Airline technologies and traditional sales strategies that have served the industry well for many years may not be as successful in their future growth ambitions. As we now turn our attention to airlines, we explore how technological advancements in retailing could help to unlock significant revenue opportunities, which according to McKinsey, airline retailing – essentially selling products in new ways, could be worth $40 billion by 2023.
Though, the real challenge is for airlines to understand and respond to the continuous scale and pace of their customers’ needs. The greatest opportunity exists for those that shift their thinking and actions to new and diverse ways of retailing, all of which have been driven by a quantum leap in the digital space and expectations of customers.
Truth is, it’s become a fundamental imperative for airlines to become customer centric, and they need to ask themselves, “what else can I do for our customer? What else can we sell that blends into their needs?”
Airlines already have clear aspirations for more dynamic methods of offer creation that will benefit those both operationally and financially.
We believe travel retailing powered by dynamic offer creation is the way for airlines (and agents) to generate ancillary revenue opportunities and satisfy the demand of modern consumers. Airlines already hold access to a great deal of data that’s enriched with behavioural insights from each passenger, and by prioritising data collection and analysis, they’ll be able to adapt and adjust to market conditions and consumer shopping patterns in real-time by constructing relevant and target-group specific offers. As a result of doing so they shall unlock:
- Greater relevant offers driven by continuous customer searches, purchasing history and pricing algorithms will significantly improve customer engagement and satisfaction.
- Customers will benefit from attractive, tailored offers that creates better conversion rates for airlines.
- Improving customer choice based on demand forecasting will optimise sell-through rate, reduce costs, and increase supply chain efficiency.
The more data an airline has related to customer purchasing or non-purchasing behaviour, the better the airline can optimise the offer. By using ClarityIFR, this attains real value out of passenger engagement driven from the data created, allowing airlines to build customer-centric, contextualised, and relevant offers for food and beverage, and duty-free items that customers are willing to pay for. From sourcing, developing, and managing the supply of air and non-air products to meet predictive demand and unlock buying behaviours, this ensures the right offer is delivered to the right customer, at the right time, at the right price, and on the right flight.
Fortunately, following this smarter approach to inflight retailing allows airlines to become increasingly sustainable. Over the years, airlines have faced stiff challenges in reducing their large carbon footprint and have recognised its role in reducing carbon emissions for the sake of the environment.
Our efforts are to support a zero-waste strategy following our desired ambition to dynamically retail and distribute a broad choice of tailored offers and orders, that ensures the optimisation of sourcing and loading of the right product, is for the right customer – dramatically increasing conversion rates. Catered by embedded artificial intelligence (AI) capabilities, to calculate the supply of product demand based on demographic, location and flight destination sets to achieve low waste rates and weight onboard, that thereby cuts fuel consumption.
Enabling airlines to better meet the needs with dynamically determined and optimised offers to customers will enhance differentiation in a crowded marketplace, promote loyalty and deliver profitable, sustainable revenue growth.
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