Techno-savvy?
Are internet and SMS technologies a viable option for driving inflight retail sales? Lisa Phillips finds out
Shopping from the comfort of home, or from anywhere at all in fact, is more of an expectation than a luxury these days. Although generally still in the early stages of development, savvy inflight operators are tapping into this potential new marketplace and growing their inflight shopping sales via web and mobile phone contact.
Scandinavian-based MyTravel Airways (excludes the UK business) has developed a whole new customer base through its online pre-order site, www.mytravelairshop.dk. Orders placed on the website are picked up 72 hours before departure and delivered direct to the aircraft. Passengers who have not ordered on the tenth day before departure receive an e-mail encouraging them to shop, and those who still have not ordered on the fifth day before departure, receive an SMS text message reminding them that they have 24 hours left to order.
“40% of people receiving the e-mail actually place an order,” says Lars Hjartbo, purchasing manager duty free and travel retail. “A certain number of those would have ordered anyway. 40% of the people that receive the SMS also place an order. We believe that only a limited number of them would have shopped with us anyway, so this is regarded as ‘new money’.”
In the last financial year, MyTravel Airways Scandinavia generated sales of US$100 million, which amounts to an average spend per head per passenger of US$100. Although impossible to estimate exactly how much of that figure has been raised through the pre-order website, Hjartbo believes it has played a significant role in boosting sales.
BA and Cathay Pacific are among the other big players who are generating extra revenue through inflight shopping websites. Cathay’s CXcitement Shop and BA’s www.highlifeshop.com have both recently been revamped to draw in new business. BA’s retail business manager, Richard Cushing envisions a future where passengers can make internet purchases from HighlifeShop whilst onboard their flights, ordering products from seatback screens and choosing whether they want products delivered to their seats of directly to their homes. “BA has always used state of the art technology to develop sales,” Cushing explains. “We are currently looking at the next version of the onboard sales computer, our warehouse management system is being replaced with state of the art technology to provide greater flexibility with regional trolley loadings, and we also use our new HighlifeShop internet site to advertise the offer.”
Cathay Pacific has seen increased usage of its website, both in terms of number of visits and actual orders. Promoting the inflight offer this way, says inflight sales & logistics manager, Erica Peng, is cost-effective and efficient, and allows the airline to secure the right stock in limited space. “The number of pre-flight orders is growing very fast,” she says. “We believe this is mainly due to the enhancement of the website itself, as well as the promotions related to it, such as the bonus Asia Miles promotion for pre-flight orders. Passengers seem to be more familiar with the online ordering model and love it because they really enjoy the convenience it brings.”
Despite this, many airlines have yet to step onto the technological bandwagon. Lufthansa Worldshop, for instance, does not yet use internet or mobile phone technology to boost its inflight duty-free sales. However, customers with residence in the EU can buy accessories from the inflight shopping magazine on the internet, at www.worldshop.eu, which will then be delivered to EU and Swiss customers. Passengers can find details of this offer from the quarterly magazine found in front of their seats. The inflight shopping offer itself is mainly promoted through the magazine and seatback video.
Similarly, Alpha Inflight Retail, which handles inflight retail management for more than 100 airlines in 12 countries, relies for the most part on inflight entertainment opportunities provided through the inbuilt cabin AV systems. Most of its customers have not expanded into the promotion of inflight shopping outside of the aircraft environment. “Some of our customers have recently embarked on the ‘rental’ of portable DVD systems to passengers once onboard, and there may be opportunities to include a promotional/call-to-action message on these by working closely with the system provider,” says sales and commercial director for Alpha Flight, Lance Hayward. “However, this will need to be netted off against the cost of the actual equipment and the expense of managing it from a space/maintenance/loss perspective. Internet/mobile phone opportunities to drive sales are in the early stages of development, and we are carefully watching the significant advances being made in functional capability in this area. This will become more of a reality as concurrent advances are made in the availability of enhanced passenger data, and the development of an onboard systems environment that supports such technology.”
Although Alpha has been a pioneer in the use of pre-order websites, there needs to be an increased appetite from the customer base for this sort of technology to be effective. “On the retail side, we are experimenting with mobile phone technology to communicate with consumers as they arrive at the airport,” says Hayward.
Using SMS and internet technology has the obvious advantages of prompting awareness of special offers and inflight shopping before the customer even reaches the airport, often generating sales from new customers. The offer can only be so extensive, however, due to storage limitations onboard, and, says Alpha’s Hayward, due to payment technologies that do not yet allow debit card authorisations. The biggest limitations, however, are the technological abilities of the aircrafts themselves. “The airlines’ decision to include onboard servers in aircraft design will impact the availability of Wi-Fi and the potential expansion of retail sales with more techno-savvy audiences (ie retailing ringtone/music/movie downloads and programmes). The technologies of the future – particularly in the digital arena – are already in the general marketplace, but it comes down to the re-prioritising of other marketing spend in order for them to drive onboard retail sales.”
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