Ai Editorial: Focusing on agile transformation with a pragmatic approach

14th February, 2020

Ai Editorial: Airlines and even organizations from other sectors in their journey of agile transformation show common characteristics. Plus, there are common pitfalls and challenges to learn from too. Ai’s Ritesh Gupta evaluates the same.

 

For organizations focused on agile transformation, there are certain common guiding ethos. They revolve around continuous learning and adjustment, there is collaboration among cross-functional teams and development teams iterate towards optimal outcomes by developing new solutions incrementally.

Concepts like Agile Scrum methodology (a disciplined way to solve a problem) and Minimum Viable Product (MVP) are integral to what is underway to deliver business value faster. Be it for an airline opting to run two different tracks, including the new one for being a part of today’s digital economy, or paving way for the entrepreneurship mode via a venture capitalist arm, airlines are moving along.

Are airlines showing signs of taking the leap into the future, combating organizational/ cultural defiance, limitation of this industry’s legacy technology and operational silos? What there is to learn from the initiatives taken by the likes of Ryanair, AirAsia, JetBlue, KLM, Etihad etc.?

Key areas

  • Leadership and internal alignment: Of utmost importance is senior management involvement and clearing stating the plan going forward. In case of American Airlines, the team asserts it is playing an infinite game. Transformation is reflecting in areas, where the passenger experience generally has been stifled by old methodologies. Any undertaking of this magnitude needs to be top-down driven, with incisive leadership laying an astute foundation. The executive leadership must own the same. Then work it through the entire organization, break down the barriers for the working group to act on it. Not a straightforward task when one considers that an establish carrier tends to feature over 50,000 employees and in certain organizations, even over 100,000. It is vital to strengthen the organization with the right skill-set, as shown by Lufthansa Innovation Unit in which the team mainly comprises executives from the start-up ecosystem.

  • Learning and adapting: As retailers, airlines are keen on expanding the basket of offering and changing the approach as well.  An organization of Lufthansa Group’s stature is clear that just selling a flight ticket and air ancillaries isn’t enough. The group is interested in understanding consumption patterns, for instance, the superapp model in Asia, as it believes the travel chain is now an infinite, relational loop, rather than being a linear one. For instance, how Didi and Grab are building on the mobility use case.
  • Data alone isn’t enough: As shared by an ex-CEO of a hospitality technology company, data alone cannot facilitate the process and pave way for desired results. Rather accessibility, acting on it, customer support, training, backing employees and ending up with the development of a customer-centric culture is key.
  • Benefitting from cross-collaboration with a structured approach for every department: A particular department (for instance, one responsible for payment optimization) interacts with other teams on a daily basis, but not without putting the requisite infrastructure and mechanism in place that paves way only the relevant team and system coming into the play. (How KLM agility is playing its part in payment optimization at KLM)?
  • Doing away with process-centric approach: When there is supposedly an ecommerce/ digital business sitting under the same roof as the operational business it tends to be get slowed down, caught up in procedures and processes that weren’t  designed for nimble and disruptive growth, but were rather designed for operational delivery, regulated delivery where it not about speed, but it’s about accuracy, and quality and safety. So it is imperative to let the e-commerce team to functional independently, and capitalize on the digital/ data economy wave. 

Organizations like Etihad and Lufthansa have worked on ways to counter internal barriers, especially ones that are associated with operating in silos. Encouraging employees to learn, adding staff with new skillsets, counting on the proficiency of self-organizing cross-functional groups, and speedy learning via shorter cycles is a common approach to agile transformation.

 

Ai has planned #AncillaryRevenue Conferences in Berlin, Bangkok and San Antonio in 2020:

https://lnkd.in/fGSVujK

 

Ai Editorial: Airline offers and shopping, what’s there for shoppers?

11th February, 2020

Ai Editorial: It is imperative for airlines to assess how travel shoppers perceive the overall value while shopping via the indirect channel. This would improve once intermediaries and technology specialists respond to the call for better presentation and UX design for discovering airline offerings, writes Ai’s Ritesh Gupta  

 

Airlines are looking at investing and structuring their teams around several areas – product management, customer data platform, data analytics, IT set up etc. to serve the customer throughout their journey.

