INFLIGHT: SCORPIO WORLDWIDE Action delivers end-to-end rewards
Leading global inflight distributor Scorpio Worldwide hopes 2018 will be the year when onboard actively appraises its listing fee levels and the model of guaranteed payments to airlines. Stuart McGuire, CEO, in conversation with TRBusiness…
changed in duty free inflight and are these realistic ambitions in the short term? A realignment of advertising and listing fees that reflects the lower sell-through on some airlines, rather than an increase to make up for the shortfall in revenue. Already, major suppliers are questioning the profitability of the business. An end to guaranteed payments
Firstly, how did your inflight business perform in 2017? We have seen good sales in the UK, Middle East, Africa and Asia, with Europe a little flat. Our general feeling is that the flagship carriers’ sales are in decline due to increased competition from airport and digital channels, the impact of selling food onboard and crew motivation issues on some airlines. There are of course exceptions to this. The low-cost carriers continue to grow sales and are developing strong businesses.
Generation data points to airline sales dropping by 6.6% in 2016 and posting a relatively flat performance in Q1 2017. How is inflight performing in your business at the beginning of this year? We have seen good initial sales for the first quarter, especially in perfume and cosmetics.
What are the top three things you’d like to see improved/
“I see some new suppliers enter the market not aware of the sale or return risks and then struggle to handle them – and the cash impact.”
Stuart McGuire, CEO, Scorpio Worldwide
34 TRBUSINESS
from concessionaires to airlines and a movement to a more trinity -based system where supplier, concessionaire and airline can all share profit. Increased
innovation to reduce the amount of products carried in the catalogues, leaving a ‘core’ selection onboard, with the rest being pre-ordered for pick up or delivery.
Wi-Fi accessibility inflight remains a burning issue with more carriers looking to improve access. Do you see this as playing a vital role in developing inflight sales and what are the obstacles? Inflight sales are traditionally done using the much-criticised trolley. However, this has proved very successful without much change in the last 50 years. It should probably be praised for
its efficiency and sales results rather than vilified. Not many other retail sales platforms could have been successful without change. However, it is clear that today’s consumer requires a much more interactive relationship when buying products and the lack of Wi-Fi onboard has hindered sales expansion; whether its because the consumer cannot price compare, or because they simply are more used to purchasing at already low prices through digital platforms, they are not so interested to buy onboard. Wi-Fi installation onboard is
expensive and bandwidth is for sure an issue. So it is important to identify
what is the desired need, until super fast Wi-Fi is freely available anywhere in the world including inflight. Anyone involved in the airline retail channel needs to be aware of opportunities through connected sales and pre-order possibilities. Airlines are the sole reason people
go to airports – if the airlines can generate a small commission for linking their passengers with retailers, through inflight Wi-Fi channels, there is a significant revenue stream to be created.
technological
What are the biggest challenges you currently face when sourcing, supplying, marketing and selling products to inflight? One of the largest challenges is sale or return (SOR), especially when pipeline trolley fills have remained the same while sales are declining. This means the percentage of returns is higher – and the ability to move these goods on is becoming more difficult. This is also restricting the ability to
bring some products into the channel, as the risk is too high – especially in electronics. I believe longer listing periods with ‘while stocks last’ promotions are innovations that airlines and concessionaires should look at to reduce the returns burden. I see some new suppliers enter the market not aware of the SOR risks, and then struggling to handle them – and the cash impact. «
Scorpio announced in Cannes that it is the inflight agent for Roja Parfums.
FEBRUARY 2018
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