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MongoDB World 2015: Keeping Pace in a Data and Digital Boom

A couple of weeks ago we attended the ‘MongoDB World 2015’ conference in New York. Our goal was to learn more about the latest version of MongoDB and see how it is being used by other companies, as a NoSQL alternative to relational database systems.

The conference opened with a keynote from MongoDB’s CMO Meagen Eisenberg, CEO Dev Ittycheria and CTO and Co-Founder Eliot Horowitz, who drove home the transformational significance of this next-generation database:

  • With $230 million in funding and a $1.6 billion valuation, MongoDB’s software and services are in use by industry leaders such as MetLife, Forbes, Expedia and ADP
  • The company has recorded over 10 million downloads of the platform to date
  • MongoDB’s 400 employees serve over 2,000 paying customers

Mongo Db MongoDB World 2015: Keeping Pace in a Data and Digital Boom

Eliot Horowitz addresses the audience at MongoDB World 2015

 

The conference itself explored a wide range of topics for developers and operational executives, including data management, big data analytics, digital commerce and the Internet of Things (IoT), plus a range of industry use cases.

There were common themes seen across the many industry presentations, leveraging MongoDB to enable application features, such as omni-channel retailing, single customer view, personalized offers, big data analytics and machine learning.

The current boom in big data collection and processing is sure to continue as IoT-connected devices lead to an explosion in the volume of useful data available to be captured and actionable insights to be gained.

The MongoDB team is clear on its role; not to make you think more about the database, but to let you focus on your application. “If you are focusing on the database all the time,” said Eliot Horowitz, “we have failed.”

Technology providers like MongoDB and Datalex have a common vision of streamlining disparate processes to improve business efficiencies and enable quicker and more effective decision-making.  MongoDB enables customers to create new applications while improving customer experience and accelerating time-to-market through just one database. Similarly, Datalex helps travel retailers to consolidate processes, products and services to enable their merchandising strategies through just one platform. The theme is global – regardless of the industry, whether it’s retail, travel, finance, health, logistics, technology, or others, all are facing the same challenges of the data and technology boom.

It is therefore more urgent now than ever for businesses to get their data strategy in order, before it becomes an inhibitor that detracts from the day-to-day business focus. As Eliot Horowitz pointed out, if you think of how much data has emerged in the last few decades, it is only going to grow faster over the next ten years. “We have to keep up with you”, he said. “The developer landscape and the operations landscape are changing incredibly rapidly, and it’s our job to make sure we keep pace with you, so we don’t fall behind.”

These landscapes are indeed changing, at a pace and in a way that many have not yet even contemplated. Take for example, Jomati Consultants’ predictions regarding the dominance of AI in the legal profession by 2030. Eliot Horowitz’s advice to his own organisation is universally applicable: when it comes to new applications, IoT or big data – make sure you don’t fall behind.

Alan Dunne
Chief Innovation Officer, Datalex

A challenging landscape for LCCs in China

West Air and China United Airlines officially announced on 29th March 2015 their transformation into low cost carriers (LCC). This results in a total of six LCCs in China, since direction was given by CAAC (Civil Aviation Administration of China) in December 2013 to encourage the growth of LCCs in the country. These include Spring Airlines, China United Airlines, West Air, Juneyao Airlines, Lucky Air and Chengdu Airlines. Tianjin Airlines and Hebei Airlines are planning to change in 2015 also. However, it has been over 18 months since the directive by CAAC was given. So given the market potential, why are there only six LCCs so far? Will the LCC market expand rapidly in the coming few years?

 

Some reasons leading to the slow growth of LCCs in China are typical of LCC development in the rest of the world, but some are typical of the China market.

1.Low Cost Carriers not operating at low cost

LCCs in China are either subsidiaries of the big four (the three state owned SOE- airlines and Hainan Airlines) or privately owned. Maintaining low cost but not sacrificing service quality is always a far-fetched task for Chinese Airlines facing huge passenger volumes, where maintaining low cost for LCCs is far more difficult. In China, subsidiaries of the big four normally get the very minimum subsidy from their parent company. In the past, privately owned LCCs got subsidies from the local airport authority or government for supporting growth of their local travel industry. However these subsidies were cut due to an anti-corruption campaign by the China government. Without significant subsidies during their start–up phase or before they mature, LCCs will likely struggle through the growth path.

2.Lack of LCC airports means high costs

Airports at big cities in China do not normally provide suitable facilities for LCC operations. They have to fight for slots at existing airports and pay at a rate similar to traditional airlines. Even some provinces have started to build smaller airports for LCCs, however they are far from major transportation links. Tourists do not normally want to take more time and pay more for connecting transportation, even if the LCC flight cost is less.