The entire plan around modern retailing starts from understanding what the travel shopper is looking for, and then working out an itinerary. An offer could include only a flight ticket (along with air ancillaries, bundled or unbundled) plus other products (travel-related ancillaries and even other products, again bundled or unbundled).

An integral part of airline retailing is enabling the shopper, be it one from the leisure segment or the corporate traveler, to view the complete offer. From distribution perspective, NDC is a messaging standard. It isn’t an answer to the entire organizational investment to support their retailing plan.

In the distribution world, the complexity primarily comes from the fact that in the indirect channel, the industry is attempting to utilize systems, fare filing etc. not designed to manage product bundles or ancillaries in general. What airlines have been finding attractive with NDC is doing away with filing of fares, and all priced offers to be created by the airline’s Offer Management System.

Just not about crafting the offer

Airlines assert that they can manage the offer on their own channels, but presenting flight-related options or offers to customers booking elsewhere tends to be a challenge.

For their distribution mix, other than the commercial aspect, airlines are looking at how their third party distribution partners are gearing up to enable the shopper to choose the offer that is right for them. 

The likes of Amadeus, Sabre and Travelport acknowledge that with options such as branded fares, a la carte ancillaries, bundling, plus dynamic NDC offers, travel technology and distribution entities have to prepare for  - how to present the assorted offers in a simple and comparable way. The airline might have worked out a compelling offer, but equally important is the fact the same resonates with the shopper, too. So travelers must fully understand the offer from the choice that is being presented before they make a commitment. Being in a position to price continuously or offering certain content only via NDC-enabled channels won’t serve the purpose if airlines and the industry at large fail to counter the hurdles associated with displaying of richer content. Airlines need to ensure they have a way to display and sell their dynamic inventory and products/ bundles.

As carriers increasingly work on differentiating the product and tailoring offers, and highlighting the same, travel resellers, too, have an opportunity to demonstrate the value they bring to indirect selling.

A positive development in this area is a set of data standards (in NGS) being shaped by ATPCO, and the initiative to work on the same region-wise. This is expected to enable travel intermediaries to better present, sort, and find the airline products and services travel shopper are looking for. It is worth following how channels utilize the same going forward to integrate content into luring shopping displays. Travel content continues to become more complex due to branded fares, a la carte ancillaries etc. and accordingly the third party channels have to respond.  Travel aggregators are working on ways to let one request, compare, and book NDC Offers.  ATPCO’s initiative will establish common standards for amenity data, providing a simpler, intuitive, graphical representation of each product’s attributes, whether they are included in a fare or available for additional cost.

As for the interface and overall UX on OTAs, meta-search engines etc., it is expected that the travel industry is going to evolve to pull in more information from their travel shoppers about what all they are looking for and accordingly come up with ranking of offers not just fares in the search results. Comparing what all each airline has to offer on a mobile device plus enabling shoppers to take a decision accordingly is one huge undertaking that various stakeholders in the indirect distribution value chain need to take – be it for GDS, search engine, OTA etc.

 

Keen on exploring topics related to digital commerce?

Ai has planned #AncillaryRevenue Conferences in Berlin, Bangkok and San Antonio in 2020:

https://lnkd.in/fGSVujK

Ai Editorial: 6 ways to improve voice-enabled travel shopping

6th February, 2020

Ai Editorial: Voice is the next frontier for travel e-commerce players and travel technology specialists. Voice technology has been around for a while, but still has a long way to go when it comes to answering complex searches/ questions, writes Ai’s Ritesh Gupta

 

Asking Alexa to pay for gas in the U. S. or ordering a Starbucks coffee via a Tmall Genie smart speaker in China are the sort of developments that make voice technology irrefutably exciting. In this case, technology is becoming a stronger ally. Simply because it complements a more natural style of interaction: the spoken word.

The fact voice, be it for search on an interface or via an assistant, simplifies the task in hand makes it a luring proposition. And on top of it, if the context is understood and user privacy is respected, then it is definitely a game-changer in the arena of shopping.

