Article

Real-time purchases take to the skies

A new program allows airlines to conduct catalog sales transactions while in mid-flight. But will travelers want to shop in the air?

July 22, 2009 by James Bickers — Editor, Networld Alliance

For nearly 20 years, passengers on domestic flights have browsed the Sky Mall catalog, dog-earing pages of items to buy once home.

Beginning this month, passengers on American Airlines can actually make Sky Mall purchases while in the air, and the company behind that functionality is working to bring it to all major airlines in time for the Christmas shopping season.

Founded in 2002, Toronto-based Guestlogix provides the handheld technology that allows airlines to process transactions while in-flight. According to executive vice president Brett Proud, the company's technology is in use on 30 percent of the 3.3 billion passenger trips globally each year.

In many instances, that technology is used for food and drink sales. But increasingly, Guestlogix is turning its eyes toward travel vouchers, Broadway tickets — and retail catalog sales.

Shopping the friendly skies

Guestlogix offers a suite of services for airlines, each centered around a specific need travelers face. Ontouch Ground Connections, for instance, allows travelers to purchase vouchers for ground transportation, giving them one less thing to worry about once they get off the plane. Proud said the service is up and running at "50 of the largest airports in the world."

"If you're landing at one of those airports, you can buy a train voucher to downtown or a shuttle bus or a shared ride or whatever it happens to be," he said. "It seems like a no-brainer — you land at an airport, you've gotta get somewhere."

It's a no-brainer for airlines, as well — they can generate revenue without stocking a single product. Once a traveler's card is swiped on the airline attendant's mobile payment terminal, a receipt is printed that doubles as a voucher for transport.

"We've made seven or eight senior-level pitches to our largest airline customers, and they're all saying, 'Yeah, this makes sense, let's start the process,'" Proud said.

Once the ability to process credit and debit card transactions made its way into the aisles, it was only natural to extend it to Sky Mall, and that's exactly what happened when the deal was initially struck in February of 2008. The roll-out has been gradual since then, with American Airlines going online this month, according to Sky Mall's customer experience manager Joey O'Donnell.

According to Proud, all major U.S. airlines will offer in-flight Sky Mall ordering by November 1st.

By the numbers, it has been a major success: On-the-ground purchases from a Sky Mall catalog average one for every five flights. In the air, that average goes up to one out of every 1.2, a nearly five-fold increase in sales.

Proud said his company's next major growth targets are services rather than products: he's signed a deal with a phone carrier that will allow international travelers to pay for phone airtime at the local rate without the fear of roaming charges. And he's emphasizing the ability to sell entertainment products, like Broadway tickets and local attractions.

But he did note that Sky Mall doesn't publish in Europe or in the Asia/Pacific regions. "Probably, we'll be looking at doing our own catalogs in those regions," he said.

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Do travelers want to shop in mid-air?

In-flight perks like the Sky Mall catalog and airline-sponsored magazines are unquestionably helpful when it comes to passing the time on a long flight. But what remains to be seen is whether travelers really want to make purchases from them while they are between destinations.

"Many times I've saved the in-flight catalogs, dog-eared something that I thought was marvelous at the time," said Geoff Feldman, traveler and software developer. "I get home and realize that this is not something I would ever really want."

Feldman also raises a larger issue — marketing fatigue. As someone who takes a lot of international flights, he said he is annoyed by the constant pitching of what he calls "supposedly duty-free junk," and adds that a "no-pitch airline" would win his loyalty.

Rob Duncan, a market researcher and author, had a more positive experience with in-flight shopping, although he noted that the product assortment could be improved. After getting bumped from his flight, he was rewarded with an upgrade to first-class on the next flight, along with a $100 credit for the in-flight catalog.

"It was good fun to try and spend the money," he said. "In the end it was stuff we probably didn't need and wouldn't have bought with our own money."