Ai Editorial: Excelling in airline commerce – don’t ignore the essentials
First published, 21st April 2016
Ai Editorial, By Ritesh Gupta in Barcelona: It’s not easy for a majority of airlines to change their processes and infrastructure for merchandising, as they are not starting from the scratch. So how can carriers make progress?
Airlines need to avoid several gaps in order to generate better results with their merchandising. So be it for not optimizing content during the flight shopping process, sorting out internal issues or not being able to make changes dynamically, its time airlines do away with certain impediments.
We take a look at what needs to be done:
· Aligning the strategy internally: Overcome the structure problem, overcome the silo problem. Merchandising isn’t a one-time thing, it’s an all-time thing. This emerged as a key recommendation during the Best Practices in Airline Merchandising & Digital Commerce session.
In order to fully capitalize on the merchandising opportunity, various departments need to be aligned i. e. IT, e-commerce, distribution and marketing.
“A lot of progress has been made in understanding the intent, the profile and value of a customer, flying behaviour and preferences, what to offer, where and how etc. But there are areas where the entire organization needs to come together,” shared another senior executive, who added that airlines are showing signs of a unified approach. “A technology decision and implementation needs to be approved, there are numerous internal checks that need to be in place. And all of this takes time – in a bureaucratic organization like airline, in several cases it’s state-owned. So it is a long sales cycle,” mentioned the source.
· Differentiate your product during flight shopping: Focusing on personalisation, pre-empting what passengers are likely to buy is being attempted. Airlines are segmenting prospective buyers (say a first-time visitor arriving from a search engine, looking for a particular destination, planning a trip with family vs. a high-tier loyalty program member who regularly logs into an account with the airline), and display an offer accordingly.
But this can go futile if the industry doesn’t match the content to the offer.
Irony is that content exists, but the industry struggles to show the same in the transaction flow. “Get customers excited about your products,” mentioned Jonathan Savitch, vice president business development, Routehappy. Show them things go beyond pricing and schedule, they are likely to keep on looking for more. The whole exercise would be like showing breakfast at breakfast time, and dinner food at dinner time etc. If an airline invests in improving the quality of the food it serves, and if doesn’t show during the flight shopping process, then airlines is not fully leveraging its product. Also, there should be consistency in airline content, be it for airline-owned channel or 3rd party distribution. It's a combination of providing better information when consumers are searching for flights in general, but also helping airlines and consumer understand product attributes in up-sell offerings. Once we achieve that, then airlines and distributors can focus on more nuanced personalization like what kind of food or entertainment offerings are available. As an industry, we need to build our new foundation first. Of course, there is a need to test, and as they say test-learn, fail-fast approach.
· Making changes dynamically: Airlines have to work on plans that result in flexibility and 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.
· Fulfilment: 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. “Adjustment would be required, say a change in record in PNR. Right piece of information to the right person at the right time in the airline is the main requisite. If the process isn’t streamlined then the whole passenger experience can go awry,” added the source. Today there are airlines that are already capable of pushing the offer via indirect channels, too, say via OTA front-end (website, mobile apps etc.) and via the traditional travel agencies. “A NDC API can facilitate an offer that is relevant to a booker, say offering a seat upgrade or a preferred meal at the time of booking on indirect channel, too.”
· Take a closer look at what can pave for better results: Airlines need to minutely look at different aspects of merchandising – content, crafting offers etc. and the available technology to do so. Airlines need to assess areas such as how content that can be show on any device, any touchpoint can easily be integrated with other platforms that are responsible for other aspects of merchandising. For instance, if a platform facilitates rich content alongside airline offers, then how it can work alongside its revenue management system. That means that amenity and product data can be integrated into other tools airlines use to inform prices and offers — and then that same product information can be integrated for display to consumers.
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