Ai Editorial: Quest for control set to take merchandising to another level

First Published on 21st February, 2017

Ai Editorial: Dealing with highly integrated processes meant for inventory, distribution and sales isn’t easy for airlines. But if one persists and decides to rework on IT  infrastructure, commercial strategy, data integration etc., then it can yield better results for merchandising, writes Ai’s Ritesh Gupta

 

Inclusion of air- and non-air ancillary services into an airline’s commercial strategy is on the rise, and so is the need for better cross-platform experiences and integrating data across channels, complete pricing and shopping and merchandising solutions that focus on revenue grow on demand, dynamic pricing and personalisation and is platform agnostic.

All of this if done in a meticulous way can also pave way for customer-centricity, and control over what to be offered to a traveller, the way its shown, on which channel etc.

Quest for control also indicates that merchandising-related initiatives are undergoing change – for instance, if on one hand new non-GDS interfaces are being developed, on the other the introduction of air ancillaries features GDS prominently in the mix.

We look at areas that indicate airlines are making progress with their merchandising strategy:

·          Every offer to depict “value”: Airlines acknowledge the need to react quickly and adjust pricing dynamically, in a flexible way according to rise or fall in demand. Of course, a major concern here is to manage price sensitive customers. In this context, dynamic bundling and cross-selling become significant - including personalized pricing and up-selling. This refers to creation of sales offers based on demand.

As Vayant’s CEO Eric Dumas indicates, airlines need to focus on technology for optional services and branded fares management, once they are filed and distributed. He says airlines can choose to unbundle sales of seats, meals, baggage, class upgrades, lounge access and more, charge different prices or create separate offers to different consumer segments. Or they can blend all elements together in order to create a vast volume of unique, personalized sales offers with the accuracy relying on real-time data. This way airlines can manage their pricing (raise it or bring it down), but by adding an extra value or services to the package airline is making its customers feel valued.

·          Sharing inventory and content in “non-traditional ways: Airlines are looking at several approaches for direct connections. The objective is here to capitalize on additional content that could not be displayed previously. Also, another major consideration is offering additional services at relatively lower cost than before. As indicated by NDC projects, airlines can selectively craft offers/ bundles for routes as chosen, being in control of merchandising. Also, another highlight is differentiation coming in via elaborate content depicting what the product/ service is all about. As we have witnessed, airlines have been working on their IT set up to ensure they put their sales and distribution in other baskets rather than only one. For instance, a new non-GDS interface in case of Lufthansa’s deal with Siemens and Volkswagen  (Amadeus Cytric bypasses Amadeus GDS to hook into Amadeus Altea).

·          Offering value to intermediaries: Airlines can scale up their direct connect IT set up and own rule-based merchandising engine to maximize their distribution strategy. Of course, there can be channel-specific or partner-specific hurdles, but as indicated by NDC pilots/ projects, all of this can be sorted. Also, a major highlight of such arrangement is: an airline working on special bundles that can be sold via intermediaries’ platform. This can be tailored for one intermediary, too. For instance, a tour operator or an OTA can exclusively offer lounge voucher or avail complementary additional luggage option. 

·          GDS continues to be an integral part of distribution mix: In a recent article posted by Airline Weekly, Scott Kirby, president of United Airlines mentioned: “…As for 3rd parties, I am all in favour of our third parties being able to sell ancillaries.” He said this isn’t an avenue to push direct sales, rather he asserted that customers should be “able to shop where it’s most convenient for them. I want it to be cost efficient, but I also want them to have full access to all of our products”. Amadeus is allowing airlines, such as Etihad Airways, to display images of  product and ancillary services, such as exit row seating. Sabre asserts that the group makes ancillary and branded fare content available through all points of sale that they develop. In an interview with Ai around mid-2016, Sabre mentioned that 72% of bookable air content in Sabre offers an ancillary and/or branded fare.

·          Facilitating sales via APIs: Today airlines have worked on their API gateway, publishing end-to-end PSS API in public domain. APIs are available for flight and fare availability, ticket issuance, payment etc. Airlines are making standardized data available to developers, allowing them to use the interface to integrate direct booking links for offers from the airline into their web- and app-based offers.

Sabre also says an advanced level of merchandising capability is also built into APIs, which are used by developers to build or update a customized booking applications for their websites or to use Sabre content within another application.

·          Capitalising on intelligence in real-time: As airlines focus on NDC systems, there would be provision for XML analytics that is tied in to the NDC API. The objective is to gain an insight into operational performance of web services and XML APIs coupled with real-time intelligence that the XML message flow contains. Right from merchandising solution to real-time PSS data reliable interfacing to the external contemporary system where the proper data aggregation could be maintained to API strategy to harnessing the intelligence embedded in the rich NDC-schema compliant XML message streams, airlines need to prepare in a diligent manner.

The pace of change might be slow, the number of airlines going about refining their merchandising strategy might be low, but it is a positive sign considering prevalent highly integrated processes, and change doesn’t come easy to this industry.

 

Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain this year. 

Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain 

For more info, click here

 

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: Digital transformation = getting connectivity + blend of technologies right

First Published on 10th February, 2017

Ai Editorial: Digital transformation isn’t just about dealing with archaic IT set up. Rather it’s a journey that is about getting IT architecture and connectivity right, that eventually paves way for collaborative innovation and customer-centricity, writes Ai’s Ritesh Gupta

 

Which is the right way to approach digital transformation?

When we talk of the limitation of a PSS, extracting data out of a legacy set up, working on connectivity for SaaS, mobile, and the Internet of Things, delivering a connected experience…it is imperative to make sure all of this can be stitched together as part of an enterprise-level cohesive transformation.

Transformation that aptly depicts the strength of the travel product, and serves the traveller in the manner that suits them best.

It’s a huge undertaking for an organization, it’s an investment. What’s the right blend of architecture, and how to work out connectivity?

