Inflight shopping is in a poor state. Only one in ten passengers make an inflight duty-free purchase today, and the proportion of duty-free sales that happen onboard are expected to fall. What’s more, many airlines have announced plans to phase out inflight shopping altogether - KLM being among the most recent.
However, while inflight shopping may no longer have the glamour it once did, it needn’t be written off as a concept. Indeed, some airlines are innovating with inflight shopping and seeing great results. This is thanks to the convergence of two things:
What impact are these two trends having, and how will they affect the future for inflight shopping?
Once upon a time, there was a certain glamour in purchasing perfumes, alcohols or luxury watches on an airplane. However, as with much of retail, the internet has changed this perception. In many countries, it’s just as cheap to buy luxury goods online, where there are far more choice and information about these goods. Leafing through an inflight catalog feels dated and limiting.
At the same time, duty-free inflight sales present a cost for airlines. If they do not manage to make enough sales, they are simply carrying dead weight and adding to fuel costs. Cabin staff is required to act as salespeople, even if they’re in not really trained to do this. And, there’s long been a risk of card fraud - until relatively recently it was impossible to verify a card purchase until the POS system was connected to the internet on landing.
Given this context, it’s hardly surprising that inflight shopping has performed relatively poorly. But, there’s potential for a big change in the coming years.
Ever more carriers today offer customers inflight WiFi - and a tipping point is expected in 2022 when research suggests 50% of flights worldwide will offer passengers this option. There’s evidently a compelling link between inflight shopping and onboard WiFi - if airlines can provide passengers with access to comprehensive duty-free stores and take secure payment midair, the options for boosting sales are enormous. Customers could browse extensive product ranges and either pick their purchases upon arrival or have them delivered to their home or hotel.
One frontrunner here is Finnair, whose Nordic Sky Portal has launched a partnership with Helsinki fashion brand Makia. Customers flying to Helsinki can browse Makia’s online store inflight and have men’s and women’s fashion delivered directly to their hotel or home address. This is a fairly new innovation but shows how WiFi and data might start changing the way passengers do inflight shopping - and how airlines can take advantage of the opportunity.
Today, most inflight shopping is still centered on catalogs found in seatbacks. However, by combining WiFi with smart personalization and data management, airlines could see a big increase in inflight sales.
The crucial thing here will be to offer more than just internet browsing. Many airlines with WiFi today have focused on upselling the number of gigabytes of data that passengers can consume inflight for more searching, watching and listening to content. However, there is far greater scope available.
Airlines that use the data they hold about their passengers to provide personalized offers over some kind of duty-free shopping portal can expect to see enormous ROI. Let’s see how this might look:
As these examples show, simply providing WiFi isn’t going to immediately convert all your customers to inflight shoppers. However, by combining it with your existing data and analysis, the potential for a new era of inflight shopping looks very exciting indeed.
Besides providing customers with WiFi access and technology to analyze passenger data, airlines will need:
While inflight shopping has seen declining levels of success in recent years, the future for this kind of ancillary sales looks very bright. Through smart data management, personalization and WiFi connections, all the ingredients are there for a boom in onboard duty-free sales - it’s down to airlines to join the dots.