True Innovation Comes Outside The Cabin

One of the biggest emerging trends I have seen in the airline sector over the last couple of years is the concept of passenger self-serve onboard or order to seat.

Despite the almost constant discussion at every industry event, the funny thing is, this isn’t really new at all – almost 10 years ago, a former CEO of an onboard retail technology provider proclaimed:

“Over time the duty free model will shift to 100% passenger self-service transactions. One of the biggest reasons being the fact that the trolley only comes down the aisle once a journey, for half an hour – in essence the duty free store is only open for half an hour. If I can make transactions myself, through self-service technology, the store is open for the entire flight.”

And yet, a decade later, this isn’t even close to the reality on-board most aircraft.

During the pandemic, with the need for social distancing, coupled with a desire for innovation, self-service again bubbled to the fore – it gained a new level of relevance. With passengers across all demographics accustomed to ordering everything from groceries to new cars via their phones, digital transactions onboard an aircraft look to be a natural extension of what has become an everyday digital experience.

The aviation sector is obsessed (but occasionally intimidated) by digital answers, and there is much that can already be done. Making a digital store available for browsing and even purchasing is achievable, both on IFE and passengers own devices. The process raises a number of operational implications, such as how crew learn of and deliver orders, how payments are handled (particularly if there is no air-to-ground connection) and how this sits alongside the existing cabin service. All of these issues require significant thought and, in some cases investment; and there lies the heart of the problem.

The technology often sounds amazing; but what are the hard numbers around increase in passenger spend per head? 

While I think everyone would agree that self-serve is clearly a win for the passenger experience, in order to invest in this area many airlines are asking what the impact will be in terms of onboard spend. And herein lies the problem. As a passenger, are you going to spend more onboard because you can self-serve? Will you buy that extra coffee, or perhaps a duty free item, because you can now order it from your phone?

Today, clear answers are not easy to find, and that makes the case for investment a challenge; how do you weigh up improving the passenger experience against an investment which, assessed in isolation, may not significantly impact revenue? That’s a complicated call to make, not least because there is much more than simply the issue of in-cabin spend to take into consideration.

As airlines evolve their digital strategy, both inside and outside the cabin, I think that self-serve actually presents an exciting opportunity to venture into the wider world of digital retail. 

If you leverage the onboard platform to offer an expanded range of items well beyond the traditional core inflight offer, the revenue needle starts to move far more sharply. Ordering for your next flight? Increased SPH. Ordering for home delivery from a wider selection of products? Increased SPH. Adding additional products and services to the offering? Increased SPH.

Whenever self-serve comes up for discussion, I am always asked how much additional revenue self-serve onboard brings. My honest answer is this: if you are only offering the same product range that you already sell today, a single-digit % uptick in onboard revenue is certainly possible. However, we see that when an airline expands the offering, this number grows far more significantly.

I think this is the point in my blog where I am supposed to deliver my killer sales pitch about how Omnevo can help to get you average onboard self-serve orders to 200 EUR per sale…  or increase retail SPH by up to 50%. In reality, both (or neither!) of those wins might happen, because the truth is… it depends. I’m absolutely certain it can be done, but so much depends on the airline’s own plans, ambitions, resources, and the pace at which it wants to innovate, as well as many other factors, from passenger demographics through to marketing capabilities and customer communication. 

I firmly believe that ten years from now, self-serve will contribute significant additional revenue to airlines who build the right strategy, and those pioneering airlines will see significant gains in both passenger NPS and passenger spend that is no longer limited to the cabin.

I know for certain that the technology can do it; the question is, can your airline do it?

Omnevo will be at Aviation Festival Asia 28th Feb - 2 March at booth H9 if you want to pop by and discuss this more.