Airlines’ retail revolution: Where’s the love?
August 1, 2019
August 1, 2019
At a recent travel industry conference, I heard a ubiquitous complaint: “Our legacy technology is keeping us from delivering a customer-centric experience.” The moan fest about legacy technology is not unique to travel—but other industries are doing something about it.
Consider grocery. Ten years ago, legacy grocery was hamstrung by legacy technology like everyone else, but industry leaders recognize that transformation was the only way to appeal to customer demands and stay afloat in an increasingly crowded marketplace.
For instance, Sainsbury’s—a grocer that opened its first store in 1869—transformed itself from a catalog-led business to a digitally-led business. By transforming mobile, web and tablet digital channels, the company has recovered sales with operating profits in the most recent financial year increasing by over 10%. Currently, £4.7 billion of Sainsbury’s sales start online (Sainsbury's, 2019) 1. The company also made changes, like supporting causes, that gave employees newfound pride and purpose in their jobs.
Argos realized that the notion of being channel-agnostic is really important to customers. By creating a seamless omnichannel experience, now 60% of their sales happen either starting or finishing online, with 80% of those occurring on a mobile device. Customers have flexibility. They can start online and finish in the store, or vice versa, depending on their own preferences.
Businesses like Argos and Sainsbury’s understand that if you don’t change, customers may not stick around. This is becoming increasingly important for airlines as customer demands are sky high while many airlines haven’t gotten any transformation plans off the ground.
Recent tweets from influencers paint the picture:
“I just don’t get how Google Flights can scan & price in real time millions of flights and airlines…but [airline] is literally unable after 15 mins to tell me the change fee for a flight and have to send it to ‘pricing for a few days.” (@tomfgoodwin)
Room for improvement
Grocers learned that we need to understand the customer journey from start to end—where things can go wrong, and where you can make them better.
Just like shoppers, travelers care about the experience, and airlines can make changes to begin to make it easier to do business. Take it from legacy retailers, who started their own journey toward a modern, digital experience about a decade ago, and have many lessons along the way.
Here are some ways to apply what retailers already know:
Whether traveling for business or leisure, customers expect the same personalization and convenience that they are experiencing in industries such as retail and other transportation services (like Uber). Airlines can learn from these leaders and begin to adapt their strategies to foster brand affinity, giving the competitive edge needed today.
Airlines won’t have what it takes to compete and grow as fast as they need to unless they transform. It is a major opportunity. Customers already trust you with their lives. Make sure they enjoy the experience along that journey.
Is your airline the one airline in your market that maintains the cost leadership position at reasonable service levels? If not, it’s time to move from flight provider to travel brand. Your customers will go with you.
1 Sainsbury’s, “Preliminary Results for the 52 weeks to 9th March 2019”
2 Accenture, “Travel’s Winning Ticket”