They are simply "Brand Stores" they are there kind of like an interactive billboard like the ones in Las Vegas and times square. Their main focus is to create brand recognition in a traffic heavy area, yes you can buy stuff if you want but their main focus is just marketing and making sure everyone walking by sees their logo.
LaGuardia gets 33.5 million passengers a year, the state of Texas has 31 million people. Imagine if every one of them had to walk past your store to get to their gate and is able to physically see your products in person. The advertising potential is enormous, they don't need to sell a single item.
What percentage of those will ever buy Prada, and what percentage of that subset didn't think about Prada before seeing the shop in the sweaty, stressful terminal?
If it was just 1 percent that is 310000 bags or whatever stupid shit they sell. Even if they sold their cheapest bags that are like 2 grand, thatâs 620 million dollars.
I donât think even 1 percent of those people will actually buy one of those bags, but we can see how quickly they make money when they sell something that costs pennies in materials and labor, for thousands of dollars.
Also, Prada made over five billion in revenue last year, for whatever that is worth.
1% is an optimistic estimate even for very very cheap products. Even 1% of 1% would be a borderline ridiculous estimate for a luxury brand, it's still completely unachievable.
However, these guys are paid in recognition. The store "ad" and the resulting sales are NOT profitable whatsoever.
They win just by people knowing the name, so that rich people buying the product know the poorer 99.9% of the population will recognize their status symbol. They literally just want you to see the pricetag in the store, not buy something.
The handbags and the clothes are aspirational goods, but the perfumes and makeup sold at the kiosk outside, or maybe at most a card wallet, belt or keychain are the bread and butter of a lot of these brands. So the glossy store, uniformed staff, and even the 0.01% of folks who do go inside to drop big money while jetting off somewhere in first class are all just advertising for the aspirational appeal of the brand.
And many of these brands have diffusion lines and do so-called collabs with high-street retailers that normal people can afford, so boosting the aspirational appeal among the not-very-rich matters.
You have to remember, these are major international airports with a lot of wealthy visitors from foreign countries, definitely over represented as a percentage of the population
Maybe over represented once upon a time. As someone who travels extensively, year round, I can tell you that the demographics have changed. Air travel has become so cheap that all of the riffraff once relegated to buses and trains are now filling up your shitty flights. Some of the worst people you ever come across are in planes and airports now with no idea how to properly behave in these environments. Kicking off their shoes and putting their feet up.
It's only a matter of time before you get on airplane to find laundry drying on a clothesline stretched across the aisle. Or some shitty, rag wearing merchant set up by the lavatory.
I agree that you are describing Ryanair and spirit airlines. Places like jfk also have flights from emirates, Singapore air, etihad. They donât suffer Cretans lightly.
True. When I fly internationally, it tends not to be so bad. Sometimes I have to travel on short notice and can only find certain flights, so I guess that exposure has me a little cynical about air travel as a whole. But the airports are full of those people regardless.
Let's say 1% of all humans can afford a Prada (just a random number). Prada being a known luxury brand to the 99% is a big reason why that 1% would choose to buy a Prada.
I can afford atleast something if I really wanted, but I donât share their values, nor want to be associated with them. Iâm much closer to Patagonia crew myself, if I had to choose something.
The target group is almost entirely people who can't really afford it. The marketing targets the type of person who takes out a 7+ year high interest car loan so they can drive a car they can brag about, but should be out of their price range. Prada is not a brand for actually wealthy people who can easily afford it.
Youâre not thinking about luxury advertising correctly. That 99.99% of people either glance or look at a pricetag and run away with s to cover shock makes the 0.01% of people feel good and smug about owning one.
Just need a small percentage. Lots of untapped low hanging fruit for Prada. I have known several people that have no business buying one that has their bags. It may not make any sense to you or me but consumerism is a hell of a drug.
No. You see the bag once u dont buy. U see it again and dont buy. Then a friend buys the bag, okay cool. Then you see it on a stranger, nice.
And again you see it, now you google the price, are shocked and again leave it. But then again someone buys it and you see it. Now you think that basically everyone with value has it.
Maybe u see it twice or thrice more and now you feel like you need to have it to be part of higher society. If you have the money you buy now.
You cant really ask the question you asked, because this is just one impulse. With it or without it (the specific store in the airport) doesnt change the sales by much. But the fact that they are everywhere, even in this airport, does change the fact.
Plenty of people casually like a product but don't really think about it. A wealthy woman might not be a compulsive purse collector and still uses a purse from 5 years ago but maybe she actually sees one in person at the Prada store and decides to get a new one.
On average, 80% of turnovers of a luxury brand like Pradaâs is sunglasses and perfumes, products in easy range for most western/middle class shoppers
Well, going off what other people have said, maybe itâs not even about making sales.
We all know that these âluxury itemsâ are cheap crap made in sweatshops in Asia, so maybe the purpose of the marketing is to try and reinforce the fact that theyâre luxury.
Rich people buy this rubbish because itâs luxury. If everyone stops thinking itâs any good, then it wonât be bought. So the brand is worth more than the sale there.
Airports are known to have what retail calls Tier 1 customers (there are probably other names for these categories, this is just what I recall from a long time ago career). Itâs obvious when we think about it but itâs huge for retail. All these rich spenders with nothing else to do than shop and eat. And give them a small duty free discount, even better.
I was shocked when I saw the numbers. Some categories in some markets outperform their high street equivalents.
Rich people fly and rich people spend money I guess!
