Digital Innovations – A Necessity for the Travel and Retail Industries in the ‘New Normal’

Digital Innovations – A Necessity for the Travel and Retail Industries in the ‘New Normal’

The beginning of 2020 brought with it the hopes for a new decade. The year which started with bright smiles, successful project launches, and travel plans, has now become a long haul waiting for life to get back to normal. The change meant so much more to the people who spent their days within the airport. It didn’t seem like the projections for the travel industry would be achievable.

Looking back a few months now, we hadn’t anticipated this drastic change. Nobody ever thought that we would see a day where not a single plane would fly in the air, that there would be a global lockdown, or that crude oil would be so cheap! The COVID-19 pandemic has shown us a new world. While we are still trying to grasp the lifestyle changes we need to make, organizations and companies are trying to deal with lost sales and loss of revenues. The new challenge has also driven the need for organizations to re-think their approach and restructure. The trust with their customers can be built now only by ensuring that safety and sanitization are maintained, which is possible only by understanding the customer’s perspective. The challenge will be to revisit processes and abide by government-issued health guidelines.

At Pittsburgh International Airport, high-traffic floor areas are being cleaned and disinfected via robots using UV-C rays. JetBlue is cleaning airport terminals using a hospital-grade disinfectant and has also increased the cleaning frequency. T.S.A. officers need to change their gloves after each pat-down or on customer’s request. Delta is using a mist-based disinfectant via an “electrostatic sprayer.” While United Airlines has introduced their ‘all in one’ economy snack bag that contains a sanitizer wipe along with bottled water and snacks, other airlines are asking customers to eat food before traveling.

The pandemic has also brought attention to facts that were ignored. The retail experience within stores at the airport isn’t the same as the retail experience on the high street. Retailers at airports are yet to catch-up with the innovations that are happening outside of their world. With COVID-19, the need to invest in the digital transformation has strengthened. The challenge to maintain the same experience of a product/brand inside the airport and outside remains and is solidified.

The following innovations need to be adopted by organizations and the travel industry in general to ensure the continuation of their businesses. COVID-19 has definitely pre-empted innovation, which was inevitable due to the ‘more online interaction and less physical’ preference of the millennials:

1) Digital transformation: The key strategies for digital transformation are driving customer experiences with customer data platforms and personalization. Tracking customer interaction at every touchpoint within the airport, with the brands and their products enables better segmentation and predictive analytics.

2) Gamification / Virtual Reality: With COVID-19, hygiene and social distancing have become the norm. Gone are the days when customers tested sample products before purchasing. The panic of the pandemic is prevalent and here to stay as a part of our life. Companies will need to think out of the box. To avoid physical contact and still ensure customer tries the product before purchasing, several tools are available in the market today. Brands have their own ‘Virtual Try-on’ tools and quizzes to recommend products to consumers.

3) Contactless payment options: COVID-19 has emphasized the need for increased hygiene and sanitization. In stores, making cash payments is the riskiest transaction. The heightened sense of sanitization will make customers avoid such transactions. To enhance customer experience and their safety, contactless payments at retail outlets will be the new norm. Technologies like NFC can help brands to enable this.

4) Loyalty: Technology can be used to enhance loyalty for travelers by firstly integrating loyalty services commonly across all stores of the brand. Secondly, via an initiative to tightly couple loyalty programs of the brand with travel service providers (like airlines and airports). This way, consumers can see the added advantage of remaining loyal to a brand, and also enjoy enhanced loyalty since the services are integrated. Customers prefer value to price, and a tightly coupled loyalty program can enable it.

5) Super apps: Especially with most consumers using multiple devices and multiple channels for varied needs – booking tickets, tracking status, tracking loyalty points for the airline, buying products, etc. If all these different apps used by the customer can be clubbed into one super app, the benefits will be immense. The customer can use the same app to book their ticket, check status (of flights or product deliveries), make a purchase of a product from the brand, and use the same app to track loyalty points (for the airline and the product purchase). This connected app will enable the customer to have everything required under one umbrella. This again requires a well-integrated system of companies/brands with airports and travel service providers.