Digital transformation isn’t only about offer management

The way airlines craft an offer for a user, be it for their own distribution channel or on 3rd party platform, is undergoing a major change – creating it dynamically to offer travellers with the most relevant offer at any given time, through any point of sale. Plus there is a need to look at pricing, availability, and schedule building as part of real-time offer creation and delivery across all channels. But working only on offer management is just one aspect of transformation.

In addition to this, airlines also need to look at areas like speed-to-market and re-evaluate their connectivity approaches.

API-led connectivity can bring a change, and there are tangible benefits that are being worked upon. For instance, flydubai via its API-led connectivity approach is looking to cut down on passenger queues at airports with mobile check-in, speed up departure gate boarding etc. As for merchandising, the airline intends to bundle its offerings with supplementary services such as rental cars, hotels and adjust prices accordingly.

Such connectivity is what that enables us to view the estimated pickup time on a map (Google Maps) when we are waiting for our cab service ordered via Uber. So how can airlines get closer to attaining such proficiency, which along the way can also improve upon overall merchandising?

API-led architecture

In a recent webinar, Mohammed Ahteshamuddin, VP, IT-PSS and Customer Experience, Dubai-based flydubai stressed on the need to transform, and this stands true for even those carriers that aren’t even decade old and carry no or less “legacy baggage”. In fact, LCCs of today are distributing via GDSs, interline partners, code-sharing etc. and this along with the call to serve today’s “always-connected consumer” calls for a change.

Need for transformation emanates from the fact that there are maintenance-related and scalability issues, dealing with data silos, monolithic systems etc.  

Ahteshamuddin, referring to digital transformation, underlined the significance of collaborative innovation via open API strategy in order to connect, collaborate and share, as well development of a platform for digital interactions and transformation. Such architecture is one critical aspect of digital transformation, and it is all about agility and speed-to-market. Importantly referring to how architecture has evolved over the years, starting from 1960’s to service-oriented architecture or SOA and eventually microservices-oriented, Ahteshamuddin said microservices archicture offers a huge opportunity to set up a scalable and available platform and also deliver contextualized personal services through APIs. Microservices are one component of working on digital transformation that are required to meet modern business demands. With it, an application is broken into smaller, completely independent components, enabling them to have greater agility, scalability, and availability. Such offering allows developers to focus on exact areas without adding unwarranted intricacies to deployment or other administrative tasks that are usually associated with isolated services.

Implementing such architecture

So how did flydubai go about choosing its API-led architecture?

Ahteshamuddin mentioned that the team, which worked with MuleSoft, chose to focus on the blend of service-oriented architecture, microservices and APIs. This was done to find a way to unlock data from legacy systems via an integration hub via SOA; flexible, scalable and available components, for composing these into more business usable assets; and APIs to standardize and simplify the interfaces. One vital area where airlines end up making progress is the resulting decentralised access to data and capabilities while not compromising on governance. At the same time, one needs to work on security capabilities for public facing APIs, e. g. presentation of data in a governed fashion. Entities need to focus on application of logic to data, such as transformation and enrichment, and access to source data, whether from physical systems, or from external services.

As for connectivity approach, multiple building blocks is the way to go in order to attain agility and flexibility.

The first layer, as explained by flydubai and MuleSoft, is systems APIs (for accessing underlying systems of record), second is process APIs (provide access to non-central data, designed specifically for processes in an organisation) and experience APIs (optimization of content, paving way for channels to access data in a desired format and accessibility for devices such as wearables, how the information is displayed on any particular device). “On this platform we have managed to transform the core system (PSS) of the airline that needs to be ready for the digital transformation. We have designed the middleware around offer management, order management and customer management. For offer management, we integrated pricing engine and merchandising platform integrated via MuleSoft hybrid integration platform, and with microservices components of availability, we have built on the offer management API. Similarly, the team has worked on order management API (encompassing sell, book, ticket, payment etc.). Also, the customer management component system interacts with the loyalty and CRM systems to create the single source of customer APIs. The API gateway exposes all these APIs to business partners.

In additon to architecture and connectivity, one also needs to focus on people – employees and travellers. For instance, if we talk of data, it alone cannot provoke change - rather accessibility, acting on it, training, incentivizing employees and ending up with the development of a customer-centric culture is key.

Making the most of APIs

So flydubai has worked on their API gateway powered by their platform, publishing end-to-end PSS API in public domain. APIs are available for flight and fare availability, ticket issuance, payment etc. and, as Ahteshamuddin says, one can build own booking engine on “our APIs”.

The objective of the airline is to collaborate with various stakeholders, primarily divided into three groups - business partners including OTAs, payment partners etc. (say enabling OTAs to build custom search and booking functions), user community including operators, agents, corporate clients (say for tour packages to include flights and travel services using  APIs or a corporate ensuring bookings are as per travel policy) and the developer community (for creating mobile and IoT applications).

How has this undertaking shaped up? Ahteshamuddin stated that agility and speed-to-market has been demonstrated with integration of the carrier’s reservation system into myIDTravel portal, a portal for airline staff to book tickets), and this project from design to going live was done in two weeks. Also, the airline garnered the IATA NDC Level 3 certification. As for the migration to the platform, the airline is facilitating migration of partners previously associated via web service page, but in terms of progress, flydubai has over 60 OTAs, meta-search engines including Skyscanner and KAYAK, IT providers and payment specialists. 

And finally, other than facilitating new apps based on the airline’s developer portal, the plan is to improvise on an ongoing basis to capitalize on data and analytics to personalise the experience. For instance, intelligence derived from machine learning can make product recommendations based on activity patterns or  ease off strict rules that force even legitimate customers to identify themselves at the time of payment. Similarly, the team is also looking at areas like shopping experience (few months ago easyjet introduced a mysterious plane door to inspire people to travel), as well as seamless, connected travel experience.

 

Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain this year. 

Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain 

For more info, click here

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: Experience optimization - key to gaining share of wallet

First published on 7th February, 2017

Ai Editorial: A series of initiatives – account personalisation, machine learning driven recommendations, tracking every interaction etc. – can pave way for experience optimization and in turn ancillary revenue generation, writes Ai’s Ritesh Gupta

 

Garnering a major chunk of travellers’ wallet, be it for them buying an airline ticket from airline.com or using a co-brand credit card for various transactions, is like putting pieces of a puzzle together.

