The Aircraft Experience GAPS Day 2 The Aircraft Experience
Mignon Buckingham, Corporate Strategy Officer, Collinson Group GAPS Day 2 The Aircraft Experience
Airports Try to Catch up with Airlines and Engage Customers to Drive Revenue But are both Airlines and Airports Missing a Trick? GAPS Day 2 The Seamless Journey
Agenda 1. Quick introduction to Collinson 2. Some industry history around customer engagement 3. What s changed for Airports and what s happening now 4. What could the future look like interesting opportunities for airports and airlines GAPS Day 2 The Seamless Journey 4
Global loyalty and benefits expertise 15 countries 20 locations Loyalty 20m+ client customers managed 5m+ own customers managed 800 clients Travel Experiences Insurance & Assistance 2,000 employees 5
Airport experience Working directly with over 20 airports globally 25+ years Priority Pass has been the leader in the market 1200+ lounge & lounge alternatives 950+ dining / retail / spa airport partners 30m+ lounge visits p.a. 100m+ airport visits p.a. from lounge customers 6
20+ million Travel Experiences customers 50+ million Members of frequent flyer programmes And some of our iconic brands include to name but a few 7
Airports & Airlines
Way back when...the 1980 s Airlines could count passengers not customers Didn t know who was valuable and who wasn t Not able to directly influence customer behavior or sales Then the FFP was born Became the poster child for a whole industry air, hotel, car, retail, B2B In some cases the loyalty programme became more valuable than the airline 9
What were Airports doing then? Our focus is Operations There is a conflict between Operations and Commercial Passengers just want us to get them from A to B Customers just want relationships with the Airlines We concentrate B2B on airports, not their passengers Airlines are our key stakeholders and won t like us getting involved with their customers 10
Many airports are looking to catch up. Airports have the same problem as did Airlines, Hotels and Retailers not being able to identify the customer 23% of the world s 200 biggest airports now have a loyalty programme Airports may be coming from behind, but they have one very BIG word as their friend. 9.3M 1.4B *The intensity of the colour shows the volume of footfall 11
Digital
Let s go back - What s Changed for Airports? Strategic Rationale for Customer Engagement Commercial Drivers Technology and Data Customer Attitudes 13
Commercial Drivers 14
Commercial Drivers Growing importance of non-aeronautical revenues Increased airline pressure on yields in turn squeezed airport fees and airports looked to non-aeronautical alternatives Coming from property income, parking, F&B, retail, commercial, advertising. Non-aeronautical tends to have higher profit/more flexible But despite focus, non-aeronautical income is declining From 50% of total airport revenues in 2000 to 40% in 2016 (ACI, 2016) 15
Commercial Drivers Why are non-aeronautical revenues declining? Passengers and global revenues continue to rise +7% 2017 But revenue per passenger has started to drop Rise in Low Cost Carriers more cost-conscious passengers Shift to on-line retail services In some cases, longer security experiences In Europe, retail spend is down from 2.91 in 2010 to 2.73 in 2016 Ride-hailing apps and better transport as well as car-pooling services and on-line parking firms have hit parking revenues 16
Technology and Data 17
Technology and Data Cost/complexity of loyalty technology used to be a barrier to entry Now a very wide choice of back-end systems Digital reduces costs and enables fast-moving customer needs to be met quickly and efficiently Impact of, and accessibility to big data usage with AI Airport is an ideal environment for mobile-first (or only?) communications Huge opportunity to combine M-commerce with information and CRM 18
Customer Attitudes Collinson Research 19
How do you feel about the airport? Singapore 11% 67% UAE 19% 63% Hong Kong 12% 53% France UK Germany USA 20% 22% 23% 30% 52% 48% 46% 41% The airport experience is an enjoyable part of the journey The airport is something I have to endure/tolerate to get to my destination All 19% 53% 20
