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I’ve just returned from the ACI Airport Commercial & Retail Conference & Exhibition in Helsinki, where the major topic was “Commerce and Retail”. The event featured many big players from airports, airlines and the travel business.
They all know that they have, or could have, data about their customers available at their fingertips – a golden source we all know is key for successfully growing their respective businesses. It goes without saying that their business is at its limits; digital is a key to continued success, particularly as it is a precondition for winning and keeping customers long-term – as they no longer make purchases based primarily on price, but make their decisions based on other, more important, factors. So, the question for all stakeholders who want to go digital is, “how”?
Wait and see what others do, look for startups with innovative solutions, follow the success of app solutions such as filo with the numbers they’ve achieved so far (900 Airports, 450x Wi-Fi Login, 250x Airport Guides, etc.) or start to “learn and adopt”. The pain isn’t so great at the moment, but will be similar to the pain the fashion-, retail- and supermarket businesses have felt.
Figure 1: Labor Productivity in the Electrification Era Surged as Organizations Redesigned Operation (Source: Adapted from Erik Brynjolfsson and Andrew McAfee, “The Second Machine Age”, January 2014)
An interesting chart by Erik Brynjolfsson and Andrew McAfee (Figure 1) shows that, when industrialization came along, many things had to change when (re)organizing operations. The DNA of airports and airlines has been to optimize the organization of flight operations, now it is time to turn to optimizing customer journey “operations”.
Or, one could say, just as maximizing the efficiency of the “turnaround time” of planes, the same will happen with passengers from the perspective of the “perfect customer journey”.
Therefore, the shopping experience will change dramatically and is already in the process of doing so. Global duty free players such as Dufry with “This is your last chance to buy” and others are just as challenged as many others in the industry.
Figure 2: What is the best time for you to consider offers for additional services? (Source: Amadeus)
Airlines have the very first “touchpoint” with customers who are starting their travel journey, as they need a ticket to travel first; the same to travel agencies. Airports are second in the customer journey next to hotel, car hire, parking, and further travel activities. Many players have to move into new and for them unknown areas of the business. The ones that have been leading the market, will or could easily be overtaken and will miss out on unlocking significant revenue potential.
Many players already have the personnel, location and off-line business, but no brand awareness, no corporate culture that allows for rapid adaption to the changing digital reality, no fast-moving digital solutions and, last but not least, they lack operative and strategic digital skills. For digital evolution to take place, companies need to cover all of these items mentioned and also need the awareness that this is just the beginning.
Even though airlines have already taken “first steps”, and on-plane Wi-Fi is / will be standard in 18 to 30 months, airports are in the position to cover the complete Omnichannel experience within a “confined area”, combined with customer “turn-around” time – while also being a funnel for all travelers. A combination of both will bring a perfect customer journey to life.
You order during your flight or before you start travelling, have your purchases delivered to the gate at your destination, or the luggage belt or even to your home. This, combined with the “golden source” of customer data, shared by airport and airline, creates outstanding potential for both and will evolve convenient new services for the market.
A major “digital” evolution is happening right this moment. And though it is still a little under “stealth mode”, it will rapidly unveil the disruption taking place in the industry.
Need more food for thought? Find additional information about retail in the travel industry here.
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.