Six inflight retail predictions for 2016

What trends are set to take flight in the year ahead? Seismic changes are afoot for the inflight retail sector, says technology company GuestLogix in a new report – check out the predictions.

According to the merchandising, payments and technology intelligence provider GuestLogix, the time is nigh for radical change in the inflight retail sector.

TFWA/Generation figures suggest that global inflight retail sales slid -6.7% in the first half of 2015. Yet, according to the technology firm, the total spent on-board – including the likes of F&B and other ancillary revenues – has been growing 13% per year since 2012, and currently stands at US$5 billion.

So what’s driving this apparent growth? And how can spirits brands gear up for the inflight year ahead?

Click through to see GuestLogix’s 2016 forecast, and see GuestLogix.com for the full report.

1. Improved connectivity

Just 24% of global airlines currently offer internet services in the air, but 66% of travellers say it is a deciding factor when selecting which airline to fly with, according to tech firm Honeywell.

Retailers and concessionaires have expressed concern in the past that inflight connectivity will drive shoppers from the brochure and to the likes of Amazon – but if, as suggested, 37% of passengers are upset when WiFi is not offered, something’s got to give.

GuestLogix says that as connectivity improves airlines will look to sell more products, not just in the air but on the ground pre-take off and post-landing, too. Plus, the stablisation of WiFi will open up advertising models to help subsidise Wi-Fi costs.

Most excitingly for inflight retail, as internet reliability increases, so will support for real-time purchases and on-the-spot transactions

2. Selling smarter

Image courtesy: Austrian Airlines via Wikimedia Commons

Even where cabin crew are equipped with high-tech POS devices, customers are likely to have ‘better’, more up-to-date equipment than the people selling to them. As such, the “next wave(s) of innovation”, says GuestLogix, will result in greater tech mobility and smarter selling throughout the cabin.

Passenger data will play a huge role – data is collected pre-flight from user accounts, loyalty programmes, apps and partner retailers. By better using this data and building a more complete picture of each passenger, sales will surely follow.

The possibilities for retailers and brands inflight will be near-endless. High-net worth individuals will be easily identifiable and tailored to, while an individual passenger’s Inflight Entertainment system and accompanying retail offer could be made entirely bespoke. That’s smarter selling.

3. Self Service

Following on from the advent of connectivity and smart selling, inflight retail could become entirely passenger-led and shopper-initiated.

The ‘self-service’ process will become more prevalent across the entire travel journey, from pre-ordering at the time of booking flights, to shopping for product delivery in-seat once airborne. In addition, GuestLogix reckons that kiosks too could support passenger self-service shopping airport environment. A 2013 Cisco report found that 61% of respondents would be willing to shop in an entirely self-automated store.

But the repercussions could be enormous for airlines in terms of supply chain and inventory system management. GuestLogix sees the self-service revolution as “inevitable” – it will be intriguing to see how the retailing of spirits brands could evolve.

4. Going mobile

With internet connectivity its underlying infrastructure, true mobile payments – think Apple Pay, Android Pay – have yet to make real inroads into inflight. But it’s only a matter of time, as consumers become increasingly accustomed to paying via device.

And once again, the payment possibilities are plentiful. GuestLogix surmises that once wearable tech and mobile payments converge, consumers will be able to shop in countless ways, both in the air and on the ground. Frictonless retail will become truly embedded in the travel experience.

5. Destination station

Image courtesy: By Paul Friel via Wikimedia Commons

Picture the scene: the sun-filled deck of a Caribbean cruise liner where every passenger secured their entire trip – travel, F&B, extras, treats – at the point of booking. GuestLogix thinks that 2016 might be the year airlines look to adopt a similar model, with destination merchandising an emerging, revenue-driving trend.

In practice, this could mean that when they book airline tickets, passengers will also be offered the opportunity to purchase destination-oriented attraction tickets, make dinner reservations, book onward transport – and of course, buy goods, F&B, seat upgrades, as have already been implemented. But if this can also be tailored by destination – perhaps with guides, or location-specific items – then the sales uplift could be significant.

6. Seeking out efficiencies

Traditionally nothing more than cost centres, enhanced connectivity will mean that airlines will start to see supply chains and logistics capabilities as revenue streams instead, forecasts GuestLogix.

Once airlines and concessionaires can operate as better, more efficient retailers, the focus will shift to updating logistics and supply chains in innovative ways. But, in the current climate of inflexible supply chains, a lack of data sharing and often set-in-its-ways approach, real change could be some time coming.

How will this impact brands? Getting the right products to the right plane in time to meet more rigorous passenger demands will require creative thinking, most likely specialised packaging, and an appetite from brand and retailer to work much, much more closely together.

“2016 will be the year that true change materialises,” concludes the GuestLogix report. “The evolution will bring new opportunities for airlines, airline retailing, airline operations and passengers around the world.”