The captive environment inside an airline is prime marketing real estate. Even with many airlines offering Wi-Fi (some even for free), passengers are stuck in seats for hours at a time with only a window and whatever is ahead of them to look at.
Airlines have been increasingly working with brand partners to work in advertising naturally onboard — think of the Casper pillow at your seat, the Starbucks cup of coffee, or the Aesop amenity kit. All are seamless marketing opportunities.
But what about shopping onboard? Are you annoyed by the buy-onboard shills (let alone the credit card pitches)?
Inflight duty-free is becoming less of a thing but there is an interesting shift in where all that shopping money onboard is going…
Breaking It Down:
Inflight Duty-Free Shopping
For decades, duty-free shopping was a popular way to market products and spur incremental revenue for airlines. Pop open the magazine for inflight items or the SkyMall catalogue and shop to your heart’s delight at 35,000 feet. It was not chump change either, at least for some airlines. As recently as in 2015, duty-free shopping revenues were in excess of $3 billion.
However, the airline’s duty-free carts require capital investment, they add weight to the plane, and airlines have been increasingly looking at ways to fly lighter — and with more seats that they can sell. The 50 bottles of grandma’s perfume takes up space. And as Wi-Fi becomes more readily available on airlines, it is easy to just online shop now while onboard instead.
Many airlines have eliminated inflight duty-free shopping. None of the big US airlines offer it anymore. KLM announced it was getting rid of stocking items inflight by January 2020. Their reasoning? Fuel costs and changing customer needs.
Because the current sales process no longer meet today’s customer requirements, we have decided, after extensive deliberation, to bring this to an end. – Miriam Kartman, Executive Vice President, KLM Inflight Services
While airlines are eliminating duty-free and passengers are spending less onboard overall, they are still spending money somewhere for their duty-free…
Airport Duty-Free Is Growing
Inflight duty-free may be shrinking but airport duty-free is growing. Some of the top airports in the world are basically high-end shopping malls that happen to have gates and planes. World class airport shopping like in Dubai, Singapore, and newly opened in Istanbul, among many others, account for 60% of traveler’s shopping overall.
There is still something alluring about those magnificently over-the-top duty-free shops, especially in Europe and Asia. I’m talking about the winding passageways that passengers are forced to walk through right after security and before the main gate areas.
There are decadent chocolates, high end wines and liquor, overly scented fragrances, and so much more that are beautifully merchandised and on display.
Airfree: Inflight Marketplace
A company is launching later this year that will basically match the inventory of airport duty-free shops while passengers shop onboard the plane on their phone or laptop. Genius. That company is called Airfree.
Airlines no longer have to worry about having items in stock and taking up space. Passengers still may be bored on flights and want to divert their attention elsewhere, like shopping. And they can still pick up last minute items on the fly, like upon landing.
The added benefit to this is that airlines already have access to a great deal of passenger data. By having all of that data, airlines can recommend items to purchase that also happen to be in-stock at the airport.
The company is working with Singapore KrisLabs (an incubator of sorts for Singapore Airlines) to get this launched at scale later this year.
At the end of the day, your shopping fix at 35,000 feet is not going anywhere. It’s just changing a bit.
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