Over the course of the past decade or so, many airlines have built high-performing ecommerce organizations from the “outside-in” – embracing the opportunity to disrupt the industry and deliver strong return on invested capital.
NB: This is a viewpoint by Dominic Clarke, senior vice president of global sales for Datalex.
Airlines increasingly followed this approach, embracing ecommerce as an opportunity to reduce cost of distribution and to extend new product offerings such as ancillaries for increased revenues. Extending the product offering beyond the air fare through digital engagement with the customer has delivered upwards of 30% in incremental or ancillary revenues.
Airlines have further experienced 30%+ increases in purchase conversions through innovative merchandising techniques such as the bundling of branded offers.
However, the growing demand for omni-channel retail requires a digital commerce system which must deliver an unprecedented level of control and agility to support consistent offer and order management across rapidly evolving channels and points of sale.
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Digital distribution channels[/caption]
The system must also enable an ever expanding ecosystem of developers, partner merchants and enterprise systems.
As global airlines increasingly converge on a model focused on revenue and cost outcomes which directly align to digital consumer engagement, the next challenge will be to future proof the commerce enterprise system which will be the primary system of customer engagement going forward.
Integrated commerce - beyond merchandising and bundles
Digital channels continue to grow exponentially and demand continual and rapid shifts in direction for the airline retailer. Merchandising and offer management must now extend beyond the B2B and B2C channel divide and converge to serve a digital C2B marketplace.
IATA NDC capable commerce platforms and continued industry alignment to IATA NDC are evidence of the industry’s willingness and intent to simplify and more effectively control all offers across all channels.
Offer Management
Omni-channel (the ability to seamlessly move between devices/channels with a consistent user experience) and multi-channel (the capability to sell in each sales channel such as B2C, B2B, airport, onboard, contact center, among others) require dynamic offer management.
This requires unified systems which can combine real-time customer segmentation with dynamic pricing strategies for any offer that generates revenue; whether a product (air, ancillary) and action (change, cancel, refund) or a bundle, package, subscription, redemption etc.
Yet, many concepts of airline pricing today originate in distribution technology developed more than three decades ago. A revolutionary change in the way airlines price and revenue manage is expected, as pricing systems will need to support dynamic and personalized offer management.
Order Management
This must be simplified and centralized to control the end-to-end purchase cycle of all offers across all channels while ensuring one single view of the customer throughout their travel retail experience.
Legacy single domain systems cannot support a reservation structure which can store and manage all offers in a common, consistent way. Best of breed commerce platforms are removed from constraints of legacy reservation architectures and are designed around the concept of a centralized customer record.
IATA ‘One Order’ is a very welcome industry initiative which will leverage NDC to modernize and simplify the order management process across all channels.
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Omni-commerce[/caption]
New digital distribution channels emerge at a rapid pace. Increasingly sophisticated ‘digital consumers’ require consistent, contextual and relevant engagement from the travel retailer, irrespective of the channel, device or touchpoint. This will require global travel brands to grow beyond traditional commerce management and future proof systems critical to compete in a digital world.
NB: This is a viewpoint by Dominic Clarke, senior vice president of sales for Datalex. It appears here as part of Tnooz's sponsored content initiative.
NB2Image by Shutterstock