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Thinking like a retailer: How many tools are in your merchandising toolkit?
Jennifer Bourdeau
Product Marketing, Merchandising, Airline IT, Amadeus IT Group
A woodworker wouldn’t simply carry a hammer in their toolkit – rather they would utilise a wide range of tools especially suited for specific tasks. In much the same way – airlines should leverage a variety of different merchandising techniques combined with the right timing in order to optimise customer engagement. Ideally an airline will have a vast kit of techniques to persuade travellers to buy. There are techniques that need to be applied universally at all times and to all channels – including UI optimisation, but other techniques need to be carefully chosen and prepared based on 3 main factors; who’s asking, and what techniques are they reactive to? Which stage of the journey are they in? What’s being offered?
3 useful techniques
After these key points are addressed, then we can consider the ‘how’ – that is, which techniques should be used to convert. Here are just 3 of the more than dozen techniques we examined in our Thinking like a retailer report:
Context-aware email
76% of travellers feel that a context-aware email could persuade them to make a purchase that they otherwise might not have considered. Post-click metrics show that email creates a conversion rate of 3.19%, compared to 1.95% for search and 0.71% for social media. An email triggered by context enjoys a 50% open rate compared to 28% for non-context email.
Likewise, the click-through rate for context-aware email is 10% against 5% for non-context emails. Implemented effectively, context-aware email notifications will lead to a 5% improvement in conversion
Push notifications
Airlines show a 95% interest in this technique, clearly understanding the importance of push for their future. However, only 49% of travellers feel this technique would persuade them to make a purchase. The best push notifications are personalised, contextual, timely, and relevant. If push notifications are overused, the traveller will disregard, disable or even delete the app. If airlines use push notifications to deliver authorised, personal, contextual, timely, and relevant offers they will drive a 10% improvement in conversion. This is greater than email, and second only to user interface optimisation.
Value-added bundles and a la carte
With 50% traveller interest, the most popular way to purchase services is in a value-added bundle, in this case comprised of airline and/or third-party provided services. To airlines, this could mean a bundle of services that improves the travel experience (such as reducing waiting with priority security, priority boarding, and airport transfer), or increases comfort with extra legroom, premium in-flight headphones, and a destination spa experience.
A traveller should be presented offers with varying techniques along their journey and through multiple channels . Additionally, these techniques should be customised based on the traveller’s past reactivity to them. For instance, if the traveller has a very low open rate on the airline’s email offers, this technique should not be used to avoid irritation. However, imagine they also have the airline’s mobile app downloaded and use it for various tasks, then a push notification is a more appropriate merchandising technique with a higher likelihood of converting that traveller.
We'll talk more about personalisation in a future blog post – so stay tuned to this blog.
Download a copy of our Thinking like a retailer report for a more in-depth look at these various merchandising techniques and stay tuned for more posts on how airlines can unlock an additional $130bn in revenues by 2020 .
Tags
Merchandizing, Research