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How technology is giving flight to customer experiences in the airline industry

The first ever aeroplane took flight on 17th December 1903. Today, over a hundred years later, with 3.7 Billion passengers a year and delivering one-third of the world’s trade, the airline industry has come a long way.

With the growth of airline industry, the players have also mushroomed, each trying to win over customers by delighting them through value and innovation. The customer too expects something more with every flight they take. Airlines are stepping up their game with technology and are trying not just to meet customer expectations but exceed them.

Building personalisation, a seamless digital interface at every touch point, operational efficiencies, environmentally friendly technologies and so on are all the elements a utopian airline world is made of. This utopian dream might soon become a reality with the fast-growing technology space.

Top Technologies & UX Design Best Practices Driving the Tourism & Hospitality Industry

Let us look at how technology helps airlines meet inherent industry challenges and create memorable and delightful flight experiences for their customers.

Industry challenges and how digitisation can solve them

Operational efficiency:

Flight delays and operational inefficiencies are not just annoying for the flyers, but also cost a great deal of dollars for the airline industry. It is estimated that during any given flight the travel time, fuel use, and flight path are 18% to 22% inefficient and an idle plane costs the operator $81 every minute. Time wasted due to operational glitches like unplanned maintenance, or inspection delays are unnecessary and avoidable. Such operational inefficiencies mean extra costs to the airline and most importantly they also add to the dissatisfaction of the customer.

In the age of digitisation and social media ‘hell hath no fury like that of a disgruntled customer’. Hence, airlines try to improve their services continuously. Thankfully, technologies implemented right help them do it easily.

Digital applications can considerably reduce the instances of operational malfunctions. E.g. they can notify the engineers on the maintenance required even before a plane touches down, through digital twins simulating the wear and tear on an aircraft’s systems and parts.

Flight delays and the costs associated with them are an even bigger deal for airlines. To reduce instances of delays and improve operational efficiencies, GE has created an innovative problem-solving process called FastWorks, which airlines are using to address customer issues more quickly and efficiently. Further, PASSUR, a business intelligence company also partnered with GE to build intelligence solutions for the aviation industry to address biggest operational challenges and opportunities with the goal of improving overall airline and airport reliability, service, and cash flow.


“It’s all about showing the business what is possible and what the technology could do for them and their customers.” – Tim Graham, Technology Innovation & Development Manager at Virgin Atlantic.

According to the SITA 2017 Air Transport IT Trends Insights report, airlines and airports are estimated to spend nearly US$33 billion on IT this year. More than half of these investments (68 percent) are expected to be spent on customer personalisation. These numbers clearly suggest that airlines are well aware of the fact that today’s digital natives are used to customised interactions and personalised solutions, thanks to the growth of e-commerce and the popularity of social media channels.

For airlines, customer interactions start way before the flight is even boarded; the test begins when the flyer is looking for a flight and extends way after they unboard the plane. It can be a daunting task to keep up with the changing customer demands and provide a seamless and delightful experience throughout the passenger journey.

Technology in airline industry

Image Source: PwC.com

Before airlines even begin to personalise a passenger’s experience, they have to be sure of what do air travellers want? What problem do they want to be solved? And, how can they work with the other members of the industry – airports, travel agents/sites to build a 360-degree digital experience?

Technology provides enough customer data enabling airlines to get to know their customers well. Further, when it comes to providing data to airlines, customers don’t shy away. According to a research, 85% of travellers are happy to provide additional personal data to airlines. Analytics can help immensely in making sense of all this data and help airlines answer the questions mentioned above.

Digital applications can help airlines personalise customer experience across every touch point. Technology can delight customers with customised offers, easy and faster check-ins, providing options to track and control their luggage remotely so on and so forth.

Cost efficiency:

It is estimated that just 1% reduction in jet fuel use alone could save the industry $30 billion over 15 years. We know that the commercial aviation industry trades on low margins and high volume. Even minimal changes in fuel efficiency, reduction in operational and training costs etc. can save huge costs for the sector.

Over the years fuel efficiency of aircrafts has increased. Today, fuel per passenger kilometre has come down to 70% since the 1960’s, and aircrafts have become 75% quieter. But simultaneously, the number of flights has also increased by leaps and bounds. This prolific rise in the volume of flights not just impacts costs; it is also detrimental to the environment.

