Inflight retail: Is hybrid the model of the future?

By Luke Barras-hill |

[UPDATED] The allure of the inflight trolley in sparking impulse purchases means it is likely to develop in tandem with e-commerce sales rather than disappear altogether over the coming years, retail concessionaires have told TRBusiness.

As discussed in the February e-zine, the revival of the airline boutique model has been a ‘pick-and-mix’ affair; while carriers such as Aeroflot, Emirates and Ryanair remain open for business, others have opted out entirely and some such as Malaysia Airlines are eagerly reviving a suspended onboard offering.

Oliver Gottschling, Sales Director, Inflight & Catering at Gebr. Heinemann said: “We firmly believe that physical onboard retail – and the trolley – will remain relevant.

“It is an impulse business, and the joy of buying something on the plane when on the way to a holiday destination or home will also remain. Similar to our airport shops, we see that when people fly there is an onboard willingness to buy – and the spend per pax has increased.”

Oliver Gottschling, Sales Director Inflight & Catering, Gebr. Heinemann.

INDUSTRY TIGHT-LIPPED ON SPECIFICS

Gottschling says that where flight movements are increasing, Gebr. Heinemann is witnessing positive signs of a pickup in the inflight business as airlines pay closer attention to ancillary revenues.

This optimism is shared by Zoe Farmer, Global Director Retail Management at gateretail. She commented: “Boutique on board is often very impulse driven, so if you have the right products available at the right price, it will satisfy demand and makes financial sense for both parties.”

While Farmer anticipates an evolution of the boutique model in the coming years, she is confident it is here to stay.

“Passengers love to buy something exclusive, special, or duty free products that offer amazing value,” she added.

Getting passengers back into the air remains of paramount importance, with the International Air Transport Association (IATA) earlier this month welcoming increasing momentum towards the re-opening of borders and a relaxation of travel restrictions.

Thirty eight markets representing 65% of 2019 international demand are open to vaccinated travellers without quarantine measures or testing requirements – up from 28 markets in mid-February.

IATA adds that while North American and European international traffic rebounded to -42% of their 2019 peaks last year, travel in Asia remains impaired by Covid restrictions at -88%.

However, there has been some notable progress of late with India and Malaysia among countries that have recently announced a softening of restrictions.

Malaysia is due to reopen its borders to international travellers from 1 April and Malaysia Airlines has been ramping up flight capacity to offer better connections across Malaysia and to destinations across southeast Asia and Australasia.

NATURAL TRANSITION POINT

For Daniel Bainbridge, Regional Director – Commercial, UK & Europe, Malaysia Airlines, out-of-the-box creativity has been influential in ensuring customers are engaged during the inflight phase.

“Through our online Temptations brand e-commerce offer, in 2021 we also launched home delivery of our signature onboard chicken satay,” he explained. “It’s a key element of the business and first class experience, an innovative way to give our customers a taste of flying again, and sales have been fantastic.

For inflight retail, the long-running question as to whether the trolley will be usurped by the e-commerce model remains and those in conversation with TRBusiness are tight-lipped on the specifics of what we can expect to see available onboard – and when.

Malaysia will fully reopen its borders to international travellers from 1 April in a major boost for the country’s aviation and tourism sectors. In line with the relaxation of travel curbs, Malaysia Airlines will reopen its Golden Lounge (pictured) at the Satellite building at Kuala Lumpur International Airport. Source: Malaysia Airlines.

In the meantime, Heinemann’s Gottschling points to the future of the inflight business as a ‘perfect interplay between onboard trolley sales and accompanying digital tools’ and Bainbridge is on the same page.

He cites Malaysia Airlines’ removal of the inflight magazine in 2021 as a natural transition point into a more sustainable operation and digitally attuned customer proposition.

“The use of contactless technology actually brings greater opportunity because when customers are comfortable using the Malaysia Airlines’ all, it gives us a new channel through which to present retail offerings in advance, as well as making the onboard retail experience more thorough thanks to an end-to-end customer proposition.”

To read the full report, click here. Original e-zine article by Claire Malcolm.

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