SUN VALLEY, Idaho, March 30, 2015 – After a difficult bankruptcy auction process, the purchase of SkyMall’s brand name was announced last Friday, March 27th. The new owners paid $1.9 million for the well-known brand. The purchase price, however, didn’t include any assurances from the airlines that the catalog will be put on their planes. In fact, all prior agreements with the airlines are void. One fact is clear: SkyMall no longer has a monopoly to sell in the skies.
Scott Jordan, CEO and Founder of multi-pocket clothing company SCOTTeVEST has been both a supporter of getting SkyMall back onto planes and a critic of the mismanagement that landed SkyMall into bankruptcy in the first place. Jordan was the most vocal during the auction process and many assumed he would be the winning bidder for SkyMall. He explains why he let the SkyMall name go to another party:
“At the most basic level, there are two things required to make SkyMall work: a catalog and placement of that catalog on airplanes. Producing a catalog is easy. The only way to get a catalog onto airplanes is with the cooperation of the airlines. SkyMall allowed every airline contract to lapse and, despite my best efforts, we were unable to come to terms with the airlines before the bankruptcy auction,” Jordan explains.
“By losing the agreements with the airlines, SkyMall’s previous management team lost their monopoly on in-flight shopping. Since I didn’t like their business model, I chose not to submit a bid. I didn’t believe that the name alone was worth it.”
About six weeks ago when SkyMall declared bankruptcy, Jordan was quick to jump to the forefront of the public discussion with a series of widely read articles on LinkedIn and many press mentions, including an appearance on CNBC’s Closing Bell. Due diligence quickly uncovered that all of SkyMall’s contracts with airlines – the foundation of the entire business – had lapsed.
Jordan insists that the concept of in-flight shopping is still valuable — if and when a brand can get back on airplanes. And, that is exactly what he hopes to do.
Introducing SKY2BUY: Your New Mall in the Sky, Inspired by Duty Free Shops
Jordan’s new new venture is SKY2BUY. It will be in planes in test markets in the U.S. in June or July of this year and plans to become the go-to source for in-flight shopping. Jordan’s emphasis is on creating a high-end travel magazine with shopping opportunities instead of a kitsch-filled catalog. Brands that cater to travelers — like Jordan’s own SCOTTeVEST — will be featured. In addition to shopping, SKY2BUY will include editorial content of interest to travelers.
Rather than developing a stand-alone publication, Jordan’s SKY2BUY will be a special advertising section in airline magazines that are already onboard every flight. The model is simple: reward travelers with massive discounts (just like a Duty Free Shop) based on shopping while traveling. Fliers already flip through in-flight magazines and SKY2BUY will provide added incentives to reach into the seatback pocket.
Cooperating with in-flight magazines is a sound cost-saving measure. Whereas SkyMall paid over $350K annually to each airline just for fuel surcharges, SKY2BUY will be integrated into the print materials already found on board. This efficiency both reduces the amount of print materials on each flight and makes SKY2BUY’s discounting model possible. This is just one example of cost-cutting to be implemented by SKY2BUY intended to pass savings to the consumer and profits to the airlines.
What to Expect from SKY2BUY
Shoppers will always be able to make purchases from SKY2BUY, but only travelers are eligible for the discounts. One is considered a SKY2BUY traveler when (s)he is in an airport, on an airplane or has arrived at his or her destination within the past 24 hours. This is verified electronically by geo-tagged locations or by entering a flight confirmation number. A traveler’s boarding pass acts as a ticket to savings.
This unique, location-based model rewards travelers who shop during/immediately after travel. SKY2BUY’s discounting concept is similar to a duty-free shop. A shopper can buy the same goods elsewhere, but it is only while traveling that the discounts are available.
SkyMall cited the increased use of electronic devices in-flight as a reason for decreased interest in their catalog. SKY2BUY will address this challenge by offering tech-savvy fliers free in-flight apps to encourage immediate purchases, as well as partnerships with in-flight wi-fi providers to provide free wi-fi for purchases made on SKY2BUY.
As a former SkyMall advertiser, Jordan’s company SCOTTeVEST was frustrated by the amount of time from when a customer placed an order and when SCOTTeVEST received the order from SkyMall so they could fulfill it. SKY2BUY’s customers will purchase directly from advertisers. By removing the middle-man, advertisers will receive order information in real time, thus enabling them to provide a better customer experience. In some cases, orders will be available upon landing at the shopper’s destination. The elimination of the middle-man will not only make things faster, it will also remove an unnecessary layer of costs.
“Realize that you forgot a tie for that big meeting? Turn to SKY2BUY. Left your sunscreen at home? There’s an outdoor excursion kit waiting for you at your destination,” explains Jordan.
SKY2BUY will dial up the entertainment aspect that made SkyMall enjoyable by embracing creative content and making it more than just a catalog.
Because all travelers are going from one location to another, there is a shared experience. SKY2BUY plans to build on that experience, offering gadgets and travel aids… not alien butler statues or dragon bookends. Travel should be enjoyable and SKY2BUY’s product selection will be curated to combat in-flight boredom and encourage shopping by providing items that are relevant to travelers. The focus on travel-related items and purchasing directly from advertisers should take care of the low conversion rates that contributed to the demise of SkyMall. Focusing on conversion rates comes naturally to Jordan after years of running the highly successful, ecommerce company SCOTTeVEST. He understands the importance of creating content that resonates with customers.
A small sampling of planned sections in SKY2BUY’s initial 16-page spread includes:
- Travel gear and Luggage
- Food and Drinks
- Auto-Related Items
Just as most airline magazines are updated monthly, SKY2BUY will be refreshed on the same schedule, ensuring that readers always have something new to peruse – and buy – while in transit.
While most customer’s first experience with SKY2BUY will be in print form, SKY2BUY is developing a sophisticated, user-friendly app. It will be available as a free download prior to take-off (without having to paying for wifi). Travelers can then shop while they are in the air. Purchases will automatically sync upon landing, with no need to pay for in-flight wireless.
“Content and commerce are inextricably bound together,” explains Jim Louderback, the former editor of PC Magazine who has been tapped to lead SKY2BUY’s content efforts. “Entertaining product curation creates stories as compelling as those on Netflix or in the movie theater. By combining great storytelling with great product curation we’ll be building a cure for boredom AND an experience you’ll want to share over and over again.”
SKY2BUY is Cleared for Take-off
Jordan hasn’t revealed which airline magazines will include SKY2BUY, but confirms that he has three major U.S. and multiple international airlines in active conversations. The airlines have been very open to Jordan’s model because of the likelihood of profitability from day one. A June launch is SKY2BUY’s goal, to coincide with the summer travel season.
On a parting note, Jordan said, “This summer, fly with SKY2BUY: your new mall in the sky.”
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ABOUT SCOTT JORDAN and SCOTTeVEST
Scott Jordan is the CEO and Founder of SCOTTeVEST, which creates multi-pocket clothing designed to carry electronics. He is the author of Pocket Man: The Unauthorized Autobiography of a Passionate, Personal Promoter.
Read a sample of Scott’s book for more about his experience on Shark Tank and the pocket empire he has built.