Customer experience to the airport and at the airport are important in choice of airport What factors influence your choice of departure/transit airport? Cost of fares Efficient check-in/security Flight routes Convenient transport route eg Preferred airline Proximity to home/office Convenient parking Good choice of food and drink outlets Airport loyalty programme Shop/restaurant offers/discounts Access to airport lounge Good choice of retailers for shopping 48% 44% 40% 37% 34% 34% 58% 65% 77% 76% 74% 82% Importance Services, within an airport s control feature highly in the decision making process Airline related Airport related 21
Relationship with the Airport Only 5% of passengers said they didn t want a relationship with the airport 58% would exchange their data for free Wi- Fi, 52% for flight updates and 43% for shopping vouchers 56% would like to receive info from the airport any time after flight booking; 26% when they arrive at the airport 22 22
Which of the following might encourage you to spend more? Receiving airport offers ahead of travel If I could compare prices between the airport and outside the airport (e.g. the high street, local shopping centres, etc.) If I could compare prices between the inbound and outbound airports If I knew what shops/brands were available in advance Real-time, location-based offers once I m through security If I could make purchases on my outbound journey and pick them up once I return home If I could shop via an app from the airport lounge and pick it up at the gate None of the above A personal shopper If I could check the stock of my favourite airport retailers in advance 25% 21% 25% 16% 23% 15% 10% 14% 20% 12% 14% 32% 34% 30% 35% 31% 34% 35% Leisure Business 46% 48% Bases: All, 2095, UAE 402, UK 414, USA 430, Germany 408, France 417, Singapore 415, Hong Kong 419. 23
Would any of the following encourage you to get to the airport earlier? Duty free/shopping discounts 56% 55% Airport lounge access 40% 44% Food and beverage discounts 46% 44% Engaging exhibitions/entertainment 32% 36% Leisure Business More low-mid end branded shops 31% 32% High end/luxury shopping Ability to pre-order food & drinks 19% 19% 23% 28% Bases: All, 2095, UAE 402, UK 414, USA 430, Germany 408, France 417, Singapore 415, Hong Kong 419. 24
How is Customer Loyalty evolving in Airports? Thanks Again Club Airport Premier Platinum Heathrow Rewards Club Airport Premier Gold Heathrow Rewards Premium Club Airport Premier Changi Rewards Purple Current Privium programmes Plus vary Changi Rewards greatly Gold in Privium Basic Changi Rewards Platinum sophistication, not often making the most TAV Passport Signature My Paris Aéroport Loyalty Programme Sophistication Chart Retail Benefits Paid Benefits Frequency Rewards Co-branded card of digital technology, or clear in TAV Passport Plus Via Milano commercials or customer value TAV Passport CPH Advantage Sheremetyevo Premium (Mastercard & Strata Club B&N Bank) Sheremetyevo (Mastercard & B&N Bank) mygatwick Strata Club Gold Strata Club Platinum Strata Club Silver Strenght of Benefits Ease of Earning Points Ease of Use Customer Experience The Noriaki Kano Model 25
Some Key Observations: Doesn t have to be about airport preference driving revenues Don t just think about the customer, start with the customer Has to be a genuine value exchange Give a reason for all customers to join in or you ll never move the revenue dial hard enough Embrace digital commerce basket size +20%-30%* Become an eco-system extend proposition with other airports, merchants, FFPs, airlines. Source: Taco Bell 2017 26
What might the future look like? 27
Tell us that you re coming Date? Flight number? Return date? Flight number? Who are you travelling with? Value Exchange Airport: Operational planning Drives retail/f&b and other revenue eg parking, fast-track Increased customer satisfaction Customer: Reduced stress and peace of mind through information and help through the airport Mobile commerce, discounts and benefits Does require me to take positive action to notify the airport But could it be even easier? 28
And then there were three...? Traditionally, airlines have not collaborated or shared data with airports other than operationally Crossover in selling duty free (and food for LCC s) Is it that big an overlap? Who owns the customer? Increasingly it s the customer! Post-GDPR world the customer will choose who gets their data and for what Airlines often neither make profit nor provide great customer experience from in-flight catering Airports are increasingly enhancing F&B range and options 29
