Introduction to Airline Retailing
Ann Cederhall, a seasoned expert in airline distribution strategy, introduces the concept of airline retailing aimed at optimizing the customer experience. As an industry consultant and columnist for AeroTime, her insights draw attention to the outdated systems airlines still use, which were originally designed in the 1960s. This discussion focuses on the limitations of the Passenger Name Record (PNR) system and the benefits of adopting an Order Management System (OMS), which she refers to as ‘glue’ for better data integration and customer service.
Challenges with the Current PNR System
The PNR system, while fundamental, is plagued with constraints that hinder modern airline retailing. This system fails to recognize linked passenger bookings unless they are handled as separate records. Ann illustrates this with an example where a mother and son traveling together cannot be easily managed within the same PNR if their travel plans differ slightly. This segmentation leads to inefficiencies and a poor customer service experience.
The Role of ‘Glue’ in Enhancing Retailing
‘Glue’ or OMS is proposed as a solution to overcome the limitations of the PNR system. This system enables airlines to maintain and utilize customer data beyond the lifespan of a PNR, which is crucial for effective retailing. For instance, integrating an OMS allows airlines to bundle services such as FastTrack and Priority boarding, based on customer’s previous purchases, thereby offering personalized and discounted packages that enhance customer satisfaction and loyalty.
Benefits of Integrating Advanced Systems
By integrating systems like Customer Data Platforms (CDP) and Customer Relationship Management (CRM), airlines can effectively utilize their vast data on customer preferences and behaviors. This integration allows for more targeted marketing, such as personalized travel suggestions and relevant promotional offers, which are more likely to result in customer engagement and increased sales.
Steps Towards Implementing Effective Airline Retailing
- Customer Listening: Understand and prioritize customer needs and preferences through direct engagement and feedback mechanisms.
- Internal Advocacy: Identify or hire champions within the organization who are knowledgeable about the latest trends in airline retailing.
- Organizational Focus: Shift the organizational focus towards customer-centric strategies rather than just product-oriented approaches.
- Technological Investment: Invest in or develop technologies that support ‘glue’ functionalities, enhancing the connection between various data points and systems.
- Strategic Vision: Clearly define the future state of airline retailing desired and assess current capabilities and gaps in technology and processes.
Ann Cederhall emphasizes that transitioning from a PNR-centric model to a more integrated approach does not require a complete overhaul of existing systems but can be achieved through strategic enhancements and a focus on integration and customer data utilization.