No doubt, it will revolutionize how people find/ learn and plan their travel. The likes of Virgin Trains, Expedia, Kayak, easyJet etc. have proved that the travel  sector has been making swift progress in this arena.

It’s about the spoken word, so has to be understood first

Digital voice assistants such as Apple’s Siri, Google Assistant, Amazon’s Alexa and Microsoft’s Cortana are widely known today. As assistants or interfaces within a digital platform facilitate voice interaction within our homes, work and cars, the opportunities for brands, too, increase.

If we talk of devices, consumers are buying voice-enabled products at a rapid pace. Voice search is also a common phenomenon now. According to a study initiated by Amazon Pay last year, 20% of American consumers are likely to buy a product or service using voice in the next three years. At the same time, from users’ perspective, there is a lot to learn and voice-enabled shopping era has just begun. Google acknowledges it. Amazon, too, says we are in the very early stages of the third era – voice.

The fact users still prefer text-based searches for more complex searches/ questions indicates that voice-based search or interaction isn’t there yet.

It still boils down to where it all started i. e. facilitating a task, search or a transaction via the spoken word, and for that the words (an even the intent) needs to be understood. But comprehending is an extremely challenging proposition. Google highlights the same. The search giant comes across billions of searches every day. But 15 out of every 100 searches ones it hasn’t seen before. So the team has to find ways to produce results for queries it can’t anticipate! With reference to voice search, specialists also point out that the main hurdle at the moment is - unable to really handle “why” and “how”  questions, be it for powering search via a digital interface or featuring in an interaction with a personal assistant.

Signaling progress, Google recently shared that with its neural network-based technique for natural language processing, the focus is on processing words in relation to all the other words in a sentence, rather than one-by-one in order. Google is confident that its algorithms are starting to comprehend certain nuances better, for instance, the word “to” and its relationship to the other words in the query.

In terms of direct investment, travel companies are refining their interfaces, so that they can facilitate seamless journey.

Preparing for voice-based experiences:

  1. Voice-first mindset:  Start and continue to focus on voice-specific requirement. How can voice travelers find a solution to a specific problem?  Which aspects of the trip through current digital channels are cumbersome or tedious, and how can voice make the experience better?
  1. Skyscanner recommends that companies should start by creating content that sounds ‘natural’ - natural language and branded search terms. Also, focus on search engine optimization of the voice channel.
  1. Amadeus recommends that one needs to craft clean, fast and intuitive UI for users to search for flight and hotel offers, both by voice and chat.
  1. Think multi-channel: Let shoppers start checkout on any platform, for intsance, mobile app and complete the purchase via an assistant, or vice versa.
  1. Work out a simple flow for transactions.
  1. Focus on privacy and security

Connected living

Ecosystems like Alibaba and Amazon are driving new experiences.

For instance, in case of Alibaba, an order placed with Starbucks via a smart speaker can be tracked in real-time and gets delivered within 30 minutes. In addition, connect their membership accounts to the smart speaker, plus receive personalized recommendations.  All the sectors, including the travel industry, need to focus on connected living. It means our lives, across our respective homes, offices, cars etc.,  – are connected via smart devices. These bring together data, voice, video etc. to facilitate incessant experiences, as per our personal needs. At the same time, it shouldn’t be forgotten that people embrace technology for a better living that includes safety, and have high expectations around how those devices and even interactions handle their privacy. Manufacturers of voice-assisted IoT devices have to combat consumer fears regarding security and data privacy.

In its recap of this year’s Consumer Electronics Show (CES), wirecard highlighted how the way we travel, shop and work will continue to change dramatically this decade. For businesses to not just survive, but thrive, they need to shift with the times and provide new, integrated commerce experiences – whenever, however and wherever the consumer expects them. And expect voice-enabled experiences, to be an integral part of the same.

 

Keen on exploring topics related to digital commerce? Ai has planned #AncillaryRevenue Conferences in Berlin, Bangkok and San Antonio in 2020:

https://lnkd.in/fGSVujK

 

Ai Editorial: Being part of every possible travel itinerary – are airlines ready?