If we talk of airline-owned touchpoints, the business challenge or the puzzle that is being sorted should be able to aptly serve the passenger, right from inspiring them to the post-journey phase.

Just focusing on transactions isn’t going to be enough. The focus needs to be on experience optimisation – which would essentially mean working out the right content for each visitor every time they visit on airline.com or their app. And this can’t only be transactional in nature, rather should span across the end-to-end traveller journey across key touch points such as servicing, delivery, disruption management plus ticketing and fulfilment.

There are quite a few positive initiatives in this context, for instance, account personalisation. And, yes, there are hurdles, too, that result in a gap in experience optimization and dissuade passengers from buying at all.

·          Account personalisation: One area where progress is being made is speedy bookings and swift flight check-ins on airline-owned platforms. This is being enabled by passenger-focused technology, one that speedily directs users to content that would make an impact or possibly a favourable action from users. Ryanair took an exemplary initiative last year, one related to account personalisation. This way the carrier chose to enable passengers to share their travel preferences by setting up a personal profile, and saving passport details etc. The users can also store their payment information. Such initiatives are bound to make trip planning, booking and even servicing simpler, more efficient. In the case of Ryanair, the carrier asserts that the scale of its application is exceptional, capable of managing over 105 million or so users. Of course, digitally-savvy airlines or retail companies today are focusing on managing data, and this includes data from that is within an organization and also from outside. So if personalisation platforms, moving ahead with progressive profiling of their customers, can act on data in real-time, then it would push experience optimization to a new level altogether.

·          Capitalizing on technology for conversion: Be it for early stages of the booking funnel i. e. when a passenger isn’t sure of where to go or removing usual pain-points when a user it about to book, technology can play a vital role.

- If we talk of finalising a flight itinerary, it could be adding context to personalise the experience when an anonymous visitor is exploring an airline website. So what if the booking flow comes alive when website users shares their interests, favourite activity etc. and the airline ends up offering an itinerary based on personalised destination recommendations. This also means relevance is added to ancillary retail products. Ireland-based start-up LikeWhere is offering such capability via their location recommendation engine, which is backed by a matching algorithm built upon  geo-data-mining and machine learning processes. And this is connected to the user interface of an airline’s website or mobile app. The company asserts that the flight is not the consumed product, the destination is.

In another judicious of machine learning, the intelligence derived from it can also ease off strict rules that force even legitimate customers to identify themselves at the time of payment. This multi-layered verification, which if same for all buyers, can increase complexity at the time of the check-out. Rather if machine learning can spot a group of buyers and term them as low-risk before they even make a purchase, then this would help in improving upon the conversion rate.  

·          Content optimization: As we highlighted in one of our recent articles, if airlines aren’t able to deliver content that covers  apps, sites, social channels, IoT devices etc., then they are falling short of displaying their own product aptly. Content needs to gear up for mobile-first approach, artificial intelligence etc. E-commerce companies are evaluating content-as-a-service through microservices and APIs. It is being underlined that headlines CMS marks the evolution of the CMS architecture. Headless is being termed as an answer for content for multiples screens, and the list also includes devices such as smartwatches.

·          Emotional engagement: Today travel companies are counting on eye-tracking and facial-movement technology to assess what and where people look at and why in order to refine design and functionality of their digital platforms. According to Expedia, such initiative pave way for more nuanced understanding of what users want and how to move them from browsing to booking. In case of Expedia, user experience researchers use electromyography technology to document minute changes in the user’s facial muscles. The findings are being augmented with eye-tracking, more visual and verbal clues etc. The resulting data eventually paves way for product development decision-making.

·          Tracking every interaction, even on non-branded touchpoints: It is incredibly tough to assess the real experience of travellers since they are also engaging and responding to the experience in the non-airline environment. Imagine you are non-loyal flyer, who has had a bad experience with an airline. You Tweeted about it, wrote on Facebook, wrote an email and eventually the airline called you to sort out. Say after a week or a month you are planning your next booking, and you access airline's site and mobile app, do you think it is possible that you are going to be greeted with a personalised message as you are looking for tickets on the same airline's website/ app?

There are various technologies available for user tracking, but it is quite challenging to link actions seen on social media to a CRM system that will enable the web experience to be different the next time the user visits.

You can only drop a cookie while users are on your own website or a hosted forum that your company sponsors. Also, there could be a great deal of privacy and access issues. As of now, be it for hotels or airlines, the sum of all interactions isn’t being analyzed, and till the point it happens, there would be a gap in experience optimization.  

 

Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain this year. 

Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain 

For more info, click here

 

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: Content is vital for merchandising, are airlines ready for it?

First published on 2nd February, 2017

Ai Editorial: If airlines aren’t able to deliver content that covers apps, sites, social channels, IoT devices etc., then they are falling short of displaying their own product aptly, writes Ai’s Ritesh Gupta

 

Airlines generally tend to struggle to make the most of their core offering when it comes to displaying images, videos etc. This means airlines are falling short of optimizing the investment being incurred on refining the overall product and shopping experience. And with this gap, they are also potentially missing out on revenue optimization, say selling of air ancillaries.

Are airlines matching content with the intent of the customer? Are airlines equipped to handle opportunities emanating via artificial intelligence, robotics and automation? Not really.

So where is the problem when we talk of management of content?

One area that is being discussed even in the other sectors is the limitation of traditional content management.

Airlines need to look beyond web publishing, and rather gear up for publishing that covers apps, sites, social channels, IoT devices etc. One also needs to support global, multilingual content at scale.

Keeping pace with technology

The pace with technology evolves increases expectations, brands are expected to be ready, and that’s what we, as travellers, expect from our favourite airlines, too.