3.Low Cost Carrier does not mean low fare

Travelers in China have not traditionally bought ancillary products or paid to get a better seat. Carriers therefore have to focus on a low price for air products.  However, even traditional airlines will compete with LCCs on lower prices via promotions and price cuts. This is a loss-loss situation and LCCs are struggling to get through. Airlines’ profit margins are decreasing. China Southern’s 2015 first quarter financials expected a USD50m loss. A price war will further reduce their net profit potential.

4.Too early to go international

According to a report issued by the China Tourism Research Academy, the outbound traveler population grew by approximately 17.5% in 2014, up to 115 million. Their favorite destinations are neighboring countries such as Thailand, Korea, Japan, Vietnam and even Australia. The big 4 airlines are planning to increase their international services to deal with the increasing demand. Facing the fierce competition of domestic routes, LCCs also plan to expand their international coverage. However, expanding nationally or internationally means bigger aircraft, better services, and better management and planning. This further drives low cost to ’higher cost’.

5.Competition from LCCs outside China

Air Asia added 17 routes within China in the past three years, amounting to up to 33 in total. Other LCCs from Asia are cutting their share of the China market including Tiger Air, Jetstar and Cebu Pacific. These are mature, well managed LCCs with steady growth. The China market now contributes 40% to their total revenue. Local LCCs starting up are finding it difficult to compete with them in the international market.

6.High reliance on IT

Facing the high cost as stated, it seems impossible for LCCs in China to rely on the travel agency channel for distribution, owing to their high commissions and kick-backs. They have to rely on online distribution from their own web sites or via OTAs with lower commission. Some have the perception that their current high operating costs cannot justify the building of sophisticated e-commerce retailing platforms or the adoption of solutions from reputable solution providers. In addition, it is not easy for them to expand into partnerships, alliances or interline agreements for broad coverage if they are not using the TravelSky PSS or have a powerful PSS in-house. TravelSky is not currently focused on its LCCs offering and does not offer lower rates for PSS use by LCCs. Therefore their current IT investment does not support LCCS for future growth.

 

What does the future hold for LCCs in China?

There are signs that LCCs in China are getting more support:

  • CAAC has issued the ’Directives from CAAC on the development of CAAC in China’ in 2014;
  • local governments are encouraging the construction of LCC airports;
  • initiatives are in place to learn and to model LCC development from Air Asia;
  • public funding to increase operating capital and other costs.

 

Generally the effects are slow and so far, not significant. Factors that hinder progress include local constraints such as lack of centralized control, lack of expertise, cultural indifference, the structure of the Chinese aviation industry, and customers’ expectations.

China is a rapidly evolving digital marketplace for travel with growing passenger numbers. IATA forecasts that China will overtake the United States as the world’s largest passenger market by 2030. The Datalex Commerce Platform is leveraged by prestigious airline brands such as Air China and the Hainan Group Airline West Air to accelerate low cost and high value retail across all online channels (web, WeChat, Qunar, Ctrip and Tmall). We are committed to the success of all Chinese airline customers where the common goal is to enhance the customer experience for increased profitability.  Our local office in Beijing is led by senior travel commerce experts with global experience.

 

For more information, contact us:

Datalex Head Office Dublin, Ireland: + 353 1 806 3500

Datalex Beijing: + 86 10 6410 8476

Email: info@datalex.com

 

Laurence Leung

Regional Director Business Development Asia Pacific, Datalex

No Waitlists Permitted

When you think of Generation Y (or the millennials), the image painted in your mind is likely to be a twenty-something, who in a matter of seconds has shared with 600 people they’re going to be in the same room as you, before you even walked in the door.  In fact, not only have they notified their outrageously large contact pool, they have also provided a picture of themselves in a chair, right next to yours. It’s no wonder with such technical capabilities, and rate of adoption, why social media and millennials are almost synonymous with each other.  But, is social media all there is to the millennial? And is this truly the way to tap into the nearly 1 trillion dollars of travel spend they are expected to contribute in the coming years?

Love it or hate it, social media is indeed a very integrated part of the genetic makeup of Generation Y. But stepping back, it’s no wonder as this group has been raised with unprecedented access to technology. And as a result, this intelligent group of people has been provided with almost instant access to virtually anything.  You want instant credit? Done. You want something delivered same day?  Done. You want to grab a hotel in under a minute? Done.  And with incredible access to services and products comes the responsibility placed on retailers to understand how to market and create loyalty based on the now – not the later.

