The Coronavirus (Covid-19) pandemic is encouraging industry stakeholders who were either not planning for or against digitalisation to rethink the concept of inflight retail.

Speaking as part of this publication’s February inflight report, Vimal Rai, Managing Director, Trace Consulting says inflight retail in its traditional form was discontinued by 40 airlines pre-pandemic and has ‘been dying a slow and painful death for some time’.

He commented: “To be honest, I’m unclear if traditional concessionaires have a future. I think the industry needs ‘digital concessionaires’ who are technology and retail experts with the capability to guide and empower airlines on their digital retail evolution. It isn’t a simple one-size to fit all solution.”

While some inflight concessionaires have decided to pursue omnichannel opportunities quicker than planned due to the pandemic, omnichannel and digital have long been at the heart of 3Sixty Duty Free’s strategic vision.

CLOSE COLLABORATIONS

Alex Anson, Chief Operating Officer, 3Sixty Duty Free told TRBusiness: “We have been working closely with our key partners, leveraging the travel slowdown and advancing our strategy quicker.

“The benefits [of digital and omnichannel] are obvious, particularly during the Covid-19 pandemic, with heightened health and safety measures, pent-up customer demand and the acceleration of e-commerce worldwide.

“However, while the strategy is clear and these ancillary revenues are critical to airlines, we need to recognise that many airlines the world over remain focused on surviving the economic impact of the pandemic, thus constraining some resources.”

Anson, however, describes the Covid-19 economic crisis as a pivotal force which has urged airlines to implement significant cost-saving measures and in turn generate ancillary revenues. He added: “As passengers return to the air, the focus is on offering a broader selection of products and services through safe and convenient experiences for crew and passengers.

“Thus, many airlines have re-evaluated their onboard proposition. This includes updating point of sale devices, expanding facilities to provide true contactless exchanges and extending the retail environment beyond the cabin to pre and post-flight solutions.

“The aviation industry has long been empowered by customer analytics. Now it is more cost-conscious and passenger-centric, omnichannel will inevitably become the cornerstone of travel retail.”

One airline which has used the pandemic to consider omnichannel opportunities is British Airways.

As part of a tie-up with Michelin-starred chef Tom Kerridge, British Airways customers can now choose food items from a pre-order menu.

The airline has also introduced ‘Buy Before You Fly’ for Highlife Shop products, allowing customers to purchase inflight retail items such as perfume, sunglasses and makeup, or food and drink up to 12 hours before departure for delivery to their seat.

Purchases can be made via BA’s Highlife Shop website.

Highlife Shop was not available for much of 2020, this publication reliably understands. In November, BA partner Tourvest Retail Services revealed that it was investing in a full omnichannel platform.

CUSTOMERS THE TOP PRIORITY

A British Airways Spokesperson commented to TRBusiness: “We take our ongoing commitment to evolving and improving our on-board customer offer seriously. Even after a difficult year for our business, our customers remain our number one priority.

“Customer and colleague feedback underpins the decisions we make. Over the last few months, for example, we know that our customers have valued having complimentary refreshments on short-haul flights in Euro Traveller.

“We also know people would like more choice and the ability to buy something more substantial.”

Tourvest Retail Services was unavailable for comment.

Reacting to the implementation of BA’s pre-order concept, Valentina Dalle Mule, Export Area Manager Airlines, Bottega S.p.A. said: “I believe that BA is reacting in the best way to Covid-19 travelling restrictions, to reduce contacts between customers and crew members.”

She continued: “Lots of airlines have started, even before Covid-19, creating a pre-order platform for duty free sales. On the trolley onboard the space is very limited and pre-order gives the final customer the chance to have an extended range of products.

“The F&B pre-order service is also giving this great opportunity to the customer and supporting the zero-waste onboard strategy which is greatly embraced by Bottega.”

Asked whether the pre-order solution could work for customers, particularly those used to buying impulse retail items onboard, a travel retail supplier who asked not to be named commented: “In the short-term, I would expect to see a reduction in sales as a result of this model. As a result, brands will hope any reduction in sales will be reflected in the commercial terms.

“While pre-order completely removes the impulsiveness from an impulse purchase, I do see this as a positive change in the long-term if consumers purchasing habits adapt to the changes.”

The source adds that the move by BA, while encouraging, should have been pushed more aggressively by airlines and concessionaires some years ago.

“It’s a brave and bold move by British Airways & Tourvest. However, if pre-order is to succeed, all airlines and concessionaires must work together to redefine passengers’ inflight purchasing habits.

“Uniformity across carriers is key. Without, it simply becomes confusing for passengers to understand at which stage they need to make their purchase on different carriers — before or during the flight.”

WILLINGNESS TO ORDER IN ADVANCE

Delving further into pre-order, Anson believes more and more pax are willing to order in advance.

“Pre-order has and continues to be a successful component of the inflight business which continues to grow. As this is the case for duty free purchases, the same and more will apply to food and beverage.”

The ongoing shift away from the conventional buy-on-board model has the potential to accelerate. Anson explained: “Pre-ordering food and beverage and duty free purchases in one transaction prior to flights with improved service, will be key drivers of the pre-order solution.”

Rai, however, suggests some customers are reluctant to order food and beverage in advance of their journey.

“On a short-haul journey, time and relevance are airlines’ biggest stumbling blocks. The key is relevance of offer in terms of when and what is presented to travellers during their booking journey.”

He added: “Until airlines and caterers sort out this bit of the product range, offer, and supply chain, they aren’t going to entice customers to buy in advance.”

Garry Maxwell, Director at GMAX Travel Retail believes that while inflight retail requires changing, the boutique model should not be lost altogether.

“I still believe the onboard offer should not disappear completely especially for essential last-minute impulse or forgotten items e.g. a travel plugs, a logo product/toy and key best-sellers,” he said.

“Many of these traditional fast-selling items will generally not be purchased by pre-order. I had a previous situation with a major airline who had two very fast-selling logo toys on board and decided to remove them from inflight and just put in pre-order. Sales dropped by over 90% for both items immediately.”

His words are echoed by Anson, who said: “While omnichannel is the future once ‘normal’ travel activity resumes, we believe there is still a role for some inflight cart sales, be it for last-minute gifting or the top-up of duty free purchases. However, this will be narrowed down to best sellers.”

“This could also mean that more luxury brands can enter this market too, which will be extremely exciting to see.”