28th January, 2020

Ai Editorial: Be it for offering a complete trip itinerary themselves or being a part of a travel-related transaction on any ecosystem or a superapp, it is imperative for airlines to a find way to facilitate the same, writes Ai’s Ritesh Gupta

Digital commerce is increasingly becoming intuitive and personalized, making it easier than ever for shoppers to close in on what they are looking for.  An area where the likes of Amazon and Netflix excel relates to predicting the intent of the customer, with algorithms coming up with a precise recommendation.

Now imagine looking for a travel itinerary on any digital platform.

If it is on an airline digital platform, an itinerary could include flights, featuring both full-service airlines as well as low-cost carriers. Plus, it could include diverse transportation options, for instance, flight + ground transportation. Chances are that the airline you chose for your search won’t be able to produce desired results, including for the first option owing to the fact it might not have any arrangement with another carrier beyond a certain destination. 

Another aspect is how to be a part of today’s digital economy, where an airline just comes into the picture with its flight or even travel inventory, for selling via a superapp or Amazon.

Progress

Travel retailing can’t be compared with shopping for books or paying for video streaming. The consumption pattern and the fulfilment part of taking travellers from one destination to another is unique, quite different from other product categories.  But airlines do acknowledge the need for simplifying travel.

Evaluating the first aspect i. e. related to multiple flights (an itinerary featuring multiple airlines) hasn’t been easy. Till date it is not easy for airlines to connect their own products with those of other airlines. There are several limitations when it comes to traditional interlining and code-share agreements , for instance, the choice of partners. In this context, the emergence of concepts such as virtual and real interlining is a welcome change. A player like Air Black Box is enabling airlines to connect inventory, irrespective of reservation system, via API integration, and sell cross-channel ancillaries. Another  company, virtual interlining specialist Kiwi.com, recently started powering the sale of other airlines’ tickets on airasia.com.  A point to note – there are no competitors’ flights offered on routes that are already operated by AirAsia. As for the work being facilitated by IATA in this space, it is being highlighted that without the interline feature, IATA’s XML-based data transmission standard, NDC, is incomplete.

According to IATA, the Shopping and Order Management schemas will enable airlines to send requests for offers and associated services to their interline partners, and manage the resulting booking and servicing, including for ancillary products. As highlighted during one of Ai’s conferences last year, there are critical financial changes that come along with the adoption of NDC. Be it for no use of filed fares to no pro-rates to the creation of e-tickets (only goes away with the ONE Order implementation), a lot of areas are being evaluated as airlines look to control the offer.

Questioning the status of NDC and interline aspect, a section of the industry suggests that the work behind virtual interlining products by certain players - dohop, kiwi, Air Black Box – could possibly be a starting point for implementing NDC interlining. 

Beyond their own products, the industry is also pointing out that airlines can tap mobility as a service (MaaS) segment, offering an interconnected experience via their own digital assets covering all of the transportation requirements. Entities like Lufthansa Innovation Hub assert that there understanding of travel and mobility is no longer linear and transactional. It points to the fact that airlines are working around ways to look beyond the air product, plus they are looking at integrating their offering into any ecosystem or even a relatively new platform such as a superapp that they haven’t worked before.

Also, for a travel e-commerce company to be a complete retailer, an integral part is to present travellers with an array of travel products, offer choice, facilitate a frictionless transaction and support them all the way to consumption and fulfilment.

It is heartening to observe that the entire industry is attempting to improving upon on this sector’s underlying processes (every airline’s IT strategy is unique, thus they may decide to take relevant/ best of breed components from a range of suppliers), and also trying to make the most of datafication and IT trends to be a part of a digital economy. It would be worth following, how by using NDC as the distribution protocol, and creating the OneOrder standard, travel merchants would streamline the entire travel journey to make it frictionless and seamless. All of this is going to pave way for those players to be a part of travel retailing, too, mainly from the non-travel commerce arena, ones that don’t have any hint about Electronic Miscellaneous Documents! Let’s see how carriers collectively build on their much larger pool of APIs and third-party content providers to serve the travellers on any platform the traveller opts for.

