ACROSS industries and sectors, some of the most significant sea changes have been spawned by challenges to widely-held perceptions. Think of the first time someone realised that the internet could be a social platform, rather than a vehicle for one-to-one communication and a placard for impersonal pages. Or when going shopping no longer meant going to the mall or a physical store. Or, a little closer to home, when someone decided that the in-flight meal didn’t have to be an included extra.
The airline industry is poised for another evolution, this one challenging the perception that an in-flight retail experience must be limited to the confines of the cabin, or even to the duration of the flight. It is a bold challenge being made by a bold company with a bold new concept: GuestLogix and the branded onboard store.
The new in-flight retail environment will be distinguished not by the reselling of once-included products and services, but rather by embracing and extending the relationship between airline and passenger. It will be marked by accurate assessments of consumer needs and wants and by the fulfillment of these at any (and every) touch point of the journey. It will be defined by customer experience and framed by retail-informed strategies of merchandising and product mix. And it will be enabled by the cutting-edge technology that has driven innovation across the industry.
Creating and promoting a successful customer relationship may be second nature for ground-bound retailers but for airlines it means re-conceptualising the passenger. Changing the industry perception of the passenger as a traveller to the passenger as a customer is no small evolution but it is one that has been in the works for some time. The unbundling of the airfare contributed to this, as did the subsequent popularity of the ‘customised’ voyage - though this is an idea that often gets more lip service than implementation.
The onboard store takes this a step further. While the unbundled airfare relies on presenting fee-or-no-fee options to passengers for basic, almost compulsory, products and services – a checked bag, a seat assignment – the new approach to in-flight retail puts the emphasis on the passenger. While the customisation of a flight experience during the booking process certainly leverages the power of choice to deliver ancillary revenue, it does not extend through the duration of the flight, much less after disembarkation .
The onboard store attempts to answer the questions: ‘Beyond the basics, what does a customer on an airplane want? And what will they want or need before and after their flight?’ That answer is found in research and data mining but ultimately it is found in a relationship with a passenger.
This is not to say that airlines have no relationships with their passengers; on the contrary, much effort has been spent over the years in promoting loyalty and extending the airline brand beyond the flight (with cobranded credit cards etc). What the new in-flight retail approach does, however, is apply different principles to the business of onboard retailing to extend that relationship with the customer beyond the core product offered by the airline (a ticket) – which is precisely why this approach is the future of the industry.
Most of these principles come directly from the retail industry. Merchandising and product selection are hallmarks of the new approach, as are purchase and preference tracking and an emphasis on value and choice. The key to implementing these common-to-retail strategies in-flight (with the cabin’s inherent limits on inventory, internal marketing and display) is the optimal leveraging of technology.
Within the onboard store, virtual shelves replace physical shelves with great effect. Products are offered based on predetermined tastes and preferences, flight duration and destination. A brand can be established and extended through interaction with this onboard store – much as it has for most of the retail success stories in the past decade. But in a controlled Wi Fi-enabled environment or through the use of smart wireless point-of-sale devices, passengers can explore the onboard store from the comfort of their seat as well as interact with in-flight entertainment systems through their own personal electronic devices.
And because the approach is grounded in an online experience, it does not have to be limited to the cabin. Counterintuitive as it may seem, the onboard store enables an in-flight retail experience to continue long after the flight is over.
One of the reasons this strategy is changing the face of the airline industry is that it taps into existing advantages inherent to airlines’ operating practices that have largely been ignored for the purpose of in-flight retailing. The most obvious of these advantages is the captive audience inside the aircraft. Some low-cost carriers have seized on this fact of flight as an advertising opportunity, usually for third parties. But until GuestLogix introduced OnTouch and the branded onboard store, few airlines leveraged their captive audience for retailing purposes.
Airlines also have information on their passengers’ demographics, itinerary and immediate purpose (ie business or leisure) readily available. Traditional retailers would have to spend countless weeks collecting data – and probably paying market analysts to interpret it – to get the sort of valuable information airlines have at their fingertips. Utilising this data to develop a compelling retail experience is central to the onboard store approach and bound to become industry standard very soon.
In-flight retailing is taking off in a new and exciting way. For some airlines, it has already. Why should in-flight retailing be limited to duty free catalogues, food and beverage and entertainment? Why should it be hindered by restrictions on inventory, merchandising or even the duration of the flight? Why should it be limited at all?
GuestLogix has a new answer: it shouldn’t.
The innovation of the onboard store is enacting a sea change in the industry and, like the many innovators that have come before it, GuestLogix is using evolution in perception to bring about a revolution in the cabin space and far beyond.
By Brett Proud, GuestLogix