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Transforming the Customer Experience Through Digital Retailing

All eyes are on "the experience" these days, and it's no wonder: every great experience, regardless of the industry, naturally raises the bar in others. How do you stay ahead of the customer experience curve, giving passengers what they want even before they know they want it? What are the expectations when it comes to booking a flight and how are airlines capturing digital retail opportunities to keep the wow factor (and profits) flying high? Mike Slone, Principal - Travel Division, talks about the trends with a customer who recently adopted the PROS digital retail solution, to learn what they're doing and how they're doing it.

About the Speakers 

Bruno Marques is the Strategic Sales Manager for Groupo SATA responsible for its strategic sales channels, including web sales, online travel agents, SATA Self Point clients among others. He also focuses on the dynamization of the SSP Online presence, and implementing digitalization roadmap. During his 11 years with Group SATA, Marques also held roles managing commercial relationships, digital campaigns, SEO and other website and advertising promotions.

John Szatkowski is the Global Offering Leader, Travel and Transportation, for IBM. Szatkowski has been involved in many facets of aviation including passenger experience, operations, and cargo. He is driven by creating transformative capabilities that improve how flight operations are planned and executed, how passengers have a more seamless journey, how IT can understand valued end-user experiences, and how businesses and individuals can function more efficiently. Szatkowski is an experienced aviation and IT professional that bridges the gap for others who cannot speak the same technical languages. Most recently Szatkowski has pivoted with the industry through the COVID-19 pandemic, doubling-down on focuses to redefine passenger experience through personalization & direct engagement, and IBM's Digital Health Pass.

Mike Slone serves as VP, Principal for Travel Retail at PROS, and joined the company after the acquisition of Travelaer SAS in August of 2019. Slone has been working in the digital space for over 20 years and has a deep passion for human-centered design, experience research, and innovation in the travel industry. When he is not helping airlines improve their customer experience, Slone is busy traveling the world with his family, trying to become a better oil painter, and seeking to capture the northern lights in a photograph - 30 trips to Iceland with no aurora photos. On the few days when he is not traveling, he is home practicing his French so that his kids and locals alike will stop giving him such a hard time. If you are an airline and you want help with your customer experience or finding an alternative to your current eCommerce software, booking engine, or online check-in - go see Mike in the south of France. Not only will he impress you with his knowledge of the airline industry, but he will take you out to lunch on the beach with a guarantee of sipping on a good rosé while viewing the Mediterranean. Paulo Ornelas serves at IT Director at Grupo SATA. For more than 24 years, he has held various roles within Grupo SATA with increasing responsibilities. Ornelas is known for his business analysis expertise, dynamic leadership and team management, and project planning. 

Full Script

Mike Slone: Hello, everyone, and welcome to another session of outperform. We're here today to talk about transforming the customer experience through digital retailing. I'm happy to be here and Kennebunk, Maine today. Mike Sloan. I'm a principal of PROS retail. And today I have with me some guests from around the world who have Paulo Ornelas, who's the director of IT, and Bruno Marques, the head of digital, both from SATA Azores airlines. And I have John Szatkowski, who's a global offering leader, travel and transportation at IBM. So thanks, guys for joining me today. I think the first question I was to ask you guys to break the ice. Where are you guys today? Paulo, Bruno, maybe start with you guys....

Paulo Ornelas: Well, awe are based in Azores users and we are in yellow island. So it's a quite nice place, quite a pleasant place to live. It's very nice weather and a very nice place for you to actually come in and preferably on our airline.

Bruno Marques: Yeah so yeah, we are here right in the middle of the Atlantic between the American and European continent. And yeah, it's a very nice place to be.

Mike Slone: Perfect I've been there many times. I look forward to getting back again. And John, I don't think you're too far away from me. Where are you at today?

John Szatkowski: Yup I'm just outside of Boston here and looking forward to think we fly directly from Boston there. So I haven't been. So I'll have to take you up on any offers you guys have out there.

Mike Slone: So starting off, I think, you know, I have known Paolo and Bruno and the SATA team for many years now. Going back, I think, to 2011 or 2012. Maybe just start out just to tell us a little bit about SATA and your organization and you know what you're really trying to accomplish in the digital space today.