And then there were three...? Airlines are looking to develop ancillary revenue via in-flight ordering and home delivery for retail Airports continue to invest in retail, many extending into wellness and entertainment Both want to drive volume from the same audience Digital commerce can enable airports and airlines to collaborate Enables on-board weight-reduction /service or product substitution Less waste for the airline, better margins and more choice and greater engagement for the consumer 30
What the future could look like The engaged customer could enjoy an increasingly seamless airport experience from home and back again Wide choice of purchase, payment and delivery/consumption options Dependent on F&B, type of retail, fitness, well-being. Pre-book a table Pick up at merchant Deliver to gate Deliver to lounge Deliver to home Deliver to hotel Pre-order or order in-flight receive at arrival airport or home Use for distressed pax vs. vouchers? More revenue for airports and airlines (and extends airline earn/burn) 31
Shopping experience Personalised retail offers Retail mobile ordering Retail home delivery / destination delivery In-flight order choose delivery Retail at gate / lounge delivery Pay with miles and / or cash 32
Summary As more airports get involved in customer loyalty and engagement programmes there s an opportunity to think wider Airport programmes: Structure your propositions around different customer needs at different stages of the journey with a revenue model to prove it Optimise mobile technology and data so your proposition lands at the right time in the right way to the customer But better still, can airports and airlines collaborate to enrich the customer s airport experience and create new and stronger revenues for themselves? 33
Inaki Uriz Millan, CEO, Caravelo GAPS Day 2 The Aircraft Experience
Traveler Journey Multiple disciplines, one single journey Inspire Loyalty Post trip Shop Revenue Management At destination Book Distribution On board Airport Check in Before departure Merchandising Traveler Journey GAPS Day 2 The World of Interactive Data
A real relationship From one-to-many to one-to-one GAPS Day 2 The World of Interactive Data
Moderator: Ursula Silling, Founder and CEO, XXL Solutions Panel: Alex Avery, Managing Director, Head of Airports, Planning, Pragma Consulting Nicolas Jourdan, Product and Services Strategy Manager, Airbus Jouni Oksanen, SVP ecommerce, Sales and Marketing, Air Baltic Mauro Oretti, VP Sales and Marketing, Skyteam Alexander von Bernstorff, Director Airline Solutions, InteRes GAPS Day 2 The Aircraft Experience
State of the Art Retail Practices & Customer Insights Alex Avery Managing Director, Pragma Consulting GAPS Day 2 The Aircraft Experience
What can airlines learn from global retail innovations to enhance the aircraft experience? PO W E RPO INT F O RMAT GU IDE 6 04 October 2018
P R A G M A
Customer needs have changed, and winning businesses have taken action Personalisation Integrity Expectations Resolution Time & Effort Empathy PO W E RPO INT F O RMAT GU IDE 8 04 October 2018
What makes a retailer successful Know your proposition What? Who? Wh y? How? Where? PO W E RPO INT F O RMAT GU IDE 9 04 October 2018
Developing a Competitive Advantage Accessibility Offer Image
What makes a retailer successful Ease of doing business 12 04 October 2018
What makes a retailer successful Ease of doing business Need a taxi Find a busy street for a chance to find one Try to get a taxi to stop Is it a legitimate / metered taxi? Explain the directions Realise taxi doesn t take card Get taxi to stop at a cash point Pay the driver Arrive at destination 13 04 October 2018
What makes a retailer successful Ease of doing business 14 04 October 2018
What makes a retailer successful Ease of doing business Need a taxi Input destination Wait for taxi Arrive at destination 15 04 October 2018
What makes a retailer successful Agility 16 04 October 2018
Dynamic expectations Perceptual competitors Customer benchmarks Experiential competitors Direct competitors Retailer benchmarks 17 04 October 2018
