Retail at 30,000 feet: Why Mobile-First Is Fueling the Future of Airline Retailing

“Mobile-first” isn’t a future retail trend—it’s already happening.

Smartphones have become consumers’ go-to accessory around the world. According to Deloitte’s 2018 mobile consumer trends update, smartphones have an average 85 percent penetration globally. As a consequence, travel companies saw 60 percent of their bookings made on mobile devices in Q4 2017, Criteo’s 2018 industry report reveals. That’s a dramatic increase when compared to 41 percent during the same period the previous year.

These trends reflect a shift in lifestyle habits that color customers’ expectations of the journey as a whole. Consumers who rely on digital devices for daily interactions and transactions increasingly expect mobile touchpoints to be available throughout their journey.

Airlines looking to harness this consumer focus are refining their mobile retail and ancillary strategies to deliver a more meaningful digital experience for passengers. How can airlines effectively capture and translate general consumer trends and deliver them in an aircraft-ready format?

Mobile-aircraft integrations are key

Global creative consultancy BMW Designworks is working with its partners and clients to design transportation of the future.

“Human-centric design ensures the continuity of the digital lifestyle throughout whatever modalities we experience,” said John Schoenbeck, Director of Strategic Partnering at Designworks, at December’s Red Cabin Innovations and Aircraft Seating conference in Hamburg.

“We need to understand the customer’s digital interactions from car to plane to train. We need to understand these transitions to come up with the right product, not only in hardware but software. We also need to understand it in the context of other platforms, like smart home and smart office,” Schoenbeck continued.

While many travelers rely on their mobile phones for check-in and other routine trip-related tasks, smartphones may serve to unlock other ancillary and retail opportunities as well, such as meal service, duty-free retail, and destination bookings.

According to Schoenbeck, the ability of a mobile device to integrate seamlessly with other digital services and hardware devices—such as a seatback IFE screen—will become increasingly important. For instance, a smart aircraft seat will soon be able to recognize the traveler, which will open up a host of services that the customer can control through the seatback interface or via their own mobile device.

“We need to understand the customer’s digital interactions from car to plane to train. We need to understand these transitions to come up with the right product, not only in hardware but software. We also need to understand it in the context of other platforms, like smart home and smart office”

JOHN SCHOENBECK
DIRECTOR OF STRATEGIC PARTNERING AT DESIGNWORKS

Premium content and retail opportunities await

Airlines appear to understand the benefits of designing a mobile customer-centric experience. SITA reports that airlines are making leaps forward in the adoption of mobile platforms for sales and customer service: 90 percent of airlines now offer mobile flight search and 83 percent send mobile promotions.

We have already seen the successful introduction of personalization via mobile companion apps. For example, on some airlines travelers can use their mobile devices to queue up the entertainment that will play on their seatback screen inflight. Airlines may eventually be able to add an ancillary feature that unlocks premium content access for passengers.

If a flight ends before a film or program reaches its conclusion, customers would be able to pick up where they left off on their next flight. If license rights can be negotiated, airlines could potentially let premium travelers watch the end of the film, or new programming, at the airline lounge. Additionally, airlines may be able to offer destination services with rich content on their seatback IFE, such as previews of tours, and let the customer complete the booking on their mobile device and store their reservation details in their digital wallet.

At the same time, there are opportunities to update the old inflight retail model to meet modern consumer ecommerce habits. According to Julie Lichty, Head of Digital Solutions and Services at Panasonic Avionics Corp., it begins with boosting onboard retail through partnerships with brands and airports. Airlines may be able to make their duty-free store available through the app so that customers can preview and set aside items they will want to buy onboard. That same shopping cart could may then be expanded to the IFE screen. Brands may then choose to pay for access to an airline’s digital mall on an IFE screen, where their product is offered with rich content and in an increasingly attractive way to passengers. An integration between the seat device and the mobile device may allow customers to pay for purchases seamlessly and securely, using their preferred mobile payment platform. The purchased items could then be picked up either at the destination airport or delivered to the customer.

Opening up new marketplaces

As Designworks’ Schoenbeck suggests, keeping up with consumers’ lifestyles will require airlines to make mobile devices a part of the travel experience. By treating personal mobile devices as a key enabler of ecommerce, airlines look to open up new revenue streams.

Airlines may ultimately shift their perception and presentation of retail and ancillary services as separate interactions locked into specific hardware to frictionless mobile interactions that can be accessed wherever desired by the passenger.

This shift is important as more competitors enter the forum, asserts Shoenbeck at the Hamburg conference. “The minute that any other brand is providing you a better digital solution for your digital footprint, you might change to that brand.”

By integrating the functions of mobile and other personal devices which travelers may use to facilitate travel and related services, such as kiosks, gates, and IFE systems, airline brands may increase the fluidity and continuity of transactions—and passenger travel experiences as a whole.