In this context, content needs to gear up for mobile-first approach, artificial intelligence etc. For instance, chatbots are being trained to respond to queries. Now if a traveller is sitting at the airport, about to board the flight in next 30 minutes, intends to ask a question around what’s going to be served during the 7-hour transatlantic flight and is even willing to pay for a certain dish, can the chatbot show the image of the dish if its available? How much to pay for it? It is definitely possible today. Chatbots and AI can provide convenience and value to travellers via real-time recommendations (say links to purchase options or opt-ins that could lead to purchases). If bots are improving upon the experience, then content that is being shown is an integral part of the whole effort. Even chatbots should be equipped to automatically serve content in the format – aptly suited for a user’s device, right?  

“Headless” CMS

The limitations of legacy content management systems (CMSs) typically are - being browser-first, page-centric, on-premises set up etc. Traditional CMS products were set up as a coupled CMS. As for the coupled versus decoupled web CMS architecture, in case of coupled architecture authoring and delivery are on the same set up. While the initial setting up is simple, there are challenges that are being highlighted with the coupled approach. Scaling up is one issue. Also, since content is normally in a database schema (CMS code is tightly connected with templates and custom code) intended for use on the site, it can make integration and migration arduous. Plus, software complexity is more since the code base features both authoring and delivery concerns. Also, being on the public server raises security issues.

In this context, headless CMS has been in news.

Such systems pave way for editing, storing, and management of content but put away the design and delivery of the same content to a distinct offering. Here API makes the content available through any channel and on any device.

E-commerce companies are evaluating content-as-a-service through microservices and APIs. It is being underlined that headlines CMS marks the evolution of the CMS architecture. Headless is being termed as an answer for content for multiples screens, and the list also includes devices such as smartwatches. Also, headless CMS allow developers to choose whatever front-end user interface technology they would prefer. Organizations can better manage application lifecycle without any interference of CMS code. Another advantage that airlines can consider is the fact that a decoupled architecture is beneficial for those digital assets that need high levels of availability and performance, for integration with third party business systems etc.

Don’t ignore customer experience

However, it needs to be highlighted that there is balancing act that needs to be managed, when we talk of headless or coupled.

As a specialist in this arena, Sitecore underlines that organizations need to be careful with the impact on customer experience (CX).

In a recent blog post by Sitecore, it was highlighted that even as headless CMS can result in freedom while finalizing on a front-end user interface technology say for an app, on the flip side the CX end up being decoupled as well.  This would limit the ability to personalize that experience, or answer real time with pertinent content, or even test and optimize and manage forms and market in context of user interactions.

So how to go about headless CMS?

Sitecore asserts that such architecture should be used by “digitally mature” entities that are capable of managing “customer experiences in context of how users interact with your brand”. Further adds, it should work for those “whose digital properties are personalized, who regularly test and optimize those experiences, and whose organizations are set up to be customer-centric.”

Then only one should expect to manage the balance between contextualized digital experiences and standout app user interfaces.

Overall, airlines need to evaluate possibilities with the cloud-first headless CMS approach.

Content management, be it for going for an architecture that supports delivery of content for emerging technologies and all devices, adopting personalization rules that tailor a site content based on visitors’ profiles, or monitoring how content is performing, without navigating to a separate web analytics system, is one key area that is demanding action in a swift manner.

This way airlines can get better with their overall e-commerce plan, and target improved revenue generation from both their core products and ancillaries.

 

Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain this year. 

Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain 

For more info, click here

 

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: Too easy to go awry with personalisation

First published on 27th January, 2016

Ai Editorial: By being too transaction-centric, overlooking the limitations of big data or not respecting travellers’ privacy, airlines can go wrong with their personalisation-related efforts, writes Ai’s Ritesh Gupta   

 

Amidst all the talk around how personalisation, backed by smarter data capabilities, can elevate the overall brand experience, there are noticeable instances where the whole initiative can prove to be either useless or even annoying.

Yes, personalisation is a journey – moving from demographic segmentation to bringing behavioural and transactional data into the picture to algorithms-driven, automated one-to-one personalisation. But being meaningless during the path is what marketers are trying to avoid. As cautioned by a couple of airline executives in the recent past, when things go wrong, the image of a brand takes a beating.

·          “Awkward personalisation can be worse than not personalising at all,” this is what Maria Cardenal, head of product development at Vueling Airlines had to say when we interacted about selling ancillaries and personalisation.

·          In another interaction, Frank Bornemann, head of marketing, Loyalty Programs & Provider Management APAC at Lufthansa, highlighted that airlines have so much data available to address individual needs, but yet they usually blast offers to all customers in newsletters, apps, social media etc.

What personalisation shouldn’t be like then?

Ø  Irrelevant by being “transaction-centric”: An email addressing users with their “name” and sending 10 emails in a month with all of them enticing them about buying your next flight with a promo code or discount can detest a user from even opening an email. And if users have accrued points or miles, it is even more detrimental to the experience as users neither can unsubscribe (since they would lose out on something relevant to them) nor wouldn’t like to open as most of it seems like “spamming”.

As highlighted by Olson Digital, for most entities operating in the digital space, every interaction with a visitor is not a direct sales opportunity.

Be it for historical data, the recent activity (say keyword search or clicks on the website) etc., anticipate where the user is in the booking funnel. Let’s say a user typically takes two family vacations (in March and in June) and there are other times when the same traveller travels for business. What would the right time to inspire this traveller for family vacations? What sort of content would be shown depending upon historical data, the recent activity (keywords search, sections clicked on email, behavior on airline app/ website etc.), the stage in the booking funnel etc.

Treat every piece of communication as part of the journey, starting from the inspiration phase, and enabling the user to take a decision with relevant messaging, choices, deals etc. Olson Digital sums this up with an analogy: a suit “must fit one’s preferences (cut, color, fabric), the season or occasions during which it is likely to be worn, and ultimately one’s body”.