Digitisation can help airlines in reducing the environmental implications due to the increase in air traffic. For instance, pilots can follow pre-programmed landing patterns that save energy and improve safety, while airlines can also analyse this data to optimise routes and altitudes to reduce emissions.

Further, digitisation implemented right can go a long way in helping the industry with less downtime, better service and higher margins. Biometric identity management, Beacons and Way Finding solutions, Pre-airport self-service options etc. are some ways the airlines are delegating manual tasks to technology and saving costs,

Cost efficiency - technology in airline industry

Image Source: SITA

How airlines are using technology in creating delightful experiences for flyers

“We wanted technology that would help us better understand our guests’ needs, focus on their individual priorities, and create an experience they can’t get with any other airline. These new solutions give us invaluable insights into our guests to create tailored experiences that drive loyalty, and support our mission to make flying good again.” – David Cush, president and chief executive officer of Virgin America.

A sentiment echoed by most airline professionals, and thus airlines are trying to offer the best possible service, keeping in mind the expectations of their tech-savvy customers, with a plethora of options at their disposal.

Though airlines do provide some personalisation options, they are mostly limited to offers and recommendations. An omnichannel digital experience is amiss. Some of the reasons for this are reliance on ageing systems, a lack of omnichannel capabilities and an inability to seamlessly coordinate the activities of multiple partners in the value chain.

According to a study done: on a scale of 5, the average mood rating of customers using airline websites was 2.4, with only 30% of customers rating themselves as satisfied. The majority of the feedback was submitted on the desktop (59%). However, mobile users reported the highest levels of overall satisfaction – with an average mood rate of 2.8.

The above statistics aptly explains what a PWC report stated in 2015 – ‘’Air travel remains for many a disappointing, grumble-worthy experience.’’ And in today’s world this experience starts right from the booking stage.

Below are some major customer pain points when it comes to digital interactions with airlines and how some forward-thinking airlines are addressing them:

Search and Navigation

As soon as customers start looking for a flight, airlines’ interaction with them begins. First and foremost their website must be SEO friendly and geared up to rank on the search engine’s first page – that’s elementary of course. But as soon as the customers land on the site their experience starts. Navigation on site must be easy for all kinds of passengers, those who exactly know the itinerary of their travel and those who are just vaguely planning a vacation.

Little things can make the website extremely easy or complicated for the users. One such function on the website can be the calendar view, which has the potential for causing confusion.

Should it scroll vertically or horizontally? What is the ideal number of months to display at one time? Should different dates with lower prices be displayed? – These may sound like basic questions, yet are extremely important.

One airline which has got this right is Raynair, with their smart calendar option which allows the customer to slide through different dates to compare prices simply, and when the departure date is altered, the return date calendar automatically slides across to the days following this date.

Search and Navigation - technology in airline industry

Emirates’ responsive calendar is another such great example, which has an ‘Inspire Me’ function which allows the user to input selected information about their ideal trip, then offers several different options of destinations and prices.

Search and Navigation - technology in airline industry1

Image Source: Usabilla.com

Booking & Payment

Nothing can be more annoying for a customer than going through a cumbersome process of searching, selecting and entering information on an airline’s website and having an error on the booking page after all the hard work is done. The booking to payments checkout process on most airlines’ websites is somewhere between 5-7 steps.

It can be incredibly frustrating for the customers to go through the grill of flight selection, upsells, seat selection, payment and confirmation etc. Thus, it is important to simplify the process and make it engaging.

Adding layers to checkout process also irks the customer as every step, and with every upgrade, their cost is going up. They start booking a flight thinking it costs an amount X, however after adding meals, extra baggage, seat selection etc. most of the times the cost goes up significantly. This leads the customer to think that either the airline is ripping them of money, or they are compromising on luxuries to actually get the value of their booking. In any case, the result is a dissatisfied customer.

According to Joe Leech, author of Psychology for Designers, and an expert in the design of UX for maximum consumer engagement:

“It’s all about timing. There are two ways to sell any item: talking about the positive things that a purchase gives you, or about the negative things that a purchase solves. During overnight flights, you’re most likely to upgrade if it’s a flight when you want to sleep. Flying back it could be about getting most successful upsells are at the right time when the problem might arise, selling travel insurance two or three days before they visit, for example.”

