skip to Main Content

How Merchandising Analytics can help Airlines Master Retailing?

Merchandising Analytics

There are encouraging signs that the ambition of merchandising analytics helping airlines master retailing is not just a pipe dream but inching closer to a real and achievable vision. Industry execs around the globe seem to be in agreement that levelling the playing field between the direct and the indirect channel and creating an infrastructure capable of handling content rich ancillary merchandising is the only way forward. Pilots are in progress and there is burgeoning interest across the globe. But these are still early days as the industry cranks up its dynamic merchandising engines and data-driven decision-making. This means letting go of a flight-centric and transaction focused mentality (and systems) in favour of a customer-centric approach with the customer journey experience at the core of what an airline retails.

At the recent Airline Information (AI) event, AI’s correspondent Ritesh Gupta caught up with Jonathan Boffey of Triometric to find out more about the role XML analytics can play in an airline’s merchandising strategy and where the company’s collaboration with Farelogix and its NDC-Xpress distribution and merchandising platform is heading.

How is Analytics shaping up?

If we look at how the world of data analytics is shaping up, especially as the industry embraces the NDC standards based on XML, the ability to know the customer better and the context in which he is making the buying decision is quite promising. It’s like several pieces of a big puzzle getting sorted out. If the emphasis is on identifying the customer using factors of probability on the one hand or segmenting them into “look-alike” clusters on the other, then there is a great opportunity to make the most of search behaviour and match it with buying intent. This is where being able to capture and analyse the detail in the data stream between requests and offers comes in.

Analysis to determine customer insights then becomes an ongoing exercise – learning about the behaviour and relating it with the merchandising strategy it paves the way for constant refining of what to offer each time a consumer searches for his next trip.

What is XML Analytics?

It should be noted that the product lines of travel retailers is expanding. Competitive differences being expressed through ancillaries and bundles. Carriers are getting more creative but hampered by their existing infrastructure in the way they personalise, package, and deliver their offers via the third party channel. This is why the ability to use search insights just at the time when a potential booker is looking for something would complement the whole omni-channel shopping landscape.

“As airlines attempt to respond to a request from the agency channel, as being envisioned with the adoption of the NDC standard, it’s imperative to leverage search and booking data to deliver products and services that customers most value,” says Jonathan Boffey, SVP- Business Development at Triometric.

As a specialist in the arena of travel analytics, Triometric highlights that NDC is based on XML and XML data analysis offers deep intelligence into customer shopping intent and buying behaviour.
The industry is already looking at making NDC shopping data more accessible.

For its part, Triometric has just launched an optional analytics service for airline clients that monitors the XML data stream passing through Farelogix’s NDC-Xpress platform, an offering that is equipped to deliver airline-controlled merchandising, pricing and API distribution in a SaaS model. The company can also deliver equivalent reporting to other NDC booking environments.

“Understanding how travellers search and book for travel is increasingly vital for airlines as they embrace NDC standards,” says Boffey. “It a big part of the NDC opportunity and it can be applied anywhere along the B2B supply chain.”

Triometric NDC Analytics will enable carriers to make the most of intelligence embedded in the rich NDC-schema compliant XML message streams.

“Whether transacted by the end consumer directly or through an agent, if the traveller data is rich enough then there is ample scope to use the available insight in the tailoring and pricing of offers,” says Boffey.

Cracking that relevant offer

“There is a big realisation (among carriers) about the potential of leveraging data sets, but as of now the use is quite limited,” says Boffey.

On the positive side, there are airlines that work with a set of rules that helps them to independently manage their own product propositions (inventory, availability, price, product biasing etc.). For example, one can work out channel-specific merchandising rules, and this would pave the way for control of what can be sold.

Bringing the element of analytics into it, by delving deeper into search requests, offers and bookings every day, one would gain an insight into customers’ travel intentions and preferences. As Triometric asserts, this would help in tailoring better offers for conversions based on customer context and market demand.

In addition to large data volume processing capabilities and real-time analytics, Triometric has focused on other key aspects, too – visual dashboards and key indicator alerts incorporated into a single platform to give airlines visibility into shopping intent on which accurate and timely personalised offers depend.
So critically what would happen at the point of search?

“So on the basis of the segmentation and the defined rules that set the scene for the chosen product mix, offers are shaped up. Now an airline might have a set of 50 offers. Which ones would be most apt and match more closely to the buying intent needs to be analysed on an ongoing basis. The success of these needs to be measured – “closing the loop”. Then over a period of time the system would prioritise accordingly. This means that in responding to a search, the airline would be in a position to come up with not just a relevant offer, but one that had been tried and tested. The fact that the basket of ancillary products is increasing, makes this issue more complex. So airlines need to be spot on with their work at the backend, and gear up for the changes,” explained Boffey.

While the business information is critical, different product searches will place different demands on the booking systems and these differences need to be understood. The team at Triometric has ensured that its latest platform also gives the IT department an insight into critical operational performance, and one would be able to slice and dice data according to key metrics. These include – performance (errors, response time etc.), product availability (no offer, how many offers were given, did the offer match the search request), price sensitivity and margin (look-to-book ratios, what sort of mix is working out well – core product plus third party products etc.) and relevance/ personalisation.

So what’s the timetable?

Online travel is a fast paced and highly competitive environment where systems must be monitored and maintained to run optimally at all times to avoid any degradation of service to the user or loss of revenue opportunities.
“The NDC program is gathering pace”, says Boffey, “Many carriers have been through IATA’s familiarization program and are conducting pilots. Very soon, NDC compliance will no longer be optional for all the major and most of middle tier carriers”.

IATA the driving force behind NDC is already intent on taking NDC to the next level with the One Order industry-led programme aimed at modernising the multiple and rigid booking, ticketing, delivery and accounting methods with a single, flexible order management process. The ultimate goal is a single customer order record holding all data elements required for order fulfilment across the travel cycle. That’s were analytics and the intelligence it can provide is also headed.

This is a guest blog written by Ritesh Gupta as a result of a conversation at the event. A version was originally published on Airline Information’s own website on their ancillary merchandising thought leadership page.

Back To Top