Why do passengers get upset with airlines?
Is it because the price of jet fuel just went up? Or is it because they’re waiting at baggage claim wondering what happened to their luggage? Or is it during any other troublesome touchpoint (check-in, boarding, arrival) where passengers feel helpless and frustrated?
To become more like retailers – which means being data-driven and customer-centric – airlines don’t need to “boil the ocean” or completely shed their legacy past (it took retailers decades of incremental change to transition from legacy systems). You can start by solving common passenger problems with insights from simple passenger data, helping you get the right merchandise to the right customer at the right time and making the most of your selling opportunities on the day of journey.
But first, you need a direct (i.e., mobile) channel to passengers. The mobile channel allows airlines to empower passengers for self-service, personalize passenger experience and engage with passengers before, during and after the flight. That’s how Starbucks and other major retailers have made their mark – putting the customer at the heart of everything they do – and that’s how we’ve built the airline commerce platform to help airlines be better retailers.
Simple Solutions to Common Passenger Problems
We all know the problems that upset passengers – long lines, lack of information, busy desk agents, packed flights. The problems may seem entrenched, but the solutions are hiding in plain sight. For example, why not enable passengers to track their baggage on their smartphones, and maybe for a small fee they can get their luggage before everyone else? This gives them peace of mind, reduces stress and gives them an incentive to spend a little more – because it will make their journey easier and better.
That’s the kind of simple solution that will endear airlines to the ‘connected’ traveler and create new selling opportunities on the day of journey. Airlines should focus on making improvements in areas that have the most immediate and direct impact on passenger experience, and work with partners who have already built the retail technology. It’s important to remember that airlines don’t have to re-create the wheel; open APIs make it easy to connect data silos and legacy airline systems to new travel technology solutions and retail platforms.
Here are 3 areas where airlines can take control of their data and be better retailers across the day of journey:
1. Machine learning / Retail analytics
Many have argued that artificial intelligence (AI) represents a “fourth” industrial revolution. And it’s not the quantity of data that matters – airlines already have plenty of “big data” – but their ability to draw insights from even the simplest data. That’s the power of machine learning. Through advanced algorithms, airlines can start using all the “little data” they already own to be better retailers and have a direct impact on passenger experience.
2. In-flight connectivity
Over the next 20 years, in-flight broadband connectivity is expected to increase ancillary revenue by $30 billion. But IFEC opportunities will be limited unless airlines have a retail platform in place to drive offers and sales through the direct (i.e., mobile) channel. Onboard connectivity will open up new revenue opportunities, but airlines shouldn’t depend on in-flight connectivity to be better retailers. They know enough about their passengers to make smarter inventory decisions before the flight and extend their selling window to after the flight – why limit your airline to in-flight selling?
The path to ancillary revenue gets easier as passengers can make payments in multiple forms and currencies, including cash + loyalty points and cross-border payments. The mobile channel allows airlines to break out of the “payments and hardware” approach to onboard retail (i.e., clunky POS devices), letting passengers control their own purchases, from their own mobile devices, before, during or after the flight. Payments are one of the most important and easiest areas for airlines to create a great passenger experience.
Don’t Wait, Start Now
By using passenger data to get the most out of these three areas – onboard retail, in-flight connectivity and payments – airlines can immediately become better retailers and free valuable data from its silos for use before, during and after the flight.
You don’t have to wait for the all-encompassing, whole-system solution – you don’t need to “boil the ocean,” in other words – your airline can start making changes now, where you are with the data you already have. Focus on basic investments (mobile apps, mobile wallets, personalization) that will give you a position of strength and profitability onboard the flight and throughout the day of journey. That will lead to ancillary revenue but also more satisfied and empowered passengers.
Want better airline retail? Schedule a demo of our new airline commerce platform and transform your onboard retail program one passenger experience at a time. You’ll also like our recent blog on what our coffee cups teach us about ancillary revenue.