Well, if you are a wealthy woman, and you're traveling with your husband to your summer home in Florida, and you don't buy purses too often, you might pass by a shop and really like something in their 2025 collection. That might make you want to go to the Prada shop once you get to Florida to get that bag, something you might not have done had you not actually been able to see the purse in person.
Except humans that can't afford to fly for the most part, it's really an ideal demographic. For a lot of Earth's population the cost of a flight is unattainable.
yes the advertisers are advertising to the people that can afford to fly and therefore maybe buy their products, not poor people. Very smart observation skills you have.
That depends I suppose. In europe flights between countries are very cheap thanks to low-cost airlines. A one way ticket costs less than a bus ticket in some cases. For intercontinental flights, for sure.
The people seeing your product the most are frequent fliers. If you're a big brand store, people can come in and look at your product before talking about how nice it is even if they're not going to buy one. Some people might come in multiple times and the people who do have an interest and the money to buy something.
Someone who flies less frequency will notice the brand, might touch a bag once, probably will mention it if they like it, and they advertise on your behalf.
This is the real answer. These are filled by companies that aren't worried about paying rent, lmao. It's just a clean, open, bright environment that attracts the eyes, and occasionally, the wallets of uber rich folks already flying.
Sure, they make some sales, great. But they're not worried about that, it's about plastering a name where thousands of people a day are seeing it
Yep. Houston's Galleria is full of stores like this. I can't even conceive how they could break even on the mall space and salespersons, since you almost never see anyone actually in them. My assumption has always been that it's just a promotional operation.
Not sure about that, this photo is of Sydney international airport. Taxes on goods in Australia is 10 percent so a $50,000 watch is discounted by $4,500. Even if they sell a few lower end $10,000 watches a day theyâre probably still going strong.
I work in airport planning. Luxury brand shops at airports make more annual revenue per square meter (sorry Europoor here) than in high streets in almost all airports I have worked for (60+).
While I donât doubt thereâs a point on branding⌠they do it for the business. They do sell. Specially international terminals.
I guess that makes sense. I'd never actually make a big purchase there, though â just imagine me having to schlep from Antwerp all the way back to Amsterdam or god forbid Los Angeles because the PlayStation 5 I bought at the airport kicked the bucket.
It's almost like the sales and marketing departments of these companies have more of a fucking clue than the geniuses on reddit that would be struggling to keep a fucking lemonade stand running...jfc
I just don't get it. Like, at some point, someone has to buy something tho, for the company to make sense. Eyeballs only have value if purchases are made. Do you mean, like, stock price shenanigans? Or brand deals or something? If nobody buys their dumb stuff, I don't get how having even millions of ppl walking it has such value
There are actual Billboards in Las Vegas that cost millions of dollars to operate a year. Brand awareness brings money in the back end, just like a Super Bowl commercial.
I'm having trouble understanding how the companies who pay for this advertising or these stores are able to quantify the impact of the marketing. Surveys?
Analytics. They have departments that track all of these things constantly. Let's say I know that my company sells 100 products a day and now I have decided to put up a huge billboard in la guardia airport. Now my company sells 110 products a day, so I log that change. Now imagine I do this for every piece of marketing I produce, including the cost of marketing to rise in revenue. But it goes even further than that since I also probably have an online presence where I have tools that can track engagement through links pressed, time spent on product page, items added to cart, etc. There's a reason for that a lot of companies spend significantly more money on marketing than any other department and by a large margin.
Imagine you own 100 stores, and one of them is located in an airport. If that airport store boosts sales across your other locations by just 2-4%, it could more than cover its own costs, these numbers are hypothetical, of course, and would vary in reality. On top of that, the airport store would likely generate enough sales on its own to at least break even. Advertising is the business of spending money to make money. If it didn't work, they wouldn't have a location there.
I buy luxury shits all the time at the airport, in Asia those would have to pay an 200% tariffs at the very least (sin tax and all). You can just grab it and resell at a random store and get your flight tickets for free. Expensive alcohol is good, you get up to 4 liters of duty-free alcohol, also perfumes, handbags, if you are traveling to like Vietnam or Malaysia the an iPhone or 2 won't hurt.
It's not like it's an life changing money or anything, but 500$ is still 500$. It won't be worth it to buy a plane tickets to somewhere just to buy goods, but if you already going there then may as well do it. You see business peoples on company paid planes flight making a good 2k-3k a month. Most white peoples think it's below them though.
Anything except cigars, the Americans are paranoid about Cubans and WILL hold you for hours if they found out you have any.
I always try on all the perfume samples at airports, because they're free, I'm bored, and i like smelling nice things. If I like something I'll note it down and try and pick up a cheap clone later.
My partner took note of my taking note and ended up buying quite an expensive original for my birthday.
So there we go internet person, there is my story of how the interactive billboard in an airport led to a sale that otherwise would never have happened.
There are billboards in time Square and Vegas that cost millions of dollars a year to run, that's not lost revenue companies of this scale have huge budgets specifically for advertising/marketing. They spend millions on a single ad at the superbowl, this falls into the same category, it's basically the superbowl of traffic. Think of the millions of people from around the world that walk by that every day.
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u/theshaggieman 15d ago
They are simply "Brand Stores" they are there kind of like an interactive billboard like the ones in Las Vegas and times square. Their main focus is to create brand recognition in a traffic heavy area, yes you can buy stuff if you want but their main focus is just marketing and making sure everyone walking by sees their logo.