For the many passengers aboard any of the thousands of international flights per day, we’re provided many options to shop and get some duty free goods while on our travels. The USD $50 billion dollar industry – where you could buy goods exempt from local or national taxes or excise duties if they are brought out of the country – can be seen in full display with shops at airport terminals, to the inflight duty free magazine found in your seat pocket. We’re used to airlines and airports giving us space to enjoy before boarding flights to our destination. While we go through the motions, it doesn’t cross our mind how it has evolved to generating revenues for a designer purse or liquor purchase.
With the improvement in technology, we could soon see a change in retail while onboard one of your future flights. While airlines look into expanding their amenities to include inflight wi-fi, one up and coming French-based startup is looking to harness inflight connectivity to upgrade and digitize the inflight duty-free experience. What began as simple assessment on the duty-free market has evolved into Airfree.
Duty Free Retail and Air Travel
Most people don’t realize the scope of travel and the retail industry, specifically how much goes into duty-free sales. It is estimated that the overall travel retail industry – which covers duty free and airline/airport retail sales – saw over USD $62.6 billion in sales in 2015. Industry experts estimate that overall sales will increase to around USD $85 billion by the year 2020. With a captive market of seated travelers on planes, you could start to see the opportunity to sell items to 3 million passengers per day on any of the thousands of planes in the skies at a time.
As airlines and airports have evolved over the years, there hasn’t been much change on the approach of travel retail. Of the $50 billion spent on making duty-free and concession purchases while traveling, a large majority of duty-free purchases made by travelers are done at airports. While airlines end up serving the passengers, only 10% of duty free sales are made via the inflight duty-free magazine. Airlines look to increase their revenue by adding seats and eliminating unneeded items onboard, which doesn’t allow them to carry items including items to sell to passengers.
Founded in 2016, Airfree is currently worked on by three co-founders: Etienne de Verdelhan, Valéry Méary, and Agnès Debains. With years of combined experience in digital marketing and technology, including Méary’s experience with the duty free industry, the team is looking to develop a system to allow airlines to generate additional revenues from the duty-free retail market via an e-commerce approach. Simply, you’ll be able to use your internet connected mobile device or laptop to find goods to buy while on a plane.
AirFree is providing the airlines the platform for passengers to access versus going through what many will see as the outdated inflight magazines. “The in-flight shopping experience for duty-free products no longer meets consumers’ expectations,” said Debains. She added that “It’s a disappointing experience for passengers, and from the airline’s point of view, it also creates challenges.” Debains stated that unlike the inflight magazines would only show a small selection of inventory that could actually be purchased, limiting passenger selection and opportunities for revenue for both the vendor and the airline.
The challenges that Debains alludes to are the limitations of airlines in storing items to be sold, and the very restrictions of delivery for duty-free items. Méary added that because of the restrictions on where duty-free items could be delivered, such purchases can’t be delivered to anywhere, such as someone’s home. Add to the limits of storage space on planes, Airfree is offering a different way to balance the limits of plane storage while providing a large duty-free shopping selection for airlines to offer their travelers.
Rather than keeping inventory onboard planes, Airfree will be offering travelers the ability to receive their purchased items at certain times during their travels such as their departure, transfer, or arrival. This would allow airlines to offer a large duty-free offering while they can focus more on storing vital flight items such as food or beverages. Add the amount of passenger data airlines have on their passengers, it allows airlines and vendors to offer more personalized duty-free deals.
According to Méary, Airfree is currently in discussions and offering their platform to use for duty-free retailers or travel providers. Méary added: “The process is quite simple: once Airfree and the vendor agree on the principle and the commission level for the sales, we integrate their product catalog into our marketplace and establish the workflows that allow them to receive and order and operate the logistics.” Regarding the future integration with airlines, the team is currently in discussions with several carriers.
As technology improves to allow us to get online on planes, we may soon be able to take advantage of buying things on international flights – reaping the benefits of having it duty-free. As airlines look for additional revenues and keeping passengers busy while aboard flights for hours, it could be their opportunity to reach what airport duty-free shops can’t: a large captive audience that is the millions who take to the skies on a commercial flight each day. If that doesn’t get you interested in the business of duty-free sales, without the added fees if purchased at a regular retail mall outlet, luxury fragrances, cosmetics, and watches could be purchased cheaper than on regular retail. You might find a great deal for such items while onboard a future flight.