Online illustrations- DutyFree

Thirty-one percent of Asian travelers made a duty-free purchase versus only two percent for North American travelers.

Based on data from over 3,400 travelers from 18 countries, the APEX 2015 Global Passenger Insights Survey reveals crucial industry information on cabin comfort, in-flight connectivity and entertainment.

APEX Insight: The APEX 2015 Global Passenger Insights Survey revealed 28 percent of Asian respondents said they had made a seatback retail purchase compared to just one percent of North Americans. APEX Media investigates the possible reasons behind this gap and whether North American carriers could maximize revenues by adopting a new approach to in-flight retailing.

Results from the APEX 2015 Global Passenger Survey reveal a discrepancy between the in-flight shopping habits of passengers from across the world. Notably, Asian travelers were most likely to have made a purchase in flight, with 28 percent reporting a seatback screen purchase, as compared with one percent of North American flyers reporting a seatback screen purchase.

According to travel retail company GuestLogix, the explanation for these results is twofold. One, which is more obvious, is that Asian carriers simply operate more international flights versus North American carriers. Two, which is less discussed, is the different approach Asian carriers take towards in-flight retailing. “Many of the most successful airlines selling duty-free are based in Asia-Pacific, such as Singapore Airlines and Korean Air. Their crew engagement from a sales perspective is certainly very different to those in North America,” explains Dan Thompson, SVP Sales and Client Services, GuestLogix.

“Many of the most successful airlines selling duty-free are based in Asia-Pacific such as Singapore Airlines and Korean Air.” – Dan Thompson, GuestLogix

Among the more notable examples is Korean Air’s Sky Shop on board its Airbus A380 fleet. The airline removed 17 seats to place physical stores, designed by Lancôme, in the aircraft and make room for a dedicated space for selling perfumes, cosmetics, alcohol, jewelry and even dietary supplements. Japan Airlines (JAL) has adopted the Thales AVANT system, which in addition to offering in-flight entertainment content, is used to showcase products available via the JAL Shop.

Source: 2015 APEX Global Passenger Survey. See the full infographic.

Source: 2015 APEX Global Passenger Survey. See the full infographic.

“Culturally, Asian passengers view shopping as one of the most important facets of their travel experience. In addition, many flights across Asia are international, further embedding this behavior,” says APEX CEO, Joe Leader.

Designer label-loving Chinese air travelers with growing incomes now spend in excess of $3,800 USD per person each year on duty-free and destination shopping – a trend China Airlines has capitalized on through its Sky Boutique, allowing customers to pre-order a wide variety of goods weeks before flying.

Thinking Beyond the Galley Cart

Leader argues airlines could boost revenues by adopting a mindset similar to e-retailers like Amazon: “The most logical way to boost ancillary sales would be to conduct sale in-flight and deliver on-ground,” he says. “If the airlines were able to sell duty-free and centralize delivery upon arrival then there would be more of an incentive to sell. More importantly, airlines could offer a much broader range of products.”

“If the airlines were able to sell duty-free and centralize delivery upon arrival then there would be more of an incentive to sell.” – Joe Leader, APEX CEO

There are tentative signs this may come to fruition. Virgin Atlantic is one of a handful of major non-US carriers adopting a pay in the sky, deliver on-the-ground approach. The airline’s Retail Therapy onboard duty-free service not only lets customers pre-order items for in-flight pickup, it offers a separate catalog of goods which can be sent for home delivery after landing. Just this month, a newly-launched smartphone app called Simplifly adopts a similar approach by letting travelers order duty-free items before arriving at one of its participating airports and collect later.

It’s too early to predict whether North Americans will embrace in-flight retail as fervently as some Asian passengers – but there are definitely ways they can work toward increasing it by appealing to passengers. “They could offer high tax-saving products such as wine and spirits, both of which are attractive to passengers,” says Thompson. “Limited-edition merchandise is another strategy that can spur growth, with products such as skincare or airline-branded merchandise.”

But for Thompson, the key to successful in-flight retailing is the adoption of a self-service model, ideally via the seatback screen. “[This] will both eliminate any barriers from unions as well as allow passengers to make purchases throughout the entire flight rather than solely during a cart run down the aisle.”

Click here to view the survey highlights infographic from the APEX 2015 Global Passenger Insights Survey. Are you an APEX member? Log in at apex.aero to access the full survey results

Ari is a digital media specialist at APEX Media and ardent follower of avgeek news.