Airline Retail Revolution #3: 7 Steps to Transform your Business Model

The Seven Steps to Transform your Airline Business Model

Welcome to Part 3 of The Airline Retail Revolution in which we examine the seven steps to transform your airline business model.

To review Part 1 of this series please follow this link: The Airline Retail Revolution – Part 1

To review Part 2 of this series please follow this link: The Airline Retail Revolution – Part 2

Part 3

How can an airline adapt the principles of retail? Airlines that embark on retail transformation projects with a view to capturing this opportunity have to fundamentally assess how to develop their strategic mindset, much more than deliver a series of technology infrastructure projects. Adopting the mindset of a good retailer, means that you have to create a defined customer experience, personalise your approach, choose the right content by connecting with the right suppliers, differentiate your proposition and develop the capability to control and orchestrate all of this directly.

Let’s get ready to be a retailer – here’s how step by step:

1. Get Experience

Customer experience is based upon the sum of all the interactions a person has with an airline – it is becoming the defining differentiator between companies. The consumer now has a set of expectations forged by their contact with the great retailers, and the platform-based disruptor brands, including Uber and AirBnB. These businesses focus on delivering a consistently excellent customer experience (CX), and airlines need to respond by delivering a seamless experience across all devices, platforms and touchpoints.


2. Get Converting

Adopting a retailer mind-set means understanding that there is a long window of opportunity to sell relevant products to customers before departure. Research from Yieldr shows that the average booking window is 78 days with a breakdown of 81 days for LCCs and 55 days for scheduled carriers. Within this timeline there will be optimal moments that matter for the customer; these will be the times when they are most receptive to recommendation of certain products. The ‘secret sauce’ is the potential for a real time response to a customer signal with the perfect product based on signals of intent and past purchase history.

3. Get Content

The most crucial element of creating a retail capability is the ability to supply and support a broad range of products. This gives the airline leverage and supports the differentiated proposition. There are multiple supply models: connecting aggregators, connecting directly to hotels, or even individually selected destination attractions. Seamless API technology is now available that enables an airline to become a direct supplier of products and develop exclusive inventory to make more tailored recommendations, and support this across multiple channels.

4. Get Differentiated

Good retailers stock the shelf the way they want to, with their own products or with partner products that are curated in such a way so that they are differentiated from the competitors. Applying your airlines’ unique knowledge of customer preferences, behaviour and purchase history means that you can select the right product supply, for example, a chain of boutique hotels, and create combination retail offers for any flight and travel product. These can be your own products, or part of those products combined and made available.


5. Get Data

There is no retailing strategy without data. Data-driven insights lead to better customer insight. With airlines able to collect and analyse more and more traveller data (including mobile app and social media behaviour, session history from in-flight connections, travel history and previous purchases), it is essential that this information be captured, stored and shared, to create a single unified traveller view. This will enable personalised search results so that the airline can merchandise the right products at the right time to the right person.

6. Get Control

Integrating all data will enable an airline to develop greater customer insight and personalise customer recommendations. But it is the combination of insight, personalisation and recommendations that provides the ‘magic sauce’ that enables airlines to use their data. Just like a retailer, an airline needs to ensure it has the correct tools at its fingertips that take contextual data and generate tailored offers to match the brand and then funnel these products to the right segment of the customer demographic – across all channels.

7. Get Personal

The objective should be to personalise a customers’ experience and by doing so make things as easy as possible in the online customer journey. Personalisation is about offering the right product at the right time to customers based on their prior history and/or current context. This is particularly important in the world of mobile where customers’ are looking to efficiently transact from the palm of their hand. Airlines already have an advantage in the wealth of customer data they possess and use profiling engines to identify the customer if they can collate it from their different sources of data and integrate it on one platform. Once the booking process is started, even if abandoned, the airline has already gathered incredibly useful data that puts it ahead of other travel vendors and data gathering can continue with customer opt-ins for email updates, app downloads etc


And finally, once an airline starts thinking about identifying and solving customer wants and desires rather than selling seats, then it can realise the opportunity to become a retailer. Airlines need to view the flight seat as just one of many products that can be developed and offered to meet both the practical needs and the more emotional desires of travellers.

By adopting a retail mind-set, airlines are always better positioned to provide a superlative customer experience. This is how to generate incremental revenue, build loyalty and engender the goodwill that translates into lifetime customer value. The right business partner and technology platform will put an airline in control of the product, the experience and the consumer data thereby unlocking the value beyond the selling of a seat.

This concludes our three part series on The Airline Retail Revolution. I hope you enjoyed the insights and that they may help you on your journey to become a better airline retailer.