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New merchandising study suggests personalised services could grow average basket size by as much as €35

Personalisation is essential to drive future merchandising revenues for airlines, with tailored bundles of both airline and partner services potentially increasing a traveller’s basket size by between €30 and €35, according to new research released today.

 

Research by Frost & Sullivan argues that airlines must deliver more data-led, targeted merchandising

Report published to coincide with Amadeus’ Airline Digital Conference in Madrid

 
Madrid, June 4 2014: Personalisation is essential to drive future merchandising revenues for airlines, with tailored bundles of both airline and partner services potentially increasing a traveller’s basket size by between €30 and €35, according to new research released today.
 
’Thinking like a retailer: Airline merchandising’, a research report commissioned by Amadeus and written by consulting firm Frost & Sullivan, highlights that in the battle for additional service revenues, airlines must be able to compete with data-centric travel companies by more effectively using the customer data they already collect, if they are to truly maximize this commercial opportunity.
 
With airlines now able to gather and analyse more traveller data than ever before - including mobile app and social media behaviour, session history from in-flight connections, travel history and previous purchases – the report argues that this information must be used to create a single unified customer profile, which in turn would allow airlines to adjust their merchandising techniques according to the type and timing of individual traveller journeys. This combination of better data management and far greater traveller insight will result in increased relevance, conversion and ultimately revenue.
 
With 26% of all travellers more likely to respond to messages tailored to personal interests and 22% more likely to respond to location-specific promotions, the study encourages airlines to develop comprehensive merchandising strategies that take into consideration the impact of timing, technique, channel, service and price.
 
The report’s other key findings include:
 
  • For a quarter of travellers, the best time to consider an airline’s additional offers is when they return home and are thinking about their next journey. To unlock the potential of this growth opportunity, the report says airlines need to change their mindset in order to recognise that their relationship with customers continues after the flight lands
  • The five most important merchandising techniques are user-interface optimisation, context-aware e-mail notification, promos & third-party deals, push notification and value-added bundles
  • Some 79% of global travellers would prefer to buy extra travel services directly from airlines. Airlines can leverage their channels to meet this need
  • The most important channel for merchandising ancillary services is the web accessed via PC – however, the importance of mobile is increasing rapidly. Airlines should optimise their websites for different kinds of mobile devices. The conversion rate of consumers using tablets (2.6%) exceeds that associated with PCs
  • When it comes to Branded Fares and Fare Families airlines need to remove the complexity and be explicit about the value of each bundle
  • Purchase of additional offers is highest at time of booking. Airlines can maximise their revenues by equipping their sales channels for such purchases at booking time
 
Julia Sattel, Senior Vice President Airline IT, Amadeus, said: “It’s clear that in order for airlines to succeed in the highly competitive and fragmented travel retail sector, they must think like retailers and adopt an effective approach to merchandising, in which personalisation takes centre-stage. We are committed to enhancing our airline customers’ merchandising capabilities across all channels, helping them to in turn better serve, manage and connect with the ever-evolving needs of 21st Century travellers across the globe as we shape the future of travel together”.
 
Lawrence Lundy, strategy consultant, Frost & Sullivan, commented: “As airlines evolve from being providers of one core product – flights – to travel experience businesses with a wide range of services, they need to view themselves as retailers. Understanding where, when and how to merchandise products and services to the traveller is vital to retailing effectively, and this study aims to cast light on precisely these elements of a merchandising strategy.”
 
Published to coincide with Amadeus’ Airline Digital Conference (Madrid, 4-5 June 2014), the world’s largest gathering of e-Commerce and mobile airline executives, ’Thinking Like a retailer: Airline merchandising’ is informed by interviews with senior airline executives, as well as a survey of more than 300 business and leisure travellers in the UK, Germany, USA, Brazil and Singapore.
 
- Ends  -

Notes to the editors

Amadeus is a leading provider of advanced technology solutions for the global travel industry. Customer groups include travel providers (e.g. airlines, hotels, rail and ferry operators, etc.), travel sellers (travel agencies and websites), and travel buyers (corporations and travel management companies).
The Amadeus group employs around 10,000 people worldwide, across central sites in Madrid (corporate headquarters), Nice (development) and Erding (operations), as well as 71 local Amadeus Commercial Organisations globally.

The group operates a transaction-based business model. For the year ended December 31, 2013 the company reported revenues of €3,103.7million and EBITDA of €1,188.7 million.

Amadeus is listed on the Spanish Stock Exchange under the symbol "AMS.MC" and is a component of the IBEX 35 index.

To find out more about Amadeus please visit www.amadeus.com

Contact details:

Amadeus IT Group
Malek Nejjai
Tel.: +34 91 582 01 60
Email : mediarelations@amadeus.com