For this week’s podcast, I spoke with Sebastian Gibergues, vice president of e-commerce at Amadeus, about the challenges of the future of online retail in the travel space:
The below is an abridged version of that conversation. Gibergues speaks:
I’ve been with Amadeus for quite some time and for the past five years I’ve really focused on the online space and even more recently – earlier this year – I moved to Singapore to work with our online travel agency partners across Asia Pacific. there are always a lot of buzzwords around blockchain, definition services, mobility and these are big topics right now but for me, I wanted to focus on the very pragmatic topic of flight retailing.
We take for granted the ability to purchase flights online and the user experience that comes with it, and we’ve been doing this for 20 years from desktop and now to mobile. But, there are many new channels coming up and also a lot of pressure and changes are coming from the supply side that really will force a paradigm shift when it comes to flight retailing.
From the supplier side, we see new technology coming from airlines to unbundle and move to dynamic pricing technology and that creates some new pressure to shop and compare these more complex products. On the consumer side, that means user experience really needs to evolve to allow a consumer to compare between the flight options they have.
For some reason, search and compare is in Homo sapiens‘ DNA; we know that we will have to translate this search and compare experience across channels.
This fundamental evolution will have to happen across devices. The original search experience was very straightforward: you were offered a list of flights by price and that was good enough for you to make an informed decision about which flights to purchase.
The reality now is that we are moving away from this paradigm because now you might choose a cheap fair but once you have added all the ancillary components of your trip — from the meals to the seat assignment to a pet you might want to bring with you on the trip — you might end up with a price that is very different from the original option you selected.
“‘Should I have chosen another price which was more expensive… but would have been a better deal?”
This begs the question, ‘Should I have chosen another price which was more expensive but actually included some of those options and would have been a better deal?’. That fundamental change will require the UI and the UX to evolve.
The paradox of choice and making purchase easier
For almost everyone, there’s a spiral when you have selected a flight and you have to go and check the ancillaries, then find another flight — this takes a long time and it is not efficient neither for the user nor for the retailer. We know that if you add more options to a product offering, the theory called the paradox of choice says that the more options you put in front of the user, the lower the conversion rate.
There’s a big debate for the retailers on how much do you out up front for the customer – he feels like he has gone through this shop and compare phase that is critical for purchasing but is still killing the conversion rate in the process.
I’m an engineer by trade so here is the engineer’s answer: build a matrix display in which we have all of the flights by carriers to a destination with the base fare and a set of columns that state which services are included for each of the flight options you have selected.
Already it is a complex task to normalise all of this content. Then, you select one of the options and say ‘I want to bring my pet’ and then check the dates across all of the airlines you have selected to find out the new price.
You could argue that, if you have real estate on the desktop, you could try to create something funky enough for this metric to be appealing to a traveller. That’s questionable already; imagine now moving into the mobile space where real estate is more complex to manage.
“If you go down to the new channels – voice and text, then forget about even rendering this kind of the display”
It would take AI or a very skilled UX designer to try to make something out of this layout but still it doesn’t stop here: if you go down to the new channels — voice and text, then forget about even rendering this kind of the display. That’s the core of the paradigm shift we are talking about.
On the supplier side, our job at Amadeus is to work with airlines to normalise this content and there are a lot of discussions on how to really bring this content together, normalise it and make it usable for any digital channel. Next, is to build the search technology – the ability to bring this content together based on the user query – to build at least the data needed to have this matrix view of the possible options.
Then we pass this information on to our agency partners who will have to work out how to use this content across the different channels they work on.There are three sides: normalising supply; finding technology to crunch this data; and presenting and delivering this content through the user experience across channels.Our roadmap is based up building use cases and the new paradigm for online travel.
Other trends in travel ecommerce
The next challenge, especially in Asia, will be the payment aspect: how do we bring about market-specific payment solutions? Everyone’s in for their payment. There are the usual solutions: WeChat Pay, Alipay, but not every platform is adding every solution – it’s Grabpay here in Southeast Asia.
The question is, how do we apply this to travel and how do you make this kind of form of payment available across countries, because they have to be very specific to a local geography and how do you play this out across borders?
Alipay tried to build a network of merchants accepting Alipay outside of China to welcome Chinese tourists but will it be the same for all of these other options? here in Singapore, it’s amazing to so how many options there are such as with QR codes. How does this come together? I’m not sure it’s workable for the merchants themselves.
Another personal favourite trend is the rise in local mobility. In Singapore, I love OFO bike-sharing – it’s the best way to get about they city. You pick up a bike from the MRT station to wherever you want to go!
They are spreading across may capital cities -this brings another set of challenges for infrastructure and the cities to manage but for the mobility of the 21st century individual, I think that has to be part of the future of travel.