The Current State of Ancillary Sales in The Travel Industry

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Now more than ever, ancillary sales present a terrific opportunity for travel companies to generate additional revenue while simultaneously strengthening interactions with customers. More often than not, the companies that find success with ancillary sales are exceptional at analyzing data, personalizing product offers, and continuously optimizing experiences across all channels.

Successful ancillary sales are about making the right product offers to the right customers at exactly the right time. The process is all about making purchases easier and understanding what customers expect while providing it to them in a way that feels effortless. Perhaps Dame Carolyn McCall, CEO of easyJet summarized it best at September’s World Low Cost Airlines Conference in London when she stated, “the key to digital is using data to understand customers to personalize offers and make it easy!”

Succeeding in these efforts require a dedication to both analysis and taking action on the vast amounts of data that is available to online travel retailers today.

Today’s traveler expects more.

Travel companies as a whole are not doing an outstanding job of merchandising and offering valuable ancillary products to those customers throughout their digital experiences. In Fusion’s 2015 Omnibus study, 61% of customers surveyed were open to purchasing additional add-ons to complement their flight purchase. However, a mere 37% of those customers said the ancillary products being offered during that purchase were relevant to their trip.

With so many opportunities to improve the digital travel experience, why has the industry been relatively slow to adapt? Fusion and WBR’s “The Digital Journey” found that of 110 travel industry executives, only 4% were using real-time ranking and decision solutions to market ancillary products to their customers. The only true alternative to leveraging today’s digital solutions to drive online sales is simply a “one-size fits all” approach that can only result in a more misfired opportunities, poor experiences, and higher shopping cart abandonment.

Travel companies are taking notice.

These findings have resulted in growing concerns and a commonly shared objective among industry executives to focus on improving the merchandising and retail methods taking place across travel distribution channels.

According to Atmosphere Research, 91% of airline executives say improving ancillary merchandising is a key objective over the next two years. There’s good reason for such an overwhelmingly strong conviction.

Improving on these opportunities would clearly be a “win-win” situation – not only increasingly the amount of ancillary sales for travel providers but also delivering a better and more valuable overall experience to their loyal customers.

So, how do we get there?

The good news is that travel companies aren’t that far away from reaching success. In pairing a customer-centric merchandising approach that’s backed by a strong mix of products, centralized data, a team of experienced strategists, and a multi-channel merchandising platform, travel companies can begin producing more relevant and personalized ancillary product offers in no time.

Once these elements are in place – delivering on the fundamentals of good merchandising and retail is actually not complicated.

• Targeting the right customers (data analysis, segmentation, and personalization)
• With the right product offers (product variety, pricing, and predictive modeling)
• On the right channel (web, mobile, email, kiosk, and call center)
• At the right time (pre-purchase, booking, post-purchase, check-in, airport, destination)
• In the right way (personalized, timely, relevant, well designed)

To find out more about the current state of ancillary sales in the travel industry, visit www.Fusion.com.