In terms of travel, sure they have great posts and images of fantastic beaches, but what drove them to choose their destination? This is a price conscious group who defines loyalty in very different terms. And how does a travel company of today need to ready itself to address this new generation of traveler who continues to make a stronger and stronger footprint?  In fact, never has a generation been connected with so many people in all corners of the world. But, what you need to be asking is, what will actually motivate them to travel to visit their globally connected friends?

I’ve asked several Gen Y’ers what the millennial definition of loyalty was, and one particular comment really resonated.  When asked about the idea of earning points, and banking them with the goal of exchanging the entire sum for a free trip in the future (this, of course, is the system in place today), there was actual laughter before an answer. Paraphrasing, the idea of banking thousands of points to possibly use later was uninteresting. Top this off with realizing just because you fly the miles, doesn’t mean you get credit for them all, felt like bait-and-switch marketing. And finish with the idea you could only fly 9 months into the future (if you want the lowest mileage award) as that’s when a seat was actually available – is the last straw.  The millennial generation has been categorized by many as non-planners; a genre of instant gratification.  In light of those comments, why would you expect this group to respond to loyalty systems based on planning and waiting?

Travel retailers should consider not only their social media footprint when bringing these new travelers onboard, but they should also focus on redefining the now.  For example, offering instant upgrades using miles already accrued, combined with a surcharge, even if the total number of miles doesn’t reach a true “upgrade” award. Or, an airline could offer an extra seat, even if one isn’t technically available in the award class of service, for a set number of miles so a friend can come along. On a more fundamental level, recognizing a millennial and previous shopping habits is even more important. Since Loyalty is redefined, then you may only get one opportunity to sell – so you need to make it a good one.

It is clear this genre of traveler is more than just social media and smartphones. They understand the value of a dollar, are intelligent and spontaneous. The challenge becomes how to deliver value and retailing opportunities today, and make them relevant.  Corporations have already adjusted their hiring and recruiting tactics to address this new type of employee. Travel companies seem quite far behind. If you want to get in on this next generation of traveler, you’ll need to do a lot more research than just reading status updates.

Brian Borg
Head of Airline Retail, Datalex

NDC: The paradigm must succeed, and why

NDC: the new distribution capability. The oft discussed and rarely understood new trend in airline distribution promises to present significant changes to how airlines address direct distribution. Much has been made of the issues of privacy, disintermediation, cartels, agendas, etc. After all, the airline distribution discussion has been a circular affair, with great leaps in distribution capabilities aligned with small steps in improved legacy distribution contract terms.

This view is simplistic, and rote.  What it misses is that NDC is not just a technology framework, it is a paradigm shift for distribution. Consider that the current benchmark, ’airline ecommerce’, is built on enabling technologies which are 10+ years old. The ecommerce department itself is typically treated as – excuse the deliberate pun – an ’ancillary’ organization within the airline.

The technology and the organization do not align the core disciplines of revenue integrity, brand alignment and distribution strategy. There is no comprehension of the customer or the journey. We are dealing with first generation query response web services layers built on top of legacy systems.

Our assertion is that airlines need to own proven new generation ecommerce platforms that drive real business value. NDC, albeit incomplete and not yet fully ready for market, represents a new way of looking at distribution – omni channel distribution.

Interested?  Read on.

First let’s consider our current enabling technologies for direct distribution.

Direct Distribution Pioneers – all tech, little business

The teams that initially took the airline product to the web were tech savvy opportunists. These guys focused on the technical challenges of serving up fares and good enough inventory to an online market place. Their focus was conversion first, revenue a distant second. The 80:20 rule pervaded and airlines essentially abandoned the learnings and experience of their revenue management teams in a rush to get online.

There are winners and losers here. The LCC tribes did very well, focusing on low price backed by low cost could actually generate demand. Whereas the brand carriers rushed to compete at the lowest levels of entry, diluting their value and brand, and committing the cardinal sin of cannibalizing their own revenue.

Today, direct distribution represents anywhere from 30% to 70% of a traditional carrier’s distribution mix.  Yet the traditional channels, although contracted, continue to yield greater margins and value. Now, for the first time in over 10 years we have seen these channels increase market share.

Is this an indication that price sensitive markets could be tapped out, considering that the leaders in low prices (the LCCs) have had to quickly revise their strategies to start targeting a more affluent, connected consumer in an omni-channel retail marketplace? Click here to watch Michael O’Leary speak to Bloomberg about the changing market.

Building the bridge to offer optimisation and profitable engagement

Airlines are successfully distributing their lowest-cost products at the smallest margins direct. This is no mistake, per above it’s by design. The tool sets that enable direct distribution did not offer fidelity or the learnings of revenue management.

