By: IM Smith • Email: email@example.com
Digital Retail integration is finally coming, but who is going to pay the price?
Almost 10 years ago, wet behind my digital ears and full of enthusiasm for my new found love, web marketing, I jumped on a plane and dashed off to meet with a big Duty Free Retail Operator to discuss my “ground-breaking” web portal dutyfreeonarrival. It was thrilling that a Major had agreed to meet me to discuss my concept. Billion Dollar tech IPO on Wall Street, he we come.
The presentation included a punchy YouTube video and a demo site of Expedia that took you straight from reservation to your destination and the airport Duty Free stores en-route.
Halfway through the video, the Principal stopped me and said “I’ve seen enough… all this is going to do, is cannibalise my sales, I can sell to these people without you, why do I need to pay a commission for sales I can get myself for free. We can’t afford it on our margins”. Then he said “if you can do this 100 metres off the airport, I’ll bite your hand off”.
Move forward a decade and a day doesn’t go by without a new Travel Retail Digital innovation being announced, the latest being integrating the airlines with airports for enhanced sales. A good theory, one of the best, but as yet, I don’t see much hand-biting going on. But, that’s coming too, eventually.
Now we have “home delivery” spreading like a virus throughout the Travel Retail world.
Redundant United Airlines inflight sales have just partnered with their Concessionaire for e-commerce only “Duty Free Sales”, Eurowings have just launched wingsshoppen and most Germans can now order from the airport for delivery to their front door.
Of course, none of the above is really a “Duty Free” business at all, it’s an online discount business, but only for travellers.
Who knows if these new retail portals operate 100 metres off-airport or not, nor do we know if these sites will work, but there’s a price to be paid here somewhere, because e-commerce only works well off the back of high inbound traffic. Travel-Tech understands this better than most, mostly at their huge cost for the traffic acquisition needed to achieve sales.
And, who is going to pay the eventual price for all these Digital enhancements?
Methinks, the Retailers are going to have to pay the price to affiliate and acquire the traffic they need and the airports are going to pay an even bigger price when cyber-space starts sitting outside the perimeter fence.
Some non-Aeronautical Airport Revenues are soon to be transferred in bulk to Google, Facebook and those large OTAs that you book your flights and hotels with. And, if domestic online Fragrance discounters kick into gear too, everybody will pay the price.
Then for airports, Doomsday will be just round the corner. Perhaps they should very quickly move their model as well as their perimeter fence?
IM Smith – Founder
Dutyfreeonarrival.com was founded in 2008 and is totally independent of any airport, airline, marine and land border Duty Free or Tax Free Retail Operator and any associated store. It provides impartial information for the travelling shopper.
It has launched Travel Retail Traffic™ a mechanism for linking airlines and airports for enhanced sales.