Ø  Missing the mark with big data: A major issue with big data is assumptions arrived at, based on variables. These can be 90% - 95% accurate and yet can end up being irrelevant with the recommendation. VCCP’s co-founder and chairman Charles Vallance made a pertinent point in a blog post few months ago, “the trick with big data is to make it small”, and “distil and compress it until it tells you something concrete, substantial and discriminating”. He underlines that if one would only end up counting on data-driven targeting as personalised and to being personal, and overall a way to forge desirable customer relationships, this may well end up being a mistake. Vallance accentuates that one needs to balance out, and make the most of the blend of human angle, communication and technology, and also states: “technological leaps that big data makes possible are seldom about understanding me better, they are more often about serving me better”.

Airlines and travel organizations can also dig deep into what sort of analytical process failure can result in disappointing results. Look into bias, and their impact, and also learn about true positive, true negative, false positive, and false negative, and ask pertinent question like why same data can result in different interpretations?

According to specialists in this arena, being extremely reliable on the initial dataset, no data cleansing or transformation, or statistics being done wrong are common issues.

Ø  For trust, know your limits: We all dread the idea of sharing too much information on any social network or even sharing our email id thinking of being chased or being exposed to unwanted messages. The responsibility is even bigger when a consumer shared some piece of information for a meaningful association. Make the effort to ensure customers can opt out. Retargeting definitely hasn’t evolved it seems – be it for chasing with same creative or showing an ad umpteen times even when a consumer isn’t interested.

As Cardenal explained, even if an organization is ready with data and has managed right interpretation of that data (aligned with the business strategy, as well as the technology to be able to use it effectively), do ensure the same comes into play at the right moment and with the right message. If no, then the same effort can come across as intrusive by the traveller.

Technology is not enough, you need to build your customer’s trust.

Travelers are willing to provide more personal information if it means a better customer experience for them. If you make proper use of their personal information and the message you send is relevant to them, then it will not annoy them, but will develop trust. 

 

Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain this year. 

Date: 25 Apr 2017 - 27 Apr 2017;

Location: Mallorca, Spain 

For more info, click here

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: Speed – one vital driving force behind every CTO, CMO’s move

First published on 6th January, 2017

Ai Editorial: Speed is one popular notion that is driving new initiatives at an enterprise level. Ai’s Ritesh Gupta assesses how 3 areas –merchandising, API connectivity and micro-moment marketing – are gearing up for the same.

 

Speed with which what an airline can do, be it for introducing a new ancillary product, acting on business intelligence or dealing with digital marketing ecosystem for funnel optimization, is now defining what transformation is all about. It is exerting tremendous pressure on every organization to evolve in a certain manner.

From the IT standpoint, one has to make the most of the blend of mobile, IoT, SaaS, cloud, big data and social and accordingly adjust their operating model. For a marketer, it’s imperative to make the most of every interaction a customer has with the brand, making apt use of CRM, marketing automation or campaign management tools to organize multichannel interactions.

Here we explore certain operational changes that denote the significance of speed, in the context of supporting an environment for innovation, gaining competitive edge for instance launching a new product or a new digital asset building on the existing resources etc.

·          IT operating model: Airlines need to excel with their API connectivity as this paves way for a seamless application network of apps, data, and devices. Implications for airlines include passenger tracking inside the terminal to speed up departure gate boarding or cutting down traveller queues at airports with mobile check-in.

As a specialist in this arena, MuleSoft foresees that in 2017 APIs and microservices are going to be vital weapons that IT teams would build for developers across an enterprise to use for apps, services, and processes. (According to IBM, microservices architectural approach is a way to set up only one application as a group of services, each operating in its own process and communicating with lightweight mechanisms, often an HTTP resource API). This way one would be able to discover, reuse and self-serve assets. Overall, such move is going to result in speed and agility by enabling more teams to innovate without central IT being the bottleneck. How? Such IT operating model means technology components can be split into smaller pieces, be composed and recomposed into new digital products and services across the business. Citing an example, a blog post on MuleSoft, explained how by divulging data through reusable APIs can propel innovation, rather than starting from scratch every time a project is initiated. From a tangible benefit perspective, this means when an app for iOS is created, and post this an Android app is to be delivered, this wouldn’t require a massive effort. Rather by divulging data required for the app through APIs, various components of the mobile app can be referred to as reusable building blocks.

Among airlines, flydubai is one such airline that has been counting on one such platform to cut down on the time taken to introduce new products by up to 70%.

·          Merchandising and distribution: Personalized offers in milliseconds? Yes, this is what airlines need to consider. Airlines have to work on plans that result in flexibility and quick, centralized approach to merchandising. For instance, the web and mobile front-end should be accommodating so that it adapts dynamically when one adds or eradicates any fare, bundle or ancillary. The work that is done at the back-end to introduce a new offering should be done in a way that there is no amendment required in existing digital assets such as PC website, mobile app etc.

Also, if an airline is pushing its content via NDC-enable API then any changes/ new offering needs to be displayed across all the channels to sustain consistency. One has to work on dynamic merchandising, pricing, availability, and schedule building as part of real-time offer creation and delivery across all channels. The related engines for such functionalities should be cost effective and have millisecond response time.

·          Not just traditional “marketing”: For marketers, it is important to respond quickly to market opportunities with real-time market and performance insights. For instance, if tomorrow another game like Pokemon Go emerges, then what sort of agile planning is needed to make it part of the marketing mix. Of course, the popularity of Pokemon Go underlined the potential of speed and scale of digital disruption, and marketers need to be ready for it. So airlines need to evaluate what they can do to integrate data and technology.

Marketers need to be nimble, need to capitalize on the blend of content, data, analytics, algorithms etc. The lines between marketing, product, and engineering are diminishing. For instance, the team needs to have certain set of technical skills to capitalize on say each ecosystem (Apple, Google etc.), what can trigger virality (for instance, how to count on gamification) etc., funnel optimization through measurements and insights using tools such as Google. We are in the era of micro-moment marketing. As Google points out, mobile has fractured the consumer journey into hundreds of real-time, intent-driven micro-moments. These moments have been categorized (Want to know moments, Want to do moments, want to buy moments etc.), and marketing today need to acknowledge that moments tend to sit at the crossroads of content, immediacy and intent. How to crack this is in real-time is going to be the key forward. No doubt piecing together a technology staff for the marketing function is a very big challenge.