Some of the things which Leech suggests can elevate customer experience are:

a) Upselling the customer an insurance nearer to the date of journey, when they are more likely to prepare for the trip and take appropriate precautions envisioning the problems that may arise during their journey. At this point, they are more likely to buy, considering it as a necessary expense.

b) Similarly, he suggests, passengers may be more likely to buy extra luggage allowance on their return trip—when they may be packing their bags and find they’ve purchased more at their destination than they can fit. A call to action for extra baggage allowance, through email, app notification or text message, is ideally timed at this point in the journey.

This unbundling of the services is known as ‘ancillary unbundling’. Kulula is an airline that has benefited by selling unbundled ancillaries on its website and believes offering critical services along the journey could further increase sales and improve customer service.

According to Lain Meaker, executive manager for commercial distribution for Comair Ltd., a unit of Kulula.com

“Products like seat pre-purchases discounted extra baggage, priority boarding all help customers in accessing specific preferences up front help with overall satisfaction. Giving customers access to these at all possible interaction points in an easy and simple interface is key to closing the loop.’’

Some of the other key tips to keep in mind to improve the booking experience for customers are:

1) Making sure customers are engaged on the site and do not lose track of the most relevant information on the site. Most airlines ensure that selected flight and price are fixed in the sidebar, that way they remain in view.

Booking experience for customers

Image Source: Usabilla.com

2) Easy currency conversions – while booking international flights currency conversions can be extremely confusing for the customer. To ease this out, some airlines like KLM, automatically alter the currency when the customer changes their country selection. This minimises the chances of confusion and adds an element of security for the user.

booking experience for customers

3) Making mobile bookings easy – according to the Google Travel Trends report, 46% of travellers make their travel decision on mobile, but finish bookings on a different device. Therefore, it is important for airlines to ensure that their mobile interface is geared up to handle the complexity of the booking process. Introducing a mobile app will further help this cause.

Post booking interactions

An airline’s digital interaction with the customer does not end with booking the flight. After sales services play an important role when it comes to retaining the customer and building a positive interaction for them. However, nudging customers towards seat selection, adding luggage, or investing in partner companies for amenities like insurance or rental cars should be done subtly and non-intrusively.

KLM airlines does this well with their minimalist page design; the options for adding extra luggage etc. are there but they don’t have an overwhelming presence, just a simple option to select or not.

Post booking interactions

Mobile apps also play a significant role when it comes to booking management. According to a study, around two-thirds of travellers use airline apps. Amongst them 40%, use the apps to replace paper tickets and boarding passes. Among them, 13% are most likely to use apps to make flight arrangements or to manage flight disruptions.

Recently Kulula upgraded digital channels and introduced a new mobile app which has improved the airline’s digital relationships with their customers, and the efficiency of its operations. According to Lain Meaker, executive manager for commercial distribution for Comair Ltd., a unit of Kulula.com:

“The mobile app that we introduced was a simple extension to our customer self-service that took place on our website. It’s a very simple application that allows for content on schedules, policies etc., mobile check-in, weather and flight status. It’s purely a supporting application for servicing. So while it’s a simple application, it has helped in driving more people to check-in online. This has the benefit of better customer satisfaction as those that don’t have baggage don’t have to queue, as well as the process efficiencies the airports with fewer people to deal with at the counters. Online check-in on the web has been available for some time.”


Easing out the check-in process

While mobile apps and websites ease out the check-in process to some extent, there remains a lot of scope for improving it further. According to a survey, 31% of customers who used mobile, rated the experience as negative due to the check-in process.

According to SITA’s Air Transport IT Trends report, in 2017, more than 91% of travellers use an airline’s mobile app for doing check-ins. While airlines are investing in mobile-specific apps, today most airlines are also trying to take out the stress out of the check-in process with Kiosks at the airport. Whatever be the medium, it is important for them to provide a seamless and an easy to navigate interface on the platform.

Easing out the check-in process

In-flight app experience

Smartphones are revolutionising customer experiences across industries and airlines are leveraging the medium to provide 360-degree digital experience to the passenger while flying. Here are some ways smartphones have changed the way people fly.

