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Ancillary Retailing Technology – If The Old Doesn’t Go, The New Doesn’t Come!

Another year, another successful T2RL PSS conference. Typically held in the heart of London, this year, the T2RL PSS 2021 conference took place virtually on 4 – 5 November. At the event, I had the honor of representing Accelya on a panel to explore the question: “Ancillary Retailing – What are the opportunities for recovery through new retailing technology”? The following article is inspired by the discussions.

There is an old Chinese saying, “If the old doesn’t go, the new doesn’t come.” This proverb aptly applies to the world of Ancillary Retailing Technology as the current crisis provides unprecedented opportunities for airlines to transform the way they do business.

Retailing Momentum

At Accelya, we have seen significant momentum building for ancillary retailing and dynamic offers, even from large full-service carriers who traditionally are cautious. We are seeing:

1. A willingness to move from an operational to a retailing mindset. The possible exception to this is in Asia, where many of the flag carriers maintain a very cautious approach to retailing. I believe this is holding Asian airlines back.

2. Growing interest in transformation. Airlines need a successful omnichannel strategy to underpin their retailing transformation, and very few airlines, such as United and Copa, have successfully executed this approach. The reason is that many current systems are simply not fit-for-retailing purposes. With interest in retailing growing, we are seeing airlines look to new generation technology solutions that are more flexible, contemporary, and customer-centric.

3. Market or customer proposition influencing retailing strategy. We’ve seen significant differences between Low-Cost Carriers (LCCs) and Full-Service Carriers (FSCs) in this respect. In some regions, LCCs are leading in ancillary retailing. In contrast, some FSCs have been overcautious to protect a customer proposition that includes all elements of the flight experience. Without a doubt, the brand proposition is a critical consideration.

Personalization – theory or reality?

During the panel discussion, we also explored the topic of personalization and were asked if it were “theory or reality”? I believe that personalization is at the heart of retailing transformation, and it’s already mainstream. Airlines are constantly personalizing, and they have been for some time, through their Loyalty programs. The question isn’t ‘are airlines personalizing’. Instead, it’s ‘how much are airlines personalizing’.

Modern travelers want freedom of choice yet look to their favorite airlines to know them and cater to their needs proactively. That’s where data plays a key part! Unfortunately, although airlines have access to a great deal of data, they’re not necessarily doing a lot with it. As Accelya’s Tye Radcliffe said during his IATA DDRS keynote, the industry is awash with data, but it is like water in the Coleridge poem that goes, “Water, water everywhere but not a drop to drink.”

To get started with personalization, airlines can look to the data they have readily available. Even small, data-driven innovations will allow airlines to adopt a more tailored approach to selling across all channels. The future of retailing is based on iterative steps.

Core systems are holding airlines back.

When it comes to ancillary retailing and dynamic offers, it’s not just the limited use of data that is holding airlines back. There’s no doubt that existing systems built on pre-internet data structures also limit innovation. And I will share an example from my experience to make this point. While I was on the airline side, even in the direct channel, it took almost 12 months just to enable Extra Leg Room seat sales online! We were already selling these premium seats at the airport and in the call center, so there were no operational challenges to overcome. Plus, a single vendor was handling the solution, so there was no added complexity on that front. The real problem was the complications created by age-old PNRs, tickets, and existing systems – limiting innovation.

Another example is the call-center wait times we saw during Covid. Lengthy queues also highlighted the need to move away from PNR and ticket-based processes.

Travelers deserve and expect more, and we must give it to them. That takes me to my next point – ONE Order.

Covid has strengthened the need to become ONE Order ready.

I feel strongly about the need for airlines to move towards a ONE Order-based platform. Given the enormous volume of cancellations and refunds caused by the pandemic, the benefits of ONE Order are even more apparent than before Covid. In fact, PNRs and ticket-based processes were a significant cause of poor customer experience and impeded automation. Airlines will overcome these limitations with a unified single order record that contains all the customer information and technology to read it. That way, the order record will enable them to automate the servicing process to the fullest and minimize disruption.

That’s customer-centricity, and it’s essential for successful retailing transformation!

Like I said, the old really needs to go for the new to come.

At Accelya, we are replacing old retailing legacy with a new-generation, offer-to-settlement platform that includes a full suite of solutions for innovative retailing, distribution, and fulfillment. This FLX Platform embraces further development towards the ONE Order standard. Despite the challenges the industry is facing, these are exciting times for us and our customers, who are doubling down on their commitment to retailing transformation.

Where is your airline on its path to recovery through retailing technology?

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