 

Conclusion

In summary, the above innovations need to become essential in organizations’ standard operating procedures to ensure that they can survive the new normal post-COVID-19. This is the opportunity for every organization to stop, assess their current set-up, and measure up for future innovations. The call for a well-connected integrated world is undying and will be here to stay, just as we tackle our new normal with the COVID-19, which is also here to stay.
It is possible that in the near future, a customer journey is well-connected and integrated – to ensure a seamless and safe experience.


Shwetha Jha, Principal Consultant at Mindtree

Last Call for Customer-Centric Retailing

Last Call for Customer-Centric Retailing

From this week, face masks are not mandatory anymore on European Union flights and airports (except in Spain and Italy), more than two years since the start of the pandemic. We may all feel like the pandemic days are about to be something of the past and that things are now getting back to normal. The truth is that some things may actually be changed forever. People worldwide spent these last two years adapting to the “new normal” and, although most of us wanted our lives to get back just as they were, some changes came with interesting challenges. It’s not just about people adapting to a new world. When people start to have new habits and think in different ways, the global market has to adapt as well.

One of the most affected areas was, without a doubt, the travel industry and now, two years later, things seem to be moving forward in a new direction instead of going back to the same place. Last year, online traffic increased by 11% in the travel industry, more than any other (ContentSquare, 2021). Airlines must face the reality of a changing travel experience in a post-pandemic world and create flexible solutions to meet the needs of the “new normal customer”.

change in online traffic of selected industries worldwide

The world was already on a fast-paced journey to digital transformation and the pandemic came to accelerate the rhythm of change. Many customers who were hesitant regarding online shopping are now comfortable with that new habit, and generations Y (millennials) and Z were already shopping online not only for plane tickets but for everyday things like groceries. These times, when the world stopped for a moment, brought much uncertainty, and a strong effort to strengthen digital solutions can be quite a challenge. Fortunately, many airlines are facing this situation as an opportunity and that can only lead us to an exciting future in travel.

 

Flying Above and Beyond Expectations

Customer-centric OTAs and travel suppliers are moving to the next level. Let’s take the example of Airbnb which just launched a new way of selling travel, based on the experience that customers are looking for. Or Amazon introducing a beta in the US to sell digital travel experiences. Airlines such as Southwest which was already leading in digital experiences just introduced additional mobile self-service options to enhance and personalize the customer experience along the travel journey. Travelers will be able to add for example an upgrade for priority boarding before leaving to the airport, instead of having to queue at the airport or call the contact center. All airlines understand now that their business model and digital ecosystem needs a serious revision.

flying above and beyond expectations

Imagine someone — we all know this person — who started a new job in this post pandemic scenario. What new challenges come to mind for this consumer who now has to create a whole office in the house? The journey has shifted completely. This person will spend some time on a thorough search for the right products and maybe find out some other products or services that were unknown before. There’s the space for recommendations where the store will gain the customer’s trust and loyalty.

It’s not just about providing the right product, the expectations are already high. The companies who manage to surprise their customers by going beyond are the ones who will win this innovation race. The companies who do this properly make their customer feel they matter all the time, and right in the device we all can’t seem to leave — the smartphone. It’s Amazon that lets you know your new ergonomic chair is arriving today, it’s the fitness app that sends you a notification that you haven’t been working out for two weeks, or any food delivery service that sends you a reminder that tonight is perfect to order tacos from your favorite place. When it comes to travel it shouldn’t be any less than this.

 

The Future Customer Experience Is Now

If we agree that the customer journey has severely changed with the last pandemic then it’s imperative for airlines to invest in extensive research on user experience.

