Cruise lines, loyalty schemes and train operators can benefit from merchandising technologies and techniques just as much as airlines, says OpenJaw Technologies.
Airlines are the driving force behind the merchandising and retailing zeitgeist. Amadeus' oft-quoted figure - that ancillary sales can bring in an additional $130 billion revenues for airlines by 2020 - is compelling.
But other travel providers are also invited to the retailing party and some of them are there already. There is no easily accessible research which shows how much additional revenue is up for grabs in these other sectors, but the opportunity exists.
Speaking at OpenJaw's first t-Retailing Summit since its takeover by GuestLogix, MD Kieron Branagan referenced a number of OpenJaw customers which are seeing the benefits of adopting a retailing approach to their brand dotcoms.
Voyages SNCF is using OpenJaw to power its Instant V brand which bundles seats on trains with event tickets, helping the train company create a new identity as a tour operator.
Asia Miles is a wholly-owned subsidiary of Cathay Pacific, and has more than seven million members worldwide. Michael Yung, its head of eProduct and technology planning, said that Asia Miles was a global business and needed a technology partner which could supports its "multiple earn, multiple burn" approach.
Yung also offered an interesting take on segmentation, one of the many subsets within retailing. "We don't segment people according to their age and gender but more in terms of how they interacted with us last month." This represents a sea-change for Asia Miles, with Yung now setting up a data analytics team to get the most out of the data it has.
Branagan also talked about OpenJaw helping Four Seasons Hotels to sell its own on-property ancillaries such as restaurant bookings and spas.
Cruise-ferry business ColorLine carries 4.2m passengers a year, mostly on its Oslo Norway to Keil Germany route. Its CIO Marianne Gade Gorbitz told attendees that fares accounted for 23% of revenues, with on-board spend accounting for 65% ( the rest comes from cargo).
Upselling on-board amenities in advance is a priority for the business - the core inventory product of a ticket operates in a very low-margin and highly competitive environment. Not unlike some airlines.
Event moderator Ian Tunnacliffe picked up on this in his closing remarks, noting that the high proportion of revenue that comes through on-board retailing "is at a level even [Ryanair CEO] Michael O'Leary would be proud of..."
It is worth noting that as well as having an appeal across travel sectors, retailing is also a global phenomenon. At the event, OpenJaw announced a many-layered deal with China's Hainan Airlines. The deal is noteworthy on a number of levels, particularly the way in which OpenJaw worked with Travelsky on the deal.
The $130 billion figure from Amadeus does not give a geographic breakdown, but quite a lot of this must be coming out of China as its domestic and international air industry continues to grow. This means that Travelsky is also a big part of the retailing and merchandising landscape, if only because it is the gatekeeper, deciding which tech providers can work with which airline and on what terms.
OpenJaw is one of a number of tech businesses which have nailed their colours to the mast of merchandising. Any travel provider interested in this has a range of partners to work with.
But merchandising and retailing is not about plugging in a bit of kit and watching the revenues flow. As Mark Lenahan, SVP product strategy said in his presentation: "Retailing is not about the technology, it's about the mindset."
Airlines need to think differently. "Every O&D [origin and destination] is a different market," he suggested. And presumably, each of these markets requires its own retailing approach.
The focus on additional revenues has been in place for some time. Now that the technology is able to deliver it, the onus is now on senior execs in travel to embrace that technology and use it to kickstart a business transformation. The pain-point for OpenJaw and other businesses is that quite often changing how a business thinks is a lot more tricky than changing how its IT platform operates.
NB: Disclosure – author’s attendance at the T-retailing Summit was supported by OpenJaw Technologies.