Ai Editorial: Retail or travel – can you define “convenience” in a different way?

First Published on 14th December 2016

Ai Editorial: Retail automation, frictionless checkout, invisible payments etc. are developments that are set to redefine shopping. As commerce evolves, airlines, too, need to respond to such exciting initiatives, writes Ai’s Ritesh Gupta


“No line. No checkout.” This is what the retail sector is inching towards.

Being “made to wait” at any stage of shopping, be it offline or online, can be a dampener. So the retail sector is steadfastly doing away with what can be the bane for conversion or the overall shopping experience.

If we go by what Amazon has come up with (Amazon Go is a new kind of store with no checkout required) or even what Panasonic is testing (convenience-store checkout machines that can scan and bag items on their own), then you don’t really worry about waiting for paying. In case of Amazon Go, the company says you never have to wait in line. Consumers can avail the Amazon Go app to enter the store, shop and leave. In case of Panasonic, the system is retailer agnostic, so one won’t necessarily need Amazon credentials or a specific ecosystem, says Apple or Google. This all needs to be considered as the bar for delighting a customer gets raised. Comparison between retail and travel would be inevitable at some stage, as one would expect travel e-commerce to respond too. So if I am moving straight out of a supermarket without having to wait for my turn to pay, then why wouldn’t I expect the same say during any stage of my journey?

Isn’t it relieving when you move out of a cab, say Uber, and all you need to do is focus on luggage rather than paying for the ride? It might not take more than a couple of minutes to pay, but when technology saves your time, we start falling for it. We start expecting it in other areas, too.

Technology – the driving force

Technology is driving automation, and it can overlap for different sectors. For instance, Amazon Go’s checkout-free shopping experience features similar technologies as used in self-driving cars: computer vision, sensor fusion, and deep learning.

The Internet of Things (IoT) is also lending a new dimension to convenience.

So as machines take over and manage certain decisions, say ordering grocery, consumer behavior is likely to alter drastically.

This definitely is going to affect e-commerce merchants, including airlines, across the globe.

As we highlighted in one of our recent articles, IoT thinking and increasingly smartphones are leading to more sophisticated digital wallets and mobile payments – which will lead to personalized mobile wallets or payment technologies with predictive capabilities built in. IoT might extent to other transaction or authentication technologies, and some banks or companies are already experimenting with voice recognition, facial recognition, various kinds of chips, even pulse recognition as the identification-verification step needed for payments.

 As for facilitating payments, as Ingenico points out, the IoT payment solution will need an infrastructure based on cloud architecture and connectivity. This would call for standardization in the payments process.   

Gap between retail and travel

Despite the unique and inherent attributes that have shaped travel into a silo industry, airlines and OTAs alike are coming to the conclusion that the gap between travel and traditional retail is reducing. This is due in part to the growth of ecommerce and evolutional demands of today’s consumers. As a result, a competitive advantage will be given to those companies that think outside the box when it comes to payment acceptance.  

Conversion has always been a hot topic, but with the transformational changes in payments, gaining a competitive advantage takes a lot more than layout and price. Similar to what has transpired with big box e-tailers, the changes in consumer behavior today foretells significant innovation requirements for travel and airlines, as asserted by Chargebacks911’s COO, Monica Eaton-Cardone. In a recent interaction, she pointed out that e-commerce leaders such as Amazon and Apple have pioneered efforts that will forever change the way buyers and sellers view commerce, but even before the hype of today’s frictionless frenzy, payment methods and options were evolving. Loyalty programs advanced to store credit, financing options such as “Bill Me Later” became a popular contender, and a variety of monthly recurring options with the addition of new value add-ons helped curb profit requirements in order to support price wars—which are still going on today.

When it comes to airlines, the breadcrumb trail has already been laid. Loyalty programs offer dwindling promises as airlines are forced to follow the footsteps of other industry pioneers that faced similar issues.

The could be fraud risk with emerging payment options and passengers do worry about security and privacy of their information, especially when it is stored in the cloud or available online databases. The good news is that travel isn’t the first industry to test out these emerging options. Effective management strategies, first designed for the pioneering retail sector, are available and scalable for travel. Solutions are derived from rule-based service policies and intelligent feedback. 

As for payments, the real challenge is that each payment method has its own risk factors. It’s necessary to plan accordingly—for each different payment method you accept or new technology you embrace, carefully research any security vulnerabilities, and have a solution in-place to mitigate that risk.

But airlines would need to respond swiftly to emerging developments in the retail sector.

The fact is, today’s customer is a very different consumer than those of the past, and the gap between travel and retail is closing quickly. In order to compete, conversion is king. This means being able to identify your customer’s wants and needs, then serving up options that meet or exceed those expectations.


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