Airlines could learn a lot from retailers that are investing in this customer experience more than ever, and it all starts with how much they prioritize user research. Tesco, one of the largest supermarket chains, realized how many customers were tired of commuting to the office in the city center because they didn’t have the ideal conditions to work from home. The result is that Tesco is now creating flexible office spaces inside their supermarkets. This is a clear example of companies that listen to the customer’s needs and provide solutions beyond expectations.

the future of customer experience is now

Concepts like innovation and flexibility have never been so crucial and, in the end, it’s all about who takes off quickly to this transition. The airline industry has been able to reach a certain level of modernization since the general adoption of the internet, however, this evolution is still deeply rooted in the same concepts and flows from decades ago. Low-cost carriers, for example, have been driving digital adoption and agile commercial policies, gradually augmenting their products. Even these companies are now realizing the need to move to the next level to remain relevant. It’s urgent to implement leaner technology and processes or rather to simplify and get rid of unnecessary processes.

The latest digital retail platforms, tools, and methods are getting increasingly important for airlines if they want to become true retailers. Air Asia aims to generate 50% of its revenue with non-travel / non-aviation related revenue by 2025. The ultimate goal is that airlines become completely customer-centric in every area. It requires getting away from legacy technology fast, which was built around transactions and not around the customer. This could mean the end of booking classes or fare filing and the beginning of a simplified and flexible process. Alongside innovative platforms travel suppliers will be ready to adopt existing next-gen services and, at the same time, guarantee a first-class ticket to future trends.

People want to travel, and only a few airlines have really used the pandemic to lay the foundations for the transformation journey and move with full speed – and low risk – to ensure they have a state of the art customer proposition. With additional challenges – and opportunities – that sustainability and new mobility models present there will be a lot of new players joggling for positions and some unforeseen ones such as rail becoming stronger again. At the beginning of the next decade, in 2030, we forecast a fundamentally different travel experience. If airlines do not grab the opportunities of digital retailing they risk increasingly turning into operating units for the players who will.


By Dario Martinho, Content Creator at Branchspace

5 questions airlines should ask about their transition to Order management

5 questions airlines should ask about their transition to Order management

When low-cost carriers designed their business models to simplify their business and reduce costs, they went ticketless. But why do legacy network carriers need tickets (now e-tickets) after all? Will they still need to issue tickets to customers who accepted their NDC offers? What are the steps for airlines to move to Order management?

 

Would we invent airline tickets today?

If you ask the question “what is an airline ticket, and can airline live without tickets?” pundits may argue that it is critical to many airline processes (which is correct), and it makes no sense to get rid of tickets. But if you ask the question differently “if we invented network airlines today, would we invent tickets?”, the answer will certainly be different.

In today’s world, network carriers are selling through travel agencies and through airline partners, they are operating at shared airports, and they are doing business like retailers, making offers to customers and delivering their orders. Indeed, they don’t need to issue tickets. Being ticketless and moving to orders is a goal shared by other modes of transport, like railways.

In September 2016 IATA published a report that studied the transition to order management, meaning retiring tickets from all airline processes and replacing them by orders. The report was drafted by Travel in Motion, on behalf of IATA’s airline distribution standards team. What are the key questions for the transition?

 

1 – Cost benefit analysis

The customers benefit from order management because they can easily create their own order and modify it before or during the trip. The airlines benefit from the increase in ancillary revenue, including for interline flights, and from the reduction in costs related to customer servicing and IT systems. Of course each airline has a different mix of customers and product offering, which will influence their analysis of the costs and benefits of order management.

 

2 – Impact on stakeholders

The report explores the vast impact on stakeholders of such a transition. Within each airline, customer service will access orders, ground and inflight staff will deliver orders, revenue accounting will process and settle orders, reservations will create and modify orders, digital channels will display orders, sales teams will notice the satisfaction of customers, revenue management will create offers than can be fulfilled in orders. Outside of airlines, interline partners, travel sellers, ground handlers, and payment providers will handle orders and benefit from them.

The PNRgov message containing Advanced Passenger Information, sent by airlines to governments prior the flights, will be based on Orders instead of PNRs.

 

3 – End state Architecture

The report recommends an architecture based on an “Offer and an Order management system” that support sales channels and rely on internal delivery and accounting systems. This architecture is free from any legacy record or message, such as PNR, E-ticket and EMD.

