Why Should Airlines Think Like Retailers?

Entering into the travel retail industry may require a philosophical shift for some airlines. After all, may be experts at air travel but they have little experience in the retail (let alone e-commerce) environment. Airlines should be taking cues from the major tech companies in this, the age of information. Companies like social media, search engines, ride hailing / travel apps, and OTAs are transforming the way that consumers search and book flights, find hotels, hail rides, and in general - travel. These companies have access to a wealth of consumer data allowing them to provide a customer-centered approach to service.

What if airlines also had a customer-centric approach and became the sole retailer along the entire travel journey? What if airlines could personalize and control exactly where and when content is served, increasing the likelihood of making a sale? And what if an airline could enter into new markets to access untapped sources of ancillary revenue? And what if they did this before those major tech companies beat them to the punch?

Can airlines become travel retailers?

Some airlines are making the leap with highly anticipated rewards. AirAsia is developing their own e-commerce app that they estimate will become the major source of revenue for their entire airline business by offering lifestyle goods and services. They expect 20x increase in revenue from an equally expanding market. If this seems like a strange move, consider that there was once a time when the only competition for airlines was other airlines. But with the rise of big data, mobile, e-commerce, and on-demand services, the airline industry has become littered with potentially huge competitors. If airlines don’t make changes soon, they’re at risk of becoming merely carriers - profiting from only a single area of travel. The real cash will be made by e-commerce travel retailers - the ones who can sell travel products from the moment a person dreams of taking a trip, while in destination, and afterwards - and serving those offers in real time, at optimized moments along that entire journey.

Imagine a recommendation engine for travel retail

There is more to travel retail than simply having an e-commerce site. Airlines need to optimize selling in order to drive attachment and conversion rates. In other words, you need to not only think like a retailer, but think like a sophisticated, digital retailer. Retailers segment consumers into a variety of personas based on customer demographics and purchase trends across customer profiles. As well, they can monitor each customer’s unique history, their wishlists, their previously viewed items, etc. Using this data, they can make targeted suggestions that have a higher chance of conversion.

Like these e-commerce retailers, airlines can leverage machine learning to better predict ancillaries to offer their travelers. Maybe it’s a vintage wine that they enjoy while watching onboard entertainment. Insight into buying behavior can allow airlines to make highly personalized suggestions.

"Travelers are always looking for guidance... but the essential part is targeting each traveler's interests - and avoiding a scattergun approach." [Amadeus]

A platform as unique as your travelers

The travel experience is unique for each. Travelers can be relied upon to make purchases at predetermined moments along the journey, but they also make sporadic and unexpected decisions. A recommendation engine designed for travel products needs to be highly intuitive, otherwise offers will not be as successfully received.

The Guestlogix Platform uses machine learning to build unique traveler profiles to provide insight to airlines. The platform works like a digital concierge, following a traveler along their journey and serving up relevant content in real time. Talk to us today to learn how we can help your airline drive ancillary revenue using a platform specifically designed for travel commerce.