UAE. “We will now be able to push the boundaries of personalisation even further by evolving our proposition, providing wider choice and allowing guests to customise their journey with us.” Etihad Airways Vice President Guest Experience and Service Delivery Linda Celestino hails the appointment of Retail inMotion as the airline’s inflight retail partner, as we reported first on 3 May.
The decision marks a big contract coup for LSG-owned Retail inMotion, and includes management of the Etihad Boutique Duty Free programme, and services related to the new buy-onboard programme. As well as introducing its onboard retail management software, Retail inMotion will manage range development, category management, crew training and catalogue design.
In this interview, Celestino speaks to The Moodie Davitt Report about the move to outsource inflight retailing and about a new direction for the channel.
The Moodie Davitt Report: What were the key factors in deciding to outsource the business and in appointing Retail inMotion as Etihad’s inflight retail partner?
Etihad Airways Vice President Guest Experience and Service Delivery Linda Celestino: This is exciting news for us. We recognise that there has been a change of pace in retail and certainly in aviation retail. We know that people want to move towards personalising and choosing their own guest experience. We think that the way to do this now is through technology and through the products and services that we can offer onboard.
Inflight retail is not our core business. To do it well in the future we need to partner with an expert in the field. Retail inMotion have got a proven track record; they have delivered personalisation for many years. They have shown themselves a strong market leader and that is what we needed to enable us to move in this direction.
How do you expect this partnership to enhance the quality of the inflight offer and to help personalise the consumer experience?
With their experience and their expertise, Retail inMotion can really deliver quality in duty free and now the buy-onboard F&B proposition. They have the digital expertise to help us do a lot of things we cannot do now: pre-order, pre-pay or home delivery, with multiple payment options too. We have been unable to step into that space until now. We want to offer our guests choices. This is going to be a game changer in our industry. We will bring the world of retail right into the space where the guest sits at 38,000ft.
This decision is two-fold for us. From a commercial perspective, there are benefits in terms of penetration when we can empower the guest to make these choices and to spend with us through a number of platforms, from mobile wallet to Etihad miles. But there’s also an opportunity to market lots of great things about Abu Dhabi at the same time. People can purchase trips to The Louvre or Warner Bros or create an experience from their seat in the aircraft.
Becoming a real airline of choice, and passing choice onto our guests, is about ensuring guests can decide what they do in Abu Dhabi or in London or in any other destination. And we can make it all happen through the technology that Retail inMotion will put in place onboard. That really opens the world up to us and it’s how we see ourselves marketing this product moving forward.
Within the Boutique shopping range, what innovation would you like to see to address the demands of the changing passenger mix onboard?
We have a very diverse guest mix around our network. It’s important to recognise that. The only way to deliver to such a varied audience is to expand our shopping range. We’re able to do that now though pre-order, home delivery, collect on arrival, things that make retail more accessible.
The airport retail experience has changed the way we think about how we generate the best product and best revenues when we have captive audience onboard. Bringing that shopping experience to the guest and making it easy and seamless delivers on that. We want the guest to be able to control and customise their experience. If we cannot carry a product onboard, that shouldn’t be a limiting factor in delivering it to them at some point throughout their journey.
So potentially the opportunity spans order onboard, collect on the ground or home delivery?
Yes it can be order onboard, order in advance, and we’ll deliver at the airport or at home. Giving people the choice of how to pay and how they have it delivered is really the key and the big change. Customisation is the way forward.
Do you see the traditional onboard offer, with the trolley going up and down, changing for retail, perhaps with fewer SKUs in future?
The days of the trolley moving through the cabin and that being your key selling tool are over. You have very limited opportunity for engagement with the guest. Taking it to a new level through a digital platform opens up the experience for guests.
The challenge when we are competing against the airport retail experience is the ability to touch and feel product. Because we have limited space onboard we just have to start doing this differently. We have to create experiences through digital that give guests the feeling that they are touching and feeling the item, and then we can deliver anything on the ground once they land.
Can you outline the reasons behind the move to a ‘for purchase’ model in onboard catering and what the Retail inMotion partnership can bring in this area?
This is a whole new space for us. We are dipping our toe in the water with this hybrid model. Our premium guests in First and Business will continue to enjoy a full-service complimentary model and that won’t change. We deliver that very well and own the luxury travel space. But what we are doing is blurring the lines in the economy cabin.
Guests can still enjoy a quality complimentary meal but they can choose to upgrade elements of their experience. If they want to upgrade their lunch or wine options, purchase noise cancellation headsets, lounge wear or amenity kits, we are saying ‘why not?’ We previously had just three products: you either bought economy, business or first. We can now offer multiple product combinations depending on what you want from your trip.
Having multiple suppliers in many locations adds complexity to that…
Yes and Retail inMotion enables us to tie all of those strands together. They will work with our catering units in Abu Dhabi [EAS Catering manages Etihad’s inflight catering business in Abu Dhabi and overseas through its network outstations. LSG provides catering services as a supplier in several Etihad destinations -Ed], but also connect with our outstation caterers to pull it all together. The digital requirements of this are complex.
Let’s be honest: we as an airline know it’s not our core business. We are great at running an airline, but not at pulling all of this together. So let’s get people who are. They are taking us on a journey from a technological perspective. It’s about having a great device that makes life easier for our crew, and having that linked to all of those platforms to make the business seamless. That’s important for our crews but also for our guests. It must be simple, safe and delivered consistently.
Retail InMotion has started work already, and we have an aggressive timeline for the coming months so we can deliver these solutions by Q1 2019.
How do you see the role of crew under this new digitally driven model?
We are doing this very differently than before. At full-service airlines crew are recruited for particular tasks, while low-cost airlines recruit differently. We are becoming more of a hybrid. It’s important to ensure we engage with crew every step of the way so they are part of the conversation and deliver the solutions onboard the aircraft. The crew are our eyes and ears, but also our brand champions. Having them feel competent in delivering this is vital. No investment is too big in the people who are spending time with our customers. We need our crew to be as excited and optimistic as we are about this change.
From a business viewpoint, what level of increase in passenger spend and overall sales are you anticipating from the inflight programme?
I would not like to put a figure on it today. We have made some conservative assumptions as we want to launch it well and unrealistic expectations only add complexity. What we want to ensure is that we get the service and product right, that we sense-check the market as we move through the coming months. We are doing a lot of due diligence and benchmarking, flying on other carriers, talking to our frequent flyer members and ensuring we do this well. So the pressure of numbers is not on my table right now. Let’s get it right first.
More broadly, how do you see the business opportunity for airline retail and F&B in the digital era? And how do you make it a more attractive environment for brands?
We in the airline industry have been slower to move into the digital world, in part because we work in a controlled environment in the aircraft. If your aircraft doesn’t already have that system loaded you face a huge investment in the retro-fitting of technology. It’s not an overnight change.
Partnering with a company like Retail inMotion allows us to make that change happen more quickly, and brings us the technology that we don’t already have. It is all about digital. That’s changing the way we design product and service, and the way we deliver and sell it. The new platform gives us real personalisation.
Historically the IFE was your only platform for engagement. We are now building on that. With everyone carrying a smartphone today, and widebody and long-haul aircraft being WiFi-connected, it opens up a whole new world for us.
On the brands’ side, we know there have been some premium brands that don’t want to work with airlines. Technology can change that. Having potentially hundreds of people on hundreds of flights a day makes it more attractive for brands who want to interact with our guests through our IFE system, and video and technology presents some great partnership opportunities. Brands are recognising that this is the way for them to enter or re-enter the airline space.
*For a major recent profile of Retail inMotion and an interview with CEO Stefan Patermann, click here.
