It is an open secret that players across the travel industry are looking to emulate the leaders of online retail, as customers start to expect the same level of personalization and service sophistication from every transaction, regardless of industry.
NB: This is a viewpoint from Adnan Saulat, general manager and travel industry specialist at Mindtree.
As customer adoption of digital technologies continues to accelerate, cross-pollination of ideas on how to serve these customers is also gaining momentum across industries.
Peering into the near future, it is both interesting and useful to look at trends in retail and banking, and to speculate on the ways in which we could adopt and adapt these for the travel industry.
The ‘Points-for-Purchases’ model has become commonplace and does not excite consumers (passengers) the way it used to. Loyalty programmes today reward shoppers for their actions and engagement rather than just purchases, so consumers are getting more sophisticated in what they expect from these, at the same time that some in the travel industry are making it harder to get points and rewards.
We believe that airlines in particular will have to rethink their approach to these, especially as consumers start to demand that the whole process be expedited to deliver more immediate gratification.
Controlling the value chain
This is a proven strategy of brands such as Apple, Bang & Olufsen, Nordstrom and Ralph Lauren - controlling the value chain from ‘creation to consumption’ helps to provide tightly curated, more compelling shopper experiences.
Despite charging premiums for this, these retailers have managed to achieve very high levels of customer loyalty and profitability.
In the context of travel, it would be interesting to see airlines and airports set aside the old debates on who owns the passenger, to instead collaborate to provide a compelling travel experience to its passenger.
Data science and next best actions
Retailers are heavily investing today in data scientists, data & analytics discovery platforms and tools that go beyond the traditional horizontal and vertical views of business.
In a world of choices where customer experience will form the primary basis of competitive differentiation, algorithms curate and drive unique experiences focused on convenience for customers.
Data science adds an extra layer of business intelligence to help retailers deliver personalised and meaningful campaigns that suit individual shoppers' needs. It’s only a matter of time before we see dedicated data scientists working their magic in the travel industry as well – the shift from seeing passengers in terms of their journey only to looking at them as long-term customers has only just started.
Mobile wallets & the cashless customer
2016 is set to be the year of the digital wallet. The introduction of Apple Pay in July 2015 saw a staggering 250,000 UK retailers on board on launch day. These are early days of course, for the ‘tap and pay’ model but payment limits will be lifted in the near future and this will create unique opportunities as we move towards the cashless (or at least a low-cash) economy.
This trend is not just a fantasy of card and payment processors – you can see it in action in Norway, which is already largely a cashless society. Tourists can pay for their airport bus fares, accommodation, meals, admission fees and even a coffee from a convenience store with a credit card or mobile wallets – you can do an entire trip without once incurring forex transaction fees or cash withdrawal charges.
P2P lending clubs that are funded by groups of individual investors have been gaining importance in banking. Peer-to-peer has already shaken the travel industry - think Airbnb and Uber - but we anticipate that more disruption is on its way as this model gains momentum in other niches such as finance.
Peer-to-peer forex is already here and would any of us be willing to bet against a future where P2P inventory exchange will happen?
Changing interaction points
Showcasing is at the heart of retail, and with digital tools there have been multiple changes in the way customers are interacting within stores. Virtual versions of fashion week, virtual changing rooms and virtual reality billboards all allow shoppers to ‘try on’ or ‘swipe’ through products and select recommended accessories.
For travel, these changes in touch points can help in inspiration based selling, feedback loops, servicing points and become a core part of the marketing strategy.
Moving fast AND slow
Retail and banking have many legacy applications that make it difficult to change and embrace what the new digital technologies can offer, just like the travel industry.
An API-first approach helps to circumvent the problem where certain functionalities can be exposed as services and orchestrated in the front-end layer to create end-user applications that are extremely rich in content and experience. This allows IT and business users time to approach legacy modernization and transformation in a more planned manner while still delivering the experience that customers want today.
This is just a brief discussion to whet your appetite – there is a lot more that the travel industry can do to deliver a better customer experience, by learning, adopting and adapting from other industries. Let’s get started!
NB: This is a viewpoint from by Adnan Saulat, a general manager and travel industry specialist at Mindtree.
NB2:Image by Shutterstock.