Panasonic’s Waterfront concept suite lets passengers customise their in-flight experience with their smartphone:

Last year, Panasonic in partnership with B/E Aerospace, Formation Design Group and TEAGUE launched Waterfront concept seat. According to Panasonic, the objective with the new seat is to “take care of a passenger’s wellbeing in a more holistic way.” Using B/E Aerospace’s Super Diamond seat as a platform, the Waterfront seat features a full privacy door, which “gives a First-Class feel within the confines of a Business Class footprint,” as RGN puts it.

In-flight app experience

Image Source: Airlinetrends.com

The Water seat has the following features:

1) Passengers will be able to control the in-flight entertainment system and the suite’s environment from their phone or from a supplied 7” tablet.

2) Passengers can then use their smartphone to control the in-flight entertainment system, as well as order food, drinks and snacks to their seat. For passengers who have previously flown with the airline, the app keeps track of any food, drink or viewing preferences from previous flights.

3) When passengers want to get some sleep, the app can be used to adjust the seat’s recline – including turning it into a fully-flat 79-inch bed.

4) When the flight lands, the app will provide gate, baggage claim and car rental information and remind passengers to check the seat for any items they may have left behind.

Flight Stages Timeline on IFE system:

Developed in-house in partnership with creative agency Reaktor, Finnair has dubbed its Panasonic IFE system ‘Nordic Sky’. The on-screen display shows the main stages of the flight, guiding passengers from departure throughout all stages of their journey, informing them in advance when meals will be served, when rest lighting will be activated, and when passengers can make purchases from the in-flight shopping service.

Cabin crew announcements appear at the top of the display and inform passengers of events such as flight schedule and meal delivery. The cabin crew can update all flight events – such as the flight schedule and the food menu – in real time.

Delta Airlines creates ‘glass bottom’ iPad app for its planes so passengers can look at view

Delta airlines introduced an iPad app, which lets aeroplane passengers admire the view, keep up to speed with their flight’s progress and find out what is going on 30,000ft below.

The ‘glass bottom jet’ feature is accessed through in-flight Wi-Fi from 10,000 ft and allows passengers to track their flight by watching a computerised image of the plane on their handheld device.

glass bottom

Image Source: Dailymail.co.uk

In conclusion:

The modern-day travellers expect airline experiences which are inline and at par with other industries, as innovative products and services in one industry raise the bar for all industries. To cater to these travellers airlines and airports must consistently work towards designing customer experiences from a holistic perspective, integrating both online and offline channels.

Today’s digitally-savvy customers expect personalised, on-time solutions which solve real-life problems for them. Simply adding digital assets is not the solution, the new-age flyer expects a seamless and delightful experience. As airlines consistently work towards building on-demand, real-time and end-to-end solutions for customers, we can expect that the future of airline travel is going to be a lot more exciting for flyers and profitable for the airlines.

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Top 10 mobile & technology trends that are revolutionising the retail industry

In a post PC era, industries across the globe have redefined the ways of connecting with their customers. The retail industry landscape is also shifting owing to the increased penetration of internet & smartphones and emergence of innovative technologies like AR/VR, AI, IoT, etc.

Retailers are working towards using cutting-edge technologies to create delightful, customised and omnichannel shopping experiences for buyers.

For business leaders staying on top of the latest developments and overall mobile and technology trends is critical.

In this article, we will take a closer look at the top 10 interesting mobile and technology trends which are revolutionising the retail landscape across the globe.

1. Today’s digitally-savvy buyer seeks an omnichannel experience

Easy access to the internet and growing penetration of smartphones has influenced almost every aspect of a consumer’s life, including shopping. Consumers are doing more than just searching for product information on the web, today more and more consumers are turning to online portals for making a final purchase. According to a study, overall 67% of millennials and 56% of Gen Xers prefer to shop online rather than in-store.

Though in-store remains the major contributor to the retail economy; online sales are growing at an astounding speed. It is expected that online retail will account for 8.8% of overall retail sales and will register a growth of 89% ($2489 Trillion) by 2018, as compared to its contribution in 2015.

The primary reasons behind the whopping growth of online sales are growing smartphone & internet penetration and changing customer expectations.

While baby boomers wanted to purchase products which were global and boasted of prestigious brand names; millennials are inclined towards buying locally-sourced, authentic and environmentally friendly products. Further, millennials are more willing to save money than spending it on ‘brand names’ which explains their dwindling interest in branded stores.

