Is Onboard Duty-free outdated?
SAS has just decided to stop onboard duty-free sales as reported on ATW Online. SAS argues that changing customer behavior and sustainability considerations from fuel savings led to this decision. This is a rather surprising move at a time where airlines are extending their ancillaries portfolio. On the other hand, onboard sales are hardly profitable. What other options are there to make online sales profitable?
Product range adjustments
Cigarettes, alcohol and perfume are the hot sellers in onboard duty-free. Many other products are sold very infrequently and might be out of stock given the small quantities that are loaded. A simple ABC analysis quickly separates top from flop articles
The smartphone enables price comparisons even on the plane. Onboard products that are offered well above the market price will certainly stay on stock
An airline knows who is sitting in which seat and has his or her credit card on file, at least quite often. So payment should be very simple and could be supported by capturing the customers signature on the personal inflight entertainment screen associated with that seat. Equally, Apple Pay and Google Pay, as well as NFC credit card technology, should make onboard payments easy. Also, mixing cash with miles should be an option
Incentives for flight attendants
Being a retail clerk seems to be unpopular among flight attendants. Yet, proper training and an attractive cash incentive can boost onboard sales significantly. But most importantly flight attendants need to hand over the product for a touch and feel experience while the customer decides on the purchase
While the top-sellers should always be available on board, a broader selection of goods can be offered for home delivery. Again, the personal screen of each seat and also the personal device can serve as a modern digital shop window. In addition to home-delivery, gate delivery, parking-lot delivery, lounge delivery etc. can be services that drive onboard sales profitability
Onboard sales themselves are not outdated. The problem is that the way goods are presented and promoted has not changed for many years. It is digital communications, customized promotions, state-of-the art payment and delivery processes that can take onboard sales to the next level.
UNEX Management Consulting supports airlines in making onboard sales profitable again.