Impulse buying: facing the consequences
December 05 2013 12:12 AM
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Korean Air takes onboard retailing to new heights
Korean Air takes onboard retailing to new heights

 

While not exactly shopaholics, it is hard at times to resist the lure of buying something on promotion or items that stare you in the face when you hit the malls.

What starts off with a simple shopping list at home ends up with bags full of  ‘necessities’ that you soon find dig into the wallet much deeper than anticipated. And so the domestic repercussions follow. The concept of shopping within budget is thrown out of the window.

So here’s the scenario. You’re excited about the upcoming holiday flying home to see friends and family. Weeks of planning, tickets booked, days off work secured and plenty of gifts packed away for loved ones.

You arrive at the airport well in advance, check-in for the flight and proceed to passport control before clearing security screening ready for the long journey ahead. With your entire family in tow, you’re looking forward to the much-needed break from your expat hideaway somewhere in the world.

The long walk between the security point and aircraft boarding gate is to be expected. Passenger buggies are nowhere to be seen. No airside porters and no airline staff to assist. You feel helpless.

So there’s only one thing to do. Sweating profusely and out of breath, you and your family run what feels like endless miles to the boarding gate. Dodging fellow passengers on the way, your limbs succumb to aches and pains beyond control.

You arrive at the gate, rummage through your bags for the elusive boarding passes and passports, eventually finding the documents to hand over to the airline representative.

The aircraft you are about to board is in good view on the other side of the large panes of thick glass that separate the holding lounge from the jet.

Phew, made it – or have you!

The conversation then goes something like this, ending up in a heated argument all to no avail.

Airline staff at boarding gate: “Sir/Madam, you’re all on flight 747.”

You: “Yes, thank you, here are our travel documents.”

Staff: “I am sorry, but the boarding gate is closed. You arrived late.”

You:  “But we got here on time. There are still passengers boarding.”

Staff: “Am afraid boarding has completed. We clearly state at check-in that the gate shuts 20 minutes before departure and all passengers are requested to arrive at the gate well in time.”

You: “But this is not on. We checked-in on time. The plane is there. It hasn’t moved.”

Staff: “Yes of course, the aircraft is preparing for final checks. But you arrived late at the gate. Looks like you have spent some time in duty free. The aircraft has to take off on-time or misses its slot and the flight resulting in severe delays.”

You: “I don’t care about slots. That’s not my fault. I am well within my rights. These tickets for me and my family have cost a lot of money. We booked them well in advance and have confirmed seats.”

Staff: “I am sorry, but we cannot let you onboard as the aircraft needs to depart on time. We have to offload your bags and try to get you on the next available flight. Depending on the fare you paid for the type of ticket, you may have to pay a difference.”

(Being the peak holiday period, getting onto another flight may prove extremely difficult with all flights likely to be full. You may have to pay more if seats are available).

You: “But this is not acceptable. We need to get on this flight as we have connections at the other end and don’t have too many holidays. Where’s the manager. I demand speaking to the manager.”

Staff: “I’m sorry but you’re late. We cannot allow you to board.”

And so the commotion continues!

What the gate agent alluded to during the verbal exchange was the passenger had done his or her fair share of shopping at the airport duty free stores and had not factored in sufficient time to reach the gate.

Despite completing most of the airport formalities, the passenger was late having gone on a buying spree.

Much of airport shopping is impulse buying. Whether you have time to spare or not, there is that urge to buy from an awesome range of products available depending on the size of the airport – anything from perfume, cosmetics, watches, jewellery, clothing and handbags to liquor, tobacco, books, magazines, toys, electronics and souvenirs.

Missing your flight can prove very costly, hence the onus is always on the passenger to go through the entire airport process with plenty of time to spare before catching a flight.

Yet, the airline faces the brunt of passenger abuse. Sounds familiar!

Today, some of the world’s largest airports are known for their extravagant shopping experiences than being a temporary home to aircraft. London Heathrow, Amsterdam Schiphol, Dubai International, Singapore Changi, Bangkok Suvarnabhumi, Hong Kong International and New York JFK just to name a few.

Retailing over the years has become big business for airports. Aside from duty free shops selling traditional items that are synonymous with duty free, leading international brand names are eager to open up shop with dedicated stores at the world’s busiest airports.

For airports, it’s a great way to earn revenue from a captive audience. Thousands of passengers stream through every hour. Waiting for hours to board their delayed flight or wanting to make that all-important purchase before rushing to the departure gate, passengers literally have shops at their doorstep.

Designing an airport is not all about check-in desks, boarding gates and departure lounges. Retailing is a crucial component of the passenger experience, hence airport operators carve out as much space as possible during terminal renovations and extensions for bigger, or more, shops.

And believe me, they will carve out as much as they can, ensuring no stone is left unturned.

Retail units are popping up at different customer touch points in the passenger flow: pre-check-in; immediately after passport control; en route to the boarding gate; at the departure gate; upon arrival in the baggage retrieval area; and past customs in the arrivals hall.

