What Happened To Skymall?

by drjim on February 9, 2015

How could SkyMall's product stop meeting it's customer's needs?

How could SkyMall’s product stop meeting it’s customer’s needs?
Image Credit: Audrey

Anyone who has ever flown on a plane in the U.S. knows who SkyMall is. They are the company that provides the catalog of things that you probably don’t really need that gets placed in the seat pocket in front of you. Even in today’s modern electronics age, when the flight attendants told you to turn everything off, at some point in time you reached for the SkyMall catalog just to see what was in it. When this happened, they had you! However, SkyMall just announced that they’ll be going out of business. What happened here?

Why SkyMall Failed

From a traditional product management perspective, SkyMall had a perfect market position. They were in just about every seat on every airline and they had a captive audience – eventually everyone would take a look at their advertising brochure (the catalog). For a long time this worked well. SkyMall started in 1989 and had US$33.7M in revenue in 2013.

However, SkyMall ran into a problem that a lot of product managers have had to face. The environment in which their market operated started to change. Their CEO cited a “…crowded, rapidly evolving and intensely competitive…” retail environment as being the reason that the company was having problems. The reason for these problems were due to an increasing number of airlines who were providing their customers with Internet access during flights. All of a sudden the SkyMall magazine was not the only place to get those last minute gifts that you had forgotten about. Additionally, airlines now allow their passengers to keep their electronic devices on at all times and this has resulted in additional competition for the attention of passengers – a game which SkyMall lost.

Just to make things even more difficult, access to their customers was starting to dwindle. Back in November, Delta airlines had stopped carrying the magazine on its flights. Additionally, Southwest Airlines has just announced that they’ll stop carrying the SkyMall catalog in midyear. SkyMall’s traditional customer base is drying up just when the completion for this customer’s attention has become heated. What’s an airborne catalog to do?

What SkyMall’s Product Managers Could Have Done

Clearly SkyMall has fallen on to some hard times. However, as with all product related stories, things didn’t have to turn out this way. Ultimately, it’s the job of the product managers to ensure that their product is a success. SkyMall’s primary product, it’s catalog, needed help and guidance from its product managers in order to change its product development definition and help it to remain successful even as the environment in which its market operated changed.

The challenges that SkyMall is facing are not unique. The Internet has operated as a disruptive force for many tradition brick-and-mortar based businesses. What’s different is that those business have adjusted to their new business environment and SkyMall has not. SkyMall currently does not really have a compelling identify. Sure, everyone knows that they exist, but nobody associates them with anything in particular. Their catalog is filled with a lot of different things, but there is no purpose to it.

What should the SkyMall product managers have done? One thing that they should have done was to realize that not all airline passengers are the same – who really orders from SkyMall? They should have identified this customer and then made their catalog targeted to them instead of trying to create a generic catalog. This skill should be on everyone’s product manager resume. Next, many of the items in their catalog can be purchased from other vendors. What SkyMall needed to do was to get unique items that only they could offer. Next, they had to make every issue of the catalog different and interesting so that everyone would always pick it up when they sat down in order to see what this issue offered.

What All Of This Means For You

As product managers we need to understand that the environments in which our markets operate are always changing. Just when we become comfortable with the way that things are, bang – something will change. The SkyMall catalog product managers became too comfortable with the way that they reached their customers and the products that they offered and they were not ready when things changed. The ability to anticipate and deal with change should be a part of every product manager job description.

Changes in what people do when they fly on planes let to the downfall of SkyMall. When people didn’t have anything else to do, they looked at the catalog. Now that they can do other things, they are not looking. Additionally, airlines are no longer providing access to SkyMall’s customers. The SkyMall product managers should have created a catalog that had great content, unique products, and was compelling to look at and read.

As product managers we always need to be keeping our eyes open in order to detect if our markets are changing. If we detect that changes are occurring, then we need to take steps to modify our product in order to better match the needs of the new market. The good news is that this is all possible to do. Just make sure that you react to market changes faster than the SkyMall product managers did!

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: How important do you think having a compelling cover on the SkyMall catalog would be?

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What We’ll Be Talking About Next Time

How much are you predicting sales of your product will grow this year? If it’s anything less than 17%, then perhaps we need to have a talk. Is it possible that you may be overlooking an untapped market for your product: the Middle East? Yeah, yeah – I know what you probably see on TV every evening, but the Middle East is a big place and there are stable places that need your product. Do you know how to enter this market?

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{ 6 comments… read them below or add one }

Jeff Frank March 18, 2015 at 10:43 am

I think you missed what SkyMall actually was… it was a collection of other companies catalogs. It’s business was akin to that of Simon Properties, the owner of many shopping malls on the ground… collect rent on the space provided to tenants. Once internet became available in the air, passengers could go to the vendors’ websites directly and see many more products than what they’d paid to have placed in the SkyMall catalog.This isn’t to say that they couldn’t have reinvented themselves, but to start procuring their own products and marketing them would have been a 180 degree shift from the existing business model… like Simon deciding to open their own stores in the mall to replace the previous tenants.

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drjim March 20, 2015 at 10:46 am

Jeff: you make a very good point. However, I guess the business that SkyMall was in was copyrighting. They described the products offered by other companies in the hopes that it would cause us to go out and buy it. Ultimately this was the business that they were in. If they had been able to boost how the presented products or collected more unique products then we would all still be reading our in-flight magazines…

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Lou Boudreau January 10, 2016 at 6:28 pm

Unfair to blame Product Managers for the demise of the catalog. Had ownership understood that the catalog was as much an entertainment vehicle as a retail channel Product Managers could have continued to find unique and quirky items that would have supported the brand. In addition, irrelevant of new technology like In-Flight Wi-Fi or the proliferation of online shopping sites like Amazon causing reduced sales ($80 million in ’09, $33 million in 2013) SkyMall’s catalog circulation of 20 million potentially reaching over 350 million domestic airline passengers would have provided advertisers an incredibly low CPM reaching an upscale audience. However, ownership demanded a percent of retail sales from participants and would not allow advertisers to include their web addresses in their ads. Stratigically, SkyMall should have been all over Wi-Fi, directing readers there to purchase product. They could also have taken the brand to DRTV and store-within-a-store retailing but that’s a whole other story. Lack of strategic planning and leadership with vision killed SkyMall, not Product Managers.

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drjim January 13, 2016 at 11:01 am

Lou: great points all around. Any failure is generally not one group’s fault, it takes a village to really screw things up. The reality of how SkyMall made money (and shared what they made) added a whole additional layer of complexity to this story.

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Q January 11, 2016 at 2:11 pm

Jeff is correct, plus you have to understand the economics of the model. There were three entities that needed to be compensated; tenants, SkyMall, and the airlines. The problem was the cost of distribution since the airlines received fuel burn costs due to weight of catalog, minimum guarantees, and had authority to veto merchandise selection. The product management team was not the problem at all.

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drjim January 13, 2016 at 11:03 am

Q: you bring up a very good point: the airlines charged SkyMall based on the weight of their product! Things could (and did) get complicated very quickly…

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