How can airlines embrace change and count on "speed" for competitive advantage? Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain in April this year.

Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain 

For more info, click here

 

Follow Ai on Twitter: @Ai_Connects_Us

Selling ancillary products – simplicity is key

First Published on 1st January, 2017

 

Ai is set to conduct the 11th edition of Ancillary Merchandising Conference in Spain this year 

Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain 

For more info, click here

 

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: Can personalisation be about knowing “me” in 2017?

First published on 28th December, 2016

Ai Editorial: Can airlines make a traveller spend based on the sum of “clicks” or “tap”, or customer experience (CX) based on sum of all interactions with the brand, probes Ritesh Gupta

 

How would you define personalisation?

This question isn’t new, but then have we found a way to excel? Not really.

For me, personalisation in travel e-commerce is about helping me in booking a flight or during the course of the journey. I believe we have a long way to go:

·          The sum of my “click”, “swipes” and “taps” on devices: It isn’t uncommon for a user to use multiple devices. One might look for destination-related content, local tours, air tickets or best hotel deals session after session, say on airline.com or an OTA app. There are stages where users give strong signals of the destination they intend to book, the kind of flight itinerary they are looking for, the sort of hotels they want to book etc. But in today’s era in which one could log on to TripAdvisor, Facebook, Google Maps, airline- or OTA –owned digital platforms, meta-search engines  etc., there aren’t sufficient ways to come to grips with what the user is looking for. For example:

I searched for New Delhi-Zurich-Geneva-New Delhi flight at least 10 times on Swiss, Lufthansa sites, Google, Skyscanner, Kayak etc. over a period two weeks. Did any airline, Google or any flight search engine at any stage offer me a piece of content that made me click and book? No. Eventually I did book, there was a comfort level with certain itineraries depending upon the price, the connecting flight, meals etc. No organization managed to sprang a surprise. Retargeting, too, today to me is just a soft extension of the session where I left. No real value is being added when I am being shown an ad. A way for brand to just hover around the screen I am on. Of course, I left the website or app for a reason. Can the reason be identified and inspire me, lure me into a deal that matches my intent, preferences, price I am willing to way. So rather than just displaying an ad for 14 days that says book a car rental in Zurich, one could show the spots that I am most likely to visit. Show visuals of say Old Town or Lake Zurich and how could I move around from the place I am trying to book. The ad tech fraternity is making moves with initiatives such as programmatic native marketing. It is being highlighted that native ads blend content/ creative with the page a user is on, don’t hamper the user experience or aren’t intrusive, and are data-driven.  

·          Selling more via seamlessness: I did use my smartphone extensively right from the planning to booking to in-destination phase. I visited 5 places in Switzerland with my wife and 10-year old daughter. I searched for “things to do”, rail passes, tickets etc on the official tourism site of Switzerland. Me and my wife paid around $US 800 or so for two rail passes for unlimited travel, and only relied on SBB Mobile rail and transportation app during the course of the stay. We bought the pass from the Zurich main train station. Wasn’t there is any opportunity to offer me this option – didn’t the airline, the hotel, the OTA etc. miss out? Timing, content etc could be the key. May be at the of time of online check-in or cross-selling when an email is being sent for the check-in? I have apps of Booking.com or Gmail. How creative can these apps get, say via a push notification, to lure a user into such transactions. One area to watch out for seamlessness is Internet of Things (IoT). It assumes that information and data will flow seamlessly and securely from one device or one party to another, where it can be accessed and used immediately. If the IoT keeps tracks of the items you intend to purchase, it can automatically tally the payment and process the payment as soon as it connects to the nearest payment terminal or app and verifies the customer's information and data. The IoT will remove even more layers and more steps that are now involved in shopping and paying for goods and services.  

·          CX based on sum of all interactions: Be it for interactions during the course of one booking funnel or one journey or counting on all this as historic data for the next trip, airlines need to improve in this arena. Again a couple of examples:

I was unable to change seats at the Geneva and Munich airports for my Munich-Delhi during the same trip to Switzerland with my family. I tweeted from both the airports. I accessed a self-service kiosk and couldn’t change it. Even Lufthansa’s personnel accessed the self-service kiosk, but in vain.  It only increased anxiety as I had to wait till I reached the boarding gate. And the staff at the boarding gate had no clue. So there is lack of integration, no real-time alignment and employees tend to go through numerous systems or data sets to find the information they need. As Sabre states, silos at the technology level (i.e. multiple disparate systems) and silos at the business level (i.e. disjointed workflows and processes) often result in siloed decision making. Post this journey, I did search for a flight again on Lufthansa.com, and there was no awareness of what I was looking for during my previous flight. Airlines need to look at cognitive computing and artificial intelligence to make the most of structured and non-structured data – could be about offering my favourite seat. It’s time to count on loyalty data, trip data, previous purchase data and with apt permissions in place for social data for a personalised experience.

 

How is personalisation expected to shape up in 2017? Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain next year.

Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain 

For more info, click here

 

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: Airlines bent on changing “indirect” equation as we go into 2017

First published on 20th December, 2016

Ai Editorial: Airlines are now seeking more purposeful association with indirect distribution partners. Ai’s Ritesh Gupta assesses what’s evolving, and what’s expected to stay the same in the near future.

 

The reach of indirect channels, be it for OTAs, GDSs, Google, meta-search engines etc. can’ t be ignored, so in this context, it is interesting to assess how airlines’ quest of being in control is shaping up.

2016 hasn’t just been another year, even though the charge to lead the change in distribution has featured a limited number of airlines. For instance, IATA’s much-talked about NDC standard is making progress, but the pace of adoption has been slow. In fact, a section of the industry has raised serious questions around the utility of NDC. Does it break the “stranglehold” of entities that specialise in aggregating and count on their buying power, and pave way for channel-constricted free marketplace? Why messaging protocols are being “wrapped around” or bolted onto legacy airline systems? What is being done to sort out unstructured traveller data? Numerous questions have been raised in 2016.  

