Archive for November 2013

What Retailers Can Learn From Airlines About Omnichannel

The financial troubles of airlines are well documented. So what can retailers learn from a historically struggling industry about how to deliver omnichannel, an innovation that has promise to drive incremental revenue and deliver a fantastic customer experience?  Well, actually quite a lot.

Airline Omnichannel Requirements

Airlines have been executing omnichannel long before the omnichannel buzz word existed.  Fulfillment of an airline's product (getting a person from point A to point B) is arguably the most complex, high touch consumer experiences for relatively frequent purchases.  After a ticket is purchased, a traveler could have 10 or more customer service interactions before the final destination is reached on issues like

  • Seat assignments
  • Upgrades
  • Special requests (e.g., meals, wheelchair)
  • Changing travel plans
  • Flight delays and cancellations
  • Buying ancillary products
  • Flight check in
  • Boarding plane
  • In flight experience
  • Lost baggage and other baggage claims.

It gets even more complicated when considering the number of channels which must be in synch with one another, including:

  • Distributors (i.e., travel agencies like American Express and Expedia)
  • Website
  • Mobile app
  • Call center
  • Email and text for proactive communications
  • Airport kiosks
  • Airport customer service reps
  • Flight attendants.

Each of these channels perform some combination of selling air travel, selling ancillary products and handling a myriad of customer service issues.

Further, a customer often interacts with multiple channels for a specific need.  For example, if a flight is delayed, the traveler may visit the website, check the mobile app, contact the call center, receive an email, look at the airport kiosk and speak with a gate agent all for the same issue.

Putting aside everyone's travel horror stories (and we all have them), airlines do a lot of things right in this challenging environment.

Airline Lessons for Retailer Omnichannel

There are many lessons a retailer can learn from airlines about omnichannel.  We'll share our four biggest insights.

1. Effective use of unique identifiers

Like other retail sectors, airlines have a unique transaction ID for purchased tickets called a passenger name record or PNR.  The PNR ensures linkage of customer service interactions across the channels and through the travel experience. In addition, loyalty frequent flier numbers connect transactions over time to customers.  The loyalty ID has been used effectively for personalization and customer life cycle management.  Leveraging these identifiers, especially loyalty IDs, can be an effective enabler to deliver omnichannel for retailers.  For example, loyalty IDs can be used to link customer research of products in digital channels with a purchase transaction in a brick & mortar store.

2. "Intelligent" middleware investments to speed cross channel deployment

Most companies have legacy technology systems that are difficult to enhance.   Airlines are no different and some have learned the hard way of not investing in "intelligent" middleware that can act as channel "brains".  Without channel "brains", new cross-channel features become a different project in each channel.  This drives significant costs and elongates timelines.  Since investment dollars are constrained, often functionality is implemented in one channel but not another.  This leads to missed revenue opportunities and poor customer experiences.  Instead with "intelligent" middleware, new functionality can be launched much more like a single deployment, enabled all at once.

3. Leveraging events for insights to trigger action

In several contexts, airlines have leveraged the occurrence of an event to take action in real time.  Events are essentially customer digital footprints that can be captured at every touch point and is usually initiated by a customer action; examples include,

  • Customer visits website
  • Customer uses mobile app
  • Customer visits store
  • Customer purchases product
  • Customer logs a complaint
  • Retailer geo-locates customer.

By applying predictive analytics and correlation techniques on events, intelligence can be extracted in real time that can be used for instantaneous decision making and subsequent actions.  For example, airlines might take several immediate actions if a flight delay causes a missed connecting flight - rebook the traveler on next available flight, ensure the bags of traveler are transferred accordingly, offer a food and hotel compensation voucher to the traveler.

4. Data management and data virtualization

Data management and access are critical to the execution of omnichannel.  Airlines have many legacy systems with each acting as a source of truth for different elements of essential data fields.  It is a natural tendency to undergo a large scale enterprise data management project to bring all of these sources of information together into one system (e.g., CRM or MDM ).  However, going down this path will significantly delay omnichannel delivery.  Instead, airlines that have enabled virtualized data stores fed from the different systems have improved time to market for critical omnichannel functionality like real time decisions and offer optimization.

Omnichannel is relatively new for retail and the sector is still trying define the opportunity.  But retail has the opportunity to learn from the lessons of airlines, an industry that has been executing omnichannel for decades.

Tell us what you think?  We'd like to hear.