Keen on exploring topics related to digital commerce? Ai has planned #AncillaryRevenue Conferences in Berlin, Bangkok and San Antonio in 2020:

https://lnkd.in/fGSVujK

 

Ai Editorial: Gearing up for the era of automated personalisation

4th December, 2019

Ai Editorial: Personalisation models in e-commerce are not only looking at aspects like predicting a visitor's likelihood of conversion, but machine learning deployed to match different offer variations to each visitor also adapt to changes in visitor behaviour, writes Ai's Ritesh Gupta

 

There is greater clarity on the journey personalisation today.

Be it for being adept with data (it has to be captured, pooled, processed and analyzed) or personalisation being an ongoing journey, an organization has to prepare and remain diligent.

For instance, in case of delivering targeted content to digital visitors, there is a need to create a personalisation rule (meeting conditions such as mapped behaviour, a certain score etc.), personalize the content (content based on the conditions in the personalisation rule), the layout etc. For all of this to work, the quality of data counts. As it turns out in case of personalized content, it is served on the basis of all the behavioural data about the visitor, plus machine learning deployed to match different offer variations to each visitor also adapt to changes in visitor behaviour.

The much-talked about individualized/ hyper-personalized offer is all about an individual offer based on one's preferences, activities and behaviour. In the ideal conditions, each individualized offer is unique, as shared by Comarch in a recent blog post. The objective of personalisation is to interact with a visitor in ways that optimize for a desired result featuring that individual, such as higher spend, continued loyalty, etc. It is about influencing a customer’s behaviour.

As for the progress being made in e-commerce, specialists already talk about automated personalisation. It not only looks at areas like predicting a visitor's likelihood of conversion, but the model also is trained to focus on a section of traffic to sustain learning throughout the life of the activity, and evaluate evolving preferences of the visitors.

There is provision for using offline data, propensity scores or other custom data to build personalisation models.

No magic bullet

It is fascinating to assess how machine learning helps in assessing the most effective content when targeting diverse visitors. It happens over a period of time as the algorithm learns to predict.

Algorithmic optimization isn’t an overnight phenomena; it entails a layered development of ever-increasing complexity. Plus, machine learning isn’t a magic bullet, capitalizing on its prowess demands diligence and a methodical approach. It one of the many building blocks that lays foundation for an astute loyalty initiative. In the initial stages, don’t target BMW of machine learning, recommends airline loyalty and big data expert, Mark Ross-Smith. Rather than thinking of AI, focus on simple things. For example, first target simple areas like identifying and addressing a traveller. “How to address someone in the right way at the right time,” he points out. A connection between a brand and its customers will build over time, deepening with each gratifying interaction.

Few key takeaways:

  • Personalisation requires clear vision, resources and investment. From the outset, the roadmap needs to be clear. So how the graph of personalisation is moving along, the entire organisation needs to be aware of.
  • For any airline to achieve personalisation at scale – the success lies in being able to unite all of their data. Data-driven organisations ensure their customer data collection fits in with constantly evolving behaviour based on their context. So if an airline doesn’t end up connecting the dots and act on the context of a situation, then it would end up missing out on optimizing the experience.
  • Move towards “operationalising” actionable data. It is imperative to interact with passengers across channels from one core hub and having an ability to answer swiftly and aptly in context.
  • Airlines also need to plan for how to set up rules and decisions for all channels, so even if starting with one channel.
  • Delivery of content: Explore the pros and cons of coupled versus decoupled web content management architecture (for instance, in case of coupled architecture while the initial setting up is simple, scaling up is one issue. As for headless CMS can result in freedom while finalizing on a front-end user interface technology say for an app, on the flip side the CX or customer experience ends up being decoupled as well.  This would limit the ability to personalize the overall experience).  
  • As Comarch points out, as a general rule, higher personalisation levels require more complex technological solutions and carry a higher degree of risk, but also may result in a much more significant set of business benefits.
  • Don’t rush to eradicate the problem of silos. Be careful about pushing for a sudden change. People aren’t going to be responsive to “new jobs, new skills, and new people to work with” resulting from drastic steps. Don’t risk the continuity of teams.

