COVID-19 has caused a near universal consumer adoption of digital far beyond just search and discovery. Globally, across almost every demographic, international lockdowns have got us accustomed to pre-order, pre-select and home delivery for many of our retail and service transactions. These rapid and continuing shifts in digital behavior inevitably affect the post-crisis traveler journey. As flights slowly resume, airlines, airports and associated service providers will no longer enjoy the luxury of resurrecting 'high touch' retail or food & beverage. Shopping and food & beverage are, of course, two of the most essential experiential elements in any travel journey. As travel restarts, travelers will now expect convenient digital access to these types of products as well as an overriding commitment to hygiene, sustainability and safety. And there is every reason to believe that these expectations will extend across the travel life cycle - from airport, to inflight and post flight.
If you were an airline now, given the devastating onslaught of the pandemic on revenues and cash flow, just how and where would you start? Where exactly are the incremental revenue generation opportunities and cost savings to be found?
Let's start by understanding the three key challenges:
First, let’s look at the five traditional key touchpoints along the traveler journey: travel search, booking, check-in, inflight and baggage collection. Apart from the built-in impediment that they are usually the remit of five different silos within an airline's organization, they are also typically managed using outdated, siloed systems that are incapable of delivering cost savings or revenue generation. The net result? A broken, disrupted travel experience where opportunities for up-sell and cross-sell are wasted.
Today, there is no shortage of tech and platforms to drive the aviation business - whether reservation systems, loyalty databases, inflight entertainment, E-Commerce and ERP platforms. Some systems, especially the inflight food & beverage and retail ones, are even owned by third parties. This often leaves the airline at substantial risk when contracts expire or vendors are changed. The result? The ability to curate and deliver relevant, customer-centric offers at the right time to the right set of travelers is largely lost.
Frequent flyers, premium passengers, families with children, single or business travelers - these diverse traveler segments generally have one thing in common: less than 15% of them transact in an airport and less then 2% of them inflight. Such patent lack of enthusiasm is not new, and while a post-COVID 'revenge spending' bounce is likely, it is clear that a more robust and sustainable strategy is needed to entice travelers who are typically non-buyers.
A fragmented traveler experience that is further weakened by the inability to target and customize relevant offers can only lead to traveler disinterest and an unwillingness to either engage or transact. We often hear that airlines and airports need to think more like retailers; but the truth is that integrated solutions and systems are what are needed to support this thinking. Today, you cannot have one without the other.
So, what would this integrated solution look like?
Well, you won’t be surprised to learn that it looks remarkably like Omnevo’s own proven solution suite - but my point here is not a sales pitch (but, hey, feel free to call me!). The fundamental imperative that airlines and airports must adapt to the customer’s accelerating shifts in behavior and needs. For the industry’s dinosaur models, that tiny chip in the traveler’s mobile is an extinction event; they cannot evolve those exhausted old systems any further and the only survival path is digital.
That path starts with a modular, next generation platform, integrated with reservations and booking flows, combined with airline loyalty systems, while also being able to manage multiple, system-wide suppliers and partners at scale. Most importantly, this platform effectively puts travelers in charge, giving them the control they demand, with multiple choices and options. And not just of products or services, but also of delivery and fulfillment options. Excel sheets and antiquated catering management systems simply lack the power and sophistication required to deliver the demanded front end user experience. Nor can those outdated systems manage the heavy lifting of the back end in terms of search and recommendation, product information management, order management, transaction fulfillment and financial reconciliation.
Yet probably the most interesting and appealing aspect of this platform is its ability to open up the means of airport-airline collaboration. Based on existing affiliate marketing methods and models, there is a strong commercial promise underpinning this collaboration, where airline passengers can be directed to the retail and food & beverage options of their preference at the airport, with both the airline and the airport sharing a portion of the spoils.
With respect to retail and services, airports and airlines have traditionally had poor engagement with travelers pre-flight. Lack of collaboration between them largely accounts for this, but then so has the traditional thinking around retail and services as being 'impulsive' actions, which take place only when physically present - whether at the airport or inflight.
Yet these are two big opportunities, both in terms of cost optimization and revenue streams. A ticketed passenger is already effectively a 'captive' customer, providing multiple opportunities for targeted, relevant and valuable offers long before the actual travel day – but only digital can turn those opportunities into commercial reality.
The value of a digitally-integrated platform that allows passengers to pre-order, pre-select or pre-buy food & beverage, duty free or services is priceless. Using targeted communications, such as to active airline loyalty members, there can be measurably increased engagement with frequent flyers as well as a better segmentation of offers based on previous purchases. The combined effect of this is powerful. From car parking and lounge reservations to pre-selection of meals and pre-purchasing of duty free, new and stronger revenue channels are created – all driven by an integrated solution suite.
We know the score here. Typically characterized by a lack of connectivity and space, the inflight environment is one where crew hold the dual responsibilities of safety and service. Retail - and this is notably true of the full service airlines - comes a distant third. The overall impact of being in an offline retail environment, with severely limited product selection, combined with a crew who have other responsibilities, simply creates passenger (and often crew) apathy and disinterest.
As a result, the lack of data and transactions and the resulting wastage and fuel burn all prevent airlines from delivering the kind of inflight service and retail excellence they may aspire to. And it's not memorable for their passengers, either.
Alternatively, a digital platform and solution suite breaks the shackles of a limited vendor set, allows the airline better integrated functionality between warehouse, catering cabin crew inflight, right up to the passengers themselves. Rid yourself of Excel spreadsheets, vanilla POS terminals and crew frustration with the reams of paperwork many currently deal with. Instead, a modular solution set that optimizes food & beverage loading, empowers passengers to select and touchless pay for product on demand (rather than needing crew to rumble carts down the aisle), all the while providing key data back to operations and supply chain teams on the ground at the end of the flight.
