Boarding Pass checkouts - the unintended consequences?

Reports in The Independent indicate that Airport retailers demand boarding cards from travel-shoppers to avoid paying 20 per cent VAT on everything they sell to passengers travelling outside the EU, as there is no purchase tax due on such goods.

Research by The Independent also suggests most of these stores don’t pass the savings on to customers.

Apart from the inevitable damage caused to retailer brand equity, and possible questions from the authorities re inappropriate VAT collection, the real issue has to be the knock-on effect of most airline passengers refusing to submit what is a valuable source of shopper insight at checkout...

In other words, think about the value of knowing name, destination, flight class and frequent-flyer details of every travel-shopper making a purchase...especially if linked with loyalty-data to optimise shopper marketing strategies in some of the world's most expensive retail real-estate...especially if it can be shared with the airline...

Think also about the fragility of shopper-retailer relationships, in a world where passengers held overlong in the security security-process, already suspicious that the indirect route to the plane is deliberately designed to encourage shopping, are known to 'punish' the airport by refusing to enter, let alone buy from airport shops...

Time for a grand gesture - and some overdue damage limitation - via VAT discounts at the checkout?

Motorway prices and the Savvy Motorist

Motorway service areas are charging up to four times the high street price for basic food and drinks, according to new research by the Institute of Advanced Motorists.

With instances of charges up to £2.09 for a 500ml bottle of water vs. a 95p high street price, and a basic cheese sandwich costing £3.99 at some motorway service stations, as opposed to just £1.00 on a nearby high street, it would be reasonable to expect savvy motorists to carry basic provisions in order to reduce costs of using motorway facilities.

One approach might be to charge for washroom facilities, a la the old Ryanair on-board joke, but even this may reveal limits that cause the ultra-savvy driver to perhaps make less socially acceptable alternative arrangements when taken short...

To take a more positive approach to optimising the mix of holiday/guilt/pamper mode that prevents too critical a response to travel retail prices at airports, and taking note of the grocery multiples response to equivalent problems, perhaps motorway service operators should focus on enhancing the shopping experience, whilst reducing prices to a level that is just about acceptable in terms of value for money...(see Buying-mix-analysis ref competitive appeal)

This could present opportunities for NAMs to treat the service station as a retail business unit, and apply shopper marketing and category management techniques already proven in a classic retailing environment.

In applying this consultancy approach to the Motorway services station opportunity, the proactive NAM may also find it beneficial to add value by coaching the facilities manager on negotiating more realistic site rentals with the landlords, a key cost driver in travel retail...

Choose your airline carefully….

Those NAMs tempted to use a value-carrier to escape the High Street doom and gloom are advised to check the airlines maintenance records before switching suppliers…

A pilot for a Chinese carrier requested permission and landed at Frankfurt for an unscheduled refuelling stop. The reason became soon apparent to the ground crew: The Number 3 engine had been shutdown previously because of excessive vibration, and because it didn't look too good. It had apparently been no problem for the tough guys on the ground back in China: as they took some sturdy straps and wrapped them around two of the fan blades and the structures behind, thus stopping any unwanted wind-milling (engine spinning by itself due to airflow passing thru the blades during flight) and associated uncomfortable vibration caused by the sub optimal fan.

Note that the straps are seat-belts ....how resourceful!  After making the "repairs", off they went into the wild blue yonder with another revenue-making flight on only three engines!  With the increased fuel consumption, they got a bit low on fuel, and just set it down at the closest airport (Frankfurt) for a quick refill.

That's when the problems started: The Germans, who are kind of picky about this stuff, inspected the malfunctioning engine and immediately grounded the aircraft. (Besides the seat-belts, notice the appalling condition of the fan blades.)  The airline operator had to send a chunk of money to get the first engine replaced (took about 10 days).  The repair contractor decided to do some impromptu inspection work on the other engines, none of which looked all that great either.  The result: a total of 3 engines were eventually changed on this plane before it was permitted to fly again.

And to think we were all worried about toys coloured with lead paint!

Why not have a stay-at-home weekend, from the NamNews Team!