 

Keen on exploring topics related to stepping up the conversion rate? Ai has planned AncillaryRevenue Conferences in Berlin, Bangkok and San Antonio in 2020:

https://lnkd.in/fGSVujK

 

Ai Video: Facilitating “in-the-moment” travel shopping

8th November, 2019

How often do you book a holiday, even for a planned destination, in one or few sessions? Have you ever felt a travel e-commerce brand has managed to pleasantly surprise you with the tools and the overall shopping experience?

It is fascinating to assess how online shopping tools, along with data signals (contextual, behavioural etc.), UX design and content, can understand “in-the-moment” intent and deliver a superlative CX.

Viewing the customer journey as a sphere 

What is limiting personalization? Tedd Evers, CEO, TripTuner points out that it is vital to connect with travellers “in a non-sequential manner around their ever-evolving set of core beliefs, attitudes and preferences”.

Evers added that in order to personalize in an effective manner, travel e-commerce companies need to drift away from the practice of crafting different personas to identify target segments. “These personas may even have their own purchasing journey mapped out.  But such personas are static representations.  If we’re trying to connect with a person’s current state of mind and inspire them to travel, we need to provide fresh, relevant ideas about where they want to be.  We need to connect with their current aspirations, recognizing they may be in flux as they move across the surface of our sphere,” he says.

Ai’s new 2020 conference dates: http://www.airlineinformation.org/upcoming-events2/370-2020-conference-dates.html

 

Ai Video: Should airlines spin off their FFPs?

5th November, 2019

How can airlines workout an apt structure for their respective FFPs?

Be it for integrating within an airline, working out it as a distinct segment, or carving out, there are several options, and as usual, the debate continues to be in the limelight. It is being highlighted that working out an apt FFP structure is not a binary decision.

Joseph DeNardi spoke about the same at #MegaEvent, held recently in St. Petersburg, Florida.

 

Ai’s new 2020 conference dates: http://www.airlineinformation.org/upcoming-events2/370-2020-conference-dates.html

 

 

Ai Editorial: Is ancillary revenue an apt barometer for excelling in digital retailing?

25th October, 2019

Ai Editorial: Share of ancillary revenue shouldn’t be the only criteria of how good an airline is when it comes to digital retailing, according to Iztok Franko, founder, Diggintravel

 

There are ample indications that airlines, be it for full-service carriers or LCCs, are not averse to transforming internally, for instance, opting for two tracks (one for running the organization as usual and one for innovation) and even setting up dedicated units to capitalize on the dynamism of the technology ecosystem.

Such initiatives have resulted in a culture of constant learning and adjustment as there is collaboration among cross-functional teams and development teams are focusing on iterating faster than ever.

Counting on digital assets to sell all trip essentials, vacation packages etc. and even running a data platform with focus on only selling products that they haven’t sold earlier (for instance, a hotel brand selling an experience in a destination even if the traveller isn’t staying with them), travel suppliers have come a long way in today’s digital economy.

As highlighted by the findings of the recently conducted Diggintravel’s 2019 Airline Digital Retailing Survey, when it comes to digital retailing, having a great business model and great product strategy is not enough.

Some of the key findings from the survey, featuring 45 airline digital professionals, include:

  • Airlines are indeed introducing new roles for real digital retailing.
  • Some airlines already understand that a systematic conversion optimization process is the core of digital retailing.
  • In addition to focusing on measuring and advanced analytics, airlines need to have a flexible martec stack that will empower digital retailing experts.
  • The vast majority (84% in this survey) say that their digital platforms are either not flexible or that it takes time and effort to implement new products and processes. Digital platforms should be designed in a way that empowers ecommerce and marketing professionals to execute campaigns and activities quickly, with minimal IT intervention.
  • By many, artificial intelligence is seen as the step that will take digital retailing to the highest level – and there are clear cases for applying AI, from identifying customer behavior patterns in data to dynamic pricing to calculating propensity for ancillary revenue product purchases to personalization.
  • Only 2% said they use data to create truly personalized offers, while 48% claimed they mostly have the same offers for all.
  • The level of organization usually reflects the airline’s business model and its digital retailing maturity. This is why there is no “one-size-fits-all” approach when it comes to the best organization. For airlines that are at the beginning of their digital retailing journey, centralized organization is probably a better model. However, for more mature and larger organizations, centralized organization could mean slower growth. Having many independent and agile teams can enable faster product development, optimization and experimentation.

