Ai Editorial: What is driving digital commerce today?

First published on 24th October, 2016

Ai Editorial: Digital commerce is one journey, which every airline needs to explore on its own. Yes, mobility, cloud, social media, big data and analytics, and AI are universal for all sectors, but there are distinctive hurdles, too, writes Ai’s Ritesh Gupta

 

Consumers are starting to expect the gadgets they use, the experiences they indulge in and the brands they choose to understand them and deliver what they are seeking.

IoT or Internet of Things is paving way for an era of personal, contextualized selling opportunities.

Airlines, like any business, need to prepare for an extended ecosystem for consumer IoT to blossom.  For instance, if a traveller is waiting at the airport lounge, he or she decides to use personal digital assistant and asks: “Can I have mango pudding during the flight? Is it part of my breakfast or lunch?” Is it possible for technology to answer this question? And can the price be known if the same traveller wishes to buy and can it be bought, say via Apple Pay, via the same device? Is this what is going to define digital commerce? 

So today one needs to assess the prowess of mobility, cloud, social media, big data and analytics and artificial intelligence while gearing up for digital commerce.

When we talk of the travel sector, buying a book is quite different from booking a seat on an airplane, or even adding car rental and a hotel room to an itinerary. The IT set up that supports controlled-merchandising, the fulfillment part or consumption of the service is quite different. Yes, this simple analogy depicts how triumphing in two vastly different sectors - retail and travel - can be a different ball game. Overall, when we talk of digital commerce, no doubt airlines have to chart their own journey.  Of course, there are areas that are universal, and all sectors need to look at – say cross-device targeting or content optimization. As Microsoft’s CEO Satya Nadella recently mentioned: business leaders are looking at engaging their digital customers, wherever they are. For their part, airlines definitely to overcome certain sector-specific challenges. We take a look where airlines can improve in the arena of digital commerce ahead of #MegaEvent16 conference to be held here in Toronto, Canada:

1.     Content:  Today digital commerce thrives on understanding the intent and the profile of the customer. But what’s the point if airlines despite investing in their product are unable to show the same product the way it needs to be shown. Also, the timing of matching intent with content needs to be perfect, too. So say, if I am looking at a flight that departs at 8am, then a sumptuous breakfast rather than a generic picture might do the trick. I just flew from New Delhi to Toronto, Canada for this conference. I wasn’t shown the food menu hours before the flight as I checked in (may be it was there, but not in the check-in flow). But the moment I sat on my seat, the in-flight screen showed me the list for dinner and breakfast. This at least prepared for me what was to be served over a period of 14 hours!

2.     Omnichannel experience: How can airlines lay strong foundation for the same? One of the prudent moves is to invest in robust API strategy. This will also ensure consistency in what airlines have to offer. Recommendations are generally based on historical or real-time interactive information. Airlines intend to interact with their customers and prospective customers through a variety of touch points and timeframes. APIs enable efficient connectivity to these various touchpoints and value aggregators can utilize these airline APIs to enhance their value creation to their customers. 

3.     Technology: The utility of IT infrastructure, especially in legacy carriers, is being questioned. Be it for merchandising or payments, it is often recommended that its time for airlines to change. For example, every payment method has its own underlying technology. Every mobile device has its own operating system. And then airlines’ legacy infrastructure wasn’t set up for alternate payment methods. “As for rewriting or migrating legacy infrastructure, we’ve learned from others in the industry that this is not a workable scenario. The best plan is to adopt technology that is modular in nature and can work as a stand-alone solution with scale and scope,” said a source.  As of today, an alternative is to separate the core PSS capabilities, which are essential to running any airline, from technology that is enables true brand and product differentiation. Carries are opting to control their own merchandising, e-commerce and API technologies, using platforms that enable airline control, faster speed to market, and flexibility – and move away from solutions that are hard coded or community-model based, or tied to a particular PSS or channel.  Airlines requires platforms that provides extensive business model control (rules based) plus strong product and channel management capabilities. These platforms must have a modular open architecture that fosters a partner eco-system for collaborations.

4.     Being flexible to boost conversion: Conversions in digital commerce can take a strong beating if airlines aren’t flexible to let travellers buy the way they want. It generally takes lots of browsing sessions across various devices to complete one travel-related transaction. What if I am ready to share a date before which I wish to buy a particular travel itinerary – airplane seat, hotel, car rental etc.? Can airlines lead the process of offering me everything depending upon what all I searched for, originating from their website or mobile app? Or what about paying via Apple Pay? Have airlines been slow in embracing new payment options? If the customer elects Apple Pay, they wouldn’t have to worry about typing-in all of their cardholder information for each purchase; that data could simply be stored and recalled at will. As a result, customers would be less likely to abandon a transaction. Of course, this could also be a double-edged sword. There is a kind of balance between streamlining the process and encouraging customers to buy without first thinking through a purchase. As a result, this could lead to buyer’s remorse, which could mean returns or even chargebacks at a later date.

5.     Digital enterprise: Every business needs to gear up for behaviorally targeted, device-agnostic, user-journey-centric experience. As Oracle points out, this “seems part science-fiction, part psychology, and part technology”! The pursuit of personalisation means gathering data, and collecting it, and then making the most of first party, second party and third party data. Also, there is a need to look at new platforms that allow entities to leverage artificial intelligence, machine learning and advance analytics. All of this also means investment.  And this is where the difference also comes in when we talk of airlines vis-à-vis other sectors. While certain operational areas can be digitized, certain can’t be automated with the same pace.  With technology becoming more pervasive, airlines need to digitize customer interactions. At the same time, all processes and staff involvement needs to be crafted accordingly.

Even as airlines look at digital commerce, like any business organization, they need to ensure they don’t spoil the customer experience One needs to ensure messages or ads don’t annoy a buyer, say post purchase communication.  There is a need to use CRM, marketing automation or campaign management offerings to manage multichannel interactions. It can be a long journey, but a fruitful one too.

For tweets from our conference in Toronto, Canada (Oct 24 – 26, 2016) – follow #MegaEvent16