Airlines are embracing digital retail strategies driven by NDC (New Distribution Capability) and OOM (One Order Management) to meet rising passenger expectations for personalized, seamless experiences. Digital retail enables enhanced customer experience through omnichannel personalization, agility through real-time pricing modifications, increased revenue from ancillaries and targeted marketing, and reduced distribution costs by eliminating intermediaries. NDC standardizes data exchange for distributing flight content, while OOM facilitates unified order management. As competition intensifies, adopting digital retail strategies empowered by NDC and OOM is crucial for airlines to stay relevant and cater to tech-savvy passengers' evolving needs.
Passengers’ expectations have soared to new heights and so have airlines' attempts to offer improved customer experience. Nowadays, passengers are not happy with just online ticket booking. They expect a range of services from the moment their journey begins.
To meet rising passenger expectations, airlines are readily embracing digital retail. From apps offering a bouquet of benefits to , airlines are offering a host of benefits to their customers. In this era of competition and disruption, digital retail strategies, driven by NDC (New Distribution Capability) and OOM (One Order Management) standards are helping airlines reach unimaginable heights in this transformation journey.
Let’s dive into why digital retail is important and what are the bouquet of benefits airlines can reap from it.
The Necessity of Digital Retail for The Airline Industry
All travelers are now digitally savvy and expect fast content. From booking to boarding, they look forward to personalized experiences and real-time information at their fingertips. Airlines must take tech-savvy flights to meet this wave of digital transformations and digital retail strategies are the exact route to take.
Digital Retail Benefits:
Enhanced Customer Experience
From the elderly planning a relaxed vacation to Gen Z exploring the world, customers of all ages look forward to personalized experiences and an array of tailored services. Airlines can harness digital retail to deliver flawless omnichannel experiences across all touchpoints. Omnichannel is a two-way street that enables airlines to reach their customers through email, push notifications, and social media. In addition, packages, services, recommendations, and promotions can be customized to meet individual preferences. Seamless interactions remove all friction points and ensure a smooth and enjoyable travel experience. The mobile app, website, and airport kiosks must connect seamlessly.
Agility and Flexibility
Digital retailing allows airlines to be responsive and agile. They can quickly respond to changing market conditions by modifying prices in real time. It also levels off the process of introducing new offers & services. Real-time pricing powers airlines to meet market dynamics and optimize revenue in the longer run. Additionally, dynamic pricing strategies enable airlines personalize pricing, based on individual customer profiles, travel patterns, and market conditions. The process of introducing new offers becomes quicker and more efficient which in turn lets airlines capitalize on emerging opportunities and promptly respond to customer preferences.
Increased Revenue
Digital retail equips airlines to tap into new revenue streams through ancillary products and services, targeted marketing campaigns, and dynamic pricing strategies. Ancillary products & services, including baggage fees, seat selection upgrades, and travel insurance can be offered seamlessly through digital channels, generating additional revenue streams. Targeted marketing campaigns can be tailored to specific customer segments, centered on their travel pattern, preferences, and demographics, which maximizes marketing efforts. Dynamic pricing strategies can be harnessed to optimize revenue by adjusting prices based on demand, market conditions, and customer behavior.
Reduced Distribution Costs
By going past the traditional intermediaries, airlines can streamline distribution processes. It not only reduces costs but gives airlines better control of their pricing and branding. Eliminating intermediaries brings down the number of entities involved in the distribution chain. Furthermore, it simplifies the processes and reduces costs associated with third-party commissions and fees. Greater control over pricing and branding equips airlines to maintain consistent brand messaging and pricing across all channels. This approach amplifies brand equity and revenue generation.
What are NDC and OOM – The Powerhouses of Digital Retail?
New Distribution Capability aka NDC, a technical jargon, has created a lot of buzz and perfectly serves the changing landscape. NDC is a data interface, built especially for the airline industry to distribute and sell flight content. This advanced data exchange format furnishes airlines to maintain a standardized messaging format and share real-time products and pricing information with travel agents and distributors.
Similarly, the One Order Management System tracks and manages customer orders from placement to fulfilment. It facilitates a unified order management system, eliminating the requirement of multiple systems.