Ai’s Ritesh Gupta interacted with Iztok Franko, founder, Diggintravel about the survey and its findings:

Ai: In your latest research, you have observed that the pressure on airlines to find additional sources of revenue is greater than ever. Can you share some of the trends that are emerging? 

Iztok Franko: We all see the yearly reports about how ancillary revenue is increasing and how more and more airlines want to generate more revenue from it. In our 2019 research, 60% of the 45 surveyed airlines said increasing ancillary revenue is one of their top 3 priorities. Less than 20% of airlines claimed that increasing ancillary revenue is not among their priorities in 2019. These percentages are almost identical to the research Diggintravel did in 2018. So, this is really nothing new or a novelty.

However, what we see as a new trend is that more and more airlines openly talking about becoming digital platforms, digital retailers. This combined with more investment into digital teams, platforms is something that we look into deeper when we do airline digital retailing research.

Ai: Airlines have been trying to innovate and expand digital offerings by focusing on opening digital labs, via their corporate investment/ VC units etc. How are these initiatives helping in becoming a digital company that sells all kinds of travel products? 

Iztok Franko: Airlines realized that they are not digital companies, like OTAs, or companies like Skyscanner, Airbnb, Uber who sell only digital products. Digital is not in a “traditional” airline DNA. High level of regulation, avoiding risk is something that airline industry was built on and in most cases rightfully so. However, consequences of this are large, hierarchical organisations that move and decided slowly and have yearly (seasonal) planning cycles.

On the other hand digital companies move fast, are built on experimentation and agility. To catch up airlines mostly innovate from outside (for example through start-ups, hackathons…), however we see the ones who are serious about long-term digital transformation investing in their own digital units. Like digital labs (example Ryanair), or Eurowings Digital which is a separate digital company under Eurowings. Eurowings stated the difference in how digital companies think and work compared to airlines as the main reason of why they created as separate digital company.

Ai: What according to you is the role of a Chief Digital Officer (CDO) in an airline, and how can CDOs play their part in airlines becoming digital retailers? 

Iztok Franko: Personally, I’m a very hands on person who does digital marketing, ecommerce in everyday life, with a hands-on approach. So, my view on CDOs is sometimes a bit critical. Airline digital narrative is very tech vendor driven, where airline tech vendors tell airlines they need to do very advanced digital stuff like artificial intelligence, 1-1 personalisation, etc. Consequently, airlines go for this silver bullet concepts, big bang digital projects or platforms that will solve their issues. In reality, we need to master digital basics first, a step-by-step approach were we build our digital skills and competences, instead of buying the best or the most shiny tool. With our Digital Retailing Framework we try to help airlines systematically asses their digital maturity in different areas and then provide them guidelines on how to advance step-by-step.

Ai: If you were to assess the goal of a group like Lufthansa vs. the likes of Ryanair and AirAsia in becoming digital retailers, what differences would you like to highlight? 

Iztok Franko: The biggest difference is the business model and complexity. Airlines like Lufthansa have complex IT, distribution landscape and digital (ecommerce) was never their only sales channel. This reflects in people, backgrounds, organisation…Although Lufthansa is doing some very good things. On the other hand, for LCCs ecommerce was only the sales channel, their organisation is more flat and they can move faster.

Ai: You mentioned that ancillary revenue generation isn’t an apt barometer for excelling in the arena of digital retailing. Can you explain the same via an example on how airline should gear up for digital retailing? 

