How are digitalisation and artificial intelligence impacting the travel retail customer journey?
In this new series of features in collaboration with Blueprint, company partner, Thomas Kaneko Henningsen details how the use of AI is rapidly increasing in domestic markets, but travel retail is still catching up
Thomas Kaneko Henningsen
Artificial intelligence (AI) is the phrase of the moment. It is on everyone’s lips. It is also not the same as digitalisation and the two should not be confused.
AI is a way of developing machines that mimic human cognitive functions like learning and problem-solving. It uses Machine Learning (ML where algorithms can identify patterns in data to make predictions. AI encompasses more complex Deep Learning and Natural Language Processing (NLP) that enable computers to reason, learn, and act autonomously.
In travel retail, the tech focus to date has not really been on AI, but mainly on digitalisation. Broadly, this is the process of converting analogue information and processes into digital formats, for example, moving from paper records to electronic databases, or automating tasks with software.
Digitalisation powered by AI
Blueprint Partner, Thomas Kaneko Henningsen said: “Operators, retailers and brands worldwide are embracing new technology from self-service security screens, facial recognition, prebooked security time slots, digital parking to in-store theft detection, online live shopping and retail store performance insights. Travel retail stakeholders are welcoming digitalisation and AI to a much greater extent which in turn are driving seamless customer experiences.”
Security screening through an AI Technology project at Amsterdam Airport Schiphol
Amsterdam Schiphol Airport Retail Association’s (ARA) Director, Theo Goldberg commented: “It is mind-blowing what technology brings to the table these days.
We are currently testing and implementing a combination of digital and AI capabilities throughout the airport. We are also looking into introducing a wider range of technology-based solutions that allow our retail partners to operate more effectively.”
The experience is everything Kaneko-Henningsen commented: “Both digitalisation and AI can exploit the data opportunity to ramp up revenue. We should not think of digital as the poor relation of AI. Rather, it is the necessary step in acquiring the data on which AI can then be put to work to achieve substantial gains in revenue, all the while giving the customers more personalised, emotional and relevant user experiences.”
The user experience – and its customisation – matters. A wide-ranging 2016 study from global airports association ACI World that included 500,000 respondents concluded that for every 1% increase in passenger satisfaction there is a 1.5% increase in non-aeronautical revenue. In other words satisfied airport customers spend more. Reducing stress levels when checking in and going through security check points critically impacts travellers’ propensity to shop.
According to Forbes, US-based TSA has committed to paying up to US$1.3bn for about 1.200 CT scanners to screen carry-on bags faster and less stressful. Passengers will be able to complete the screening process in an average time of 60 second and in as littles as 30 seconds which theoretically should drive up satisfaction levels and increase shopping time on airside.
Like airport operators, brands are very much on board with AI. Skincare house Babor has combined digitalisation and personalisation in its online Skin Coach. This is a post purchase experience allowing customers to set goals and track skin progress over time to drive up customer loyalty and commitment.