One of the UK’s favourite children’s programmes of the 1970’s was Rentaghost. The UK TV show aired on the BBC with a simple premise: a cast of ghosts, who when alive, were rather ‘unsuccessful’, are given a second chance (the intended name of the show) in the afterlife by being hired out by the eponymously named employment agency.
Despite the current prevalence of fast fashion, second chances for clothing are gaining popularity, and for good reason.
Last year, a poll from online personal styling store Stitch Fix UK found that British adults had an average of over £211 worth of unworn clothes in their closets. And despite such overstuffed wardrobes, many still claimed not to have anything to wear on a regular basis.
Step forward clothing rental services. H&M-owned brand Cos launched its own digital resale business Resell in 2020, while Selfridges has a vintage channel, RESELFRIDGES. However, such services are not a new phenomenon—UK high street store, Moss Bros has been renting out suits to the man about town since 1897.
For many, the switch to second hand is born of squeezing pressures on wallets. For others, it offers a guilt-free model to wearing the latest fashions or contribute to the circular economy. For Japan Airlines (JAL), it’s the lure of a market for second-hand clothes estimated to be worth in the region of US$1.5 billion this year.
Ghost in the shell(suit)
JAL is currently nearing the end of a trial of its Any Wear, Anywhere clothing sharing service, which sees those travelling to Japan on the airline by August 31, 2024, able to rent clothing items procured by online outlet platform WEFABRIK from excess stock and pre-owned clothing. Sumitomo Corporation is responsible for developing the reservation system, as well as for laundering and delivering the clothes.
Using the service is simple: passengers select their desired clothing set (costs range from ¥4,000 to ¥7,000 (US$25-$40), enter their JAL flight booking number, the date of pickup and return of the clothing, and information about the destination to pick up the clothing set, and make a payment. The clothes must be reserved online, one month prior to the rental date.
The airline says it will monitor changes in passengers’ checked-in baggage weight and verify the reduction effect of carbon dioxide emissions by reduced airplane weight due to use of the service.
JAL’s move seems at odds with an industry which has seen cabin overhead space evolve with bigger bins offering twice as much room for passenger luggage ensuring we all have space for our carry-on bags, such as Boeing’s Space Bins and Airspace XL Bins from Airbus. Additionally, some carriers have increased their baggage fees, such as American Airlines, which will now charge a $75 fee for the first checked bags on its all-basic economy ticket, its cheapest fare, on transoceanic flights.
Through the first quarter of 2023, 14 airlines collected nearly $1.71 billion in baggage fees alone, according to the US DOT’s Bureau of Transportation Statistics. Across 2022, these same 14 airlines reported $6.75 billion in revenues from baggage fees – a not so trivial amount. In Europe, airBaltic has just reported record H1 revenues, bolstered by a 10% increase in checked baggage fees and a 40% increase in revenues from heavy hand baggage.
Making the most onboard
While passengers may not be able to get around such fees, there are ways to avoid them, as Icelandic LCC PLAY discovered last year. Announcing its Q3 2022 financial results, the airline conceded that its ancillary revenues had underperformed for reasons that included the fact that passengers were still mainly travelling with carry-on items rather than purchasing bags.
The airline already had plans to insulate itself from further erosions to its baggage fees revenues, introducing enhanced upsell capabilities to its booking engine earlier this year, on the back of selecting MOST to provide it with onboard retailing and payment solutions, including software, hardware, and payment gateway services. Upgrading from card readers to frictionless inflight payment technology, PLAY’s passengers are now able to tap and pay with all major cards or digital wallets worldwide in a range of currencies when ordering inflight food and beverages.
As our newly published report The Market for Onboard Ancillary Revenues and Payment Solutions 2023 Edition discusses, digitalising the onboard retail experience and offering greater payment flexibility opens up exposure to both new and more revenue channels, as well as contributing to an airline’s Environmental, Social, and Corporate Governance (ESG) policy.
The jury’s out on JAL’s Any Wear, Anywhere initiative and how it will actually support the airline’s own ESG commitments. We will have to wait to find out the uptake rate and ultimately the emissions saved during the trial, which has been derided and applauded in the media in equal measure.
What’s certain, is that we are at an exciting time for airline ancillary revenues. Whether it’s the creativity shown by JAL or the wider, continual investment in innovative solutions onboard that is simplifying inflight sales and enhancing the travel experience for passengers.
If you would like to learn more about airline ancillary revenues, please reach out to a member of our team here. Interested in purchasing our latest report on this subject? Please download our information brochure here.
