The growth of inflight eCommerce is a promising development for the airline industry because it empowers carriers to diversify their lines of business, allows for an increase in ancillary revenue, and provides passengers with added-value services. Passengers may also love it because it brings a known feeling from home into the inflight experience. Similar to their day-to-day lives, passengers can use connected devices—in this case, seatback Inflight Entertainment (IFE) screens and their own personal electronic devices —to power a live, robust, and familiar omnichannel shopping experience.
To accomplish that takes data—a lot of it. Handling that data requires powerful, lightweight processing solutions. This is where the cloud comes in.
With the cloud, the airline industry is in a position to reap unprecedented rewards. For instance, importing passengers' cloud-based digital twins – a digital replica of physical assets, people, processes, systems, and devices—into an aircraft environment will empower airlines and drive customer satisfaction. It will also give airlines new opportunities to develop affiliate relationships, design more highly targeted advertising, and create smarter, more effective retail experiences.
Cloud computing will be a major enabler of eCommerce and payments for the airline industry—both in the cabin, and in the procure-to-pay process with OEMs, airlines, airports, catering, and other suppliers and merchants. The cloud has the capacity to make every flight a high-tech one using digital wallets, AI, machine learning, IoT, blockchain, and other developing technologies.
A challenge to airlines is integrating cloud-based payments into larger digital ecosystems in a fast, seamless, and secure way. With that in mind, there are at least three key challenges the airline industry must address to achieve a better payments environment.
1. There are a lot of options
Airlines can't just flip a switch and start accepting mobile wallet payments. Rather, they need to carefully consider how connectivity, data storage and privacy, and international standards and regulations intersect—then determine what the most worthwhile investment is.
Bring into the mix fast-changing and competing technologies that muddy the decision-making process. Airlines want to make sure they invest their money in the right technology, but the rate of innovation and breadth of competition can be overwhelming. Is near-field communication (NFC) still the future of payments—or is it all about the cloud? What about using the cloud to process digital, or invisible, payments?
What's more, payments don't exist in a vacuum. Airlines also need to evaluate the entire passenger journey and how they can best streamline all the digital components of a trip. After all, digital wallets aren't necessarily just for storing credit card information; they could also be used for check-in, passport control, and connecting to their personal accounts and companion apps while aboard the aircraft.
These dynamics have led some airlines to hit the pause button on adopting more modern payment options altogether. At this point, airline executives might find themselves weighing whether to focus on a more intuitive, streamlined payments experience first and introduce other elements later or to overhaul the entire digital ecosystem at once.
Making decisions in this kind of competitive environment can be overwhelming. It takes a clear vision—and a good partner—to make the best choices for your airline.
2. There's no single standard for inflight payments
Passengers aren’t confined to a single airline for all their travel, and that means their experiences will vary from one trip to the next. One carrier might accept all major digital wallets, while another might still require customers to swipe their credit cards in a handheld terminal, and still others might require the passenger to set up a new account on a proprietary system in order to make purchases. Incongruities like those can dissuade passengers from bothering with inflight retail altogether—and when that happens, the entire industry loses.
In short, airlines may want to consider working together to establish consistency across the industry.
"Standardization is really important as it creates the power of the network," says Venkat Eswara, Panasonic's Director of Software Product Management and SaaS Solutions.
"As a passenger, I don't want to use a third-party payment option. If airlines extend the services and experiences that passengers are already accustomed to, they can take their revenues to the next level. Control is key; control for airlines, control for passengers, and control for partners," Eswara continues. "If you give people some measure of control, they will feel empowered—and that's an ideal scenario when it comes to retail."
Tapping into experienced technology contributors will help allow airlines to take advantage of the latest tech, with much less overhead than if they created in-house solutions.
“The cloud can help solve important carrier difficulties around service, profitability, and passenger expectations. It has the power to centralize passengers' preferences, personal information, and account logins.”
3. Passengers might not love the options that airlines choose
As Eswara noted, "control" is the keyword. The need for control is hardwired into human beings, yet so much about traveling is beyond our control. If a flight is weather-delayed, passengers often have no other choice but to wait. If there are no animal-free meal options on a menu, a vegan might grudgingly subsist off a meal of chips and cookies. If making inflight purchases on an IFE system is unnecessarily complicated, passengers might abandon their impulse buys—meaning airlines will lose out on additional revenue.
These passengers might not have true control over their situations, but giving them better options is key to creating better passenger experiences. Science backs up this idea. According to psychological research entitled Born to Choose: The Origins and Value of the Need for Control, even just the perception of choice is powerful and helps regulate emotional responses to stressful situations. The best way airlines can respect that biological imperative is by offering passengers options—and good ones at that.
The only problem is: How do airlines know what people want? Companies can focus-group the question into the ground, but at the end of the day, everybody's got their own personal preferences.
So, now what?
The cloud can help solve important carrier difficulties around service, profitability, and passenger expectations. It has the power to centralize passengers' preferences, personal information, and account logins. The cloud can be a kind of aforementioned "digital twin" that equips people with relevant choices and control, even in unfamiliar places.
To truly maximize these technologies—and their investments—airlines need the right expertise. In a highly competitive arena, developing technology internally is equivalent to reinventing the wheel. Simply put, it's generally faster and less expensive to team up with an experienced and multidisciplinary hardware and software provider. The added bonus is consistency through the creation and adoption of industry standards.
Find out more about how Panasonic can supply airlines true leverage in the quest of perfecting the passenger experience while maximizing profits.