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Rakhita Jayawardena: Some airlines are suffering from decisions by brand owners to distribute selectively in the channel |
SINGAPORE. Selective distribution by some brand owners to the airline industry is damaging to industry partnerships and shows “contempt” for the travelling shopper. That’s according to Rakhita Jayawardena, President of King Power Traveler, who today delivered the keynote address at the 2014 Airline Retail Conference (ARC) Asia Pacific in Singapore.
Speaking on the theme “˜Creating & Managing Effective Partnerships’, Jayawardena said industry relationships are at their best “when information flows freely, people trust each other and are loyal to each other and their mutual success”. He said this applied to KPT’s long-term airline and brand partnerships.
But, he noted that he was disturbed about “the emergence of strategic marketing changes with some of our supply partners”.
“It was not so long ago that a major company in the fragrances & cosmetics industry made a decision to withdraw the sale of their brands from the entire inflight duty free retail market,” he said.
“This was followed with another big company too, pulling out their brand from a vast majority of the airlines. Some other companies are closely monitoring these changes and we believe are reviewing their brand positioning for the airlines, going forward.”
He said this was “a real threat” to inflight retail. “There is a distinction and a line that is being drawn by some of the bigger brand houses on where their product should be distributed and made available. The low-cost airlines and smaller national carriers in the Asia Pacific region are being unfortunately affected by these decisions. In a few high-profile cases [so are] the major carriers.”
He emphasised that each partner in the travel retail chain is serving the same customers, whether as airport, airline or brand.
“Therefore, if this passenger is denied the availability of a certain product or brand onboard their selected airline, but that same passenger can have the product available to him at the airport retail shops, is that fair and is it correct? Is this a crack that’s appearing in a valuable partnership?
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Jayawardena’s powerful message to brands in travel retail |
“Who are the brands partnering with? The travel retail industry – or just some of the travel retail industry?
“Why is there selective distribution on offer to the passengers? Small or big, scheduled or low cost, the travelling consumer should be a valued passenger and potential shopper. Therefore, why have some of the supply partners begun to treat the airline customers differently?
“Such practices not only show contempt for and, I believe, commercial differentiation against, the airlines but contempt for the travelling consumer by dictating where they can buy. And it’s short-sighted.”
“As I’m speaking on the subject of partnership it is appropriate for me to stand here and make a clarion call to all brand houses that target the travel retail channel to stop this so-called selectivity in the positioning of their brands within the airline industry.”
“Having said that I wish to take this opportunity to applaud some of the major brand houses who have stood firm and continued to provide their products, irrespective of whether it is a large legacy carrier or a small national carrier or a low cost carrier. They are real qualitative partners as they recognise the importance of service to consumers irrespective of the clothes they wear, their class of travel or the carrier of their choice.”
He concluded by highlighting the importance of trust in industry partnerships. “Trust is non-negotiable. It also needs to be unreserved, unambiguous and unequivocal.”
*We’ll bring you a full report shortly on day one of the ARC Asia Pacific event.
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Jayawardena: Industry relationships are at their best “when information flows freely, people trust and are loyal to each other and their mutual success” |
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