Controversies about the distribution of products and services are not unique to the travel industry, says Chris Pouney
Listening to the radio recently on my commute one morning, I paid no more than a cursory interest in a piece on sportswear retail.
The story revealed that Mike Ashley, a prominent UK businessman and retail magnate of Sports Direct, which sells a number of sports brands, was urging the UK and EU regulators to review the sportswear market. Several retailers had been informed by sports shoe manufacturers Nike and Adidas that they will no longer distribute some of their products through some channels, choosing instead to focus sales of their product lines through their own shops and websites.
We may feel that the travails of the travel industry are unique to us, but the reality is, they aren’t
It was only later in the day, reading through an article about airline distribution that I had cause to reach for the podcast again, this time paying more attention.
Hold on, I thought. Manufacturers, distributors, consumers and competition authorities are seemingly at loggerheads in an industry other than ours? So what are the themes and why is Mike Ashley getting so excited? The questions seem to be:
1 Who owns the customer?
2 Who owns how products and services are branded and merchandised to the consumer?
3 Does a service provider or manufacturer, have the right to select where its product is sold?
4 Is it ethical to allow distributors to only sell certain product types?
The sports shoe manufacturers would argue that they spend a lot on product development and marketing, and they have a right to control these areas.
While we may feel that the travails of the travel industry are unique to us; the reality is, they aren’t. This is a battle of market dominance, control of distribution and market authorities fighting for the rights of consumers. It transcends many industries indeed. I’ve often felt that to find answers to the problems in the travel industry, we need to look for solutions elsewhere.
So next time you buy a pair of trainers, consider how you bought them and what that means to the airline New Distribution Capability - a new system of technology standards to allow the distribution of airfares and ancillaries through third parties which is being developed by airline association IATA with... debate. We are not alone!