Paulo Ornelas: Um, well, I can give you a bit tough on us, but we do go back quite some time. We did started the digital journey. The big jump that we had actually was with Dubai. When we start working together for almost 10 years ago. And the moment when we actually give the extra push for us to be present on the digital world. It's actually when we start having a generous offer. Well, good offer offering a good demand for our products and get where we have been investing on the web quite strongly since then, it has become the more, more robust channel in terms of sales. And a roof.

Bruno Marques: Yeah, so basically, it's one of the most important challenge that we have right now, as well, we understand the importance that we have to have this direct channel and what a showcase it is to our products and to our services. And it's being challenged. And it's very challenging for us because we do not only sell flights from a to b, we have a lot of particularities and specificities of on a lot of our business. We handle liberalized and regulated airspace. And having that transformation and having all of that on a simple and easier platform digital platform on our website, it's been challenging and you have been helping us with that for quite some time now.

Mike Slone: Ok, John, the similar question for you, I mean, tell us just a little bit about the work you're doing at IBM and what you guys are trying to accomplish these days.

John Szatkowski: Sure, IBM's fairly large. And so we do many diverse things. Recently, we announced some of our restructuring and so forth with different groups. One of the groups that I'm closest to is now called IBM Consulting. So that's where we really start the journey with many of the airlines, as well as hotel and rail cruise lines. From a passenger perspective, reimagining what is their journey but not only day of, but throughout their lifecycle as a passenger with that given service provider. So, for example, it's not only with the beginnings of the booking, but it's all of those journeys sort of tied together that bring in loyalty and digital and predictive insights about a passenger tied to a myriad of different things, all driven by cloud modernization and various technical IT terms. But I think at the fundamental heart of that, all of our work is really driven by how are you? Net improvement in the passenger experience. That's where we work with partners like PROS to help enable that.

Mike Slone: Cool. So not to dwell on COVID and the pandemic, but it it's a reality of the travel and airline world. So now that we're 18 months or so into this pandemic and the effect that it's had on travel. You know, where has SATA made progress during this time, Paulo and Bruno like, you know, where, where, where have you guys really focused and during this time tried to make improvements or progress? And that's question number one. And where do you still see opportunities to improve?

Paulo Ornelas: Can I can you just a start on overall and bring you more on the digital. Actually, the whole of this period is associated with the new world that actually entered on the January 2020. We engage with a lot of changes in the organization. Somehow, the pandemic gave us some more focus on these internal initiatives that the business was that sometimes stopped completely stopped it, it allow us to look into multiple processes and implement multiple solutions and that allow us actually to be stronger out of the pandemic than we actually when we entered it.

Bruno Marques: Yes that brings us to the main focus that we have right now, that is, again, the digital retail channel that we have with you guys. This is important to us because it makes the customer experience as well as us making returning customer to us. That will allow us to decrease the cost of it because we don't have that, that the middleman in between. So the point is and the point is, this is loyal. And if the customer is happy. And if we exceed or at least fulfill their needs with that customer experience, that will be helpful. Of course, there's always times and it's always there's always a chance for improvement, of course. And I think it's important that the work that we have done in trying to always to improve not having just a closed in retail channel and be able to improve that because, for instance, on ancillaries, there's a lot of things to be done and there's a lot of things that change from time to time. And that flexibility is important for us because it fulfills as well the clients and the customer needs.

Mike Slone: Ok thank you, John. A similar question, but maybe less specific to one airline and, you know, more specific to where have you seen airlines make progress? In general, you know, during the pandemic and you know, what do you think sort of sets them apart from the airlines that didn't make any progress?

