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Flying high: One A330 leg, from Oslo to Phuket, generated amazing duty free sales of US$76,237 |
SCANDINAVIA. Spurred by remarkable spends per head and some extraordinary individual flight performances, inflight retailer MyTravel Airways Scandinavia generated duty free sales of over US$100 million in its last financial year – on a passenger volume of just 1 million.
That represents an average spend per head of US$100. The figures, which exclude the UK division of MyTravel Airways, are for the 12 months ended October 2007.
MyTravel Airways Scandinavia generated some phenomenal total spends on individual flights, highlighted by the year’s high of US$76,237 on a leg from Oslo to Phuket in February. The Airbus A330 flights have average sales of US$51,881 per journey.
“We had positive progress in all product categories,” Purchasing Manager Duty Free/Travel Retail Lars Hjartbo told The Moodie Report.
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Lars Hjartbo: Success through better penetration and higher pre-order spends |
Leading category, wines and spirits, (which accounts for 40% of sales) rose +7% year-on-year. Perfumes & cosmetics (35% of the mix) also rose +7%, while tobacco (12%) was up by +3%. Gifts & Accessories, worth 8% of turnover, rose +2% year-on-year and confectionery (5% of the mix) increased by +3%.
“How did we do this? By focusing on two simple things,” Hjartbo said. “Increased penetration and increasing the transaction value on pre-order.” The airline is about to celebrate the 25th anniversary of its successful pre-order service.
To improve penetration it offered all passengers who pre-ordered duty free from its website (where there are no order processing costs) products at “˜offer you can’t refuse’ prices. It also sent reminder e-mails and SMS text messages to passengers who had not pre-ordered prior to departure.
To boost transaction value MyTravel Airways Scandinavia offered a ‘Take 4 – Pay 3’ promotion in the two main categories (perfumes/cosmetics and wines/spirits). “We lowered the (percentage) margin on the most expensive products in each category and thereby increased the perceived saving in absolute value for the passenger,” Hjartbo said.
He added: “In 2008 we will be studying new ways to use e-mail and the Internet to increase penetration and to do aftermarket research on the non-shoppers (on-line surveys).”
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For nearly 25 years pre-order has been a key driver of the airline’s success. Here a crew member delivers the requested duty free items to a passenger – note the number of items in the bag | |
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(Left) Cartons filled with pre-ordered products are taken up from cargo during the turnaround at the original destination airport before being distributed to homebound passengers; (Right): Crew members with sealed bags packed with duty free items – testament again to the power of pre-order and the Internet | |
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(Left) Anne-Maarit Laajalahti processes a telephone order from a passenger; (Right) The message is short, simple – and brilliantly located: “Don’t waste time and money – you are sitting in the world’s biggest tax free shop. Order now!” | |
FOOTNOTE: MyTravel Plc and Thomas Cook merged in 2007 to form Thomas Cook Plc. Consequently MyTravel Airways Scandinavia will change its name to Thomas Cook Airlines of Scandinavia later in 2008.
