What’s next for inflight shopping?

By Hélène Dubos | Trends & Innovation

Jul 10

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:

  • Onboard WiFi 
  • Better use of data for personalization

What impact are these two trends having, and how will they affect the future for inflight shopping?

What went wrong 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.

WiFi changes the game for inflight shopping

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.

Examples: how inflight shopping could be revolutionized

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:

  • Demographic targeting
    Airlines have a powerful advantage over regular online retail or duty-free stores in airports: they already know a lot about their customers. This means they could provide targeted shopping based on specific demographic characteristics. By analyzing your customers’ historical shopping patterns you could offer highly targeted promotions.

    For example, on flights to a tourist destination, the analysis might show that Group A is interested in buying guidebooks for their destination country. Group B always buys sun cream and flip flops. Group C is interested in car hire and perfume. You would then be able to promote specific products to individuals from these groups in the inflight shopping portal.
  • Location-based sales
    Besides focusing on the demographics of your passengers, you could also sell products and services which tie in with the destination - similar to the Finnair example above.

    Is it raining in your destination country? Why not offer a flash umbrella sale? Are you flying towards a city with historical sites? Why not let customers book city walking tours through your portal?
  • Analyze data to decide what to carry
    While WiFi means you can have bigger online stores than catalogs would allow for by letting customers pick goods up at their destination, this needn’t mean that all inflight sales need to disappear.

    For example, Flybe analyzed its data and realized that on flights to certain destinations passengers were much more likely to purchase perfume, cigarettes, alcohol and other luxury items than they were when flying to other destinations. As a result, the airline chose to only stock these kinds of duty-free goods on flights to specific destinations.

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.

What’s needed to make this a reality?

Besides providing customers with WiFi access and technology to analyze passenger data, airlines will need:

  • Data analysts
    Analysts will need to understand the trends in your customers’ shopping behaviour and cascade the information to operation staff managing stock at each destination
  • Partnership building professionals
    As with the Finnair example above, airlines will need to build out their teams so they have staff who actively search for and negotiate partnerships with travel content aggregators such as Inflyter and a wide range of partners including car hire firms, tour guides, restaurants, hotels, and luxury goods stores
  • Portal design teams
    You will also need to invest in web designers who have experience building high quality, user-friendly purchase portals that can offer dynamic sales options.

An exciting future for inflight shopping

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.