M&S to cater the skies?

The end of an era.  BA is planning to scrap free food and replace it with a pay-for service catered my M&S.  Supermarkets taking to the skies.  Or so the rumours go.

British Airways is negotiating with Marks & Spencer for a contract under which BA sell the M&S food to pax, replacing “complimentary” food and drinks, and adding a new revenue stream.  And creating another grocery distinction for M&S.

This sees the continuation of the low cost airlines trend of compartmentalizing services and charging incrementally for everything.  BA already offer a ticket category that doesn’t include checked baggage to allow comparable price quotes with low cost carriers who charge extra for baggage on short-haul routes.

It’s not clear if this will allow BA to lower headline fares.  Clearly their marketing team sees the need for them to compete further in the lower end of the market.  Mostly as short-haul air travel within Europe has become an increasing no-frills experience as passangers are willing to accept low standards for the short hop flights.

Axing complimentary food removes one of the last remaining clear differentiators with the low cost carriers.  I hope they don’t plan to introduce selling scratch cards and stewardess bikini calendars as well!

Still, this is a groceries network, and the thing we are interested in is the M&S dimension.  British Airways are no doubt hoping that the Marks and Spencers brand will differentiate from the Ryan Air Pringles and Coke offering and maintain an upmarket perception.  Afterall, they did not select Aldi as their partner!

And it may be an improvement.  Most of the complimentary refreshments were so atrocious that many skipped them in any case.  “Can I interest you in a vacuum sealed cheese sandwich and a microscopic bag of crisps sir?”.  So an airborne Chicken Kiev may be very welcome, price depending!

This will come back to the time honored dilemma: variety, price and comparability.  I bristle at paying £3 for a bottle of water that sells for max £1 because it is readily comparable commodity and I feel I’m very much not getting a good deal.  I’m more likely to find £9.99 for a hot meal in the air to be a good deal, but I’m unlikely to pay £25 unless I believe I really am getting something better than a supermarket microwave ready meal (or if there are readily available voucher codes to bring down the top level sticker price)!

And of course we haven’t got to the drinks yet.  A glass of M&S bubbly or wine?  May be helpful, as I’m always terrified my seat neighbor is going to spill red-wine on me.  And it may cut down on the number of people drinking on 8:00am flights just because its “free”.  Personally, I don’t drink on flights, so as long as they continue to provide water I won’t be especially bothered by this.

So we wait to see.  Indications are that the earliest this will get introduced in 2017.

Open question: will we still have to eat the M&S fare with plastic cutlery?

Online groceries and the voucher game

In the bricks and mortar supermarket market, convenience and location play a big part in customer acquisition and retention.  The prospect of £2 off my weekly shop is unlikely to make me go out of my way to a different chain.

However for online shopping with home delivery, the cost to consumers of switching low.  So how best to entice new shoppers to try you out?

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Increasingly the answer appears to be vouchers, coupons and offers.  For example, Ocado, long time holder of the Best Online Supermarket award, has been aggressively pushing first time customer offers and vouchers for quite some time.  They have a regular offer which accumulates to a £100 discount over 5 consecutive orders.  Tescos, Sainbursy, Morrisons and Asda, longtime producers of “traditional” coupons (you know, the ones you actually had to cut out) have all increased the availability and ingenuity of their digital voucher offerings.

Close to 50% of UK consumers now use online grocery services on a regular basis, with around 10% relying on delivery for their entire shop.  Busy lives means that convenience is the main driver behind this trend.  Many don’t have time to make the trip during the week, and really don’t want to vaporise 2 hours of every weekend making the supermarket pilgrimage.  So in this environment, incentivising customers to try your service and build share is a far more realistic proposition than poaching large numbers of bricks and mortar “physical customers”.

In a coming series of articles, we’ll look at the digital marketing strategy different players are using, and how vouchers and incentives are being deployed to acquire new customers.