INFLIGHT: GATERETAIL
Gateretail: Three Ps can help combat inflight retail’s decline
As inflight retail continues to weather commercial challenges, Gateretail Managing Director John Moriarty shares with Claire Malcolm the three Ps fundamental to the sector’s future success: personalisation, premiumisation and pre-ordering.
Above: Personalisation, premiumisation and pre- order can fuel onboard purchases, say Gateretail.
G
ateretail’s contribution towards the fortunes and success of global airline
catering, onboard and equipment solutions provider Gategroup was highlighted in its recently released 2017 financials. The Group reported a 35% year-
on-year rise in revenues across the board, noting that its strong focus on commercial innovation ‘has delivered attractive culinary and retail onboard solutions proven to enhance the passenger experience, allowing renewals and new
“While we see positive signs of growth in some markets and with some airlines, the underlying decline is also very apparent. In order to address this we need to start differentiating the product
range onboard, create experiences for passengers and make it relevant for them.”
John Moriarty, Managing Director, Gateretail
contract wins’. Talking the bigger picture, John
Moriarty, Managing Director, gateretail pivots towards a re- evaluation by the airline industry, as carriers look deeper into driving ancillary revenues. “If we talk about overall retail on
board, it’s very clear to understand that you have more and more airlines looking at their business model as they seek an incremental source of income. More and more of them are saying that food and beverage is a part of this and are switching from complimentary across to retail because it takes a large cost of the business for them, and allows them to then generate revenue from it. Moriarty coins this shift as part
of a strategic approach, insofar as “the passenger is now in control of the transaction, and [airlines] are starting to realise that”. “It’s no longer chicken or fish; they
want choice, they want convenience, and that’s a driver for the retail business.”
‘Inflight needs to evolve’ Homing in on inflight duty free
26 TRBUSINESS
specifically – and with Qantas the latest legacy carrier to announce its withdrawal – there is work to be done, according to Moriarty. “If you look at the traditional
onboard duty free model, it needs to evolve to meet the needs of the traveller. “Very little has significantly
changed in the last 25 or 30 years; it’s still one trolley going up and down the aisle with a limited product range and assortment, predominately due to space and weight constraints. “The onboard range more or less
reflects the offer in the airports. Along the whole traveller journey, this opportunity for retailing is only one of many.” The hard-hitting reality is reflected
in the sector’s P&L, with 2017 registering a decline in inflight retail sales globally. “While we see positive signs
of growth in some markets and with some airlines, the underlying decline is also very apparent. In order to address this we need to start differentiating the product range onboard, create experiences for passengers and make it relevant
FEBRUARY 2018
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