As technology continues to develop at a rapid pace, how can airlines design their retail strategy with future proofing in mind?
It is important to optimize total revenue across all channels – thinking about what can be sold beyond the seat for each set of customers utilizing all transaction data about the trip and customers preferences. Furthermore, we will see development of new digital products that can be merchandised and distributed in new ways.
Further, to future proof anything these days you need to have an agile strategy and processes. So that you can adapt to the changes that are bound to happen along the way. The one thing that we are sure of is that in 12 months time things will happen in our surrounding that we didn’t foresee. And with an agile setup we think that our retail strategy can have a longer lifetime than it would otherwise.
What would you say is the most exciting feature in your digital retail channels which is really driving engagement with customers?
Two things: 1) social dimension of traveling sharing, rating, recommending, guiding etc and 2) give the power to our customers to tailor experience in all dimensions for instance the proactive communication from us, participation in test panels and A/B testing different solutions.
How is your airline working to reach the next level of data insights and personalisation through retailing channels? Could you outline what this will look like?
Personalisation will have a significant value in revenue uplift and to enhance customer experience e.g. iIncreased conversion rate due to personalized marketing, ancillary revenue uplift, dynamic ticket pricing, and establishment of NDC (New Distribution Capabilities, the new travel industry standard for distribution).
Modern technology, paired with retailing capabilities and analytics, gives the opportunity to personalize the offer in all channels based on customer data and shopping context. More cost-efficient customer service through automated and personalized interaction in every touchpoint.
We have been experimenting with personalisation for quite some time. We are getting ready to organise our work to enable scale by automation including AI enabled insights and optimization.
Ancillaries are a key priority and area of opportunity for nearly all airlines, what would you say are your biggest priorities when thinking about ancillary development over the next 3-5 years?
Our priorities is to develop ancillaries for the growing leisure segment. This means for example bundling of seat and meal, or (kids)meal and wifi. Further to increase the attachment rate by making ancillary available across all channels incl APP and to Agents.
This interview is part of the Retail Advisory Board Report. Download the full report here.
In the last 12 months we have seen some interesting models around subscriptions for regular customers. Do you think the Netflix model is one which is ready to disrupt the aviation industry or is it just a passing trend?
The subscription model is here to stay. In SAS we have offered a solution for customers who travel frequently for many years (=Travel Pass). The concept of subscribing rather than owning has completely changed some industries already. If it changes the aviation industry in the same way is still unclear. I wouldn’t be surprised if it did. With great curiosity we are following the subscription models to see if consumers have an interest in adopting new models and also if we can enhance our current solutions.
What is the best retailing experience you have had outside the world of aviation? And what learnings would you apply to your airline? [this can be a real life experience or a digital one?
Considering how fast-paced retailing can be nowadays, the best retailing experience outside the aviation industry I have had is when delivery, service and payment procedure has been integrated under one easy-to-use platform. Key takeaways from this experience that is applicable to the aviation industry would be the service-minded approach and strive to deliver on time.
This interview is part of the Retail Advisory Board Report. Download the full report here.
