March 2, 2024

The race for retail

Julie Baxter asks if airports and airlines investing in retail technology, and the opportunities it brings, are missing a trick by failing to collaborate…

Travel retail is on the up as both airports and airlines race to roll out tech innovations to meet passenger expectations that food, beverage and retail will be offered digitally.

Enhanced platforms have been launched to improve the passenger experience and build ancillary sales but airlines and airports are in the strange position of collaborating on huge parts of the passenger’s journey, while at the same time competing for the same passenger’s retail spend.

Early access to the passengers’ data clearly gives airlines an advantage but airports have real estate – eons of space – much better suited to the presentation and storage of retail product than an aircraft. It provides opportunities to supply many more services too.

Among those seeing the benefits of tech innovation is Fraport, owner of Germany’s largest airport, which works with Omnevo for an omnichannel e-commerce solution at Frankfurt Airport. Their cloud-based digital airport marketplace proved its value by generating digital sales during the COVID shutdown.

More recently, Zurich Airport also began working with Omnevo to launch ZRH Comfort, an e-commerce transformation programme designed to build direct-to-customer business. Enhanced e-commerce offerings are being used as the first step towards a unified digital experience, connecting passengers to an array of services while adding personalisation and efficiency at every touchpoint.

A change in retail

This initiative represents a step change in airport e-commerce. If such platforms sell to passengers on the ground, what happens to inflight retail?

Omnevo believes airlines still have huge opportunities. It recently launched digital platforms for Fly Arna and Fly Jinnah, and has ongoing projects with Singapore Airlines, Sky Express and Virgin Atlantic along with rail clients Eurostar and Thalys. The tech facilitates rail service providers like Momentum and Railrest and airline caterers such as dnata. Omnevo further collaborates the Retail inMotion (RiM) for easyJet – providing an e-commerce and pre-ordering solution while RiM provides the inflight retail offer onboard.

Paul Bilham, Omnevo’s VP of Sales, says: “The appetite for retail is there. Collaboration is underway between suppliers and airlines and airports know they have to make their moves, but the challenge is they are not really retailers, they are not used to selling goods and services digitally [except their core products] so it is a learning process. They want the extra spend but it is hard to move fast because there are so many stakeholders and many conflicting interests. Ultimately, it will be putting the passenger first that reaps the best retail results but the obstacles to collaboration are all in the details.”

Elsewhere, gategroup and Immfly Group have signed ‘a disruptive strategic alliance’ which they claim makes them “the most technologically-advanced retailer in the aviation industry”.

Unifying cabin services

The agreement integrates their technologies and expertise to digitally unify all cabin services including crew applications, payment solutions, in-seat ordering and back-office functions. Passengers can pre-order meals and retail products, work, socialise or access entertainment through the system. It brings dynamic pricing, real-time inventory tracking and integrated data analysis tools to inflight retail and e-commerce development can follow. The launch partner was Air Europa with TAP Air Portugal next.

Fernando Guinea, Managing Director of gateretail, says: “This partnership takes our inflight retail solutions to the next level and helps drive an integrated solution for airlines. It provides a comprehensive, seamless and engaging retail and entertainment experience that also drives incremental revenue.”

Tourvest’s, Michelle Green, Director Business Development – Strategy and Innovation, sees potential for airline and airport partnerships: “Collaboration will surely come but it is a hard path to walk as the commercials remain key. Everyone is nervous about handing over a share of the pie and there is something of a race between airports and airlines to capture the retail opportunities. I strongly believe we are always better together so we are not afraid to try and walk this path.”

Having developed a model that could enable airports and airlines to work together to mutual benefit, doors appear to be opening for both parties in a market set to become even bigger.