For a long time, duty free meant “getting a good deal when you travel”. But the model would be on its last legs.

We didn’t see that one coming. We have seen how the internet and e-commerce have changed the way people consume, forcing traditional players to reinvent themselves to face the competition of pure players.

The e-commerce killed the Duty Free

But it seems that the culture of permanent promotion created by the pure players of online commerce is killing Duty Free.

KLM has indeed decided to abandon the in-flight sale of goods from July 2019 for European flights and January 2020 on intercontinental flights. The airline’s argument is consistent with what is written above: in a world where the passenger can find bargains anywhere at any time and where fast delivery is no longer an issue, the duty free model as it exists today makes less and less sense.

In-flight duty free offers onlya limited range and availability with prices not necessarily better than those found on the web. If we consider the weight of the stock (thus the fuel cost) and the amount of sales, it seems that the Dutch pragmatism has spoken again.

Nothing surprising: in October 2018 the Observatory of Consumer Behavior had shown that for consumers the “permanent promo” was well anchored in their heads and that the moments of traditional promotions like sales were no longer of interest to them. And obviously the duty in flight has joined the sales in these symbolic but useless moments.

Amazon partnering with airlines?

Now that raises another question. What about Duty Free in airports? We can think that it has still beautiful days ahead, proposing an occupation to a captive and idle clientele. But does the passenger who kills time in an airport buy things? There is no doubt that this model will have to reinvent itself in the long run as well.

In the meantime KLM says it is considering another model to offer personalized retail with unlimited choice on board. Here we can imagine anything but in terms of disruption it would be funny to see airlines for which retail was a peripheral job become retailers in their own right either by offering the possibility to order on board for delivery at home or at destination or, conversely, by becoming the “collection” point for an online retailer.

Not sure that tomorrow we won’t see airlines setting up partnerships with Amazon.

Photo : Duty Free by Oliver Hoffmann via Shutterstock