John Szatkowski: Sure you know, there's been a number of cases or metaphors for, you know, if you're not going to take advantage of the crisis, are you really moving the ball forward as I think we've seen that with some airlines. But but not all. We had very good progress with, with a few moving, making some dramatic shifts to their infrastructure stories, so moving things to the cloud in a fairly rapid basis. But what we ended up finding is when you have such a large project like that has many tentacles or even a very targeted thing. What happened, especially through most of 2020, is a lot of the resources that the airline traditionally had at their disposal, employees or whatnot. We're either on furlough or let go or moved on to other jobs. So it was there are many airlines that wanted to do a number of improvements, but they and it was a great time to do so because there was less load, so to speak, because of the load, factors were lower, less implications on irregular operations and so forth. But there were just simply not enough sort of hands on deck, so to speak, to get the job done. So that drove quite a bit of work from us, from a consulting side. But where we sort of not necessarily didn't anticipate, but what was sort of surprising out of that was how much additional reliance many of the airlines and some of our partners as well, required an even further extension or moving that line of demarcation of work, which would have traditionally been on the behalf of the airline to some degree, to our hands or to even third party partners to help execute. And that's sort of more broadly. And when it came right down to it, you know, they were really looking to see, well, what are those tactical projects that we can execute and still keep the lights on is really what prioritized their bodies of work. So luckily, there have been some airlines. Lufthansa is one example on a larger case that we've made public that has sort of a broader spectrum, longer timeline for all of their roadmaps and projects, and a number of their passenger experience projects simply just did not stop because they knew they needed to reinvent when they came out of the pandemic, not only during the pandemic, dealing with social distancing and the new protocols around testing and vaccination credentials and so forth. But when you come out of the pandemic, your workforce is going to look dramatically different. So from a interaction standpoint, from a knowledge, skills and abilities standpoint, what we really are seeing is how much can you move the needle as an airline? And again, more broadly beyond Lufthansa to enable passengers to have in their control how they sort of navigate their entire journey, but also give them personalized again, coming back to the thematic, your personalized insights and offers and so forth to basically remove what would have been completely dependent on employees and agents at the gate or ticket counter agents that had tenure. They're losing a lot of that experience, and they needed to not only make up for that, but try and make their way into an area of marked improvement.

Mike Slone: Switching gears from, you know, less about COVID pandemic and talking more specifically about customer and user experience, you know, we go back a little ways. Working together at SATA. And so, you know, I know that user experience and customer experience is important to you guys. But you know, how do you ensure moving forward that what you're creating for your customers, you know, does exemplify that great user experience or successful digital retailing channel?

Bruno Marques: Well, basically, we are constantly listening and requesting feedback from our customers and not only listening, but also act upon that, that's that feedback that we have from them. Of course, if we make the product more appealing to the customer and if we listen to their needs and fulfill those needs, the customer experience will be better and we will have that returning customer that will help us, like us, and bes loyal to us. So basically what we have been doing in. On that is just listen, just requesting feedback from the customers and. Well, doing something about it, not just forgetting about that, not just having those feedbacks, just because we have them and act upon them. So basically, that's what we have been doing that is acting and putting in place the feedback that we receive from the customers really listen and fulfilling their needs.

Mike Slone: OK, cool. I love when people say that they're listening to customers because I believe ultimately, you know, an entire digital experience to be successful needs to revolve around the customer and the customer needs to be put first. How has the PROS Platform that they're using, you're using today, how is it? How has it helped you improve the user experience? Or how has PROS played a role in helping you guys with the user experience?

Bruno Marques: Yeah so basically, PROS help us improve that, that digital space, that digital sound that we have and just making it simpler, cleaner and an accommodate that specific things that we have in terms of our business that liberalize routes, that we have the constraints that we have on our regulated routes, it's a very challenge and you have been able to provide that simplicity without losing that focus that we need to have because we are compelled to do that and we understand that is that we are not easy. We are we are a very complex airline, and we understand all the efforts that we have been doing in having the best customer journey that that's good, that we can provide you as well to our customers.

Mike Slone: Does the PROS Retail Platform provide you with the flexibility you need to accomplish the goals digitally of SATA Azores airlines? Has it been complimentary in that?

Bruno Marques: Yes, it has been complimentary. Of course, there's always space for improvement and we understand that. And so one of the things that we like more about that, that it is not a closed product is something that's evolved over time and we can make some tweaks and some tunings to it, according to the feedback that we have from the customer. And yes, for sure, I truly believe that's PROS help us achieving that.

Paulo Ornelas: If I may, just to kind of add something to bring up, well, that we are not one airline. We have two airlines that we manage seamlessly, and we do have some with Bruno saying we have to complete different business models, one, we don't operate on a free market and the other one that we actually operate with specific rules where we are obliged to offer specific fares to specific customers like the residency here. And this means that we need to bundle it seamlessly because you may end up traveling from Montreal, for instance, to Lisbon, and you may actually do it via different ways and different rules being applied to it, so it is at this time we have been able to accommodate all of this complexity. Both airlines working seamlessly to different business models and working and being present as a single offer to the customer through the Platform.

