Dynamic Retailer Debut
The New Innovative Airline-Retailing Solution
A new state-of-the-art airline-retailing solution helps airlines differentiate themselves and retain customers through more personalized product and service offerings. Through this innovation, airlines can generate additional revenue by offering the right ancillaries, as well as discounted and bundled services, to the right customers when they are most likely to purchase.
Until now, airlines have been limited in their ability to influence travelers across the entire customer journey. Siloed data, coupled with decades of operational cost-saving initiatives (instead of value creation), has left travelers around the world feeling disconnected and underappreciated.
This is not a problem unique to the travel industry. In fact, a recent study conducted by BusinessInsider and Timetrade found that at least 60 percent of retailing executives report a personalized customer experience as the No. 1 shopping factor missing today.
Fortunately for airlines, the future is not as grim as it appears. The industry is slowly seeing these trends reverse, and more airlines than ever before are focused on truly understanding what customers need and are willing to pay for. Airlines are no longer reluctant. They are ready to harness customer insights and deliver on differentiated customer experiences across all points of sale and service.
To help airlines meet these goals, Sabre Airline Solutions® developed a new solution, SabreSonic® CSS Dynamic Retailer, which enables carriers to join customer data (such as trip history, tier status and social-media value scores) with their fare and ancillary catalog to generate flight, branded fare, and ancillary bundles and discounts that are both relevant and personalized to the individual traveler. This data-rich solution is wrapped in an intuitive, flexible interface that makes it easy to define, manage and execute targeted offers using dynamic rule configuration.
Utilize Customer Insights
Dynamic Retailer creates customer-driven offers based on profile information obtained through customer insights. Shopping results can be bundled, discounted and personalized for specific customer segments and upsell opportunities.
How It Works
These personalized offers include a combination of flight offers, discounted ancillaries and ancillary bundles, and are made possible through a service-enabled platform with flexible open technology. The platform includes a turnkey solution and can be delivered to different points of sale.
What It Does
The service-enabled platform within Dynamic Retailer is designed to integrate across both direct and indirect channels.
It can also be accessed at various points in the customer journey, allowing airlines to gain an unobstructed view across all systems throughout a passenger’s trip so they can effectively personalize and influence customer behaviors and patterns. Limited visibility of the retail lifecycle ultimately results in lost revenue opportunities.
Dynamic Retailer has opened up exciting new merchandising and retailing possibilities for commercial teams. Information in the solution can be leveraged to:
- Offer numerous combinations of unique product bundles that are seamlessly integrated into the booking flow,
- Promote upsell opportunities of higher-margin brands to customers most likely to convert,
- Integrate the full ancillary catalog to discount and promote ancillary products based on airline-defined rules and business objectives,
- Determine the products and services customers are most likely to buy at each phase in the journey based on time to travel (for example, a pass for expedited security during high-volume periods with long wait times).
While the most advantageous applications will vary from airline to airline, there are a couple of common-use cases that demonstrate how Dynamic Retailer can bring retailing to life.
Dynamic Retailer delivers a personalized retailing experience for airline customers by generating relevant offers based on customer insights, flight attributes, and product and rule configurations. Together, this combination allows airlines to create the right offer to the right customer through the airline’s preferred channels.
Consumers have come to expect their daily life to be as customizable as their online experiences. Advances such as dynamic online advertisements based on previous browsing sessions and predictive product suggestions based on purchase history have conditioned consumers to think that all online interactions should be tailored to suit their individual preferences.
According to online magazine Forbes, companies such as Target have tackled this issue by “personalizing” targeted promotions and product recommendations to groups of similar users who, based on their profile attributes, would be likely to purchase specific products. Companies that have invested in this type of personalization have seen tangible upticks in customer satisfaction and return on investment.
The good news for airlines is that tools like Dynamic Retailer finally make insight-driven personalization feasible throughout the entire passenger journey. The retail rules engine produces customer-driven offers that are based on profile information obtained through customer insights.
Within Dynamic Retailer, offers can be bundled, discounted and personalized for one or more customers based on specific attributes. Current capabilities of the solution also include tier and flight-based offers and exclusive promotions driven by airline-specific customer-segmentation and upsell opportunities.
Max Rayner, a partner at travel and technology consulting firm Hudson Crossing, contends that, “There’s an emerging Millennial trend” of customers who are coming into prime traveling age who “don’t want a chain or a package or two hundred other people getting the exact same thing.” Dynamic Retailer gives airlines the power of contextual personalization.
Branded fares have become increasingly popular — and profitable — during the last six years. Air Canada was an early innovator in branded fares, offering multiple tiers of “bottom-up” fares for leisure- and business-class travelers. Leisure travelers could choose from three fares (Tango, Tango Plus and Latitude) to personalize their flight experience with varied benefits and fees.
In 2008, Air Canada reported that 47 percent of its passengers chose a higher branded fare because of additional attributes. Since then, ancillary sales have exploded and other airlines around the world such as Air New Zealand, KLM and American Airlines have adopted similar branded-fare strategies to boost ancillary revenue and offer more choices to consumers.