The alternatives include the “encapsulate” option, where the legacy records and message are encapsulated into orders, and the “on-top” option, where the core functions remain in the PSS and the new management functions are built “on-top” of the PSS.

 

4 – Approaches to transition

The report recommends the “staged” approach, as opposed to the “shadow” or “big bang” approaches. Indeed the approach that takes place in phases or stages help minimize risks. The steps can be defined by channel or by product or by function, which progressively cutover from the PSS to the new Order Management System.

Each airline may start the transition with a different configuration, either a PSS and a website, or already a merchandizing platform creating offers and an NDC API distributing offers. Each airline may have a different end state architecture in mind, which generates as many possible transition paths.

 

5 – The right transition

The report argues that different profiles of airlines may choose different paths, which find the best compromise for them. At a high-level, the three airline profiles are network airline, hybrid airline or low-cost airline, and within those profiles there are innovative or follower airlines. The decision criteria include cost/benefit, architecture, transition approach, impacts and risks.

 

Conclusion

In summary, the air travel industry has moved from asking “if” to “when” to “how” the transition will take place. In the “how”, the 5 questions to ask are: What are the costs and benefits? What is the impact on stakeholders? What is the end state architecture? What are the possible transition paths? Which transition is right for my airline?

The airlines which will get this transition right will be the first to deliver a smoother travel experience to their customers.

5 points to watch for business travelers who pick rail as an alternative to air travel

5 points to watch for business travelers who pick rail as an alternative to air travel

While safety, on-time performance and cost effectiveness made air travel the preferred mode of transport for business travelers, the new priority is on sustainability and carbon emission levels, and air travel cannot compete with rail on this metric. As business travel is coming back after the pandemic, is rail ready for business travel?

If we take a simple example of a trip from Geneva to London. By plane, the journey takes 1 hour and a half, produces about 100kg CO2 and costs about EUR 100. By rail, it takes about 8 hours with 1 stop (change station in Paris), produces about 5 kg CO2 and costs about EUR 200. Let’s assume the environment-conscious business travel favors low CO2 emissions compared to time and cost. What are the other points to watch when traveling by rail?

 

The itinerary

 

Air journeys including connection use “Minimum Connecting Time (MCT)” which build a contingency when connecting between two flights. Rail journeys don’t include MCT, i.e. an itinerary may show a 3-minute time between the scheduled arrival of the train and the departure of the next one, which is barely the time to change platform. This may work with Swiss railways that operate like clockworks, but not in other countries. Railways don’t track on-time performance of trains, in the same way FlightRadar tracks flights. Railways don’t check if passengers are on board and won’t wait for connecting passengers, unlike airlines. Railways don’t provide assistance in case of missed connections like IATA airlines do. These differences mean that it is safe to add contingency in the rail itinerary compared to what a website may suggest.

Websites may not recommend the best itinerary if they don’t search the right websites. For example, I searched a solution to go from Bremen to Berlin in Germany. The Kiwi website recommended a combination of flights via Palma de Majorca on the way out and via London (7 hour self-transfer from Gatwick to Luton) on the way in, whereas the direct 3-hour train connection was available on DB website.

 

The ticket

 

Air travel has made electronic tickets and boarding passes a norm since 2010. For rail, electronic tickets exist at national levels but are not ubiquitous for international journeys. In a recent example I booked a train ride from Germany to France using the SNCF (French railways) website which required to collect the ticket for the DB (German railways) segment on a kiosk in a French train station! Not only the delivery of tickets should be completely electronic and mobile, but in case of changes the customer expectation is to receive the new document on the mobile phone.

Intermediaries such as booking sites could help by bringing transparency. Unfortunately, websites like Omio don’t make it clear whether the ticket is booked directly with the rail operator or with Omio. The Terms of Use say that it may vary. From a customer perspective it is important to know, at time of booking, who to deal with in case of changes or refunds. Especially if the change is due to the operator, the traveler needs to be notified and proposed with alternatives.

