Aeroplanes are not an obvious retail channel, but as flights enabled with Wi-Fi become the norm, could they be a beacon for online retail?
The airline industry can be forgiven for not taking up the opportunity of selling to passengers up until now. Most technology goes through very tight specifications, and even the software used for playing movies on the back of your seat requires months of testing before it’s released on the plane.
However, the proliferation of internet-connected flights is growing rapidly, and airlines are looking to use this connectivity to make good on this investment.
Although the industry is resistant to change, it’s a miracle its hands have not been forced on us by the starved revenue departments in airlines.
Running an airline is tough, with huge outlays, low margins and no-one else to take the risk when a new route is opened. It is a little surprising to me that this stone has laid unturned for so long.
So why will it change? Well, 10 million people fly every day. We have passengers in various states of emotion going on holiday or coming back from work trips with their mental wallets already open and their value perception scrambled.
“Although the industry is resistant to change, it’s a miracle its hands have not been forced on us by the starved revenue departments in airlines”
Not only can the devil make work for idle hands, but we have even strapped them in to their seats so they cannot escape.
The global online population (3.45 billion people) are online for an average of 2 hours 43 minutes every day, and spends around $1.8 trillion a year shopping.
So, of the 10 million passengers flying an average of two hours per day, they could be spending, let’s say, 50% of their in-flight time online, and 10 million passengers constitute (very roughly) to 0.1% of the global population.
Therefore, 0.1% of global ecommerce spend is around $2.47 billion, which is a significant amount of untapped revenue for the inflight market, and makes me want to glue some wings onto all the Westfield’s around the UK.
I recently took two flights, one with a budget airline and one with a national badge carrier. From the moment we hit 10,000ft, I was being sold products on the budget airline.
With this in mind, I bought a new pair of headphones, a toy and some chewy cheese bread. With the flag carrier, I waved to a stewardess a few times in an attempt to buy my wife £110 worth of skin cream, but this was de-prioritised by – albeit a quite welcome – tea delivery to other passengers.
The moral of that story is that without the investment in technology, service will always overcome shopping, unless the revenue is part of the airline model.
That is why shopping in the air so far has been a red herring. However, now digital and connectivity has arrived, expect to see it supercharged.
There is some fantastic technology going on and some smart people in airlines preparing the shelves. Not a moment too soon either for those who love to shop and for the airlines who deserve a helping hand.
- Steve King is chief executive and co-founder of Black Swan Data