Towards customer-centric airline retailing with orders
Airlines have achieved moderate progress in realizing their vision of modern retailing. Much of that progress is on the airline's direct channels but there's still much that remains to do to achieve the end vision. Not to mention deploying it across the intermediated channels.
Consumers enjoy simple, intuitive, and personalized retailing experiences in the FMCG and entertainment spaces but replicating those experiences in travel has been slow. The industry's underlying technology landscape is a major part of the challenge.
In my previous blogs, we looked at how retailing with offers and orders can unlock new value for travellers and airlines by thinking beyond the airline ecosystem. We later looked at the required technology components to get retailing with offers off the ground. Of course, the customer and brand experience isn't just about sales. Equally important are fulfilment, settlement, and servicing. In this blog, I want to look at order management and why it's so important to getting to the airline retailing vision´s end destination.
Generating efficiencies and unlocking customer data
The consumer experience is key to repeat business. A big part of excelling in the delivery of the customer experience is knowing who the customer is. Followed by the individual's, and like-minded peers', purchases, preferences, dislikes, etc. Successful retailers know how to use data to create, deliver, and service personalised offers that can include partner components. However, the patchwork landscape of complex, siloed, and legacy systems, processes, and standards make this very difficult for airlines.
Back-office processes continue to require the generation of multiple documents, such as PNRs, eTickets, and EMDs. These multiple documents are used for different purposes and generated by different systems, presenting challenges for airlines to track customer orders throughout their lifecycles.
Thankfully, industry initiatives including ONE Order are underway to generate efficiencies by simplifying the creation, delivery, servicing, and accounting of orders. Equally important, however, is how a new landscape of retailing with orders will provide a unified and accessible view of a customer's purchasing habits. The ability to tap into this data across channels will finally tip the balance towards customer-centric retailing, as opposed to the product-centric approach the industry has largely had to conform with.
As we've seen, ONE Order is but one component within an airline's retailing technology ecosystem, that includes distribution via NDC, Offer Management, Revenue Accounting, direct and indirect channel digital experiences, and more. An Order Management System (OMS) is a centralised repository housing all orders allowing authorised users to read and update the status of services contained within the order. The end-state is to have all order changes, including cancellation and refund, available across channels in real-time, facilitating reporting and the flow of information for greater collaboration and efficiency between airlines and their partners.
Benefits of retailing with Orders
The OMS is central to a ONE Order solution and is used to automate legacy internal processes. It is central to many aspects of the airline, including point of sale, inventory, product catalogue, departure control, and customer service. Replacing the legacy framework with orders comes with many benefits, including:
- Simplifying post-booking servicing for travellers and airlines
- Enabling the retailing, settlement, fulfilment, and servicing of ancillary products across airline partners to support a seamless passenger journey through interlining with Offers and Orders
- Accelerating innovation and time to market for new products through downstream and back-office process simplification
- Improving interoperability with intermodal and non-air retail partners
- Generating a holistic customer view through a single source of data to improve personalisation capabilities and techniques
- Supporting retailing at departure control for increased customer satisfaction and airline revenues
- Saving costs by streamlining processes and sunsetting legacy systems like eTicketing servers
- Simplifying integration with future systems and retail partners.
A new landscape unfolds
With the above benefits, we can do away with complicated and nested inventory management. This can be simplified to what is available, what has been sold, and what remains. Pricing can also be simplified leaving the pre-filing of a finite number of fares as a thing of the past as the industry evolves to real-time price calculations in response to customer requests.
A product catalog will control all products offered, including rich content describing these products. This will also include partner products and will help to facilitate seamless interline experiences for customers.
The inertia in progressing to retailing with orders is in large part driven by having to run old and new systems side-by-side until such time as all legacy systems and processes have either been sunsetted or enhanced to run off a new OMS. Dual systems have cost and risk implications particularly in the areas of consolidated reporting. Any customer itinerary that resides partly in the new OMS and partly in the legacy PSS will require special treatment e.g. inventory handling, for both order creation and servicing. The good news is that solutions exist today to address all these concerns.
OMS integration to other systems
The centralised OMS will connect to many systems, including DCS, Revenue Accounting, Payments, CRM, Loyalty, Customer Data Store, and Business Analytics.
Using a modern DCS system with direct access to orders will open new opportunities for airline gate agents to better serve customers by selling them last minute upgrades to make their journeys more comfortable and seamless. Constraints when using traditional or legacy DCS systems simply cannot deliver on this ability.
The OMS will need to meet certain regulatory requirements, such as delivering flight passenger lists (PNRGOV) to national government agencies. It will also need to work with the Offer Management module to manage voluntary and involuntary changes to orders, which will sometimes require new offers to be generated, such as when a previously booked seat or meal is not available on a new aircraft.
Until the ONE Order environment matures, the OMS will likely have to be integrated with legacy messaging for partner systems seeking to query inventory to create airline orders or interline/codeshare itineraries.
One Order deployment will ramp up
While IATA introduced ONE Order at its World Passenger Symposium in 2015, industry adoption has been slow. To date, 31 players populate the IATA ONE Order certification registry, including IBS Software. As airlines continue to progress down the offer management and NDC avenues, we expect to see increased interest in ONE Order as airlines aim to close the retailing loop.
Paul Byrne joined IBS Software in May 2021 as Vice President, iFly RETAIL, focusing on bringing to market the company's latest omnichannel airline retailing platform. Paul has over 25 years of experience in technical, product management, and business development roles. He has been actively involved with IATA in the NDC, ONE Order, and Dynamic Offers working groups. He was a non-executive Board Member on the Open Travel Alliance.