Confident, savvy travellers, high profile airline marketing and increased competition in the travel sector are having one very noticeable effect – downward pressure on headline ticket prices. For those looking after airline eCommerce this is a significant challenge; shareholders demand strong profits year after year and you don’t want to let the side down under your watch. However ancillary sales offer an important additional revenue stream, and mobile offers a unique platform to tap into that market.
When one door closes, another opens
It just makes sense - with the money saved from a bargain price flight, customers are much more likely to loosen the purse strings on extras that they once may have deemed extravagant...upgrades, priority boarding and travel insurance for example.
Ancillary revenue has grown by 163% since 2010 and tapping into this stream will be crucial to achieving your revenue growth goals.
Mobile simplifies ancillary sales
According to our research, airlines globally are deriving just 4% of ancillary sales from mobile apps - which means the majority are missing a major opportunity. We expect to see that figure increase to 14% over the next two years, but forward-thinking airlines can grab a greater share of the market now, particularly as 46% of sales are expected to be completed on mobile and tablets in that same period.
Mobiles are getting smarter and becoming more and more like a personal assistant. Where once they were mainly used to answer queries on the go, increasingly people are buying more and more stuff on their phones, flights included – the fact that mobile web traffic now exceeds traditional PCs by at least 10% bears this out.
Shaping the mobile experience will be crucial to increasing ancillary sales. Here are three practical areas to focus on.
- Exploit mobile simplicity
A great mobile experience makes it very easy to access key features and functions. As a result, successful mCommerce makes it as simple as possible to complete a purchase.
As your customer makes their initial purchase via a mobile app, it is vital that ancillaries are clearly displayed at checkout. The checkout process needs to be simplified to the point that a single button press is all that’s needed to complete the purchase - at least 15% of eCommerce transactions are abandoned because the checkout process is too complicated (some reports suggest up to 27%). What does that equate to financially? Jumio put the figure at £2.7 billion for the travel industry.
Your app should harness the built-in capabilities of the phone wherever possible - Apple Pay and TouchID make payments as simple as scanning a fingerprint, saving time and hassle associated with keying credit card numbers into a small screen.
You also need to design the app so that these upgrade options are prominently displayed every time the user signs in, right up until they board the plane.
- Context is king
Your airline’s mobile app provides travellers with useful information about their itinerary - but it needs to become much more. Using the built-in capabilities of their phone, you can begin to deliver contextually relevant information in real-time - all geared towards increasing sales of add-ons.
As their departure date approaches, you can use push messaging to advise passengers about their preparations. Reminding them to check in online pulls the traveller back into your app, and provides an additional chance to present them with upgrade options for instance.
Using GPS location technology, you can generate alerts based on the customer’s position in the airport terminal too. Faced with slow, inefficient security checks that add to the stress of travelling, you can tempt them to make a last minute upgrade to priority boarding, or even a lounge upgrade through one of your partners. Juniper Research suggests that mobile location based services will be worth $43.3 billion in 2019.
The more relevant and personalised your deals, the more likely customers are to buy them.
Earning opportunities don’t end at the gate either. In-flight upgrades like Wi-Fi and entertainment can be purchased and accessed direct from a phone or tablet onboard the plane. It’s just a case of making those features available and visible to passengers.
- Increase urgency
Integrating third party data sources into your app, such as travel reports, provides your users with valuable updates that help them better manage their journey. This same information can also be used to subtly increase pressure on fliers.
Consider the busy exec who is in a taxi, running late for their flight. Advising them of relevant information, like traffic conditions near the airport, or current queuing times at security/passport control allows them to plan how best to navigate the terminal. By presenting relevant upgrade options alongside that information - security fast track passes for instance - the exec has a chance to get back on schedule.
For frequent flyers you can leverage travel history to further tailor deals to suit their preferences. Using the travel dates, destinations and known personal details, it becomes possible to provide one-click, last minute insurance policy sales or airport transfers at their end point. And using lockscreen notifications you can bring these ancillary offers to the flyer’s attention without the user necessarily logged into the app directly. This targeted mobile push messaging can increase ancillary revenue by 55%-100% and helps to “own” the traveller by preventing them from buying from your competitors.
mCommerce context is not just about making relevant offers to your customers, but making them at the right time and place so they become irresistible.
A trend that cannot be ignored
If ancillary sales are central to boosting profits, airlines need to take every opportunity to offer them to customers. There’s a very good chance that your website is already set-up to process these add-ons, but is your mobile platform?
At a time when travellers are swapping PCs for mobile for almost every task, an unengaging mobile app with basic functionality is unlikely to impress. Ancillary sales can be increased with a fully-featured mobile app that delivers personalised, context-aware offers and promotions to your customer’s phone. When backed by a suitable analytics program, your mobile app will go from strength-to-strength as you test, tweak and optimise those offerings to increase relevance - and sales.
To learn more about how to drive ancillary sales via mobile, and to see some real-world examples, download your free copy of ‘The Evolution of Mobile’ eGuide now.