Duty Free Wi-Fi and in-flight Amazon shopping on board Delta Airlines
Published by The Duty Free Advisor: Editor on 2012-06-29
Delta Airlines has just announced that it intends to fit its entire fleet with Wi-Fi connections and include international flights in this program.
Delta recently introduced a free Wi-Fi connection, within the USA, for Amazon.com on board. This enables passengers to buy goods direct from their seat and without the need to pay for this internet enabled service. But, the introduction of this international Wi-Fi service and (presumably) a global link to Amazon.com will mean that (all of a sudden) flyers can compare off-board retail products and prices with the on-board duty free retail selection and thus make purchases based on their on-line search results, comparing them to the actual in-flight catalogue and prices.
This changes the entire marketing mix for inflight sales as it means that airlines are willing to introduce an on-the-ground sales opportunity in direct competition to their traditional in-house on board offer. For years now, airlines have run the normal "duty free" cart through the aisles in the hope that passengers will buy.
A lot of time has been dedicated to inflight crew training, colourful catalogues and inventory management in an attempt to maximise this business. But, in spite of all these efforts, airlines still only retain an approximate 7% share of the global duty free market, whilst airports have about 60%. This is still a big business, some airlines have a sales turnover into tens or hundreds of millions of Dollars, but what will happen when passengers can cross the Atlantic whilst comparing the price for that perfume or watch for direct delivery to their home?
This is a shrewd move by Delta, although we are not privy to their reasons and can only assume. In effect, they have introduced in-house competition to their own retail departments, whilst (presumably) banking the fees which Amazon will pay them to run this test. They have also made these on-board sales virtual and so removed the inventory issues. This is the best of both worlds in Airline Ancillary Revenue and an initiative to be applauded, innovation at its best.
The upcoming Airline Retail Conference (ARC) in London heavily features sales Innovation on their Agenda, yet there seems to be no reference to this development, the most significant development for airline on board sales in recent years. Perhaps it should be added as a significant after thought.
In the meantime, whilst other less creative airline retailers are designing new trolleys to accommodate more stock or expensive seat back shopping videos, the passengers on Delta will be sat there and passing the hours, free of charge, arranging discount purchases direct to their door.
Fantasy or reality? If the overall industry perception is that the initiative is working, tighten your inflight retail seatbelts for some turbulence in the market.
For those wishing to compare airline catalogues and prices, before you fly... go to http://www.dutyfreeonarrival.com/en/search/airline
