News | Distribution | TechnologyWearables enter the personalization fray in travelThis article was originally published onBy Viewpoints | February 23, 2015 As airlines look at multiple sources for data to create personalized offers, intelligence from smart glasses and smart watches could start to play an important role as consumer adoption increases.NB: This is an analysis by Nadejda Popova, senior analyst for travel and tourism at Euromonitor International.The fluctuating global oil prices have amplified hedging costs for many airlines, which, in turn, has put severe pressure on airfares, thus making fuel one of the most variable costs for the carriers.In such turbulent times, ancillary revenue streams and personalisation of airline offerings are effective tools for survival as a means of increasing margins, especially as global ancillary revenues of airlines were expected to have been nearly $50 billion in 2014, according to IdeaWorks.That said, airlines still suffer from a lack of sales flexibility, which limits their capacity to offer differentiated products to individual customers and to sell ancillary services.But if airlines can restructure their internal practices to allow full control of the passenger spend through aggressive innovation, ancillary revenue and personalisation strategies will be a financial success.An omnichannel approach to retailing will allow airlines to analyse different sources, building a complete profile of the customer in order to introduce greater personalisation.So airlines need to move from “transactional consumer information” – which airlines get from their GDS and their loyalty schemes – to information that responds to the consumer preferences, covering more than just the flight experience.However, this is more easily said than done. Many airlines question whether these value-added services are properly presented on GDS and if a lack of understanding and poor presentation of these services generates less revenue than could be achievable.Indeed, some airlines use this to argue that distribution power should lie completely with the airlines themselves.Thinking like retailers"Airline retailing mentality" must be built through strong connections between online and onboard operations in response to consumer preferences.Such strategic approaches will allow airlines to offer products and services based on the itinerary of the passenger, rather than standardised to all flights productsIn addition, customers are demand more in return for their business, which requires airlines to provide immediate and personalised rewards to passengers in order to generate loyalty.An online focused helps airlines will to collect data and facilitates customer segmentation.The next stage of establishing an “airline retailing mentality” will be to use this data to provide a personalised experience, from recommending products based on past purchases to displaying content tailored to personal preferences.Airlines such as Virgin America are innovating with the aim of boosting additional revenues by currently providing personalised in-seat sales of food and beverages. In-flight purchases for home delivery could be a natural extension of thisLearning from the bestAirlines are increasingly recognising their deficiencies and have started to look at best retailing practices from businesses such as Amazon, Wal-Mart, Tesco or Aldi rather than looking at the practices of other carriers.Amazon has a history of cutting-edge retail services, and its mooted offer of drone delivery and anticipatory shipping are in line with this tradition.Some of the text-book practices adopted by Amazon that have contributed to its competitive advantage over other market players are: Consumers able to track purchasesActive across a wide range of social media, offering consistently low pricesUtilising automatically generated emails informing customers of savings Amazon records consumer purchasing history, transforming it into a recommendations list. It collects enormous quantities of valuable consumer data about preferences and habits, which it then uses to better target consumers.All these aspects from Amazon’s strategic activities could serve as a base for airlines to build strong retailing platforms.Opening a new pagePersonalisation is a must for airlines’ long-term strategies in order to increase revenues and loyalty,. The biggest constraint for many is, the need to adapt their IT systems to be able to handle new products they want to offer.Despite the costs, airlines are also actively looking into wearable technologies as a way to personalise offerings.The ability to use key travel information obtained through such technologies to support the customer during his/her journey is in line with the trends identified as strongly influencing the 21st century traveller.Moreover, wearable electronics are expected to become an important tool for travellers, who will be increasingly connected to the internet through different types of mobile devices.Global Wearable Electronics, Volume Sales by Type 2013-2018:NB: This is an analysis by Nadejda Popova, senior analyst for travel and tourism at Euromonitor International.NB2: The source for the chart is Euromonitor International. "Passive wearable electronics" collect data and relay it to another device for processing; autonomous wearable electronics include a built-in processor and can be used as stand-alone products; smartwatches and smartglasses are defined as autonomous wearable electronics.NB3: Wearables image via Shutterstock.