Old isn’t fading away    

Established B2B conglomerates such as Amadeus and Sabre play multi-faceted role in the whole value chain – from IT to distribution. Since NDC is an investment decision, and change doesn’t come easy to airlines, Sabre and Amadeus are expected to figure in the scheme of things. But emerging entities, too, are making steady progress, and forcing airlines to pick and choose, and improvise on their existing set up.

“We are talking about big, heavy systems that need adjustments (not easy to change say PSS). Yes, airlines are looking at fair distribution of their offering, but can they do without GDS as of now, not really,” stated an executive when asked to comment on airlines’ stance towards NDC and change. In fact, it needs to be noted that airlines’ ancillary revenue generation is on the rise and they are trying to push their products through as many channels as possible, as stated by American Airlines when a deal was signed with Sabre earlier this year (Sabre stated that it was first to deploy NDC-based technology solution to sell American Airlines premium Preferred and Main Cabin Extra Seats to travel agents). Few months prior to this, American confirmed their GDS integration to Sabre using the airlines’ NDC-style API.

“Airlines have the right to sell their product the way they want. OTAs and meta-search engines have the right to make the most of the traffic they garner. PSS/ GDS specialists can continue to count on their transaction processing model till provision of indirect distribution services and IT solutions can’t be done without,” added the executive, who indicated that airlines are definitely looking at their IT infrastructure, though PSS remains firmly perched in the value chain. “We are witnessing carriers increasingly opt to control their own merchandising, e-commerce and API technologies, using platforms that enable airline control, faster speed to market, and flexibility – and move away from solutions that are hard coded or community-model based, or tied to a particular PSS or channel.”    

The strength of APIs

Whether we talk of retailing, be it direct or indirect, one clear area that stands out is API-led distribution.

“Whether you believe in NDC or not, it describes a practice that is becoming more and more prevalent, airlines are switching to API distribution,” says Mark Lenahan, co-founder, CJ Ingition.

Airlines are after differentiation now, and they expect their content and merchandising to stand out in the indirect channel, too. So what would make it possible? Lenahan agreed and explained: OTAs, GDS and meta-search companies need to be able to price compare offers from multiple carriers, and that includes ancillaries. Yet airlines naturally want their products to be distinct, and will all come up with different pricing models (not just different prices) and bundle combinations. “(Probably) there isn’t a consumer search engine (web or mobile) yet that lets a user search for flights + a checked bag + extra legroom and compare multiple all-in prices from different carriers, or better yet let one pick a carrier based on fare only, but when one adds the other products points out one could now get the whole thing cheaper on a different carrier. That’s complex enough without even considering what we get for free because of our frequent flyer status. High performance, real-time APIs are probably the only way to solve this kind of complexity,” mentioned Lenahan.  

Doing away with old arrangement

The quest of being in control has seen new developments this year, for instance, in case of Lufthansa and Siemens, the arrangement uses Amadeus Altea and Amadeus- owned Cytric OBT, and Amadeus GDS is out. It’s worth following how airlines would go about connectivity as they try to streamline distribution, be it via direct connect agreements, API-led distribution etc. “Well yes what Lufthansa has been doing has been quite striking (developments), but this might not work for everybody,”  mentioned an executive.

And if we talk of airline-OTA dealing, the striking difference between direct and indirect sales for an airline used to be the cost of distribution, but it has increasingly become about the quality of the customer data, the opportunity to cross-sell and up-sell, and owning the ongoing relationship with the customer. “On one hand retailers (such as OTAs) want to control the offers, partly because merchandising is the retailer’s job and also because they don’t want ground and insurance products to come from the airline. On the other hand, many airlines want to control their products by channel, keeping the option open to have some products or bundles unique to their direct channels, or their loyalty programs. With sufficient motivation the technology can be made to work, but I’m not sure both sides are working towards similar goals,” said an executive.

Focus on Google and meta-search too

EveryMundo recently highlighted that airlines need to focus on “search-informed digital infrastructure”, and if this isn’t handled, then Google will continue to “defer to OTAs as long as their user experience is superior”. Of course, there are other areas, too, as far as Google is concerned, say native programmatic buying that can tap indirect traffic to drive direct response bookings.

Other than facilitated bookings in case of both Google and meta-search engines, airlines also need to look at the cost component while considering meta-search engines. Airlines can count on technology to manage all requests from meta-search engines and ensure queries only touch a system once the customer is on the booking path. The logic of whether to pull results from a pre-computed shopping system or to perform a query on the live systems is determined by the airline through a business rules engine.

Being an ally

How can airlines better work with distribution partners – for instance, an OTA sending traffic to airline.com? How about a meta-search engine seeking the FFP number as the request for an offer comes and then passes on to the airline?

Lenahan says some degree of personalisation is inevitable. “Consumers want convenience and value, meta-search and OTAs need to compete. So if one OTA or meta adds “status aware” pricing and offers (e.g. accounts for baggage and upgrade allowances) then customers will use it, and the others will be forced to do the same. Just look at what Pointshound, Rocketmiles and Kaligo are doing in the hotel search space,”  he says. “It is absolutely in the airline’s interest to allow 3rd parties to identify the individual passenger as soon as possible, but this does create a conflict of interest between the OTA and the airline - who exactly is selling the upgrades, hotels, car rental, insurance, etc.? More importantly – whose app or website gets used the next time this customer travels. OTAs pay a lot for customer acquisition and they need commission products to survive. The OTAs sometimes do not even get a GDS segment contribution when selling airlines who are not full content (on GDS), instead they have to pay for access to best fares using tools.”  

 

Can we expect any major change in status quo in 2017? How will NDC shape up? Gain an insight into intriguing issues at Ai’s 11th edition of Ancillary Merchandising Conference in Spain next year. 

Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain 

For more info, click here

Follow Ai on Twitter: @Ai_Connects_Us

Ai Editorial: Making merchandising an integral part of a traveller’s journey

First published on 16th December, 2016

Ai Editorial: If airlines are seeking a greater share of the customer’s wallet then they actually have to care about a passenger’s journey, writes Ai’s Ritesh Gupta   

 

Airlines are digging deep to ascertain what passengers love about them, and striving to become an integral part of their journey. So for a family it could be about making the most of togetherness on the day of travel, whereas a business traveller would prefer flexibility on ticket changes, and for their part, airlines are trying to entwine their merchandising around this.

Constant effort is being made to ensure unbundling or re-bundling matches with what a brand stands for and at the same time make benefits apparent.

Merchandising continues to evolve, a fact exemplified by the constant introduction of new offerings from airlines across the globe. So be it for Ryanair’s tailored bundle of discounted travel extras or American Airlines opting to extend availability of Preferred and Main Cabin Extra Seats to travel agents, there is plenty of action in this arena. Unbundling, branded fares, service bundles, fare families and subscription are all being played around with, and airlines are refining these all the time.

This level of product differentiation is must as the game of merchandising and ancillaries is bigger than ever. According to IdeaWorksCompany, airline ancillary revenue generation is projected to reach $67.4 billion this year. The report mentioned that optional services, such as onboard sales of food and beverages, checked baggage, premium seat assignments, and early boarding benefits, is expected to generate $44.9 billion of the total figure.

Being part of a journey

Every airline has unique values that appeal to different people, for one it might be a particular seat pitch, for another carrier it might be the food served or the airport experience or the on-time performance, says Mark Lenahan, co-founder, CJ Ingition. He says this varies by customers also. “Maybe there’s a UX (user experience) for the hundreds of different things I might want to filter flight results on, but I think the answer is not to just keep adding more data to the booking engine shop window,” says Lenahan. He says the vast majority of passengers are not first-time passengers, most of them are familiar with most of the airlines competing for their business on a given route. So a traveller might know a special feature, say a seat pitch, is worth $10-$20 more for a better experience. “What airlines need to work towards is improving the experience in the whole journey not just onboard their flights but including interline partners, ground transport, destination and airports. If you want a greater share of the customer's wallet then you actually have to care about their problems. The alternative - equally legitimate - strategy is to be the cheapest and most efficient transport provider you can be, but drop any pretence about being a retailer,” explained Lenahan.  

Also, airlines need to look beyond cost, revenue, margin, etc., and rather assess retail metrics like revenue per visitor, average basket size, and attach rate - which can apply to all ancillaries or down to individual products, says Lenahan. He says analytics tools need to be across all channels and fine grained - reporting views, clicks, purchases down to the individual product. “I think the two most significant KPIs are cost of acquisition and lifetime value. The industry has significant issues minimising the former (e.g. paying for the same customer over and over) and understanding the later (strong tendency to ignore the earning potential of all but the top tier). If the customer experience in the whole journey (airport, on board, at destination) isn’t competitive then lifetime value will decline, even while the attach rate on the app or website improves in the short term. Airlines have to think of the long-term impact of everything they do.”

Value should stand out

Do you get peeved when you have to pay for a seat?

The fundamental idea behind charging for a particular seat is not the opportunity cost, but the benefit of choosing where to sit and removing the uncertainty of where you will finally sit, says Maria Cardenal, head of product development at Vueling Airlines. She says Vueling passengers will have a seat assigned for free if they choose so or will be able to choose it themselves if either they pay for Optima fare or pay for Basic fare and then the seat they prefer. Either in an unbundled way or in a bundled way, there is value behind the possibility to choose.  It’s the same simple principle for which you have different prices depending where you want to sit at the theater or the Opera or a football match. You will have to pay extra if you want to sit in a privileged zone.

Sell what makes you special

Fare and product attributes need to be presented in a way that is easy to understand, digest, compare and personalise. There are several areas where airlines can improve.

When I spoke to Robert Albert, CEO, Routehappy, (a company that helps airlines to deliver their product attributes wherever flights are sold) same time last year, he indicated airlines are between 5-15% of their differentiation potential in their own channels overall, and closer to 0-5% in indirect channels. More recently, during one of our conferences in Kuala Lumpur, he urged airlines to take concrete steps. “Airlines everywhere are investing to transform their products. When will we merchandise these innovations in flight shopping? When will we showcase product in up-sell, ancillary and other offers?”probed Albert, who said the hotel industry has differentiated “well”, and get their “customers excited to buy their products”.

Irony is that content exists, but the industry struggles to show the same in the transaction flow. Albert asserted that one needs to “sell what makes you special”. For instance, ANA can count on their 34” seat pitch in economy, Singapore Airlines on their champagnes etc. and this needs to be integrated into product offers. Also, avoid overly generic or inconsistent presentation of product attributes. Don’t opt for “too general” a way of showing content which can’t be truly useful to a consumer's decision process. Information shouldn’t presented inconsistently so it doesn't reinforce usefulness, importance, comparability, or accuracy of the product attributes. 

As for technology and e-commerce, airlines need to seamlessly integrate all ancillary products and services into their own payment and booking processes. As Datalex points out, airlines require significant investment in re-platforming their digital commerce suites to enhance their ability to dynamically price, promote and reward customers across all channels and devices. The industry may not be equipped to assess the booking flow in real-time, say what to display after the first click or the third click, but retailing is evolving all the time. So watch out for IoT commerce or new checkout experiences, and strengthen commerce initiatives.

Lastly, what is being promised needs to be delivered as well. So, for an example, if an airline identifies that a flyer tends to buy certain items on-board, let’s say a mango pudding, then the catering and crew needs to be informed about the same.

 

Ai is set to conduct the 11th edition of Ancillary Merchandising Conference in Spain next year.  

Date: 25 Apr 2017 - 27 Apr 2017; Location: Mallorca, Spain 

For more info, click here

 

Follow Ai on Twitter: @Ai_Connects_Us

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