The potential for sustainable business model innovation : a case study of the airport retail sector in a low-carbon society

• Main Author: Heyes, Graeme Alex
• Published: Manchester Metropolitan University 2016
• Subjects: 387.7
• Online Access: http://ethos.bl.uk/OrderDetails.do?uin=uk.bl.ethos.684850

The sustainability of the current economic system is coming under question, because of its continued reliance upon carbon fuels and their consequential impact upon the world’s climate, and because levels of consumption are growing. Nowhere is this more apparent than in the retail sector, and in particular for airport retailing. Airport retail represents a vital revenue stream for airport operators, yet faces the challenge of being part of an industry that is itself under increasing pressure due to its significant and growing energy use and CO2 emissions. This research considered sustainability challenges arising from current patterns of consumption. It investigated environmental threats posed to the sustainable development of the airport retail sector, and its ability to adapt to a low carbon economy, via case study analysis of the World Duty Free Group (WDFG). It also identified the incumbent business model of the organisation using the ‘Business Model Canvas1’. It quantified the carbon impact arising from airport retailing, finding that emissions arising from products sold being carried onto aircraft were greater than those arising from the outlets themselves. Finally, it assessed the suitability of emerging ‘sustainable business model archetypes’2 to meet the sustainability challenge faced by WDFG. The research found that airport retailers are constrained by the commercial, operational and regulatory aspects of the airport setting, which result in higher levels of energy use and emissions but also makes them more difficult to manage. It found that WDFG is a successful example of an airport retail concessionaire whose success results from the fact that it is highly specialised. This very specialisation makes it difficult for the organisation to implement emerging sustainable business models. However, proactively adopting some of these principles could differentiate WDFG from others in the sector thereby enhancing its longer-term growth.