We have observed and are invested in a distinct shift from such behaviour.

Datalex is leading an NDC pilot with Swiss International Air Lines, PROS and HP. This pilot is being driven directly by the Swiss revenue management team to drive offer optimization for more profitable customer engagement. Through NDC and with our customers, we are driven to progress distribution standards beyond the existing piecemeal messaging and enablement tools. NDC can be an enabling message set but must keep pace with those innovating beyond the standard.

Many airlines have progressed the concept of NDC, where availability is calculated, fare bundles are an intrinsic branded entity and the customer is known. This allows the airline to present specific market-tested fare combinations based on loyalty tier, past travel experiences and market demand. The airline and providers involved will help progress NDC and afford the airline the lexicon to understand the customer journey, and to drive the right offer at the right price at the right time.

 In summary:

It used to be ’distribution costs savings + increased direct distribution revenue/yield’. Now it’s ’profitable customer engagement as an omni-present travel retailer’.

 NDC thus far has enabled this discussion. It has brought to the fore the need to align internal business and technology systems to design products that will not only distribute simply, but will be targeted to specific audiences to drive revenue.

 NDC in itself is not the solution. As it stands, the message set is incomplete. The internal changes within the airline,  the adoption and ownership of the airlines new gen distribution technologies and a core understanding of what it means to be omni channel will differentiate the winners from the losers.

 The internet is how business is done. It’s time to evolve.

Gianni Cataldo
GM Americas, Datalex

Loyalty and Reward

As airlines continue to flex their retailing muscles we are seeing a clear demarcation between ‘us’ and ‘them’ carriers.  

In traditional retail, this looks like a retail/warehouse (Costco) club member versus a premium retail outlet (Saks) Prestige Shopper. The latter gets rewarded by better service, exclusive gifts, or maybe even a personal shopper. As the consumer spends more, their rewards grow. For a Costco member, the reward structure is simple: pay for membership and then get the best value. The hook is that as someone who has paid for membership, we can guarantee repeat business.

Both models work, both models engender loyal behavior, and importantly, both reflect the retailer’s brand aspirations. 

Now to airlines, which continue to evolve their direct retailing strategies.

Mainline carriers: Delta Air Lines was the first to market with a loyalty plan that we have no doubt will be echoed across all the mainline carriers worldwide. The program values are simple: we reward high value customers; low value customers will no longer be afforded the same rewards. It’s a simple principle which makes sense for Delta and makes sense for loyal high value Delta customers.

JetBlue, Southwest and others have been pretty successful in linking their rewards programs to dollar spend; probably a little less overtly than how Delta introduced their program, but all based on the same ideas – spend more, get more.

So next up – the low cost carriers and ultra LCCs: Their approach to loyalty is akin to Costco, and is influence in no small part by the need to work around full content agreements. Their approach: the ‘Fare Club’.  

By paying a ‘membership’ fee (approximately USD150-180), customers are rewarded with reduced fares and reduced prices on bags/seats. These programs are pretty democratic; your savings are immediate, and your condition of reward is upfront payment. The Fare Club concept drives excellent values for families and infrequent travelers. For a single membership fee a family of four can save up to USD80 on the fare and another USD100 on bags and seats. The scheme pays for itself on the second trip. 

The Fare Club does little to engender loyalty for the corporate frequent flyer; a few dollars saved on bags and fares on carriers with smaller route networks is not attractive. The benefit of differential treatment (high end loyalty) across all trips is what matters here.

In the same way that ancillary fees disrupted the industry and separated the value-driven flyer from the loyal flyer, will round two of the great direct airline retailing war be waged on loyalty and benefit. The lines have been drawn. Will these divergent approaches on loyalty drive market shift? 

For which population of travelers will the spend orientation of traditional loyalty drive a change in behavior to move to the ‘Costco’ model carriers?

Gianni Cataldo
GM Americas, Datalex

Make me an offer!

Most other retailers know they can easily increase profits by making an additional offer above the original purchase, which closely matches what a customer wants at any given moment. Airlines have made big moves, with some great success, to act more like retailers in recent years. But there is still a lot to be done. Offers remain relatively static especially when considering how dynamic the travel experience truly is!

For example, time-limited offers (think of snap chats disappearing messages) can be made to create urgency and these can be targeted at the customer based on their precise location (iBeacon or Gimbal), such as when they are approaching the airport, the boarding gate or when they disembark. This makes the offers both timely and relevant. In 2014 and beyond we will see mobile payments become significantly easier with one-click payment and the use of mobile wallets becoming the norm. This is already an everyday occurrence for millions of Starbucks customers who pay for their morning coffee in a similar way using their smartphones. Soon, airline customers will be able to tap one button on their smartphone to avail of and pay for a (push notification) offer on their mobile before it expires, perhaps 60 seconds later. There are almost limitless opportunities to engage with customers in this way.