It’s hard to miss the tempting 3 for 1 offer, the free gift promotion with every purchase, or the travel exclusive only available at your nearest airport, not in the High Street. The thought of allowances permitted at your final destination, or the penalty applicable if you are over the limit, doesn’t come to you. As you soon discover, shopping can be a lethal and expensive.

For greater ease and convenience, you can try out the pre-order option. Buy online and pick-up at the airport before you fly.

Over the past 30 years, airports have evolved from being simply municipal or government infrastructure providers into sophisticated and business-oriented service providers.  Airlines are an airport’s largest and most important customer base followed by passengers. No airlines, no flights, no passengers.

Airports increasingly look to non-aeronautical operations such as retailing for revenue growth. Typical aeronautical revenue relates to areas directly associated with airport infrastructure charges such as passenger and cargo aircraft landing and takeoff fees, aircraft parking charges and security costs.

Non-aeronautical earnings determine the financial viability of an airport as these tend to generate higher profit margins compared with traditional aeronautical activities.

Aside from retail concessions where rent is paid by outlets to the airport landlord and a percentage of retail profits are payable if stipulated in contracts, there are car parking fees, land rent from third parties and advertising on airport walls, billboards and shuttle buses – all to boost the treasure chest.

Amsterdam Schiphol International Airport is seen as the pioneer of airport retailing. Not only is its airside shopping extensive, having grown sharply over the years, but the landside operations have proved extremely popular. The Schiphol Plaza shops are located in an indoor shopping street before entering the terminal complex to capture business from commuters, airport workers and visitors.

In North American airports, there is a growing trend to position kiosks and vending machines which maximise space that may be deemed unsuitable for traditional retail outlets. Seen as a convenient point of sale for the passenger on the go, the vending machines not only dispense food and drink, but the growing trend is to buy grooming products or even smartphones through these automated retail units.

Airlines and airports have to work in sync, but the thought of shopping delaying a flight has kept the two sides apart. Airlines loathe the airport shopping environment as this can hold up flights, cause delays and create more tension for gate agents. Airlines strive to offer passengers minimum connecting times between flights to get them to the final destination in the quickest possible time. Airport shopping, therefore, is seen as a bit of a distraction.

Delayed flights as a direct result of passengers not turning up at the gate on time, for whatever reason, have their share of knock-on effects for which the airline is forced to bear the responsibility.

Baggage has to be retrieved from the aircraft resulting in a missed takeoff time; a missed departure slot can result in arrival at the destination later than planned; the quick one hour turnaround of short-haul flights becomes impossible; onward passenger connections potentially missed; passengers forced to be accommodated in hotels at the airline’s expense; positioning of an aircraft on a later route is severely affected; and the consequences continue.

Hence, airlines pride themselves with on-time performance – flights that depart and arrive on time.

However, there is an interesting twist. Retail is also a good revenue earner for airlines.

Though the figures are not earth shattering, airlines do make good money from onboard duty free sales. After all, the captive audience on a flight of one hour or 17 hours is too good an opportunity to miss to drive a sale. Many airlines now offer pre-flight online sales marketed through their websites to boost takings.

Yes, there is an element of  impulse buying during a flight, particularly if there’s no time on the ground to indulge in airport shopping. Passengers are able to make informed choices onboard because they will generally have more time on hand depending on the length of the flight which affects the extent of the duty free service.

Sales people from some of the world’s leading cosmetic and fragrance brands don’t limit their visits to department stores. They frequently visit airline head offices to provide flight attendants with product training and incentive schemes. More sales, more incentives.

Traditional forms of purchases are through the inflight retail magazine. Cabin crew still parade a duty free trolley up and down the aisles showcasing a limited selection of items drawn from cosmetics, fragrances, tobacco, liquor, watches, jewellery, toys and travel amenities. Lack of space onboard prevents carriers from stocking large items or huge volumes of selected products.

With the biggest passenger jet capable of carrying 400 passengers or more on distances in excess of 14 hours flying time, the Airbus A380 has created new opportunities for airlines to show off their retailing prowess.

Korean Air, for example, has created an onboard shopping experience not seen before. It displays a range of best-selling items from its glossy duty free magazine. On long-haul flights between its Seoul base and destinations as far afield as Frankfurt, New York, Los Angeles and Bangkok, the display units stock up to 65 different items and complements the trolley service. This gives passengers the freedom to walk around and explore products rather than products being thrust upon them in their seat.

Airlines are clearly making great innovative strides in the retail arena.

As we come to the end of 2013 and the holiday season about to go into full swing, airports around the world will be busy looking to strengthen revenues for the 12-month calendar year. More passengers equate to more retail sales and more revenue for airport operators.

For airlines, the misery of facing an onslaught of passenger complaints at different customer touch points will continue as they come under pressure at the height of the holiday season.

So next time you fly, spare a thought about the likely cost of missing your flight if you end up shopping more than you bargained for and not keeping an eye on the airport departure screens.

Impulse buying is human nature. For some, however, it’s nothing more than second nature, yet can prove to be very expensive indeed.

 

Updesh Kapur  is a PR & communications professional, writer, aviation and travel analyst. He can be contacted at [email protected]

 

 

 

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