ever before. This is good news for the airport industry with a captive audience whose boredom is imminent. “Their heightened senses now drive our passion for more and more stimulus. We can provide an environment that is secure, accessible and interesting,” says Baker. “It doesn’t mean the formula is easy and that anything goes. The spaces need to feel special — the flow, the mix and the entertainment factor must be considered and all need to compliment the uniqueness of the offering.”
Despite living in a media-driven world where consumers readily accept new trends and adapt accordingly, the question does arise on how this new form of media impacts consumers and benefit retailers. “All forms of ‘info-tainment’ affect our habits; it influences the way we shop, the way we eat and the way we live. Measurability is a tough one to answer, as the only way we can honestly see the attributes is through increased sales and customer experience which is not always easy to gauge,” says Baker.
This specific design concept is a requirement in traditional retail environments. However, Baker points out that duty free stores have a unique capture rate given their location within a terminal and typically carrying a deeper diversity of brands and products over traditional retail stores. The diverse brand offering creates an opportunity to develop shop-in-shop environments, utilise media to engage consumers and showcase the latest products through promotional opportunities. A well-assorted offering combined with an emotionally engaging design creates an opportunity, an increase in capture rates and ultimately spend per passenger, resulting in commercial success. Many operators try to reduce costs by standardising the overall space design — a typical commercial retail brand approach which does not always result in maximising the earning potential. A successful design will compliment an airport’s sense of place and overall brand (provided they have one) and be tailored to consumer demographics and habits.
Having worked on numerous interesting projects, Baker finds it hard to mention one specific project as his personal favourite. “I enjoyed working at Incheon International Airport, the challenges of working with a successful airport to further increase its outstanding revenues in 2006, to become today’s industry leader with retail revenues that top $1.5 billion, and also watching our creation of the ‘Airstar’ brand become a synonymous trademark for the Airport,” says Baker. The New Doha International Airport (NDIA) topped SmartDesign Group’s all-time favourite list. The company was called in to drive the commercial plan and design the stores and overall environments for the operator. Baker confesses that the sheer scale of the project was daunting and the magnitude of the vision is a dream come true. “I’m not sure if we will ever get the opportunity to do a similar project again; however, I am confident that once unveiled to the world, NDIA will instantly become the benchmark of the aviation industry,” says Baker.

Coming soon
The Qatar Duty Free (QDF) project will be operating within an environment that is almost ten times larger than its current footprint. Having been involved with NDIA for more than three years, SmartDesign Group was enlisted to drive the retail and food and beverage master plan in regard to form, configuration and mix. In addition, the company also helped develop new store concepts, brands and future strategies. “As you can imagine, the project is shrouded in secrecy and I wouldn’t want to give anything away,” says Baker. He admits that working with QDF has been an incredible experience and he commands its vision, enthusiasm, commitment and professionalism. “I adore the non-conventional approach as it mirrors our philosophy and their aim to present to the world a menu that has never been seen or experienced at an airport before — a dream client for a designer,” says Baker.
SmartDesign Group was backed by NDIA at every stage of the project while working diligently with the terminal architect, the NDIA design team and QDF. “The vision has always been very clear: ‘Simply the best, simply five-star quality and something for everyone’,” says Baker. SmartDesign Group was engaged at the earliest stage of the new terminal and the concourse development. The company’s forecasting and research also helped influence investment and capital spend, according to Baker.
Apart from completing the project at the NDIA, SmartDesign Group has also been commissioned to work on a major project at John F. Kennedy (JFK) International Airport — Terminal 4, where it is currently expanding the concourse and terminal. SmartDesign Group is involved with all the commercial areas, incorporating new food concepts for end users and the JFK International Air Terminal team. Besides the JFK project, SmartDesign Group is also lending its expertise to the Toronto Pearson International Airport, the Phoenix Skyharbour Airport, the Las Vegas McCarran International Airport, the Orlando International Airport and several other major airports around the globe.

Inspiring concepts
When asked if there is a form of science and research that goes into determining the right concept where design will inspire consumers to spend, Baker disagrees. “Science? No. Metrics? Yes. Airports deliver consumers to the retail forum and have a captive environment. Therefore, it should be easier to create spending. Unfortunately, if the concourse lacks flow, stimulus and a sense of place, you will never make the sale.”
One of SmartDesign Group’s biggest merits is its ability to understand consumer and passenger behaviour. Baker explains that passengers flow through an airport with several intentions. These intentions coupled with the stress of being processed through security and the fear of the ‘unknown’ that lies ahead has an adverse affect on their ability to spend. Until passengers pass through customs, immigration, security and are educated on the dwell time available, they are not able to relax and enjoy their environment.
“It’s at the moment of that relaxation that we as designers need to deliver the wow factor as they are ready to engage in the airport’s offerings,” says Baker. The company’s designs educate passengers through every step of the travel experience while effectively communicating the wonders and relaxation that are about to welcome them. An additional service offered by the company is Building Science. This service builds systems that mandate daylight harvesting through solar technology and smart management systems.
“We are firmly committed to new technology and more importantly technology that reduces environmental impact,” says Baker. The company looks into heat reclamation from its food operator, which includes reclaiming heat from kitchen exhausts; refrigeration, where several technologies such as the protocol system or glycol chilling systems can centralise the cooling process, which in turn reduces heat and noise.
Almost 90 per cent of SmartDesign Group’s projects are driven from a commercial master plan. Since category and mix vary geographically, Baker states that in North America, food and beverage contributes to 65 per cent of sales. In Asia, retail and more specifically duty free is the power house and dominates with up to 80 per cent of all sales. “Since airport authorities are starting to move away from the master concessionaire model and promote a local flavour with their offerings, the competition within the airport is growing and the end-user operators are having far less input,” says Baker. However, the company does encourage its landlord clients to interact with operators and for operators to interact with their brands as everyone’s success is based on the outcome of the master plan.
In terms of competition, Baker admits that the company has yet to meet an adversary that is as diverse as SmartDesign Group, in terms of offering. “It has taken our team years to understand the transportation market, it is beyond unique. Many like-minded creative groups have undertaken similar projects around the globe, and some with much success and admiration. However, we are confident that our approach is different and more commercially driven than others,” says Baker. Being involved with more than 100 projects across the globe with no sign of stopping or slowing down, it is highly unlikely that SmartDesign Group will see strong competition any time soon.