What are the problems with Inflight Retail? Insert chart 18 04 October 2018
No differentiation 19 04 October 2018
Lack of customer focus 20 04 October 2018
Difficult to transact 21 04 October 2018
Limited choice 2 Inflight Watches Vs. 22 04 October 2018
Outdated business model 23 04 October 2018
Inflight retail can take off again $2.47bn 24 04 October 2018
Playing to the strengths of the airline asset Key capabilities and strengths: AUDIENCE: 4.1bn customers per year VOLUME: 280m trips CONNECTIVITY: 20,000 city pairs FREQUENCY: One flight every 22 months ATTENTION: On-aircraft dwell time 25 04 October 2018
Check 1 - Use the data 26 04 October 2018
Vending Fresh Cars Daily in San Antonio
Check 2 - Make it easy 30 04 October 2018
Convenience F&B delivery Deliveroo, P R A G M A Dubai Airport
Check 3- make it relevant 32 04 October 2018
Convenience a superior lounge experience A taste P R A G Mof A the future
P R A G M A
P R A G M A
P R A G M A
P R A G M A
Check 3 - Make it relevant 38 04 October 2018
Check 3- make it relevant 39 04 October 2018
Check 3- make it relevant 40 04 October 2018
Check 3- make it relevant 41 04 October 2018
Connecting people to products & services With the right proposition Accessibility Offer Image
The business model can be challenged 43 04 October 2018
State of the Art Retail Practices and Customer Insights Mauro Oretti Vice President of Sales, Marketing and Customer Experience for SkyTeam GAPS Day 3 PLENARY SESSIONS
SkyTeam 20 member airlines 2
Facts & Figures SkyTeam by numbers Destinations 1074 Countries 177 Daily Departures 16,609 Number of Lounges 600+ Annual Passengers 730 million FFP members 200 million Interline passengers Transfer passengers 28 million 8.5 million 3
Will we all be Amazon of the air? How SkyTeam is refocusing on customer and technology Customer Technology SkyTeam s member airlines are evolving along with the new reality in the value chain, taking into account the shifting Distribution landscape (NDC, Offer/Order, i-emd ) and the new opportunities this entails As an alliance, SkyTeam is developing technology to enable its members to cooperate in this new environment And, help its customers solve common pain points 4
Identifying customer pain points Research what our customers expect and need Research commissioned by SkyTeam* identified a lack of digital seamlessness in retailing one of the top travel gripes 60% of travelers have experienced and been inconvenienced by a lack of a complete ancillary offering across multiple carriers Two-thirds of business travelers identified choosing a seat on all flights as being very important 7.5 million, the amount of customers that are expected to benefit annually, from the improved online experience offered by SkyTeam s new Seamless Seats & Ancillaries program *Source: Atmosphere Research Group - 2017 5
Addressing basic customer expectations We are solving the.com seam for interlining ancillaries When it comes to buying ancillaries in a ticket involving more than one airline, two major seams exist: The distribution seam Product offerings differ depending on the channel (.com vs GDSs) The interline seam passengers are unable to buy ancillaries on a leg of the flight if a second carrier is involved 6
Pain Points Seamless Seat Maps and Ancillaries Solving basic service customer pain points and generating additional revenue With interline tickets, often customers: can t view the seat map can t make their seat selection can t select preferred seats can t change seats can t purchase baggage ancillaries All of which leads to inconvenience and stress The result? Travelers are frustrated p7
The solution? Introducing
Advantages Bridges providers and message formats (both NDC and non- NDC) Provides airlines with numerous options if they want to add new functionalities Enables leaner and quicker development of new IT-services Delivers a more consistent customer experience Quick time to market
Solution Seamless Seat Maps and Ancillaries Solving basic service customer pain points and generating additional revenue Exchange seat maps and cross-sell ancillaries through the SkyLink Digital Spine Bridging differences between system messages Marketing carrier s look and feel Operating carrier s product characteristics and prices Delta and AeroMexico were the first members to go live with the SkyLink Digital Spine on August 2 nd, 2018 More members will follow over the next two years