Iztok Franko: What I meant is that share of ancillary revenue shouldn’t be the only criteria of how good an airline is when it comes to digital retailing. During my projects with airlines I’ve seen LCCs that generate high share of ancillary because of their business model (very unbundled model), however they still have big gaps and opportunities when it comes to digital retailing. For example how they use their data to create more relevant offers, communication, UX…Or how adept are they at digital analytics, conversion optimization, using marketing automation platforms.

On the other hand, I’ve also seen more traditional airlines doing some very innovative digital stuff when it comes to digital retailing. So, by comparing only ancillary shares one cannot get real picture of how good airlines are when it comes to digital retailing. This is why we evaluated airlines in 5 different areas when we did our research.

Ai: As per the study, only 7 airlines (15.6% and only 1 FSC) were classified as “Leaders”. Can you explain how these carriers are going about finalizing people with the right skillset, then nurturing creative, cultural and processual freedom to prosper? 

Iztok Franko: These airlines, the ones we identified as Leaders really recognise the importance of digital retailing. They have built their digital capabilities, like analytics, user research, they invest in UX development and build great digital experience on all digital touch points, have systematic experimentation programs, etc. They use data to be more relevant to their users, instead of one-size-fits-all approach. Again, it’s not one thing that makes them Leaders, rather systematic long-term investment in building their digital capabilities.

 

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Ai Video: Selling air ancillaries via interactive email

17th October, 2019

Amidst all the talk around simplifying travel, there are times when even simple aspects like checking-in or selecting a seat can be a tedious task or even results in abandonment of a session.

Finding ways to streamline the same also works in favour of an airline as air ancillaries are already playing a key role in stepping up the average order value.

Taking note of painpoints such as copy-pasting of the PNR or e-ticket code on the airline’s site and then going through several clicks, SeatAssignMate worked on an offering that allows passengers to pay for seats, select meals, and check-in bags once they open up their confirmation email.

As Duncan Sham, Founder & Product Manager, SeatAssignMate explains, his team has worked on a dynamic seat map. It is an integral part of an effort that transforms a static email into interactive content. For airlines, this gives their travellers the ability to assign or upgrade a seat directly in their email with minimum friction. The map is displayed right within the customer email, showing real-time airline data. According to Sham, SeatAssignMate connects the email content to the airlines’ PSS system in order to streamline in real-time data.

 

By Ritesh Gupta

Ai Correspondent

 

If you are keen on knowing how the dynamic, interactive emails/ messaging to increase ancillary revenue is shaping up, then join Brad Berkson, Chief BD and Strategy Officer, SeatAssignMate.com at this year’s MegaEvent (to be held in St Petersburg, Florida (29-31 Oct, 2019).

https://lnkd.in/fqV4JVH

 

Ai Video: Counting on headless air commerce for airline retailing

20th September, 2019 

API-led or headless commerce as a concept is being increasingly considered to offer a unified brand experience across all the touchpoints - web, voice, social platforms etc.

In such approach, commerce and content offerings are detached from the front-end and linked straight to all customer touchpoints through APIs.

Airlines, too, can focus on the same to control their respective ancillary offers, for instance, air ancillaries, by abstracting and enriching their API to support any front-end delivery, says Jonathan Newman, Chief Commercial Officer, caravelo, a Barcelona-based travel technology specialist. “Headless air commerce is about taking an airline’s product and abstracting into byte size widgets,” said Newman. “Deliver widgets ready to be embedded in any front.”

Focus here is on introducing widgets faster and ensuring a superlative experience across all the channels. Such e-commerce set up works by passing requests between the presentation and application layers through web services or API calls.

As for how to go about the same, specialists recommend evaluation of `front-end as a service’ to overcome hurdles linked with working on a custom front-end. It is being highlighted that such service paves way for experimentation for including new front-ends, learning and executing on a regular basis etc. “As an airline, if you have to re-render your seat map or recreate your booking engine for every new app, chatbot or mini-program it dramatically slows down your time to market and increases your cost and inefficiency. Instead, through headless commerce, your back-end is embedded in your front, making the deployment eminently scalable,” explained Iñaki Uriz Millan, CEO, caravelo.

For more, watch the video featuring caravelo’s CCO, Jonathan Newman

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