Ai Editorial: Airline merchandising and mobile – 8 areas to look at

First published on 2nd March, 2017

Ai Editorial: Selling core products, air- and non-ancillaries via mobile to a leisure traveller is one proposition that demands constant improvement, writes Ai’s Ritesh Gupta

 

Merchandising via mobile is an attractive opportunity, and airlines fittingly are looking at several areas – their IT infrastructure, data and analytics, fulfilment, facilitating payments via mobile etc. – to ensure progress is being made.

Here we look at 8 areas that need to be dwelled upon to step up ancillary revenue generation and overall merchandising strategy via mobile:

1.    What makes mobile stronger than ever before? The prowess of mobile lies in its ever-present quality. So as precision of location data goes up, airlines should also “contextualise” their marketing efforts better. It is being highlighted that the number of beacons and sensors has risen considerably. And with better data quality, the game isn’t just about location anymore, but rather there is an opportunity to refine travellers' profiles and demographics based on emerging accurate, real-time data. Airlines can look at the airport environment and push ancillaries. Of course, other areas of merchandising do come into play as well – preparedness for personalised offers, sales offers, seamless transactions, ancillary partnerships etc. For instance, today I can be offered a latte at Starbucks via an attractive coupon based on previous purchase history and proximity. But with more data available, it is time for airlines to get creative, target even better experiences and as result higher ancillary revenue generation.

2.    Improving upon the journey of the traveller: It can be frustrating to queue up at the airport or looking for directions to the gate from another terminal. Airlines have to look at the overall journey, right from booking to pre-book phase to day of travel to the airport environment to in-flight to arrival. As stickiness of an airline app increases, the chances are travellers would be receptive to messages, notifications and even browsing for products/ offers on their own. Airlines have to evaluate new developments around mobile that can make the journey a pleasant one. For instance, IoT can connect a passenger’s baggage to his/ her mobile device for real-time tracking and updates. It can create verified IDs from distributed documents, speeding the process of passing through security, customs or boarding a plane. It can be used to provide real-time alerts about flight changes, status updates or emergency notifications. The potential of IoT commerce, however, requires airlines to embrace mobility, connectivity and IoT thought processes and strategies now.

3.    Dig deeper into funnel analysis: Passengers are willing to pay for extras that add value to their itinerary. For this, the mobile booking funnel analysis needs to be spot on, taking care of distractions, friction points or non-converting data, checkout effectiveness via testing.

In fact, funnel analysis can be an important weapon in assessing where shoppers are dropping out of the onboarding flow or how they end up completing a transaction after adding an item to their cart– this way airlines can gear up for a-la-carte sales or branded fares. This is vital as airlines need to find a balance between offering choice and how to sell them via mobile. For example, if the deal is too cluttered or the display isn’t simple enough to understand, then conversion won’t take place. Doing too much, say too many bullet points or offerings too many options, especially on a mobile device, can be a major hindrance in shopping.  So typically in funnel analysis, the series of steps leading to a transaction might look like search – view flight - add to cart –add a hotel to the cart - checkout - enter payment information and flight shopping is done.  

4.    Mobile experience: Speed is one factor that can make or break an experience. Airlines like Virgin America have relied on one simple call to action that are booking flights.

Among other issues, the mentality of offering the “lowest common denominator experience” needs to be done away with.

For instance, in case of responsive web design, it is being underlined that it has touched its saturation point. Even though it is apt for layout management and discovering distinct devices, there is a need to look at adaptive technique as well, delivering app-like sites. This way airlines can optimize experiences for mobile web – delivering web push notifications and app-style web payments.

Also, airlines need to build on the momentum of conversational commerce, and capitalize on it via mobile. Such trends can’t be ignored, as the blend of millennials and mobile is forcing evolution in consumerism and workplaces, both undergoing societal and technological transformation. At the same time a thorough study of what millennials expect is required as technology only facilitates the life they want to lead. “Millenials seek convenience, seek to belong and co-create, for them it’s about creating stories around travel, and being part of an authentic experience. Airlines need to recognize this and serve their mentality,” LikeWhere’s founder Simon Dempsey told me in an interview late last year.

Also, content needs to gear up for mobile-first approach, artificial intelligence etc. 

5.    Personalisation: Data analytics is critical in coming up with personalized offers throughout the travel process.  Without knowing what a passenger has shopped before, it is tough to fathom what they might want in the future. So the basic foundation is laid when a robust data strategy is in place, otherwise growing data will end in silos, and one will always struggle to attain customer centricity. Efficient digital organizations are looking to collect, store, process, analyze, and visualize big data on cloud. As more a traveller feels that their experience has been tailored for them, and the more relevant recommendations are to them, the more likely they are to engage.

Those airlines that aren’t ready to count on data, analytics and cloud are definitely missing out on shaping up their mobile personalisation efforts as studies have indicated that more than 70% of travellers share location and personal data for personalised services, and have indicated that context-aware promotion could persuade them to make a purchase.

Once airlines manage to clear the hurdle of inter-operability i. e. sharing of data from disparate sources, then they can get closer to serving offers/ recommendations as per travellers’ preferences.  

6.    Non-air ancillaries: In addition to flights, airlines need to gain access to inventory from hotels, car rentals, insurance and activities etc., either as standalone products or bundled packages. And as part of their offering or under their own brand. Airlines need to work on flexible web and mobile front-end, and also a single, standardized set of XML messages that cater to all channels.

Airlines are increasingly opting to control their own merchandising, e-commerce and API technologies. The focus is on using platforms that enable airline control, faster speed to market, and flexibility – and drifting away from solutions that are hard coded or community-model based, or tied to a particular PSS or channel. (Read about NDC XML APIs vs proprietary APIs).

7.    Payment and fraud related to mobile: In-app purchases and one-click ordering are a norm now. Shopping is all about toward convenience, simplicity, and speed. Airlines need to look at a couple of areas – streamlining process for transactions, fulfilment and transfer of funds and as well being prepared for fraud. One has to move in a swift manner as IoT thinking and increasingly smartphones are leading to more sophisticated digital wallets and mobile payments – which will lead to personalised mobile wallets or payment technologies with predictive capabilities built in.

Airlines need to support popular wallets and payment apps. Considering that every payment method has its own underlying technology and every mobile device has its own operating system, airlines need to take control of their payment ecosystem by owning their own payments layer that can deal with the fragmentation. The best plan is to adopt technology that is modular in nature and can work as a stand-alone solution with scale and scope. However, airlines also need to be careful as all new payment options may not pay off in travel commerce.   

Mobile fraud is complicated for airlines just like any digital business as transactions that are made through mobiles collect less information than web transactions, and therefore look much more similar. It isn’t easy to  differentiate between the real or fraudulent orders. As a result, higher costs are incurred, which includes the greater chargeback rates, lengthier time for manual reviews and bad service rendered to users. Airlines need to look at ways to authenticate users, relying on signals to add to the fraud prevention mix, like mobile carrier, precise geo-location and biometric behavior. There is also a need to make use of low-friction authentication steps that are made for mobile, like fingerprint scanning technology, SMS verification codes etc.

8.    Attribution: As Google recommends, even if the transaction didn’t materialize on a mobile device, “that doesn’t mean mobile didn’t play a role”. Airlines, like other businesses, need to assess the ways travellers are using mobile to connect with a brand. So in this context it is vital for brands to match a user’s engagement to actions across multiple devices. Of course, what works on a PC site may not work on an app, so sewing engagement via relevant metrics would be the key.

 

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

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