Despite recent signs of business success, the airline industry faces a moment of transformative disruption. The current system of retail distribution cuts into profit margins and prevents airlines from forming ongoing relationships with customers. At the same time, new “digital invaders” like Google, Amazon and Uber, companies built with technology at their core, are redefining the future of the digital customer experience for many industries, creating rising expectations among airlines’ passengers and customers.
The challenge, and opportunity, for airlines is to evolve their businesses for a new “connected commerce” environment. The airlines that will prosper in this new environment recognize there are three key areas that will determine their success. One is addressing the growing impact of mobile technology and the expectations it creates for immediate, constantly-connected, airline products and services. Another is supporting omni-channel interactions with customers, where customer engagement happens across a range of touchpoints. The third is using technology to deliver more personalized, seamless, products and services to passengers.
Even as airline industry executives recognize the opportunity to transform their business, they also face a variety of internal and external obstacles. Legacy technology systems are one key pain point. A lack of a “single view of customer” is another, referring to the competing (and siloed) applications airlines use to monitor, assist and market to customers. Meanwhile, new industry-wide standards like IATA’s One Order and NDC, which are designed to help airlines better merchandize and distribute their products, offer potential solutions, even though implementation is still a work in progress.
As airlines look to build the connected commerce systems of the future, putting technology at the core of their redesigned retail experience, a number of strategies are finding success. Many airlines are recognizing the benefit of using a “Systems of Differentiation” approach to building new retail and technology experiences. More unified offer and order systems will also prove critical. So will opening up back-end systems to enable collaboration with a growing ecosystem of airline partners and channels, offering new opportunities for innovation and scalability.