Decoding Modern Retailing: A practical guide to Offer, Order, Settle, Deliver
Check out my new white paper
Today’s article is about a piece of my writing that you can read free of charge on another website.
Eagle-eyed readers will have spied that for the last few months Airline Revenue Economics has been hosting an ad from industry vendor Accelya. Here it is!
Advertisement:
There is slightly more to our co-operation than the ad alone.
I recently prepared a white paper for Accelya that I hope all readers interested in airline revenue will find interesting. It is called “Decoding Modern Retailing: A practical guide to Offer, Order, Settle, Deliver” and can be downloaded at this address:
https://w3.accelya.com/resources/whitepapers/decoding-modern-airline-retailing-oosd-guide/
The paper is free to read but you will need to give your name and work e-mail to Accelya to receive a copy. The paper is written as a neutral shaping-the-conversation piece.
It expands ideas initially explored in some of my earlier articles:
Offer-Order Blueprint: The Three Missing Ingredients
Embracing Randomness in Airline Revenue
There are four parts:
1. Offer, Order, Settle, Deliver (OOSD) technology is new, but the process is established
2. Now is the time for all airlines to get involved creating the OOSD infrastructure
3. How can airlines design organisations for OOSD?
4. The best way for airlines to learn about what works with OOSD will be to start doing OOSD
I made some cool new diagrams comparing the “old world” of airline retailing, Pricing and Revenue Management with the “new world” of OOSD. The paper also contains nine “action boxes” and six trial-and-improvement style experiments that In hope practitioners at all airlines will be able to act upon.
I also outline nine “action boxes” setting out things that airlines can bear in mind now as they shape their plans to make OOSD a reality. These are:
1. Developing OOSD requires skills in systems analysis, implementation and management. Using OOSD will require airlines to apply different skills, many but not all of which they may have already.
2. The challenge of implementing OOSD is not entirely technical. Presenting complex bundles of products and services as simply as an on-board menu will require care and attention to detail by human designers, as well as whizzy algorithms.
3. Now is the time for every airline to get involved with the definition of public standards to ensure that their voice is heard. Working with Accelya is a good place to start. A coherent set of public standards will need three characteristics:
(a) Available to any airline who wishes to interline, partner, codeshare, enter a Joint Venture or be an alliance member;
(b) Standards should be modular, which means that airlines will be free to change part of their package from a technology vendor at any time without other elements collapsing;
(c) Standards should address the technical interface of different platforms and the processes that need to happen both in front of passengers and in the back office.
4. At a minimum, an airline’s product catalogue must contain all the existing fare data. These alone will be sufficient to power “right to fly” pricing in an OOSD world. So airlines who want to focus just on selling flights and traditional ancillaries need only copy and paste their existing products and services over into a product catalogue.
5. The decision to make an offer available will depend on a new value called the “Marginal Cost Factor” (MCF). RM will need to subtract MCF from raw revenue to decide whether or not an offer should be made available.
6. It will be hard for airlines to know whether or not a product or service has actually been delivered. No system can tell whether or not chocolates were actually placed onto a traveller’s seat prior to boarding for example.
7. Some tasks done by humans today, such as manually deciding when to offer a group and bulk deal, may or may not be automated. But other roles will expand or change. Airlines will need to prepare new teams and organisations that manage each element of OOSD.
8. Airline “holiday” platforms selling flights, hotels, cars and insurance together are a good place to start with OOSD, for airlines who operate them. They will give an idea about which market segments buy different product and service bundles.
9. Experiment, trial and improvement will be necessary for OOSD to succeed. These may not come naturally to many airlines as they require an entrepreneurial culture and management of an appropriate degree of commercial risk.
If you choose to download and read the paper, I hope you enjoy it! Please also let me know if, having read it, you have any questions.
This is the first of four white papers that I will be preparing for Accelya. Stay tuned for the next one!