retail news in context, analysis with attitude

The Chicago Tribune reports that airlines around the world collected more than $13 billion in fees for things like baggage, food, blankets and pillows - all things that used to be included in the price of a ticket. Access to things like faster security lines also is generating some cash for the airlines.

Yes, $13 billion. With a ‘b.” That’s not a typo.

United Airlines alone collected close to $2 billion of that, and was the airline with the highest fee-based revenue, and the president of United tells the paper that they’ve only just begun to develop these alternative revenue streams.


That’s a little scary. You begin to wonder what else they could charge for, and one always comes back to the option reportedly being considered by Ryanair - charging a small fee to use the bathroom. Mostly, that gets mentioned as a punchline...but it begins to seem more likely in an environment like that described by the Tribune.

Though I wonder if middle-aged men would have grounds for a class action suit against any airline that might try it, since it would seem to be discriminatory against those of us who need to use the lavatory more often than others.

I also have to wonder at what point this approach comes back to bite the airlines, at what point consumers begin thinking that they are being nailed for things that simply ought to be included in the price of a ticket. Taking what might be called the “Southwest position” - aggressively marketing the fact that a ticket costs what a ticket costs - may increasingly become a favored approach.

There is a wonderful piece in Knowledge & Wharton this week about the growing popularity of what is called “referral marketing,” in which companies say to customers, I’ll reward you for every customer you send my way. The result, the piece suggests, is that people not only offer referrals to companies that offer products and services they like, but even look for new friends they can refer.

According to the story, a recent study conducted in Germany concluded that referred customers have higher margins than other customers, stay longer with the firm than other customers, and have a higher customer lifetime value (CLV), the net present value of all the profits a customer generates over his or her entire association with the firm.

That’s what I call winning the trifecta.

But the other thing it does, I think, is create an environment that encourages the creation of advocates, not just customers. And we all know that advocates are the best advertising for any business.

I was flying from JFK to San Francisco this week and the fellow sitting next to me had an iPad. I inquired about it, and he did nothing but rave.

Then, after our conversation, I pulled out my Kindle.

And to be honest, it just felt like I was using old, dated technology.

I know it is just in my mind. But there it is.

And the thing is, this is precisely what Apple wants me to think and feel.

Damn you, Steve Jobs!

(Now, how long is the wait for the new iPad...?)

Great news from San Francisco. One of my favorite bistros, the Cafe Zoetrope, which is owned by Francis Ford Coppola, has put chilaquiles back on the menu. Chilaquiles are a wonderfully spicy dish made from crispy tortillas, scrambled eggs, tomatillo sauce and melted cheese - it’s typically a breakfast item, but I can eat it anytime, and I’ve always loved the Zoetrope version. (It fell off the menu a few years ago, and I am thrilled that it has made a return. I figured it had to happen eventually, since a bartender there once told me that chilaquiles are a personal favorite of Coppola’s.)

And it went great with both the 2007 Coppola Diamond Malbec and 2007 Coppola Diamond Syrah. (Each of which I could drink anytime, anyplace...but tasted even better because I was sitting at Coppola’s bar drinking them.

BTW...anybody have recommendations for a “don’t miss, can’t miss” vineyard in Napa?

On one other MNB user wrote the other day that he’d taken note of how I’ve changed the sign-off for my Friday OffBeats.

Bring back Sláinte, he wrote.

Maybe in the fall. For now, we’re enjoying a hot summer, I’m spending much of my time in shorts and flip-flops. And so I think it is appropriate to use a different sign-off ...

Fins Up!
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