IATA and BCG have just published the first article of a series on airline retailing, which focuses on the implementation of new techniques. Here are my 4 observations:
✈️ The article assumes that we’ve read the 2019 McKinsey article “airline retailing: the value at stake” and understood what’s in it for air travel customers (offers relevant to your needs, automation of itinerary changes, better prices, etc.)
✈️ The “bionic company” concept is interesting, as it moves beyond the debate of AI replacing human expertise, and proposes that tech will augment humans, in this case to make pricing and offer decisions. I can’t wait 🚀
✈️ Dynamic bundling (the right product) and continuous pricing (at the right price) at the two pillars of IATA’s Dynamic Offers. The article suggests that a third pillar, about customer lifetime value, should influence the offer optimisation. Otherwise offer creation can be very transactional.
✈️ Retailing (as in understanding the customer needs to offer the right product at the right price) represents a mindset shift from the traditional approach (the flight is safe, on-time and with a good frequency hence customers will come)
I look forward to reading more about the path to airline digital retailing 😊