According to a report by Accenture, Forty-one percent of millennials examine merchandise at a nearby retail store and then shop for it online to find the lowest price.

Taking a cue from this shift in consumers’ shopping habits, retailers are striving to build an omnichannel experience for their customers. Largest offline retailers across the world like Walmart are investing in an online shopping experience; similarly, largest online retailers like Amazon are building brick and mortar stores.

It is apparent that these retail giants do not want to leave any gap and are taking steps to approach their customers at every possible touch-point – online & offline.

For retailers small or big, the implications are rather clear – build an omnichannel shopping experience for customers, which demands an integrated approach including both offline and online presence.

The lines between online and offline shopping experiences are also blurring, and prudent retailers are realising this fact and acting upon it. Walmart, for example, has started using touchscreens in some stores to enable product searches. Retailers are also deploying mobile devices to enable online ordering in-store and offer easy access to inventory searches for customers. For e.g. Lowe’s mobile app allows customers to search and see the entire catalogue, and purchase for in-store pickup, have items delivered directly or find Lowe’s store near their vicinity.

It has become critical for retailers to build a seamless and an easy online shopping experience not just to acquire but retain customers as well.

Further, given the fact that 45% of millennials purchase online through marketplaces like Amazon, small and mid-size retailers must look at listing their products on such online portals.

2. Cross device shopping experiences

Today’s digitally savvy consumers are connected via multiple screens, sometimes at the same time. At an average, Millennials use 3 screens and gen-Z use 5 screens at a time.

According to a study, in 2016 one-third of online retail transactions involved two or more devices across all the retail categories. Throughout the buyer’s journey consumers end up using different devices for individual actions. And these interactions are more complex than the conventional wisdom of ‘browsing on mobile and buying on desktop’. Today’s consumers love their mobiles, and it is an integral part throughout the buyer’s journey too.

Cross device shopping experiences

Image source: Criteo.com

However, the desktop still remains the preferred method of making a final purchase. While mobile accounts for 58.7% of purchases in the UK; in the US, the majority – 54.6% – still use the desktop.

Time Spent Vs. Dollars Spent on retail, By Device

One of the reasons why most of the shopping dollars are still getting spent on the desktop is that most retailers fail to provide a seamless and end to end mobile shopping experience.

A survey done by Newstore found that only 22% of the retailers offer mobile apps that can be used for making purchases. An additional 21% have non-shoppable apps that show products or have other features, but do not allow transactions to be completed through the app.

For retailers, it is important to understand their interactions across platforms and offer intuitive and customised user experience across all the devices that customers are interacting with.

Device performances also vary by the time of the day for e.g. in the US customers shop the most on the desktop during work hours and mobile purchases peak during other hours and weekends.

For making the most out of their cross device strategy, retailers will have to track consumer’s buying behaviour not just across devices but across time too and devise strategies to reach out to them at the right time on the right device.

3. M-commerce is on the rise, and mobile apps are leading this growth

App economy is expected to reach a whopping $6.3 Trillion by 2021 and m-commerce is going to be a major contributor to this revenue.

For retailers choosing between the web and mobile app is an eternal dilemma.However, statistics are inclined to suggest that mobile apps drive more engagement compared to mobile web. Mobile traffic dominates the overall internet traffic, and mobile apps get the lion’s share of consumer’s mobile time with more than 3 hours a day and 89% of the mobile time devoted to mobile apps.

According to a report by PredictSpring mobile apps can drive 3x times more conversions vs. mobile web. Another study suggests that Gen Z are twice as likely to convert on mobile. However, they are quite aversive to poorly functioning apps and websites.


Image Source: PredictSpring

One such example of mobile apps leading to higher conversion is McDonald’s India’s – Mc Delivery app. Last year, to make their mobile app a preferred medium of ordering, McDonald’s India decided to revamp the app. With an intuitive, personalised and simple user interface, the Mc Delivery app was able to garner double the traffic and 103% more orders by redirecting traffic from the web based platforms.

What leads to this positive influence of mobile apps on conversion rates?

