Ai Editorial: Retailing and CX, are airlines up for it?
Ai Editorial: Airlines are investing in their IT and retail infrastructure, and the NDC, too, has been around for a while. How all of this is shaping up? Hear from experts at this week’s Ancillary Merchandising Conference in Barcelona (20-22 April).
The buzz is unmistakable. The industry – airlines, OTAs, technology companies etc. – at large is working its way to shape up superlative experiences.
From the moment we start planning our next journey till the point we complete it or even get inspired for another trip, each touchpoint is being spruced up to deliver something beyond the mundane. Something that fits in with what we are seeking, what might surprise us and eventually builds a stronger affiliation with the brand.
So as we gear up for this week’s Ai’s 10th Ancillary Merchandising Conference in Barcelona, here’s what to expect, what the cream of the industry is going to discuss:
Personalisation: This is what everyone seems to be targeting – winning me over, my experiences through relevant, contextual content, offerings, service etc. just when I need it. So be it for the device I am using for my digital access or even my interaction with the staff, how easily can I be identified and helped out? A critical area is what does it take to “personalize” and how to do it. Airlines need to collect relevant data about the customer, often from a variety of sources. But is it resulting in a negative experience – say a retargeting campaign going overboard? Yes, it’s happening and it’s annoying.
The industry is also looking at in-flight experience as a key differentiator. The future of in-flight analytics should be able to offer you the rest of the movie you watched (and didn’t finish) on the last flight - recommendations of movies based on what I have watched - this could be applied to food, drink, duty free products, gifts and home delivery products. This is the same outside the cabin - offer me a specific coffee as I am entering the airport to have it available in lounge. Exciting, for sure.
Collaboration/ tie-ups for merchandising: As for the industry, there is lot of discussion around what can be done to present a passenger with relevant content/ offer and importantly, getting the timing right. That is to crack the device, intent, location etc. of a passenger. Farelogix, Sojern, Adara, Travelport, Amadeus, Sabre, ATPCO, IATA etc. are all addressing different aspects of the differentiation merchandising opportunity, each with a healthy respect for common platform and standards. For instance, how a flight shopping platform can be integrated with other platforms that are responsible for other aspects of merchandising innovation — such as revenue management systems and dynamic merchandising offers? As Routehappy’s CEO Robert Albert told me: there is no single system that will transform flight shopping itself. So it’s worth assessing how airlines, distributors, and technology partners need to come together to adopt common platforms and standards to make airline merchandising click.
Distribution: Airlines intend to be in better control, and that’s where the focus shifts to IATA’s new standard NDC. The NDC XML-based Standard follows four guiding principles: it is modular and flexible, it is not mandatory, is business model-agnostic, and can be integrated into existing processes and systems. So how are airlines, GDSs, technology specialists shaping it up? According to IATA’s update in March, 24 airline NDC pilots across five continents have been conducted and 15 of the top 20 airline groups (by revenue), have either deployed components of the NDC standard or plan to do so during 2016-17.
Also, the dynamics of 3rd party distribution are evolving. There are notable developments - booking on Google-hosted environment (or “Book on Google”), airlines offering direct access to its fares to agencies via direct connect, the introduction of a global charge for bookings made through GDS etc. As for GDS companies, we are already seeing that usage of NDC -XML by airlines and GDSs will vary in its shape and form, resulting in a mix of EDIFACT and XML connectivity. A lot to look forward to in this arena, too.
Retailing: Airlines acknowledge the need to revisit their IT infrastructure. But there is a long way to go before airlines come to grips with what’s needed and real differentiation happens. “I sometimes wonder if all this talk about “retailing” in the airline industry is really relevant,” this statement from a senior IT executive exemplified the status. Datalex asserts that unified commerce systems must deliver an unprecedented level of control and agility to support offer and order management across rapidly evolving channels and points of sale. Farelogix states that in terms of an API strategy, the future lies with airline-controlled technology that is PSS, channel and device agnostic. “The biggest disruptor (in airline distribution) is the overall movement toward airline retailing and personalization across channels, which drives the requirement for airlines to control their own pricing and offers. The way this happens will be many and varied ,” says Jim Davidson, CEO, Farelogix.
Also, airlines continue to get more sophisticated in the arena of ancillary revenue, fare families, bundling/ unbundling etc. An interesting area is how processes are being refined for product biasing, bundling, etc. In theory if you have 10 ancillary products, you have 45 possible 2-product bundles, or 120 possible 3-product bundles. However, many of these bundles don't make logical sense. So how to make every retail offer relevant?
So a lot is at stake. We know things are evolving. In this context, the sessions on 21-22 April and the overall event, including the Complimentary MasterClass with Farelogix on 20th April, is a must-attend one.
By Ritesh Gupta
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