Mike Slone: Yeah, that makes sense, I think a lot of people, they assume that if you're a smaller or medium size airlines, that you have less complexities after working in the airline industry now for, I think, almost 15 plus years now, I would say that I've found a lot of complexities working with smaller airlines who have things like residence fares or the various government stipulations that must be included and in the user experience and trying to make those simple can be difficult. So, I'm curious like, I'm curious why after moving forward with travel air, why you continue to stick with the PROS Retail Platform, you know, what about what about PROS, do you feel is different really from the competitive products or companies out there? Do you like to work with PROS?

Paulo Ornelas: Well, somehow, I believe it's kind of a continuity of our experience with you prior to PROS. And it's the same reasons that actually took us initially to decide via traveler when we were initially engaged with the vision that you had was quite aligned with ours. And also, to be honest, at that time, being a project that was kind of new for both of us. It did seem easier for you to accommodate our complexity in the way that we need to be addressed, and this complexity has been addressed along this time and PROS as it is today. Although being a larger organization, what we do find is that the same type of interactivity or easiness of relationship is still there. So we have been working quite successfully in the new digital platform that is being implemented, and the type of interactions is the same as we had before with a much smaller organization.

Mike Slone: So you feel like we gave you the attention and the customer satisfaction? Well, I mean, one thing that I'm really excited about joining PROS is that we took the Traveler Platform. We began to integrate all of the other PROS products. And I know in the past you guys have used things like Fast Search and One Search, but now in the new Retail Platform, those are all integrated into a product called Dynamic Offers. And so a couple of the new products that we've integrated into the Retail Platform that you're going to be taking advantage of are the Merchandising product and the Repricing product. So I'm curious how you guys want to use the first, utilize the merchandising products and what improvements do you think that's going to bring to the SATA retail experience?

Paulo Ornelas: I can give you advice. I just a very short introduction or insight on that. The merchandising is a very powerful platform. And we are now scratching the surface on what we can do with it. And they do believe that there is, we will be able to be inventive on how to be able to actually take advantage of it. The main focus now is to have everything live and price reduction is a very important tool for us. It's a very, very important tool for us and also my goal is actually being able to take advantage of these services that are in the platform, but outside of them and to be able to use it on other solutions that we developed in-house and to take advantage of the offer platform to empower what you want to do with our own products.

Mike Slone: Do you expect to use Merchandising from PROS? Are you going to start with anything specific related to ancillary revenue? Where do you see it helping first and the most for PROS for SATA Azores?

Paulo Ornelas: We do have some services that are now being offered that are sort of like, I do believe there is much more that we can do. There is a product that is open internally that will, I believe that merchandise merchandising as it is with actually allow us to do everything that you. And there is a bit of ambition. We want to do in the way that we are positioning our product on the market. And that will be, I will say, some somewhere around the first and the other first quarter of 2022. The pricing itself is something that I'm quite eager to for a session to take advantage of it not only on the digital platform, but also for ourselves on our own ticket offices and try to have an accelerator to the agents to be able to be more efficient on the repricing or refund of a ticket. And this is something that is the test that is quite time consuming and having a tool to support us on that automation will be a powerful enabler to our own agents to assist the customer in a situation that he already pricing.

Mike Slone: Switching back to John now to ask some related questions. You know, John, how has IBM seen airlines advancing their customer user experience for passengers or travelers through personalization? We hear a lot of talk about personalization, but I'm curious what you've seen and what your thoughts are on this.

John Szatkowski: That's it ultimately ends up driving yet another technical discussion focused around the user. I think we've talked about this before in several conversations. There's a lot of systems behind that complex airline infrastructure, whether or not it's the reservation system, GDSs and even operational systems. When you talk with when you build your reservation but have to talk to the loyalty desk or have to talk to customer service and a flight attendant and the gate agent. None of those four different parties really know that you've been handed off. Know they have an abstract understanding that you went through that process. But by and large, the flight attendant doesn't really know what you really just endured before you got on the plane. And so there's been a lot of sort of decoupling of traditionally stored data and then sort of realignment of it. So there's been many projects to go basically re-evaluate how that information has been stored and repackaged to do the fundamental personalization algorithms that we're both trying to prove. So that's really been a lot of where our work has been focused in the last few years. It's not necessarily just, hey, let's go build another data warehouse data lake, machine learning algorithm exercise. It all starts with what is the core problem you're trying to solve? How is that data then stored today to then go affect the outcome? So really, I appreciate the comments earlier. It's very customer driven as opposed to just a very brute force. We're looking to replace our blah blah blah, fill in the blank system.

