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Airlines must act more like retailers by adopting merchandising mind-set

Jennifer Bourdeau

Product Marketing, Merchandising, Airline IT, Amadeus IT Group

Airlines are exploring new types of travel services to add value for their customers and improve profitability, but they are still selling these services with a traditional airline mind-set. Instead, airlines should behave like retailers, meaning that merchandising must be core to their strategies.

In the diagram below are five merchandising techniques that airlines must treat as high priorities to meet the needs of travellers and drive profitability. The diagram shows each of the high-priority merchandising techniques, the ROI improvement, the best time during the booking flow for the techniques to be implemented, and the best channel to reach the traveller

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merchandising techniques for airlines

Mobile also presents many opportunities for airlines, highlighted in the following diagram, which depicts each opportunity and the ROI airlines can expect.

merchandising techniques for airlines

Airlines must embrace merchandising techniques that strike the right balance between yield and customer satisfaction. The key to future success lies in brand development and the delivery of real value that will create customer loyalty. By broadening the product portfolio beyond flights and just a few high-yield services like excess baggage, airlines have the opportunity to move up the value chain, away from price-driven flight products, towards brand and experience-driven travel services.

Moving up the value chain requires investment in five key merchandising techniques: user interface optimisation, context-aware emails, promos or third-party deals, value-added bundles, and push notifications. Each of these techniques must be personalised to the traveller using as much data as possible, to ensure relevance.

If airlines adopt a retailing mind-set with merchandising at its core and invest in the techniques that we have identified in our report, Thinking like a retailer, we believe they can become leaders in the travel experience market with an opportunity to unlock more than $130 billion in revenues by 2020. Airlines already have a strong competitive advantage with a wealth of traveller data and the trust of their customers, but now the task ahead for them is to leverage this data and trust to deliver personalised and relevant services.


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Merchandizing