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Hot topics from April’s Ancillary Merchandising Conference

The 12th Annual Ancillary Merchandising Conference (AMC) is one of the key travel conferences for airlines, Online Travel Agencies (OTAs), aggregators and travel businesses that work on ancillary products and services. Hosted at the Hilton Edinburgh, Grosvenor in Scotland, the theme for this year’s conference was “Getting ahead in the Digital Age,” and focused on the best ways to improve products and services for customers, while also increasing profits.

 

The key takeaways from this year’s conference were:

  • Visual displays are crucial to ancillary sales
  • Personalisation is imperative when targeting potential customers
  • Long loading times are unacceptable
  • Focus on knowing your customer if you want to upsell
  • Mobile is key
  • The airline industry needs to become less analogue
  • Ancillary revenues have risen sharply since 2010
  • Seamless payment systems and inflight broadband will change everything

 

The conference began with a welcome address from the event organiser Michael Smith, before airline ancillary guru Jay Sorenson took to the stage to make a presentation about Airline Product Orientation. Jay questioned why airlines use dated galley carts that don’t display the items on sale, before drumming up examples of airline packaging that does nothing to promote the product. Then, after rubbishing the current state of airline product display and packaging he showed the new face of airborne shopping, namely Korean Air’s A380 flying duty-free shop. This shop replaces 13 seats on the aircraft and has five display units that can house 30kg of duty free products, while up to 64 products remain magnetically displayed for inflight shoppers. Jay also detailed how 1937-1978 was the era of fine dining and on board catering on aircrafts and how this was phased out as airfares reduced and airlines saw the potential to capitalise on inflight food.

 

Nives Nadoh, of Comtrade, then took to the stage to discuss the digital marketplace and how this personalised, targeted ecosystem can be used for travel advertisement and ancillary sales. He then spoke about the digital API economy and focused on the MyRyanair platform as an example of an API that allows an external party to integrate. Nives also touched on monetising assets in the digital economy and how companies, which are targeting digital data, have fewer employees than those focused on physical assets. He asked what advantages airlines have over other players in the travel ecosystem and detailed how best they can capitalise on their position in the booking funnel.

 

Next up was Kevin O’Shaughnessy the CEO and co-founder of Indigo, who asked which were faster; app responsive websites or custom made applications, and which of these was more likely to show the loading wheel? Kevin then showed the room some slides detailing the loading times for many airlines and OTA’s, with Ryanair coming up tops. He finished up by detailing why the user should never have to wait and the importance of moving from hybrid websites that exist within a native app shell to rich packages that offer a flexible web-app within a native app.

 

On day two, Mike Slone, the Chief Experience Officer at Travelaer spoke about the pain points of agile merchandising platforms, before giving his tips for user centric platforms, these included: understanding your users, leverage the post booking period, regular user testing, not copying others and the need for performing agile, quick development cycles. Mike also spoke about the importance of understanding your customers, why you should carry out regular surveys, and the 60/60 rule of upselling, which claims that 60% of people will pay 60% of original price for an upsell. Ancillary guru and CarTrawler contributor Jay Sorenson then took to the stage again, this time to talk about mobile, earth’s largest store. Jay spoke about airline apps for ancillary sales, Pegasus’ mobile buffet and Air Asia’s pre ordered food. Wizz Air’s subscription model, mobile merchandising methods and personalised pop ups were also on the menu.

 

Following this a panel session moderated by Sinead Finn, the Director of Affinity, asked “does merchandising drive technology or the other way around?” The panellists first focused their attention on the problem of legacy technology in the airline industry, how it is too complicated and has too many complex systems. Next, their attention turned to customers of the future by looking at how young people are using their smartphones and the realities of an ever-changing digital landscape. They noted that kids are more likely to have Snapchat than Facebook and wondered what impact this generation will have on the industry, this led on to the topic of chatbots and conversational commerce and just how far behind western airline are compared to their Asian counterparts. Finally, the panel discussed the airline industry’s fear of being blindsided by disrupters as the taxi industry was by Uber.

 

Bahrat Sherm hathen took to the stage and briefed the attendees on how between 2010 and 2015 ancillary revenue more than doubled and the expected $30 billion that can be made from inflight broadband. He then moved on to talk about the holy grail of seamless payment integration and the world of mobile commerce. Stig Williams from the Avis Group then presented about how they see the future of mobility.

 

The companies competing in this year’s CarTrawler Lions’ Den included LikeWhere, a firm that uses granular location data to serve personalised recommendations to travellers, Essentialist, a private club for travellers that offers a tailored tourism experience. Also presenting to the Lions’ were Raleigh & Drake, a millennial-focused discovery platform powered by a knowledge of their users’ community and Get Your Guide, a business that collects and categorises activities throughout the world, allowing travellers to spend less time researching and more time enjoying their holiday. Follow this link for the full coverage of the Lions’ Den.

 

 


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