Speed and simplicity are the two primary reasons of this. Mobile users are used to simple UI and faster loading speeds, owing to the experience they get on the extensively used social media and messaging apps. Even if the mobile web experience is simplified, it is hard to get the speed factor right all the time. Today’s shoppers have a lower attention span, and lesser time, any delay in loading speed can lead them to abandon an app or divert them to other sites.

According to a recent study, 60% of Gen Z will not use an app or website that is too slow to load, and 62% won’t use an app if it’s difficult to navigate.

Slower sites and apps not just diminish user experience but also result in revenue loss. According to a report, even 1 second of delay in loading speed costs Amazon, 10% on sale, which is $13.6 billion every year.

Sadly, very few retailers make mobile experiences simple, functional and personalised for users. Of the few brands which offer mobile apps, most do not use them efficiently. According to a survey, not many retailers are taking full advantage of mobile technology, almost 36% of retailers miss using push notifications on their apps, and out of the retail brands which offer native apps, only 24%display real-time inventory and a mere 2% offer social sharing options.

For retailers, who have not yet invested in a mobile app, optimising the mobile web experience should be an immediate action point and planning to create a mobile app platform in the near future should be a top priority on their list.

However, while building a retail mobile app the expectations of consumers from e-commerce apps should be kept in mind. According to a survey done by Clutch, the top reasons consumers use mobile apps are -deals & offers, flexibility, price and product comparisons and saving time.


Image source: Clutch.com

Further, consumers expect their retail apps to be more than just a buying and browsing platform.
They want innovative, high tech and personalised features on their apps.

In essence, they want their apps to act as a personal shopping assistant to them which can help them with product recommendations, price comparisons, discounts through push notifications, options for social sharing, etc.

For retailers aiming to invest in mobile apps taking into account the above factors and introducing innovative features in their app can give them an edge over the competitors and ensure high customer retention rates.

4. Mobile payments and Digital wallets drive conversations

For consumers, a secure and easy checkout option is of prime importance when it comes to online shopping, and digital wallets can facilitate that. When it comes to mobile apps; digital wallets and in-app payments make life easier for the user by eliminating the need to fill out complex forms on a smaller screen.

The digital wallet market is booming, and consumers are increasingly moving away from hard cash to virtual money mostly because of the convenience factor. In fact, this year Apple Pay’s Monthly Active User’s grew by an astounding 450%. M-commerce is one of the key contributors to this growth. Also, in 2016 in-app payments in retail saw a 57% YoY growth.

The British Retail Consortium estimates that the use of cash has decreased by 14% over the past five years.

Forward thinking retailers are already offering options of mobile payments to their customers even in their offline stores. For instance one of the leading retailers J.C. Penney has adopted payments through Apple Pay across all its stores.

Today’s consumers are moving towards convenient payment options like m-payments, digital wallets, in-app payments, etc. Even payments through Wearables (otherwise considered to be a nascent technology) are also seeing growth. It is estimated that payment transaction volume from Wearables could reach $501 billion by 2020. This is an opportunity which still hasn’t been explored much by the retail industry.

Retail industry must pay heed to the promising attitude of consumers towards mobile wallets and use it to make their interaction simpler on their online and offline platforms. Digital wallets enable users to complete their check out process with just a few taps, making the shopping experience more delightful for them.

5. Live chats giving real time assistance to shoppers

Customer support in e-commerce plays a significant role. A live chat option on the e-commerce platforms (mobile and web) can augment users’ experience and increase conversion rates. It is a known fact that a poor customer care service can adversely affect a brand’s reputation and result in a higher churn rate. According to a survey, 60% of customers say that they have decided to not purchase from a particular retailer after a poor customer service experience.

Live chats giving real time assistance to shoppers

Live chat solutions can help retailers in augmenting customer experience on their platforms with real time assistance throughout the buyer’s journey. According to a report, live chat app solutions have the highest satisfaction level for any customer service channel, with a 73% approval rating.

Smaller retailers are keener to adopt live chat services because it can help them in connecting with the customers during the purchase process and reduces the chances of post purchase customer grievances, which in turn reduces their customer service investment.

According to Michael, merchants have been adopting their services at an annual rate of 84% and have experienced a 100 to 300 percent increase in order size when customers speak to a representative through live chat.

Even larger retailers like Walmart and Nordstrom have adopted live chat to improve user experience on their platforms.

