Finding new revenue streams while also creating brand differentiation is critical to airlines. Merchandising presents a powerful opportunity for both. Therefore, airlines must act more like traditional retailers if they want to have effective merchandising strategies.
In the retail industry, some of the most successful companies focus on having a solution to their customers’ problems and delivering the right products at the right price at the right time. For airlines to succeed in merchandising, they need to adapt the mindset of a retailer by:
- Truly knowing their customers
- Optimizing inventory and pricing levers
- Developing a blended-channel strategy
- Delivering a consistent brand experience
- Having consistent, near-real time data to create one source of the truth
Download your free merchandising InfoPac to learn how your airline can develop a more successful merchandising strategy.
Solutions To Develop A Successful Merchandising Strategy
Offer the right product to the right customer at the right time using our end-to-end merchandising solution. Increase revenue, improve customer satisfaction and streamline your ancillary and branded fare processes with an integrated, industry compliant solution.
Most airlines take an ad hoc approach to ancillary pricing. With industry standards still being defined and adopted, visibility to market pricing of ancillaries has been limited, making it difficult to take a data driven approach to pricing these new offerings.
The pricing of ancillaries and branded fares should follow an approach similar to the pricing of seats, which uses analysis from data on profitability, load factors, customer willingness to pay, competitive pricing and a number of other factors to determine optimal pricing.
Take a more data-driven approach and realize revenue increases with the help of a new ancillary pricing model developed by the Sabre Airline Solutions consulting team. This proprietary methodology utilizes customer surveys and historic buying behavior to determine a customer’s willingness to pay for individual ancillaries or branded fare tiers. Based on experience with airlines so far, the research team estimates that developing effective branded-fare product design and pricing can improve an airline’s profitability by 2 percent or more.
The ongoing management of pricing distribution for ancillary offerings presents another challenge. Sabre Airline Solutions is actively working with industry organizations on opportunities for bulk manipulation of pricing for ancillaries as well as investing in capabilities to support Optional Service standards for ancillary pricing as a part of our fares management solution.
As the percentage of airline revenue from ancillaries grows, revenue management becomes increasingly important to your merchandising strategy. Sabre® AirVision™ Revenue Manager draws upon its customer choice-based modeling experience in designing new tools to support individual ancillaries and branded fares. Customer choice-based modeling breaks a customer’s decision down into multiple attributes and then combines these attributes, weighting them differently in varied environments, and then models customer choice. This type of analysis will be critical as more airlines look to interpret and revenue manage the growing amount of ancillary data.
We can help you drive revenue and take your airline to the next level. Contact us for an assessment of how you can better grow your airline's revenue.
Tel: +1 682 605 6750
Tel: +65 6215 9500
Europe, Middle East, Africa
Tel: +44 208 538 8539
As the merchandising trend evolves, it is imperative for airlines to shift from a service provider to a retailer as part of their successful end-to-end merchandising strategy.