Four takeaways from Mary Meeker’s Internet Trends 2018 report…

…and what they could potentially mean for an airline

Globally, Internet usage has been enabling a massive shift in the way consumers interact with
brands and a lot of these are extremely relevant in India as well. In fact, due to the very high
penetration of Mobile Internet in the country, as compared to Broadband Internet, the Indian
consumers probably set the trends on some of these behavior changes if they are not closely
following the globally observed shift.

Mary Meeker (now ex-Kleiner Perkins) has been putting out THE definitive annual research
document that has been tracking these changes and making an attempt at forecasting what we
could expect over the next few years. These are especially valid and relevant for businesses that are
now driven by the Internet economy. And the consumer side of the traditional airline business is
getting increasingly influenced by the internet economy and the increasingly mobile internet-savvy
Indian consumers.

While there can be several implications of the emerging internet trends on the airline business, I
have picked a few that I think would be very relevant for 6E / InterGlobe. Improtant to note that
there is no specific prioritization to these recommendations and the specific road-map would need
to be developed after a much deeper understanding of the business and the market context.

User Experience is important

Traditionally, Airlines haven’t really focused on their website booking experience and that is
probably one of the reasons why the more UX-focused OTA’s have drawn the consumers attention
(apart from the price-comparison functionality itself). Globally, simple to use products have gained
in traction and are attracting users’ attention far more than ever and this trend is here to stay.

In fact, a clear and lucid Digital Strategy will

be the cornerstone of most businesses in the
future. The airline business today operates
amongst these digital audiences largely
driven by the pervasiveness of technology,
specifically the ease of internet access
through mobile devices. Given the changes
in the behavior of their audiences, a strong
Digital strategy, backed up by great
execution and supported by a robust
Operational Framework would be a
Competitive Advantage in the future.

UX, by itself is extremely complex and multi-

faceted and will encompass a wide range of technology investments – building internal Technology
capability, building frameworks and tooling that can help the airline really understand customer
behavior by leveraging data outside of the traditional airline data, building hypotheses and the
capability to A/B test various scenarios and building agility into this entire process so that the
hypothesis-test-learn-implement loop is done at the speed of thought (rather than the traditional
quarterly or annual cycles of change).
Personalization is a given (may be more than a Freq Flyer Program!!)
Personalization is here to stay and is a key part of customer expectations. Several e-commerce
businesses have bet big on it and are already seeing the benefits of delivering real-time tailored
experiences customized to each individual customer – better conversion rates, higher repeat
customer cohorts, better quality of customers, etc.

While I haven’t come across any Indian

consumer research that is relevant, the US
data says that nearly 40% of customers think
that online retailers should do more to offer
personalized experiences. Airlines have
access to very useful customer data-points
that they can help deliver even more
meaning to their journey. However, without
the investments in the right technology, it
will be impossible to deliver a real-time,
tailored experience customized to each
individual customer.

The starting point here would be to build a

robust & scalable data platform that can ingest relevant data from various sources, both internal as
well as external (covering, but not limited to, telco & isp data, card, bank & co-brand, internal click-
streams and third-party data).

E-commerce is here to stay, so build a robust Digital platform

About 13% of all retail sales comes from e-commerce, up from about 5% a decade ago (this is US
data from the Meeker Report). Even though e-commerce revenue growth continues to be strong
outside of the airline world, airlines continue to struggle to increase direct bookings, especially with
competition coming from metasearch and online travel agents who have much more sophisticated
digital platforms.

Airlines should look at things such as

personalization, instacart, one-click
purchasing, and new seamless payment
options. Ryanair’s Express Booking (home
page, express booking page, confirmation
page) is still the closest thing to an Amazon
one-click flight purchase experience that
exists today. The typical legacy IT mentality
needs to change quickly and a long-term
investment view is needed to ensure that the
airline web-sales approaches an e-commerce
way of thinking and execution.
Technology investment is a moving constant and needs to be future-focussed
Artificial intelligence IT projected spends will grow by over 5% is what the Meeker Report says.
However, the use of AI is extremely limited within the travel industry in reality. Deployment and
usage of AI hasn’t really gone beyond some mundane use-cases like chatbots – the upside on
improving Customer Experience using AI is significant and is an untouched area globally. For AI to
be effective and drive value, Airlines need to integrate AI through their core digital systems.

They should also not be afraid to take risks - given

the generally risk-averse nature of the airline
business globally this is contra to the nature of
their business. AI is still an evolving area of
consumer technology and I reckon that the
rewards for the travel industry could be huge. One
of the areas that should be examined is an airline
centric natural-language processing (NLP) engine
that can process natural language data for the
acronym heavy airline industry.

McKinsey Global Institute’s latest research on AI

analysed 400 use cases across 19 industries and posited that the travel industry is where AI could
create the most value as a percentage of revenue - potentially a 7 to 12% positive impact as a
percentage of annual revenue. Why travel? McKinsey Global Institute partner Michael Chui,
the main author of the report, says that, “travel companies perform complex marketing, sales and
operations, all areas where McKinsey sees AI creating the most value.”