However, one of the drawbacks live chat options are known to have is that they slow down the performance of the sites. This is something retailers must bear in mind if they choose to implement live chat services on their platforms.

6. Innovative ad formats are driving sales

Online advertising is booming. According to an IAB report, digital ad revenue grew to $72.5 billion in 2016. Retailers across the globe are using contextual ads across different platforms to drive sales. In 2017, retail paid clicks were 52% of all the PLAs(Product Listing Ads) on Google.

This boost in online advertising is leading to the emergence of innovative ad formats by various ad platforms, for retailers to experiment with. Exposure to right ads in the right context is driving conversions for brands. Some of the examples of different ad formats being used by the retail industry are:

a. PLA (Product Listing Ads) on Google
b. Geo targeted local ads
c. Targeted pins on Pinterest
d. Goal based bidding ads on Snapchat
e. Contextual ads of Facebook Messenger

Product Listing Ads

Targeted pins on Pinterest

Online ads are not just driving online sales; they are positively impacting in-store sales as well. Location based ads and In-ride/In-hand recommendation ads are formats which are driving footfalls for brick and mortar stores.

Platforms like Uber, Foursquare and Nextdoor, are collaborating to provide location-based ads, and consumers are more accepting to mobile ads which offer them rewards.

In-ride and In-hand recommendation ads

Retailers must use different platforms to target their customers based on where they lie in the purchase journey. For e.g. re-targeting can help in urging a customer to complete a transaction if they have abandoned the cart. Similarly, PLAs can lead the buyer to explore your website or app.

7. Social media influencing buying decisions

Social media is one of the most popular app categories; users are not just engaging with social media platforms but are also getting influenced by it. According to a study, 74% of millennials and 80% of Gen Zers are influenced by social media in their shopping. However, while social media platforms can drive them to make a purchase, these young shoppers despise seeing ads. For retailers, it is important to leverage their social media platforms in an engaging manner rather than just pushing their brand communications with sponsored posts.

Marketers are already devising ways to target the social media loving millennials and gen zers with innovative use of technology and content, be it by using influencer marketing, user generated content or contextual marketing on these platforms.

According to the recent Internet Trends Report Effective UGC (User Generated Content) can generate 6.9x higher engagement than brand generated content on Facebook. Major brands across categories are using UGC to drive engagement.

Internet Trends Report Effective UGC

Further, social media has empowered customers by giving them the opportunity to voice their disappointment and also appreciations on a public and a larger platform. Therefore, stakes for brands are high, not only they have to ensure their product quality and customer service is impeccable; they have to also be vigilant and responsive to their customers on their social media channels.

Chat bots on social media is another example of how brands are leveraging social media to improve customer service.

8. Social media platforms are offering Chatbots services to improve customer service & provide real time solutions

The popularity of virtual assistants like Apple’s Siri, Alexa, Cortana, etc. and inexplicably high engagement drawn by social media has led the way for the introduction of AI on social messaging platforms. Last year, Facebook launched its Messenger platform and businesses since have been using it to create chat experiences for their customers for answering their queries, having customised communication or providing product notifications, etc.

Luxury apparel brands like Burberry, Tomy Hilfiger, etc. are using chat bots to drive user engagement and improve customer engagement.

Burberry launched its chatbot last year during New York Fashion Week. Initially, the bot gave fans an opportunity to shoot the looks they liked and then shop the pieces from the fashion show directly from the app. Burberry has upgraded the bot since then to provide live chat options, store locator function, ask questions and browse and shop from the collections.


‘’Customers aren’t spending their time on a sprawl of apps anymore. But, there’s a high concentration of engagement on Facebook Messenger. So we created an experience to fit into the natural behaviour that’s already happening on the platform.” – Alan Tisch, Founder, Spring.

9. Augmented Reality and Virtual Reality bringing online and in-store together

It is expected that retail industry’s investments in AR and VR technology will touch approximately $30 billion by 2020. One of the major benefits of in-store buying is shoppers can see and feel the product. Technologies like AR and VR can bridge this gap for online shoppers.

AR can also help customers to easily get information about a particular store and therefore turning Image based platforms into front-end stores.

‘Well we know that 95 percent of all information humans consume is visual. AR is about the experience and consuming information in real time, which is really the next logical progression from something as pervasive as the Google search engine. AR removes the part of the current process of searching for information on Google, which is that you have to know what to search for, and then sort through information to find it’. – Rohith Bhat, CEO, Robosoft Technologies.

