An aircraft used to be a mode of transport from A to B. But with a connected world, there is potential for airlines to transform into strong commerce platforms.
While flying, today’s “digital” traveller expects every aspect of his travel to be smooth, enjoyable and stress-free. No long lines at airports, no tasteless food on board, no outdated reruns of old television shows for in-flight entertainment, and no more kitschy aircraft-shaped souvenirs offered as in-flight shopping.
Keeping Up With The Times
Airports have come a long way in reinventing themselves as much more than terminals for aircrafts. They have capitalized on the huge passenger base with hours to spend (and money, too!) while waiting to board planes. And the offering isn’t limited to duty-free goods – there are spas for tired travelers to get massages, gaming and entertainment centers, even fine-dining restaurants. Some, like the Changi Airport in Singapore, and the Dubai International Airport are nothing short of glamorous malls.
Similarly, can airlines shift from just businesses operating aircrafts to be complete commerce platforms.
Imagine an aircraft with 200 passengers, “buckled in” for 6 hours, with (probably) a significant spending capacity. And their likes, wants and needs have gone well beyond a limited range of duty-free perfumes, watches and travel-sized personal care products.
A traveller has the luxury of time, and the internet to take advantage of. He can utilise the 6 hours to plan his entire home renovation – order that limited-edition leather couch, china cabinet and the home entertainment system. Six hours to focus on browsing endless items of furniture and electronics, pick the most suitable ones, order them and pay online, and select home-delivery on the desired date. And just like that, by the end of his flight, his dream home is much closer to becoming a reality. And all of this, without leaving his seat.
So, what can airlines do to provide their customers a retail experience that boasts variety, ease of use, competitive prices, and preferred payment and delivery options?
The future of in-flight retail: Make The Sky Your Playground
Traditional in-flight retail has its drawbacks – limited variety, no sales expertise (the hassled flight attendants must double up as salespeople), stocking and inventory management aren’t easy, and the list goes on. However, today, everything is “connected.” Some airlines have already moved towards discontinuing regular duty-free in-flight sales because of competition from airport outlets and e-commerce. Singapore Airlines has taken the e-commerce route already, with KRISSHOP, its online retail portal. It is an omnichannel shopping solution that offers pre-order, in-flight collection, home delivery to local Singapore addresses as well as international addresses. Popular payment methods such as credit cards, as well as popular Chinese payment method, Alipay, are accepted.
So, how can others follow suit, and use technology to enable retail and grow their business?
Connectivity is non-negotiable
The internet makes it possible to purchase anything easily. Offering Wi-Fi connectivity to passengers is the first step towards making a big splash in retail. The sales that result from customers freely browsing e-commerce website might well make that free Wi-Fi offering worthwhile.
- Convenient for passengers: Customers can have a simple, secure and quick shopping experience online. They can spend time browsing through a vast online inventory, and choosing products, rather than just picking from a limited range from a trolley. The scope for an omnichannel purchase experience is high, because the customer can order and choose the mode of delivery – at home, at the destination/origin airport or even at his hotel.
- Increased convenience = increased conversion: Airlines can benefit from these purchases by partnering with a wide range of retailers.
Take advantage of the treasure-trove of data: Machine Learning
When customers travel, they provide businesses with data that is extremely valuable. With customer consent, this data can be used to offer a sophisticated and customized shopping experience. Machine Learning algorithms have the potential to enable airlines to use customer data effectively and offer a personalised experience.
- Customer data is a tool that airlines can effectively use to their advantage and provide travelers with relevant offers and discounts. This can go a long way in sealing brand loyalty.
- Airlines have an audience already – passengers traveling to specific destinations. Offers tailored to their destination or interests can be made available – tourist attractions, event tickets, customized experiences, and so on.
Payment – the last but crucial link
A superb user experience and wide variety will amount to nothing if the customer is unable to complete payment for some reason. Payment does have its cultural, social and generational contexts – such as travelers who are averse to using credit cards, or travelers who don’t feel safe carrying cash, mobile-savvy users who don’t carry physical wallets – airlines need to keep user preferences in mind.
- Offering preferred payment methods, or payment methods that are geographically relevant is extremely important to increase conversions.
- Loyalty programs need to extend beyond redemption for tickets or use in select outlets. Allowing customers to use their miles to purchase online is likely to boost sales, because customers will truly experience a reward programme that is relevant to them.
- Easy ways to pay should be available at all times during the traveler’s journey – during registration, while boarding, on board and when disembarking. A truly omnichannel payment acceptance is critical for airlines to optimize the payment processing via all channels flows, reconcile and keep a 360-degree view on customers’ transaction data.
Travellers are more discerning than ever, today. They are not satisfied with old ideas wrapped up and offered as new. Airlines have the opportunity to offer them a new type of shopping experience adding value to their services. This will undoubtedly turn into a competitive advantage for airlines choosing this new path.