Public Doesn't Buy Airport's Buy & Bye Plan

All the ingredients for success came together in Ben-Gurion 2000's new terminal - a brand spanking new mall including the best brands, millions of shoppers and the well-known Israeli obsession with shopping.

But in the four months since Buy & Bye opened its doors, the skyway mall has simply not taken off. As opposed to the innovative thinking that led to opening stores before passengers reach passport control, Israelis accompanying travelers are in no hurry to buy sneakers at the airport.

In 2004, 5.5 million visitors and about 7.6 million passengers passed through the terminal. While both arriving and departing passengers pass through duty free shops either at Ben-Gurion or at their airport of origin, the millions of visitors have no access.

The Israel Airports Authority thought that in addition to 14,000 square meters of duty free shops, those visitors were a serious enough consumer base to justify 10,000 square meters of commercial space.

IAI claims that "open commercial space inside the terminal is a global concept, implemented at leading international airports."

There may be "financial potential" at the airport, but it's far from realized at Buy & Bye. Israelis haven't jumped on the bandwagon and aren't turning those family farewells or reunions into shopping sprees.

IAI has apparently figured out there is a problem. The authority has approached a number of mall management companies in recent weeks asking for proposals that could improve proceeds per square meter.

Senior executives in the sector say the problem begins with the mix of stores. This should be planned to suit the population that frequents the site, attract them and cause them to spend, spend, spend.

Almost all the duty free players are represented in the airport shopping center. While James Richardson, which operates 2,520 square meters of duty free perfume, liquor and tobacco stores, the Buy & Bye foray is just 200 square meters. Reality has shown that travelers prefer to pay the lower duty free prices, and the rest of the public doesn't think driving a friend to the airport is just cause to buy Lancome makeup.

Even IAI says the tender for the space, designed so duty free vendors would get a second sales point, essentially just created advertising space for the upstairs duty free spaces.

Jewelry chain H. Stern CEO Israel Kurt doesn't believe that's a problem. "We use the ordering system. Customers order pieces in the outside mall and receive their merchandise in our duty free location." He believes this might be the draw that attracts customers bombarded with shopping options in the duty free zone.

Kurt may not mind, but retail sector executives say in duty free, time is money. When passengers waste time trying shoes on for the kids in Buy & Bye, they don't have time left for an average of $100 in spontaneous purchases in the duty free area. Retailers say that has hurt their cash till.

It may all be a matter of habit, and Israelis may not have changed their shopping customs. Or it could be a matter of advertising, with all the publicity centered on the duty free stores leaving Buy & Bye on the sidelines.

IAI reiterated in response, "After its trial run and marketing period, Buy & Bye will become a shopping center serving passengers and their families and friends. An ad campaign is planned."