I recently read an article from Google’s VP of Global Performance Solutions, Jason Spero, titled, “In the Age of Assistance, Delivering Growth Starts With Predicting What People Want.” In the article, Spero addresses how to positively impact conversion and sales by better understanding customer needs. This is important when you consider that by 2020, smart personalization engines used to recognize customer intent will enable digital businesses to increase their profits by up to 15%.1
Airlines already have immense amounts of data about how passengers use or don’t use their product. As airlines accelerate on the retail path, they will have the opportunity to use this data to capture insights that make the difference for a traveler. For example, a frequent flyer colleague of mine mentioned his airline of choice finally stopped offering him miles years after he never made a single mile purchase, shifting instead to more relevant offers.
With the global trend for unbundling fares coupled with the acceleration in NDC adoption, it is becoming possible for passengers to cherry-pick their products and services and compare offers beyond just price. In addition, I already see airlines investing heavily in differentiating their brands to escape the perception of commoditization by implementing AI innovations to deliver seamless digital shopping experiences and personalized offers.
Here’s a real-life story of how search insights can fuel personalized offers to impact both passenger experience and airline ancillary revenue.
It was only six months ago at PROS Outperform conference when we officially presented PROS Offer Optimization. One of its projects, fueled by AI and PROS Merchandising, is dedicated to helping airlines become better retailers by personalizing ancillaries during flight shopping.
We began enabling airlines to personalize ancillaries by focusing on the order in which products are presented to the customer. By Outperform, TAP Air Portugal had emerged as the innovative partner airline to debut the project for its dotcom. With a significant share of direct sales, the European carrier aims to deliver more personalized offers, taking control over how its product gets distributed with the help of artificial intelligence. On this exciting project PROS has worked with Microsoft, who has provided guidance on the use of Microsoft Azure Machine Learning service and leant their experience on AI projects, to deliver science-driven offer creation.
So, when you go book your flight to Portugal this summer on TAP Air Portugal’s website, the airline will offer you the ancillary add-ons ranked in an order closest to your purchase intent. Behind the scenes, the sophisticated AI platform will process various data like origin and destination of your trip, number of travelers, and previous ancillary purchase history, to name a few. With the help of machine learning algorithms, the products that make the most sense to your profile and trip context will be presented, thus increasing your propensity to buy and impacting positively airline ancillary revenue. And if you happen to be offered that additional bag you always purchase first, it’s not magic – we just know you always pack more, just in case.
Curious to find out more? Listen to TAP Air Portugal's presentation from Outperform 2019 and learn how the carrier used PROS AI to help personalize offers and predict travelers' intent.
1 Gartner Magic Quadrant for Digital Commerce June 2018