Most importantly, the digital solution provides for an almost unlimited expansion of the inflight product and service offering - from 150 to tens of thousands of items. And these from thousands of third-parties both on and off airport, whilst still enabling multiple post-flight fulfilment options. Starting to sound Amazon-esque yet?
As it happens, this is what our teams have been busy creating over the last 4 years so that end-to-end total commercial engagement and management is now no longer a vision but a reality for an increasing volume of airlines migrating to our solutions. (I’ll be honest – that bit is definitely a sales pitch!).
This is traditionally the weakest link in the passenger journey within the airline industry, where aligning pre- and in-flight experiences with post-flight targeting and communications is notoriously challenging - given the separate booking, transaction and CRM silos that sit across multiple business units within most airlines. Yet the post-flight stage also yields some of the greatest integration opportunities in terms of digital retargeting and loyalty marketing.
Imagine a scenario where the flight may be over, but the passenger's consumption and engagement experience is extended beyond the flight itself. Post-flight order deliveries, collection from the airport, social media engagement, even return flight offers - these are just some simple examples of how a solutions suite can effectively maintain airline (and airport) brand engagement with the passenger. Loyalty and frequent flyer miles redemptions (together with part cash payments) present yet another channel for non-travel engagement with the airline.
As I’ve outlined, the digital travel retail platform of the future is not a destination but a journey in itself. It begins with a clear understanding of what travelers are going to expect and how they are likely to behave - both in the approaching recovery and beyond - followed by a purposeful design of existing systems and processes. This will deliver the key desired outcomes - cost efficiencies, revenue generation and excellent passenger experiences - both offline and digital. Agile implementation and new versions follow - without the need for resource or capex intensive investments. Start small, deploy a minimum viable product, scale up. But, most importantly as an airline, take back control of your ability to deliver your uniquely branded experience to your passengers - seamlessly!
Join me at the FTE-APEX Virtual Expo on May 25th at 1600 BST for an exclusive presentation as part of the 'Business Transformation Think Tank - Phase 2:Turning Ideas into Reality'. I’ll share specific examples and case studies of Omnevo's comprehensive digital solution suite as implemented for airlines and airports. This will be followed at 1700 BST by a Round Table discussion on challenges and solutions as well as recent learnings from our projects in digitalizing the customer journey for catering and retailing on-board, via E-Commerce and on any channel. Registration is free.
From major FSCs to small LCCs, digitalization provides the most effective, low-cost path to new levels of operational efficiency and revenue recovery to all airlines. Kian Gould, Chairman of digital revenue innovators Omnevo, explains 5 reasons why. Let’s start on the bottom line: any airline – including everything from flagship FSCs to small regional LCCs – can now cost-effectively digitalize their attack on the recovering market and seize the digital route to recovery. Let me explain why.
Frankfurt, July 14th, 2021 - Omnevo, leading provider of revenue-increasing digital platform solutions for airports and airlines and part of the AOE Group, and Fraport AG, owner and operator of Germany's largest airport, announced today that Frankfurt Airport goes live with the latest advanced version of Omnevo's award-winning omnichannel e-commerce solution. Additionally, the two companies announced that they have extended their long-term partnership for another five years to further develop the digitalization of the airport's range of products and services for the almost 70 million passengers (before COVID-19) who travel through Frankfurt Airport each year. With go-live, the existing digital solution platform, which Omnevo’s parent company (AOE) had originally developed for Fraport, was migrated to the latest Omnevo product version. Through its original partnership with AOE Fraport utilized the OM³ digital platform (now known as Omnevo) to become the world’s first omnichannel airport focused entirely on omnichannel both before and, especially, during the pandemic. The newly enhanced Omnevo cloud solution enables the operation of a complete airport marketplace solution for all travel retail sales at a fraction of the costs previously required for such a leading ecosystem, creating new revenue opportunities for crisis-hit airports of any size. Thanks to the highly flexible SaaS solution, Fraport has also effectively future-proofed its digital strategy by integrating directly in the Omnevo product roadmap, enabling it to benefit from Omnevo’s strategy of continuous improvements to the solution.
The past year has been extraordinary in so many ways and, while the tragic impact on lives takes precedence, we’ve also had to deal with the huge changes in our working life too. As the crisis developed early last year, I was busy planning in my new role as CEO of Omnevo - AOE’s new specialist product division - positioned as a digital solution pioneer in the travel industry, launching in early 2021. As the crisis grew, this became the most challenging experience of my career, but I’ve been surprised to find that it’s also become one of the most instructive and rewarding experiences too. Creating and launching any new company is always a huge challenge but we suddenly faced extraordinary new barriers as the way we do business had to be transformed. Much of 2020 was spent planning the new company and today, still operates almost exclusively remotely. Many of us, including some of the founders, worked together for almost a year but have still not actually met in person! Yet we already operate successfully in a global network and are scaling and winning new business. Omnevo is a truly virtual organization; this is how we were born and that is how we thrive. In this short time, we’ve already made our mark on this industry, with a culturally diverse, agile and highly committed team working alongside customers of all sizes around the globe. We’re gaining a lot of attention because we are recognized as game changers - and that innovative spirit is integral to our team spirit. We are committed to being the digital challengers and innovators in the travel and mobility industry – an ethos drives us every day. And it’s working. But what is the glue behind this, what makes us successful? Why is it working and, in these bizarre working conditions, how did we manage to get the team so well and engage with our customers so quickly? I’m obviously proud of what we’ve achieved but I want to share my personal perspective on how we made this happen and hope that it will resonate with others in the industry - and, hopefully, help you with your management challenges too.