On-board retail revenues to rise in 2011 as airlines embrace technologies

On-board retail enabler GuestLogix reckons that airlines are set to see huge growth in the revenue sector starting next year.

In a report by the company's EVP for New Markets and Products, Brett Proud, Guestlogix says that on-board duty-free concessionaires will evolve as passengers take advantage of destination related offers

In surveying travellers globally, GuestLogix found that more than half of them would take advantage of destination-related offers aboard a flight. And that means things such as tickets to entertainment, ground transportation, attractions, tours and other offers that add immediate value to a trip.

"In response, leading onboard duty-free concessionaires will evolve their business models to include broader shopping categories with the convenience of home delivery.

"This will represent the next wave in onboard innovation that will usher other important changes in the onboard experience.

"There will be an evolution in payment methods onboard to facilitate more higher-valued transactions.

"As the use of credit cards and other payment methods penetrate the industry, there will be greater demands placed by the payment industry for operators to achieve security compliance in Asia.

"Airlines will need to upgrade their existing POS systems to meet the more stringent payment standards globally.

"As connectivity slowly takes its place onboard aircrafts, payments will incorporate real-time credit card authorizations to support higher-valued transactions.

"Airlines will look at new and meaningful ways to support their customers

"Carriers are seeking new ways to interact consistently with their corporate and leisure customers through all travel touch points in the travel continuum.

"By staying better connected with their passengers throughout the entire journey, airlines can establish new and meaningful ways to support their customers, invigorate their brand loyalty, and sustain ancillary revenue growth.

"By doing so, they can extend the access to their onboard store to all travel touch points.

In addition, smartphones are changing the way travellers behave; with almost 100 million travellers using smartphones onboard US-bound flights, for example.

"Travellers today can use their smartphones to book their airline tickets, track their flights, hold their boarding pass and more. They have also begun to rely on their smartphones for their virtual check-in and travel concierge.

"The airlines will focus on monetising more travel touch points with their customers.

"Through GuestLogix’ new OnTouch™ Concierge application for the BlackBerry smartphone, travellers can easily access and transact with the airline’s branded onboard store to purchase a variety of goods and services.

And airlines will be able to differentiate their onboard offerings on different flights

"Airlines will focus efforts that benefit all customers as most flyers are affluent and highly predisposed to spending.

"Onboard retail technology is now such that operators can differentiate offerings to appeal to their most valued customers on any given flight.

"There is also the potential to allow passengers to upgrade meals and seating. This virtualises the traditional fare class structure, and with shopping on onboard, they can present different offers based on frequet flyer status.

Finally, GuestLogix reports that electronics, skincare and jewellery  continue to be the top performing duty free categories - and it reckons that's not going to change anytime soon.

According to GuestLogix’ duty-free partner, In-flight Sales Group Hong Kong, the top performing category has been electronics, particularly those related to the iPhone and BlackBerry smartphone.

"We expect this trend to continue with the introduction of new product models. Skincare has been strong across all North and East Asia countries, but especially strong in mainland China. Jewellery has also experienced strong performance and a marked return recently to higher priced products and premium positioned brands. Bottom performers are tobacco and colour cosmetics."