A small step, but a significant one These are the first bricks of a Value Creation Hub (VCH) A wealth of additional retail opportunities exist: - purchase additional baggage - upsell from economy to business - lounge access, wifi or meals - GDS indirect sales Check-in RES MMB SkyTeam s focus is only on this relatively small segment. But this technology can really open up a world of possibilities MMB
The future opportunities are endless This innovation, could, in the future, enhance the customer experience by offering, among others: Seamless check-in Track and trace for baggage Using miles as currency (enhancing loyalty) Plus, scope will be extended beyond the Manage My Booking (MMB) functionality to all parts of the booking journey
Alexander von Bernstorff, Director Airline Solutions, InteRes GAPS Day 2 The Aircraft Experience
Air content distribution made in Germany since 1997
InteRES is suggesting to utilise the concept of the NDC Order throughout the customer journey. All commercial interaction between the airline and the customer is through NDC. Let s have a look
initial shopping pre-departure @airport in-flight after arrival NDC Order NW-AK8U-B77J-04 Order-item price delivery status
initial shopping pre-departure @airport in-flight after arrival NDC Order NW-AK8U-B77J-04 Order-item price delivery status Flight SCL-CDG-FRA 899 ready initial shopping XXL Seat SCL-CDG Airport transfer SCL 35 29 ready ready Flight SCL-CDG-FRA 899 XXL Seat SCL-CDG 35 Airport transfer SCL 29
initial shopping pre-departure @airport in-flight after arrival NDC Order NW-AK8U-B77J-04 Order-item price delivery status Flight SCL-CDG-FRA 899 ready pre-departure XXL Seat SCL-CDG Airport transfer SCL 35 29 0 ready cancelled ready Lounge CDG 25 Lounge CDG Premium meal 25 17 ready ready Premium meal 17 CANCEL Airport transfer -29
initial shopping pre-departure @airport in-flight after arrival NDC Order NW-AK8U-B77J-04 Order-item price delivery status Flight SCL-CDG-FRA 899 ready @airport XXL Seat SCL-CDG Airport transfer SCL 35 0 ready cancelled Fast-lane security 5 Lounge CDG Premium meal 25 17 not ready claimed ready Fast-lane security 5 in-progress
initial shopping pre-departure @airport in-flight after arrival NDC Order NW-AK8U-B77J-04 Order-item price delivery status Flight SCL-CDG-FRA 459 in-progress ready in-flight XXL Seat SCL-CDG Airport transfer SCL 35 0 consumed ready cancelled Shower (A380) 20 Lounge CDG Premium meal 25 17 not claimed in-progress ready Duty-free 96,79 Change CDG-FRA flight 0 Fast-lane security 5 in-progress consumed Shower (A380) 20 in-progress Duty-free 96,79 consumed Important: On-board a connected aircraft, customers will interact with the airline based on its NDC Offer- & Order- Management system (single-point-of-truth) e.g. for - itinerary changes - duty-free purchase - entertainment system
initial shopping pre-departure @airport in-flight after arrival NDC Order NW-AK8U-B77J-04 Order-item price delivery status Flight SCL-CDG-FRA 899 consumed ready after arrival XXL Seat SCL-CDG Airport transfer SCL 35 0 consumed ready cancelled Hotel transfer 15 Lounge CDG Premium meal 25 17 not claimed in-progress consumed ready Fast-lane security 5 in-progress consumed Shower (A380) 20 in-progress consumed Duty-free 96,79 consumed Hotel transfer 15 in-progress
The airline is now a data-based retailer NDC Order NW-AK8U-B77J-04 Order-item price delivery status Flight SCL-CDG-FRA XXL Seat SCL-CDG Airport transfer SCL 899 35 0 consumed consumed cancelled Lounge CDG Premium meal 25 17 not claimed consumed Fast-lane security 5 consumed Shower (A380) 20 consumed Duty-free 96,79 consumed Hotel transfer 15 consumed Complete data on purchase and usage history along the customer journey on a given O&D Single-point-of-truth for revenue optimisation, product management, marketing, accounting, sales, etc. Holistic view on customer because shopping, offer and order data are available no siloed data even if PNR, ticket and EMD are still there Increased customer satisfaction because of more relevant offers and end-to-end servicing / usability.