 

The travel experience

 

The longer the journey the more important is the travel experience, for the business travelers who’d like to be productive. Forward-facing seat, wifi on-board, plug for the mobile and laptop, spacious table are examples of attributes valued by a business traveler. Assuming that the train cabin is equipped, the traveler should be able to book the seat and access the attributes.

While airlines have designed products for business travelers (calling it business class), railways still operate first and second, with sometimes very little difference. In another example, the fare difference between a first and second class on SNCF is 2 euros on a 52 euro fare, or 4%. The ticket can be modified with conditions in both options, bags are included and electric sockets are available in both options.

 

The disruption management

 

The longer the journey and the larger the number of connections, the higher the chances of missing the last train and ending up in a station closed for the night. While IATA airlines accommodation for the travelers who missed their connection, railways don’t have procedures in place. This is simply due to the nature of the contract with the carrier: the airline commits to carrying a customer at a specific time to a destination, whereas the railway simply allows the customer to occupy the car.

In a recent example in Germany, after all trains to France were cancelled for the day, I ended in a German train station at night, with DB offering to sleep in a parked train. There are no alternatives by bus or no hotel accommodation. Although the cancelations are not the norm, the business traveler must know that in this case hotels will be full and the only option to stay warm for the night is the car reserved to refugees and homeless people.

 

The refund process

 

The airline refund process is not designed for simplicity and automation. The airline fare may not be refundable, but the government taxes and fees collected with the fare are not due in case of cancelled flight and should be returned to the customer. I’ve not seen yet an airline ticket which can clearly show the refund value in case of a customer decision to cancel or in case of airline decision. This would not only add transparency but also enable automation.

In the case of railways, the complication is augmented by the lack of real-time traffic information. In my example above, SNCF didn’t know that their train stopped in Germany and I received a confirmation that the train had arrived in Paris, while obviously it was blocked in Germany. In the case of DB, the refund process requires to fill an online form and send it by post. The claim request is not valid without a “confirmation of delay” which is not provided by the carrier, defeating the entire process. In this case, I eventually found a hotel room, at EUR 100 for the night, which is unlikely to be paid by DB or SNCF.

 

Conclusion

I love traveling by train and live in a country with excellent rail services, Switzerland. But rail is designed for mass local transit, not for internal business travel. This article looks at the gap between the modes of transport from a customer experience perspective, trying to use rail for business travel.

It shows that there is a clear opportunity for rail operators to capture business travel demand in a time of sustainability-consciousness, until air travel deploys massive fuel alternatives becomes competitive from a CO2 emission perspective. Adapting rail for business travel means addressing ticketing, itineraries, customer experience, disruptions and refunds.

If any rail operators have already implemented some of the changes suggested in this article, I encourage them to comment below and I will gladly feature them in a future article.

American Airlines’ Alison Taylor on Enhancing Travel Retailing to Drive Recovery

American Airlines’ Alison Taylor on Enhancing Travel Retailing to Drive Recovery

During a breakout chat conducted at Aviation Festival, London, Alison Taylor, Chief Customer Officer, American Airlines, shared some of the airline’s changes to its retailing strategy as it adapted to the COVID-19 pandemic.

One of the strategies has been offering customers menu options to book ancillaries and services on-demand on the day of travel, such as requesting wheelchair assistance, adding a lap child to the booking, getting a day pass for the airline lounge, or booking preferred seats.

“Even now, you can buy flagship dining—which was only ever for our first and business class—for that day for that airport. They’re opening at JFK, Miami, and soon they’ll be LA. We’ve tried to become more nimble at the options we offer for the customers and how we deliver those offers. Of course, NDC always helps us with that.”

 

“We want people to be able to purchase where they want to purchase”

 

Taylor said the airline had employed an “educational” approach to merchandising, informing customers on the options available to them more than pushing a sale or a particular sales channel. “We want people to be able to purchase where they want to purchase. It could be via GDS, or it can be direct. That’s not for us to worry about. We just want the customers to be able to purchase it, but it has enabled some things for us on the retailing side that we’ve never done before.”

