New research released by Inmarsat, conducted by the London School of Economics (LSE) has revealed how younger passengers could drive a change in the way we shop in the air. According to the research, Generation Z is set to make up some 1.2bn fliers by 2028. This generation prefers to shop last minute and, in combination with a robust inflight WiFi product, presents a unique opportunity to airlines around the world.
The rise of Generation Z fliers
In case you’re unclear on the nomenclature, Gen Z is the next cohort after millennials. They are sometimes also called the iGen, the Net Gen or even Neo-Digital Natives. To sum them up, these are the guys who can’t remember a time when the internet didn’t exist, who grew up interacting with technology and who are a key target market for airlines.
Gen Z were born from 1997 onwards, and reached adulthood during the second decade of the 2000s. Right now, they are the DINKYs, the guys with all the disposable income and the people who value experiences over material possessions. As such, Gen Z love to travel, and often have the cash to do so. As such, they are destined to play a key role in the evolution of aviation going forward.
In fact, the LSE research suggests that Gen Z will become the biggest group of airline fliers over the coming decade. By 2028, 1.2bn will be flying every year, making them of huge importance to the future strategies of airlines.
What does Gen Z want?
We already have a good idea of one of the things Gen Z is keen to have while traveling, and that’s connectivity. The idea of being on a plane for several hours with no opportunity to Insta-share their lives is a terrifying prospect. As such, inflight WiFi is moving forward in leaps and bounds to satisfy the needs of both these and the other passengers who want to stay connected.
However, there’s another way in which Gen Z could serve to influence the future of travel. According to Inmarsat and the LSE, Gen Z prefers to shop last minute. The research looked at purchasing decisions made during three key points of travel – a week or more before the trip, in the days before the trip and on arrival at the destination.
Gen Z were far and away the most likely generation to delay the purchase of products and services for their trip until there were only days left to go. This, says LSE and Inmarsat, presents a significant opportunity for airlines to boost ancillary revenue.
How can airlines capitalize on this?
Within the research, Inmarsat and the LSE discovered that 70% of Gen Z and Millennials would delay making arrangements for their trip if they knew there would be a reliable WiFi connection on board. Currently, only around one in ten passengers make a duty free purchase on board, but with the growing trend for last minute spending, this could be about to change.
And it doesn’t mean airlines will need to carry huge stocks of products either. With a robust delivery mechanism in place, passengers could order what they need on their way to the destination, and have it delivered to their hotel room by the time they check in.
Dr Alexander Grous (B. Ec, MBA, M.Com, MA, PhD.), Department of Media and Communications (LSE) and author of the research, said,
“Having grown up in a digital world with connectivity at their fingertips, more often than not Gen Z make last minute decisions when it comes to travel planning and preparation. This behavioural shift presents an exciting opportunity for airlines to strike innovative partnerships with global and local retailers that extend the possibilities of inflight spending.”
If inflight spending really does change in this way, it presents a unique and exciting opportunity for airlines to get on board. Earning commissions from sales could serve to not only offset the cost of providing WiFi to passengers, but could also generate substantial ancillary revenue too. Philip Balaam, President, Inmarsat Aviation echoed this sentiment, saying,
“If passengers reject traditional purchase channels in favour of inflight spending to the extent that this suggests in the next decade, the implications for airlines and retailers would be huge. We may be on the verge of a habitual shift in travel spending, much like the movement from offline to online purchasing witnessed on the ground in the last decade.”