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Insights / Press

OM³ to revolutionize downtown tax-free shopping

March 05, 2019
Author Christian HolzschuhChristian HolzschuhMarketing & Communications

AOE’s OM³ Platform continues to change the way airports do business. The first-of-its-kind downtown tax-free shopping logistics solution, based on OM³ technology, is up and running  at Auckland International Airport, providing passengers with the world’s first integrated Omnichannel solution enabling end-to-end off- and on-airport retail. The solution is set to revolutionize tax refund processes for international shoppers at airports.

The solution, which currently handles thousands of packages per month, enables passengers who purchase tax-free- and duty-free goods downtown to collect them at the airport’s convenient collection points.

Passengers save the full 15 percent GST as well as applicable duty fees in fully automated process

In addition to shopping convenience and speed at the Collection Points, passengers also save the full 15 percent New Zealand Goods and Services Tax (GST), plus additional duty on selected products at the same time – without losing significant savings through expensive tax-refund fees, commonplace in other countries. Savings occurs directly at the point of sale, where the applicable taxes are deducted from the price so shoppers only pay the tax- and duty-free price. This is made possible as shoppers don’t receive the products at the point of sale, but are seamlessly delivered to the airport’s convenient collection points. For the first time, customers can now shop downtown, but still save taxes – and have purchases delivered to the airport. Passengers also no longer need to wait in long tax-refund lines and fill out complicated forms, saving both time and money.

Richard Barker

Richard Barker

General Manager Retail & Commercial / Auckland International Airport
We are excited to partner with AOE for this unique solution to one of the most disruptive challenges to passenger dwell-time at our airport.

“We are excited to partner with AOE for this unique solution to one of the most disruptive challenges to passenger dwell-time at our airport,” says Richard Barker, General Manager Retail and Commercial at Auckland Airport. “Current data regarding the number of processed packages, waiting times as well as customer acceptance is extremely encouraging. The solution is driving our vision for a truly connected passenger experience.” 

AOE CEO Kian Gould comments, “We believe that this solution has the potential to dramatically change the time-consuming, complicated and often painful tax-refund processes that are in place at airport’s all around the world. Tax refunding is not perceived as a good deal as up to 50 percent of refund amounts are eaten up by fees and commissions. Our goal is to completely replace the current model with a fully automated one, which enables true downtown tax-free shopping powered by automated and digitalized logistics processes.”

The entire process is geared toward making shopping and tax refunding as convenient as possible for Auckland Airport’s more than 20 million annual passengers. The customer purchases the desired products, provides identification and verifies flight details. Purchases are then delivered to the airport, where the customer can pick them up airside. Due to the fully integrated, omnichannel approach, passengers can purchase goods up to four hours before their flight.

“The solution potentially can save passengers billions on a global scale,” adds Gould. “For the individual passenger, it means cutting the average time spent waiting in tax refund lines from 18 minutes to 90 seconds. Tax savings for passengers is significantly increased, as no commissions or fees are deducted from the passenger. Airports can benefit significantly in multiple ways. Passengers now have more free time to dwell at the airport – time they no longer waste getting their taxes refunded. The airport receives a small percentage commission from the retailers for providing the service, all whilst collecting valuable insights on its passengers shopping behavior." 

About AOE

AOE develops digital business and E-Commerce platform solutions based on Open Source technologies. the company specializes in the implementation of complex enterprise software applications for global corporations and supports its customers in the development of digital business models. In addition, AOE develops its own products such as the Open Source framework Flamingo and the Omnichannel Multi-Merchant Marketplace OM³, the leading E-Commerce marketplace for the aviation industry and Travel Retail. Headquartered in Wiesbaden and with more than 250 employees in five countries, AOE serves global companies such as congstar, Deutsche Telekom, Heathrow, Singapore Airlines, Commerz Real, Sony, Panasonic and Frankfurt Airport.

Aviation & Travel

True Innovation Comes Outside The Cabin

One of the biggest emerging trends I have seen in the airline sector over the last couple of years is the concept of passenger self-serve onboard or order to seat. Despite the almost constant discussion at every industry event, the funny thing is, this isn’t really new at all – almost 10 years ago, a former CEO of an onboard retail technology provider proclaimed: “Over time the duty free model will shift to 100% passenger self-service transactions. One of the biggest reasons being the fact that the trolley only comes down the aisle once a journey, for half an hour – in essence the duty free store is only open for half an hour. If I can make transactions myself, through self-service technology, the store is open for the entire flight.” And yet, a decade later, this isn’t even close to the reality on-board most aircraft. During the pandemic, with the need for social distancing, coupled with a desire for innovation, self-service again bubbled to the fore – it gained a new level of relevance. With passengers across all demographics accustomed to ordering everything from groceries to new cars via their phones, digital transactions onboard an aircraft look to be a natural extension of what has become an everyday digital experience. The aviation sector is obsessed (but occasionally intimidated) by digital answers, and there is much that can already be done. Making a digital store available for browsing and even purchasing is achievable, both on IFE and passengers own devices. The process raises a number of operational implications, such as how crew learn of and deliver orders, how payments are handled (particularly if there is no air-to-ground connection) and how this sits alongside the existing cabin service. All of these issues require significant thought and, in some cases investment; and there lies the heart of the problem.