Rich content options available through ATPCO and Routehappy have helped the airline get creative in presenting offers to different customers. “We had rich content that we could supply whether you’re a leisure agency, corporate agency, or corporate direct. For us, that freed up that content. We have a lot of leisure operators absorbing that into their systems, making sure that it’s enabled through ATPCO and NDC. That has helped us to deliver the content they needed. We dealt with some cruise lines as well. [The COVID pandemic has] broadened the audience that wants that [rich content]. They had to have a lot of information available to their customers on travel, health protocols, safety, wellness, and the leisure agencies needed that quickly. We could do that by working with Routehappy and ATPCO… We’ll continue that journey now, but it was very much at the forefront of the pandemic because the leisure operators needed to inform their team members and also the travellers.”

Taylor shared that the pandemic has also resulted in a marked shift in buying habits and preferred sales channels and increased the demand for customer support teams.

 

“One of the things that we needed to do for returning customers—who were younger—[was to simplify enrollment].They weren’t going to fill out a whole screen of forms.”

 

“It’s quite different depending on the country, of course. When you talk about American Airlines now, one of our major markets is the US, without a doubt. In the US, we have seen that many of our travellers are buying through agencies because they need that extra helping hand, and they want the servicing aspect of being able to travel. I’ve been seeing many operators here while I’m in the UK, and they have seen that shift as well. So I’m sure we’re not the only ones. But, at the same time, we have seen new customers, booking on AA dot com, and new customers becoming AAdvantage members. We had to change our AAdvantage Program very quickly. One of the things that we needed to do for returning customers—who were younger—[was to simplify enrollment]. They weren’t going to fill out a whole screen of forms. They just needed a one-click to join the AAdvantage Program and become members. We did that very quickly. It’s something we’ve been talking about but hadn’t done. We did it in a matter of weeks, which greatly helped the number of young millennial memberships for AAdvantage. Also, even our corporate brand card—we have MasterCard, Citi, Barclays, of course, very strong here in the UK. We even had to change how we talked about our partnerships onboard and on the ground, changing the scripts to appeal to a different audience when we send to different channels…[Another] shift for us was people needing more servicing. We have large servicing centres, and we added almost 3000 [staff] to reservations. Because those that did book direct, and all those agencies, just needed more servicing. The calls were much longer. The calls to our reservation teams are five times longer than normal because they’re asking about border closures, border openings, and of course, what you’d expect about [travel health] protocols.”

 

“…recognize our customers and understand what they may need without constantly asking them the same questions again”

 

Personalization continues to be a priority for American Airlines, Taylor shared. “Personalization has been on our roadmap for a while—this is really important for us so that we can recognize our customers and understand what they may need without constantly asking them the same questions again. It even means—eventually—we can serve up different surveys for them as well…We just want to be customer-centric in using our data. I’m going to give you an example. If we know that you never buy flowers on Valentine’s Day, why are we serving you up via AAdvantage, something to do with a florist, right? So [we want] to make sure that we’re relevant at every touchpoint. Maybe we also know that you don’t open emails at a certain time. We can be relevant with that in our communication or the offers we are providing you, whether on the ground or in the air. It also helps us to adapt our offers. We want to get to the stage where we know that if you’re in your seat, we can utilize our IFEC data and understand what you watch, so we serve that up to you more naturally. That’s down the track, but those are the things that we’re working through. We’re working through with AAdvantage Program on entertainment, understanding whether you enjoy lounges, as well. Data enables all of that. Our customer journey is very important to us. My title is Chief Customer Officer because we want to put the customer at the forefront, not just commercial or business deals, etc. This is important for us. We’re completely enhancing our AA dot com app to make sure that we’re at the forefront of that. What the app will eventually serve you up will be more personalized as a result.”


By Marisa Garcia

Distribution

Panel: How does American Airlines plan to offer enhanced travel retailing to help drive recovery?

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