Mike Slone: And I know we don't have time to get into this topic in detail because it deserves its own probably panel or discussion, but Paulo mentioned utilizing PROS Tools to help beyond just like the direct channels with agents and their internal staff and things like that. So I'm curious, you know, how you see some of these benefits of initiatives such as NDC or one order? And how do you how do you really see them benefiting airlines moving forward? Especially, I would say, you know, the small to medium size airlines compared to, say, the strategy of the larger ones, because you hear a lot about larger airlines moving in this direction with NDC and one order and maybe less about the small airline. So I'm curious your thoughts there.

Paulo Ornelas: So you can for us, What I can give you is we have not the same capability of imposed in this channel to the market where we do see it as an advantage. Exactly, we are able to have more seamless integrated distribution of our product and to be able to be consistent across the channels. It gives us some benefits in the overall cost of distribution. But I would say at the end of the day is being able to offer our products in a seamless way, regardless of the channel that we are using to make available our products.

Mike Slone: And John, maybe your thoughts as well.

John Szatkowski: Sure yeah, I mean, from our perspective, it's really driven from again sort of feedback like that where the number of the larger airlines have resources that are specifically dedicated to either determine if they're going to go build that from a custom basis or bring together best of breed. And that's where they generally need a large systems integrator sort of approach to figure out how to go do that. And in those cases, they're looking to determine, well, if we're going to customize something, we're going to want to do it using NDC in one order for all the benefits that are touted to bring. And we still want to put our chips or our investment in an area where we think it's going to give us competitive advantage. So if there's more rigid pricing and packaging structures elsewhere, is there a way to fundamentally deconstruct all of that and rebuild it more dynamically so that you have a chance to personalize things sort of just in time with more context? From a middle to smaller size airline, they generally don't have the IT resources to go do that themselves, so they're looking for sort of a more tightly. I don't say off the shelf, but a more capably fully featured system that's ready to be deployed that takes less administration and so forth. I think that's where you start to see a convergence of some of those other SAAS providers providing capabilities in that area.

Mike Slone: Probably the last question we have time for today, but I'll start with Paulo and ask the same question to John as well. But where should airlines start when they're looking to improve their customer experience? Where do they where do they begin?

Bruno Marques: Yes so basically, I think that stick to the basics, just listen to your customer, and I think that's the best approach and do something about it and well, it just you need to fully understand exactly. Of course, we understand that some of the feedbacks that we have from our customers are not doable. We cannot we cannot meet them. And that will happen from time to time. And we are OK with it. We understand that and we fully accept it. But in the meantime. Keep and again, I keep coming to that and just listen and act upon it because that makes a huge difference.

Paulo Ornelas: You can always attend PROS Outperform and listen to us to get some guidance.

Mike Slone: I would say the thing that we're taking for granted here is that when there are airlines that do listen to their customers and they do listen to their customers or try to improve their customer experience, but they don't have the proper platforms in place even to improve upon that. And do what the customers want. So John, I wanted to give you one last word in this. What would you say? Same sort of questions you know. What do you say to airlines who need to improve their customer experience? Where do they start?

John Szatkowski: They're very, very much in line with what your just all speaking of is. I just spent a workshop here with another large airline last few weeks and we broke it down. From the travelers perspective is down to three or four core personas. And coming out of that, what was re-instilled in us was that they are distinct and in experiencing different traveler journeys from the business traveler to leisure and so forth. But even within those course personas, there's still elements and needs for personalization in the moment that are cannot just be sort of assumed that when Mike and John are traveling, even though they both are frequent flyers and at a certain level, that my experience is the same as Mike's in, that's true throughout the entire manifest of who's on that aircraft.

Mike Slone: Yeah, so, so, so true. I like that you mention the personas there, we think airlines need to be looking at all the different personas that to address and not treating everyone the same, so couldn't agree more there. I want to thank Paulo and Bruno and John for joining me today, and thank you all again for joining us here at PROS at Outperform 2021. Thanks again.

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