Big Interview: Proving the power of personalisation will spur innovation in travel

Lee Hayhurst speaks to Boxever co-founder Dermot O’Connor about its work with airlines like Ryanair to bring personalisation to travel, something lastminute.com founder Brent Hoberman claimed in May has not yet come to travel

Lee Hayhurst speaks to Boxever co-founder Dermot O’Connor about its work with airlines like Ryanair to bring personalisation to travel, something lastminute.com founder Brent Hoberman claimed in May has not yet come to travel

When Europe’s biggest airline, Ryanair, states its aim is to become the Ikea, or even the Amazon, of travel, no one doubts the scale of the ambition.

That’s especially true of one Irish technology firm it has the task of turning Ryanair CEO Micheal O’Leary’s dreams into reality by providing the ‘brain’ at the heart of its tech stack.

Boxever, which was set up in 2011 and has been recognised by the likes of Gartner and Forrester as a leading light in efforts to bring personalisation to travel, has other major airline customers like Emirates.

More: ‘Travel firms have no excuse for not innovating,’ says Hoberman

But most eyes will be trained on how Ryanair, with its huge scale and access to customer data, is able to stretch its brand to cover much more than just the airline seat and associated products and services.

Dermot O’Connor, vice president of business development and a co-founder at Boxever, said its role is to use data to make every customer interaction matter, whether that’s on digital channels or through the contact centre.

“One of our other co-founders has a background in telcos [telephone communications] and he saw what they were doing with their customer data.

“We saw that airlines had all this data but did not know who their customers were. They understand how many passengers and seats they have in their fleets but do not know how many customers they have.

“That was the niche we spotted – to take this customer-centric data driven value proposition to the airline industry, which was kind of lacking in this area.”

At the heart of this approach is to bring Artificial Intelligence to the travel industry and it is this which is behind Ryanair’s “bold vision” to evolve into a travel retail platform.

Boxever has been brought in to help an airline not, by reputation, known for its compassionate approach to customer service, use data analytics to transform its customer experience.

O’Connor said Ryanair wants to deliver more choice, lower fares and take better care of its customers.

Outside of headline-grabbing suggestions it could start charging to use the loo, or bring in stand-up seating, Ryanair has talked about offering seats on other airlines on its website when it cannot fulfil a request.

O’Leary has even floated the idea that the carrier could give it seats away for free while it makes its money selling other associated products that customers taking a flight usually need.

“Ryanair has hundreds of millions of customers every year. They need a technology platform that can handle the scale of all these behaviours and transactions.

“We make sense of all that data and build automation at a scale that delivers to that promise that they are making to their customers.

“That’s their immediate objective: to build digital personalisation capabilities across their business to better deliver their product and services and by doing so to sell more product.”

O’Connor says once the core technology backbone is in place that will give Ryanair the platform to extend the range of product it offers. “It’s not actually that far away,” he says.

Going from not knowing how many customers you have, to knowing each one so well you can start offering them products your brand is not associated with is no mean feat.

That’s why the strides the travel sector has made in this area over the last two decades since the emergence of the World Wide Web are denigrated by those, like lastminute.com founder Brent Hoberman, who are frustrated by lack of progress.

O’Connor says Boxever has been building the platforms, integrations and data analysis algorithms to achieve this for years while many firms, Ryanair included, have tried and failed to do it themselves.

“It sounds relatively straight forward on paper. But it involves a huge amount of development to build a system to handle the scale, to do the data processing, to surface that in a clean data model and build a product to deliver user experience on top of that and integrate it in multiple channels.

“For a lot of companies it looks very simple when they start on that journey, but the thing they realise very quickly, usually at a cost of several millions of pounds, is they are not going to get there.”

While companies need to own and control their own data internally, the activation of the business insights from that data back into their ecommerce or customer service systems is a third-party challenge, says Boxever.

O’Connor believes “fear of failure” may explain a lot of the inertia in the industry, the aviation sector being not like any other business in terms of having multiple distribution channels and that innovation will be spurred once evidence of commercial success is established.

“Airlines are really complicated businesses, probably the most complicated type of business out there,” he says. “Iata’s NDC [New Distribution Capability] is a good example of trying to break free of the old way of doing things. Once someone proves it works, they will all adopt it really quickly.

“It’s really about trying to get to grips with across-functional challenges in the business. We have started to ask our clients are you talking to functions like operations, or the revenue management part of the business?

“There’s a left brain, right brain situation and that can really stifle innovation. That’s why smaller low-cost new entrants have a real opportunity. Those guys can grow really quickly.

“They don’t have airline heritage, they can just execute business in the way they want to execute business and many have grown at an incremental rate maybe because they go about it in a new way without being encumbered by legacy decisions.”

So, if personalisation is the key to success in travel now and in the future, does Boxever see larger competitors in the general online retail sector that are seen as the reigning champions of personalisation as the biggest potential competitive threat?

O’Connor says he is less concerned about Amazon’s threat – which he believes will come up against legislative issues due to their sheer size – than Google and the search giant’s ability to disrupt with its search capabilities. But he adds he fears more something coming from leftfield.

“Maybe the biggest threat they [airlines] are not aware of right now is some sort of real disruption coming into the space in the way that Uber has moved in and is taking over cars, haulage trucks and taxis offering transport logistics as a service. How far away is commercial aviation from this?”

From a simple ride sharing app, Uber’s potential disruptive influence is being seen in the wider automotive industry as it pushes ahead with its vision of becoming an AI orchestration platform for fleets of self-driving vehicles.

“Airlines could become almost a kind of broker of aviation services. Then the likes of Amazon could become really dangerous, because where then is the value proposition of the airline? These are big threats, but they are 25-plus years away.

“In the meantime it’s all around personalisation, revenue, operations, selling more product and competing from a customer loyalty and customer experience perspective.

“That’s what’s behind Ryanair’s vision, to be part of the customer journey more than just taking them from point A to point B. They need to own more of that journey because everyone else is out there trying to own more of it, so you get commoditised.

“The companies that will win are the ones that will learn to expand their customer proposition and personalisation is just one tool to compete, it’s not the be all and end all, but it’s one way to improve revenue and retain customers and build that relationship.”

O’Connor added: “People love Netflix because it personalises and makes recommendations, Amazon is a strong brand because it’s really good at making recommendations. If airlines really want to tackle that position they need to do the same with confidence.

“Where people are afraid is that there is this legacy conspiracy that airlines are gaming pricing even though they don’t have the capability of doing that. But there is a concern about how the market will react.

“Airlines need to be really clear with the customer why they are getting this price and explain why they are personalising and give the customer the option to opt in or out. It’s about giving the best deal to the customer they can give which works for them from a margin perspective but the customer feels that they are getting better value.

“It would not stop price comparison because this is good for demand generation, for airlines to drive traffic, but when they get to their site it’s an opportunity for the airline to double down on that offer. It’s opaque dynamic bundling and can be used to leverage better share of wallet.”

More: ‘Travel firms have no excuse for not innovating,’ says Hoberman