Airlines have a distinct advantage over many other travel retailers – it’s their brand.  After all, the airline is most often the first point in my travel journey, and moreover when I am not skydiving out of planes I trust my airline to take me up 45,000 feet and down again safely, in comfort and on time. If they will listen and deliver precise and relevant offers throughout my journey, I will gladly click my travel spend through them over any other retailer! So, make me an offer!

Mark O’Brien
Travel Retail Insights, Datalex

It’s not just a seat!

A view from Datalex’s commercial director in Latin America.

IATA recently advised that ancillary revenues are a key driver of improved financial performance and that worldwide ancillary revenues have risen to an estimated $13 per passenger. They continue to add that without ancillaries, the industry would be making a loss from its core seat and cargo products.

Seats have been and still are one of the most relevant drivers behind that revenue opportunity, especially in the US and European markets where seat fees are at a relatively mature stage of development. In those markets airlines know, for example, that some customers are willing to pay to reserve seats ahead of flight check-in or to sit together. Therefore they are starting to introduce a variable pricing model which, with the right technology, will enable the airline to price seat assignments based on demand.

Legacy airlines in the LatAm region, unlike their counterparts, are starting to discover this untapped revenue. We can see some airlines starting to charge to select a seat for its proximity to the front of the aircraft especially. Some, but decidedly not many, for an aisle or window seat; and even fewer for extra legroom or amenities like in-seat power.

In any case, the particularities to exploit this revenue according to market, equipment, profile of customer and so on are not minor. Therefore a common approach or ‘one solution fits all’ do not seem to be the most appropriate way to optimize this opportunity. As airlines become expert retailers, they will need more than ever to merchandize their products and show value across direct and indirect channels. They will need to personalize their distribution to avoid being seen by customers as substitutable commodities.

 Alejandro Ormeno
Commercial Director Latin America, Datalex

Datalex recognised at World Travel Awards with industry elite

Among an audience of travel industry elite and leading travel suppliers, Datalex was named the World’s Leading Travel Merchandising Solution Provider and World’s Leading Travel Distribution Solution Provider at the recent World Travel Awards 2013 gala event.
The grand final gala ceremony took place in Doha, Qatar, and followed a number of competitive regional events at which Datalex also won the title of Leading Travel Merchandising Solution Provider in North America, Asia and Europe.

Read more…

Do you have Peppermint Tea?

The answer is usually no, as most airlines only serve standard tea and coffee. These days I only drink Peppermint Tea, so I have to do without a cup of tea on most flights. As I sat on a plane recently and watched the duty free trolley pass me and everyone else by, without selling anything, I thought to myself, I don’t want a cuddly bear, but I really would buy a cup of peppermint tea. A box of peppermint tea (other types of tea are available) must weigh less than a cuddly bear, wouldn’t it make sense to use the valuable galley space for something you could sell? easyJet serves peppermint tea and they do a great chocolate muffin that complements it very well, so it isn’t just me who wants more than the standard. Customers will pay extra for services that add value to their experience. Aer Lingus has also proven this through the success of their Gourmet Meals – inventory controlled on domestic and international flights. Knowing your customers enables you to deliver a service that meets their needs, drives incremental revenue and improves their loyalty and perception of the airline brand. I know it certainly has an impact on me.

 

Mike Naylor

Business Development Director

2013 IATA World Passenger Symposium: Welcome to Dublin

Céad Míle Fáilte (A hundred thousand welcomes) to Dublin, our global headquarters.

We are proud to sponsor the 2013 IATA World Passenger Symposium and look forward to meeting you at the event.

We’re also looking forward to presenting an NDC pilot in cooperation with HP, PROS and Swiss Airlines International. At last, proven providers collaborate to demonstrate  how to optimize pricing, merchandizing and reservations for air and ancillary products in a unified retail framework.

Speaking of ‘proven’, we’d be delighted to show you why the most innovative and progressive global airlines have chosen our retail platform and how we deliver a unified and optimized  passenger experience to over  500m travellers across the globe, driving  double digit revenue growth for our airline partners. Meet us at Booth 36 or alternatively contact info@datalex.com to schedule a private meeting.

Finally, dinner is on us!  Please join us for ‘craic agus ceol’  (fun and music) on Wednesday, October 30 at 19:30 as we sponsor the Gala Dinner !

Safe Travels to our Emerald Isle

Go n-éirí an bóthar leat (may the road rise to meet you)

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