Image based platforms into front-end stores

AR is also being used by retailers like Lowe to guide customers in finding in-store items while shopping.

Lowe to guide customers in finding in-store items while shopping

Home furnishing retailers like IKEA and Wayfair are already using AR to let buyers overlay furniture in their home setting and see if it goes well with their current interiors or digitally paint their house to see if the colour they are planning to go with indeed looks great in reality as well.

Virtual Reality, on the other hand, is helping retailers with making business decisions by providing ways to A/B test store layouts with a set of shoppers or finalising shelf assortments and display. Further, VR helps executives ‘walk through’ their stores across multiple locations.

According to Nikki Baird, managing partner at Retail Systems Research, ‘posting analytics through a VR interface that is driven off of the actual store design provides a lot of important context and can potentially surface connections between things like product categories that are physically proximate, which might not be easily found from a chart or a graph’.

For retailers, planning to experiment with either of these technologies to elevate customer experience it is important to decide which format suits their business objective. Though, VR seems to be an exciting option to go with it requires expensive devices to implement. Further, customers are not yet accustomed to using VR devices for anything else other than gaming.

AR, on the other hand, can use simulations from the real world and augment users experience by overlaying virtual elements on it, and it is easier to implement because any smartphone can be an AR platform.

10. From automation to augmentation – AI reshaping in-store and online retail experiences

Artificial Intelligence in retail has found application across the buyer’s cycle from product assembly to post purchase customer interactions. AI is changing the realms of both online and offline retail experiences.

AI use-cases in the retail industry are going beyond chatbots and product recommendations. According to a study, 45% of retailers plan to use AI based technologies in the next three years.

One of the major advantages of AI solutions in retail is they allow to offer a personalised user experience to consumers. Aided by the Big Data and data analytics platforms, retailers can use AI to have customer centric interactions involving product recommendation, customised searches and even personal assistance, etc.

One such technology platform is Vue.ai, which offers dynamic personalization solutions which enable retailers to personalise every step of the shoppers’ journey. This technology learns in real-time from every click, swipe, product view, cart addition, and purchase, to uncover buyer intent, ensuring that the retail journey is tailor-made for individual customers.

AI solutions like Amazon’s Echo and Home are accentuating users’ online shopping experience, for instance, Google Home can enable users’ to buy products from across 50 U.S. retailers. Given the popularity of voice assistants, last year Amazon unveiled several Echo-exclusive deals and gave $10 off on orders over $20 placed through voice.

Voice Based Mobile Platform Front-ends

Recently, Amazon also launched Amazon-Go unveiling the immense potential of AI in changing in-store shopping experiences as well. Amazon Go store allows users’ to have a new check-out free experience. To use the service, the buyer has to install the Amazon Go app, log in with their account credentials, and then simply put goods from the shelves into their bag and walk out. The store and shelves are equipped with “computer vision, sensor fusion, and deep learning,” which means it can detect when products are removed and returned to the shelves. When the shopper leaves the store, their account is charged directly.

Retailers are also using for inventory management for,e.g., Pittsburgh-based Bossa Nova offers robots that ensure shelves are always stocked, while French start-up Exotec raised $3.5 million to help warehouses dispatch goods using mini robots. IBM’s Watson is providing a slew of order management and customer engagement capabilities to e-commerce retailers. It is also helping retailers like North Face to assist consumers in determining what jacket is best for them, based on variables like location and gender preference, etc.

While AI can advance customer experience and operations by leaps and bound, it is important for retailers to determine how and where they will implement it. The direction of AI revolution is getting carved by the bigger industry players, for small and medium retailers it is critical to take note of the AI trends and implement it with an objective to drive sales and improve the user experience.

In conclusion:

The retail industry is at a sweet spot right now, with physical stores using emerging technologies to innovate and offer exciting shopping experiences to customers and online retail making shopping convenient and simpler for them.

Technology advancements and ever-changing consumer behaviour together are opening up newer playgrounds for retailers faster than emerging fashion fads. Needless to say that smartphones and internet penetration is leading this revolution and for retailers, the first step to win the retail war is to provide an omnichannel retail experience for their customers across platforms and devices.

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