INFLIGHT: HANSE DISTRIBUTION
Understanding the price and value proposition
After more than two decades supplying the world’s airlines with inflight extravagances, Hanse Distribution is re-addressing its product mix as declining prices and passenger interest point towards a more eclectic offering. Claire Malcolm reports.
F
or Nikolas Hogrefe, Managing Director, Hanse Distribution, there’s little point in reminiscing
about the heyday of inflight retail without having a handle on future strategy. “As a supplier, the market is
changing fast. Price points are far lower than they were five years ago and our product offer has also changed dramatically. The issue is, if we continue to drop prices lower and lower, at what point will it still make sense for the airlines if business profits also continue to decline?” Hanse currently has around
80 listings with two of its biggest customers, Lufthansa and Swiss. Although prices of onboard products are clearly locked in a downward trend, Hogrefe says the airlines are rebelling against moving down the full ‘bargain basement’ route. “When we talk price, they’ll say
that an item at €19 is not attractive for them, even if they sell 2,000 pieces,” he states. “But even with Etihad, up until a year ago, having a
FEBRUARY 2018
watch retailing for $49 simply didn’t exist, and now it does.” He tempers this by adding that
the availability of bargain price timepieces in the domestic retail environment is something that has been around ‘forever’, with even supermarket chains like Aldi and Lidl selling super-affordable watches. He also points to a general decline in watch wearing with the growth of smartphones.
Airlines’ openess However, there is a market dynamic that edges towards duty free as a potential avenue for the unique and unusual – including in the watches segment. “Around 20 years ago we
introduced a dual-tone watch to the German airlines and last year Lufthansa asked me once again for a dual-tone watch, which came as a crew requested item,” recounts Hogrefe. “So, we created a classic design and put two extra straps on it, with a sub-€100 price point and it’s
now also selling onboard Swiss.” This is just one example of what
Hogrefe sees as the future for inflight duty free, with a strategy that focuses on sourcing fresh, one- of-a-kind, exclusive products that passengers only come across when they travel – and that don’t cost the earth. “We look everywhere for new
ideas,” he enthuses. “Interestingly, not a single product we have today is a ‘kickstarter project’, but we do have a lot of fun – crazy products like Feet Friends, which are healthy socks
“As a supplier, the market is changing fast. Price points are far lower than they were five years ago and our product offer has also changed dramatically.”
Nikolas Hogrefe, Managing Director, Hanse Distribution
TRBUSINESS 23
Above: Sourcing novel, exclusive onboard products at affordable price points will dictate the future of inflight duty free. Source: Swiss International Airlines.
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