Not only has the revenue from ancillaries increased exponentially since 2007 (nearly 1,200 percent according to IdeaWorks), the number of airlines globally reporting ancillary revenue have grown from 23 in 2007 to 59 in 2013. This change is indicative of a growing trend in the industry and poses urgent need for a solution that will support airlines as they look to bundle and unbundle ancillaries to increase revenue and customer loyalty.
Dynamic Retailer addresses this issue for carriers by allowing the display of ancillary offers based on flight or brand attributes. The solution enables airlines to show ancillary items at a flight level (with or without charge) and/or include them in a particular brand. Capabilities include an intuitive, flexible interface to define and manage retail riles, full access to the air ancillary catalog and dynamic rule configuration.
The Massachusetts Institute of Technology International Center for Air Transportation (MIT ICAT) recently posed the idea of giving individuals with higher ancillary revenue better availability, based on actual or expected ancillary revenue spend. Simulations run by MIT ICAT suggest there are substantial revenue gains possible by creating “customized offers.”
Dynamic Retailer supports customized offers with the bundling of ancillaries for targeted offers across sales channels using the industry-standard format through SabreSonic® Merchandising Manager. Capabilities include product optimization, discounts and branded fares association. Individual ancillary products can also be discounted to reward loyal customers or retain high-value customers after service disruptions.
Dynamic Retailer enables airlines to personalize and deliver targeted ancillary bundles to specific customer segments in the shopping path. This can be done at the individual flight level, with or without charge, within or outside of a particular branded fare.
Dynamic Retailer In Action
The value of a solution like Dynamic Retailer is apparent when you consider joint benefits to airlines (increased profits and loyalty from valued passengers) and customers (access to personalized services and products that suit their needs).
Dynamic Retailer can influence known travelers as they shop for their trips.
For example, fictional character, Lucas Celis, has been a customer of WorldWide Air (WWA) for many years. WWA is his go-to airline, and he relies on its efficient, reliable and consistent service for the many business trips he must make every quarter. Lucas is a busy executive and enjoys the occasional perks that his top-tier loyalty status provides.
A few weeks before his next business trip, Lucas visits worldwideair.com to shop for a ticket. WWA recognizes him as an established loyalty program member and, in the background, begins assembling individual products and bundled services he might be likely to buy based on past travel history.
Lucas enters his travel information and begins progressing though the booking flow on the WWA website. He selects his desired departure time and discovers that there are three branded fare options for his flight. When he hovers over the middle fare — AirPlus — he discovers that for a marginal upcharge he will benefit from a refundable fare, an in-flight snack and an in-flight entertainment package.
From here, Lucas has two options: select the base fare, or upgrade to the AirPlus or AirPremium fare. Lucas decides to pass on an upgraded fare and selects the base fare that is available. At this point, WWA realizes the missed up-sell opportunity, and triggered rules instructing the next set of personalized offers to be presented to Lucas.
Strategic Priorities Shift
A recent study conducted by the Economist Intelligence Unit on behalf of Sabre Airline Solutions found that 40 percent of airline executives agreed that improving the passenger experience would be a top strategic priority over the next 10 year. Dynamic Retailer enhances the customer experience by helping airlines take full control of the customer retail experience.
On the next booking screen, Lucas is presented with several ancillary bundles intended to both acknowledge his premium loyalty status, as well as pique his interest for other value-added services.
Lucas immediately notices that his normal checked baggage fee has been flagged as free. His long-term affinity for WWA is once again validated, and he feels confident that he has chosen the right airline.
Further down the page, an ancillary bundle catches Lucas’s eye. The “Speed & Convenience Package” that includes in-flight WiFi, early boarding and a copy of Forbes magazine looks appealing. He purchased the package and WWA’s investment of knowing how to offer the right products to Lucas at the right time is realized by the incremental revenue it has gained.
While airlines hope that all trips will be perfect, a mechanical malfunction caused Lucas’s flight to be delayed for more than three hours. Triggered rules inside SabreSonic® CSS Customer Experience Manager, a complementary product to Dynamic Retailer, sent an email offer to Lucas for 30 percent off his next trip as soon as he was aboard his re-booked flight. When Lucas landed at his destination and saw the email message, his earlier frustrations were tempered by WWA’s proactive approach to service recovery.
A few weeks later, Lucas returned to worldwideair.com to book his next trip. With his discount offer in hand, Lucas once again felt confident in making WWA his preferred carrier.
Ready, Set, Retail!
A 2014 study by eMarketer found the relationship between loyalty programs and customer and sales data to be synergistic. The study concluded that, “As much as loyalty programs need data to personalize messages, they also serve as a key source and connector of consumer behavior across different sales channels.”
The same study cited 2013 research by Forbes Insights that found that more than three-quarters of U.S. business-to-consumer customers saw the benefit of trading personal information for more relevant discounts and offers, and 62 percent were willing to do so in return for personalized offers.
The value of a customer-centric retailing strategy is clear. It’s now up to airlines to find the personalization “sweet spot” to create and monetize value for the customer. Like Lucas’s experience illustrated above, tools like Dynamic Retailer can help airlines expand their touch and influence throughout the entire journey. Doing so not only builds long-term affinity and results in incremental revenue, it ensures that customer’s will have the full experience designed for them every time they fly.