two (T2) and three (T3), with the retail mix curated to reflect each terminal’s passenger base.   The stores will offer a mix of international and homegrown brands across beauty, fashion, accessories, watches and jewellery, wines and spirits, gifting and confectionery. It will also introduce a health and well-being category to the domestic terminals. At 1765sqm, the T2 shopping experience will mostly cater to leisure travellers and a youthful demographic, with an offering of designer streetwear, athleisure, niche fragrances, haircare and other on-trend products.  At 506sqm, T3 will focus on luxury fashion brands and accessories, as part of its appeal to seasoned business travellers and discerning shoppers. Heinemann’s full domestic product assortment will be available online, with the retailer deploying its Heinemann & Me loyalty programme in its domestic airport stores. The business has been Sydney Airport’s largest retail partner since 2015, when it secured duty free concession rights for the T1 international terminal. It will operate the T2 and T3 stores on a five-year concession. Heinemann Australia managing director George Tsoukalas told Inside Retail that the domestic department store is not constrained to targeting travellers.  It will offer home delivery and click-and-collect services in order to expand its reach. He added that the department store model has potential to elevate the overall traveller experience in Australian airports. “This will be our first domestic airport store in Asia Pacific and is an important milestone in the evolution of our regional business model. One of our key value propositions is to be a ‘valuable travel companion’ and we believe a domestic offering is critical in engaging with travellers,” Tsoukalas said. “Sydney’s domestic terminals are the busiest in Australia, with 26 million passengers travelling through T2 and T3 in 2019. We are very excited about the opportunity to reach this large [and] dynamic market.” Proof of concept Tsoukalas sees significant opportunity – particularly in the gifting space – to reach domestic travellers before and after their flight.  He says there are substantial dwell times waiting to be occupied, with 60 per cent of passengers spending an hour or more in the domestic terminals prior to their flight.  With fewer customs and immigration formalities to complete, he says that there’s a greater opportunity to engage with passengers who are in transit.  Tsoukalas said that it did not want to copy and paste its international assortment into its domestic terminals.  “We have specifically created our assortments for T2 and T3, and integrated [local] favourites into the stores. The department store model has a lot of potential to elevate the overall traveller experience in Australian airports, and we are looking forward to bringing the new Heinemann stores to reality as a proof of concept,” he said. “A key focus for us will be to make Sydney Airport an online and physical shopping destination for travellers and non-travellers.” Extremely resilient While the cost of flights – and everything else – is sky-high at the moment, Tsoukalas believes that demand for travel, when possible, is extremely resilient. He points to Heinemann’s 2022 sales which have far exceeded his expectations at the beginning of the year. “We are optimistic about domestic air travel in Australia for the next year, but we have an agile team that is always ready to adjust our sales tactics and our assortment to accommodate any changes in passenger demographics and preferences,” he said. He added that the brand is excited to relaunch its redeveloped store in the international terminal – as part of the airport’s new luxury precinct – as part of its plans for 2023. “We will share more about our offer there in due course,” he said.