Tourvest Inflight Retail Services challenged the inflight industry to move the retail model forward at last month’s TFWA Airline Conference in Cannes.

 

Tourvest’s Chief Sales and Marketing Officer Joe Harvey (inset, right) said: “The share of the duty free market for inflight retail has shrunk from 6.4% to 5% over the last four years. On Monday [opening speech-Ed] the President of TFWA spoke about two things that are missing from our industry and that’s we’re not converting enough customers and we haven’t advanced with technology.

 

“So we would like to challenge the industry this morning, because we feel the inflight retail market is in a bit of a stagnated position and we want to offer some alternatives and solutions that we feel can move the inflight retail performance onwards.”

 

He then laid out Tourvest’s impressive credentials, explaining that they extend much further than the inflight duty free sector, since the company is actually the largest integrated tourism group in South Africa. It offers a wide range of tourism-related services, besides operating retail outlets – including 80% of all the shops at Johannesburg’s Oliver Tambo International Airport.

 

Back on the inflight retail side, he said Tourvest sells to 42m passengers. On an annual basis he said it packs some 579,000 trollies loaded with 31m products over 10 international hubs, and it trains, motivates and incentivizes some 21,500 flight attendants and cabin crew.

 

Tourvest’s current inflight clients include British Airways (currently out to tender), South African Airways, Arik, SA Express, Precision Air, Kenya Airways and TAAG [the last two airline contracts recently renewed-Ed].

 

 

 

 

IMPULSE PURCHASING DECLINING?

Harvey said that the commonly accepted statistic is that 60% of all inflight purchases are impulse buys, but he says Tourvest now believes that this percentage has actually dropped quite drastically and he explained why.

 

“Who remembers six, or seven months ago when you boarded an aircraft you had to sit in your seat, take your headphones off, you waited for the safety demonstration, you wait for the aircraft to take off and then maybe 10 or 15 minutes later you know the cabin crew will put the IFE [inflight entertainment] system on.

 

“With a change in inflight safety you can now sit in your seat and start watching a movie right from the minute you sit down. This is why the impulse buy, we now believe, used to be done previous to that – because people had nothing else to do but to take out the inflight brochure or catalogue.

 

“That crucial 10 or 15 minutes, we believe, has had a drastic effect on inflight retail, and that’s why we must look at retail strategy that realigns all these needs, but must offer most of the retail opportunities and touch points – not just the traditional trolley.

 

“I challenge all the airline people in the room to look at their customer penetration figures and see actually how many passengers you are selling to by just using the trolley service – and I would probably tell you that the percentages are quite low.”

 

He said it is well accepted that the traditional marketing mix is about product, place, price and promotion, but he added that he would also like to add personalization and partnership to that.

 

 

 

IN FAVOUR: NEW TECHOLOGY USE

Continuing, Harvey said: “Wikipedia describes personalization as the involvement of technology to accommodate the differences between individuals. To succeed to do this we need to offer the right deal at the right time to the right channel. We are in competition with the airports for those passengers.

 

“They get more time with them to browse and to shop than we do, because once the customer gets on board the aircraft the headphones are on, the IFE goes on and they’re looking at what movies they can watch.”

 

It is now vital to try to remove the barriers to sales on board aircraft, he said, and the way forward in Tourvest’s view is to look at the use of different devices such as offering services to desktop, tablet and mobile devices. Here, he also paid tribute to similar comments on new tablet technology from earlier speaker Jasmine Lee, Manager of Inflight Sales and Service Development at Cathay Pacific Airways.

 

Harvey said that apart from a few like Cathay, not many airlines have inflight mobile phone sales applications and this is why Tourvest believes that it needs to embrace big data. He said E-commerce is the fastest growing retail market in Europe and in 2013 there was 21% growth, with a slight drop in 2014.

 

“Ladies and gentlemen, do you know that we spend 4.7 million minutes on Facebook per day, and in Europe currently 45% of retail website visits are done on a mobile device? And yet how many airlines in Europe actually have an inflight sales app?”

 

’The way forward’, said Harvey is an omni-channel, multiple device strategic approach, which will lead to less full burn for airlines based on Tourvest’s firm belief that pre-order is the way forward.

 

 

Left to right: Joe Harvey, Chief Sales and Marketing Officer, Tourvest Inflight Retail Services; Ana Rita Aragão, Inflight Sales Director, Lojas Francas de Portugal/TAP Air Portugal; and Jasmine Lee, Manager of Inflight Sales and Service Development at Cathay Pacific Airways.

 

 

97% OF AIRLINES NEED TO SHARE MORE DATA

He continued: “So how do we link personalization with partnership? According to IATA recently, 97% of airlines need to do a better job of sharing information. The reason is that they have the data that we need as concessionaires, or that the inflight retail departments need. However, it’s in too many different places and they don’t know how to put it together. We need to get a comprehensive view of the customer.

 

“How many of you receive emails or newsletters from airlines offering you fragrances, cosmetics? How much better would it be for you to receive an email based on your demographic, your age and what your preferences are? We need to improve interaction at every touch point and we need to look at the use of new, non-traditional modes of selling, and that’s why at Tourvest we’re very lucky to have things like our destination management teams who can offer those.”

 

He concluded by saying that partnerships ‘are so important in our industry’ and Tourvest believes they are the way forward, along with sharing data for the benefit of the customer.

 

“This will ensure that we understand your customers and their needs and this will lead to better, route-specific packing,” said Harvey. How many of you carry the same ranges around the world and find that you don’t sell stuff, but you would look to sell more products of certain items?

 

“On one of our major customers we have up to 85 different route-specific packing plans for their operation, however, we could have a lot more if we could get more data with the rest of our partners and from our industry, and we believe that’s what we’d like to do.”