A Brief Encounter with priorities in a London hotel…

Arriving in London too early for an appointment in the West End yesterday, I decided to kill an hour by slipping into the lobby of a prestigious Mayfair hotel for a £10 latte and to informally check out how the global financial crisis was impacting other layers of society….

Flipping open my laptop to develop an idea for KamBlog, I was interrupted by a concierge who discretely whispered that working on laptops was not permitted in the lobby, ‘…causing possible offence to other guests busy negotiating multimillion pound arms deals at nearby tables etc, etc’

This gave me time to take in more of my surroundings…especially the higher than normal temperature, causing me to remove my jacket and drape it elegantly over a nearby chair.
Again I was approached by the concierge to let me know that gentlemen were not permitted to remove jackets in the lobby…

As I slipped back into my jacket, I reached for my mobile to check a real-world news update, when the concierge approached yet again.

This time I interrupted him, and summoning up my best version of a Dublin 4 accent, asked him to please speak up, as I was having difficulty hearing him over the sound of the wh*res’ high-heels as they click-clacked across the tiled floor on their way to client meetings upstairs….

As I left the hotel I began to mull over the issue of priorities in these unprecedented times…

A Unique Day-out Treat For Your Buyer?

M25 Orbital Coach Tour

Think of it, a 4 hour (minimum) captive audience, you and your buyer, with little or no outside distractions as you explain category dynamics and share a packed lunch in recognition of current austerities.

The day is designed for lovers of modern coach travel by Brighton & Hove Coaches in an attempt to provide a “flight of fancy” around the London Orbital.  The coach direction will be decided on the day by the drivers and will stop to take refreshment at the services, perhaps even at Cobham to coincide with the opening of the new Cobham Services.  An entertaining commentary by the co-driver will accompany the journey covering interesting facts about the motorway’s evolution.  Passengers are invited to crowdsource by guestimating to the nearest mile the distance the coach will travel around the route, with a bottle of Champagne as a prize for the closest.

The planned date was 11 October 2012, but because of demand, another date, 22nd March, has now been added.

Book up now to avoid disappointment

Airline chaos: another nail in the coffin of discretionary business travel?

The past week's compulsory grounding coupled with the 'regular' delays, body-scans, strip-searches, cost and general inconvenience of air travel has given a shot-in-the-arm to video conferencing and net-based meetings.
Obviously, nothing beats the real thing (?), but business travellers have to question whether the advantage of face-to-face over screen-to-face is always worth the trouble?
Suppose this results in a 20% drop in business air-travel, then there will be a drop in premium-fare revenue. The reduction in this subsidy will then increase the cost of economy travel, further alienating non-business travellers.
As world governments are now insisting that airlines compensate travellers for last week's 'act-of-God' costs, the result will be an increase in insurance cover by the airlines, causing them cut costs including staff-reductions thereby reducing service-levels... This will oviously cause them to raise their prices, making alternative transport and comms-media even more attractive, physically and financially….

Time to re-consider an 'inhouse' EMR-Namnews webinar, tailored to your categories, customers and trade issues, without leaving your laptop?
Contact bmoore@namnews.com for details

Optimised Duty Free at Heathrow?

Attempting to check in at one of the world's most crowded/high-profile airports, how bizarre that having had shoes, belt, jacket, laptop, watch, aerosols, sharp instruments and all liquids removed and x-rayed, been virtually 'strip-searched' via a full body-scan sensitive enough to detect metal teeth-fillings, the passengers are then encouraged to buy (at a discount!) a couple of litres of highly inflammable liquid in glass (not plastic!) bottles, to be hand-stored for easy access under the seat in front, or in the overhead locker ("where they can possibly fall out and injure someone") and are then presented with a pair of flight-socks fine enough to fit through the neck of each bottle, allowing the passenger to spend the remainder of the flight, under cover of semi-darkness, quietly assembling and even deploying a couple of DIY Molotov cocktails…

(Alternatively, why not simply be issued with a receipt in Duty Free, for collection of purchases on arrival at the destination?)

Have a safe journey…..!