“The adoption of digital air cargo sales is accelerating, but it is a multi-tier world”. In this Q&A with Airline Cargo Management, Simson Demmer, VP Partnerships at cargo.one, explores the trajectory of digital sales.
How would you characterise the progress made by the industry with digital sales this year?
There has been strong growth during 2022. Forwarders and airlines are seeing great results from digital sales: increasing visibility and reach, freeing up time to spend with customers while becoming faster overall.
Progress in the digitalisation of sales in air cargo has been significant, and is continuing to accelerate. Many sales and commercial teams are quickly becoming more focused on strategic sales rather than individual transactions.
Hesitancy about investing in digital sales has fallen away: airlines are adding digital sales channels, and forwarders are making use of them at a rapid pace. Airlines in particular recognise that digital sales and data-driven buying journeys confer a competitive edge.
Strategic digital sales has also proven that it can be an important contributor for airlines in elevating revenue management and capacity utilisation. The question now is how fast digitalisation can now progress, with forwarders, airlines and of course cargo.one pushing ahead on all fronts.
Cargo.one and BCG recently conducted research into the trajectory of digital sales. What were the aims of the study?
While the industry is now far more ambitious about digital sales, we were still lacking an impartial barometer for airlines to benchmark their progress, and use to contextualise their commercial strategies or digitalisation plans. With our ‘Digital Sales Trajectory Report’ we provide this overview together with insights to support airline leaders with insights and strategies to gain maximum value from digital sales.
What did you find out about the trajectory?
The industry-wide report revealed that across airlines surveyed, on average the share of bookings via digital channels is expected to rise from 20 per cent in 2021 to 40 per cent in 2023, and will hit almost 60 per cent by 2025.
The data reveals that 2022-2023 is indeed a pivotal period for digital progress. All carriers surveyed expect to sell online by 2023, and those currently achieving 10 per cent digital bookings today do expect this to double towards 20-30 per cent digital channel share by 2023.
Digital air cargo sales are growing strongly overall, but it is a multi-tier world. The airlines that can now prioritise customer needs and digital transformation, within a multi-channel framework, will build a competitive advantage.
Do platforms like cargo.one help airlines to fast-track the switch to digital?
Yes, without a doubt in many areas. Cargo.one enables an airline to significantly broaden its digital footprint almost overnight. We are available in dozens of the world’s most important markets – including North America, Latin America, 19 European nations, Japan, Korea, Singapore, India and Brazil.
Another example is how we make technical integration with cargo.one, whether direct or with an integration partner, effortless for airlines with very low requirements for airline teams.
What do you think has been holding airlines back with digitalising sales?
The differing speed of progress of airlines has been driven by how well they have embraced the transitions involved. The report shows that organisational constraints and system limitations are the main barriers to progress. An airline must progress core competencies like real-time pricing, capacity management and service delivery in order to build real momentum in digital sales success.
Some airlines were held back by planning digital sales growth to be entirely contingent on technology investments. But it is organisational changes and strategic realignment that involve learning cycles that take time, and you cannot get started early enough. The learning starts with the first digital booking.
Carriers recognise that by focusing on customer needs and embracing digital transformation, applied consistently across all of their channels – both online and offline – they can delight customers and win competitive gains that are sustainable.
A hot topic at the recent World Cargo Symposium in London surrounded real-world ways to ensure digitalisation works. How does cargo.one help airlines to maximise this?
Modern multi-channel distribution requires an airline to make technological upgrades and organisational changes that are hand-in-hand. Cargo.one does not merely provide a technology pipeline for sales – we are unique in showing airlines how to adopt digital sales into the organisation.
This encompasses us sharing our learnings on how to build leading integrations, to making available new digital KPIs and working jointly to understand and act upon their insights. Our airline growth managers support airlines to progress more rapidly by applying best practices and adapting them for the specific needs of the organisation, and its strengths.
Cargo.one teams support airlines in the steps towards becoming more digitally-minded and holistic as sales organisations, and this requires a degree of organisational change – where offers are truly consistent across channels, and teams are focused on offer management, complex negotiations and high-quality service delivery rather than transposing data between core systems and e-mail.
The best performing airlines for digital sales are building up agile, cross-functional processes for their pricing, revenue management and offer design as a whole. This is how they can achieve maximum value from digital sales.
This year appears to have been full of new airline partnerships for cargo.one. What has been the strategy behind that?
Since 2018, we have partnered with leading global airlines, but this year has seen an acceleration with large airline groups and standalone carriers coming on board. We have significantly expanded our capacity offer in all of the most relevant air cargo markets in the world: Europe, North America and Asia.
With more than 40 bookable airlines, we now offer the world’s largest cargo airline, the airline with the largest global network, and the European, North American and Japanese market leaders.
In recent months alone, cargo.one has added many thousands of new O&D pairs and additional flights per month. Today, we offer a huge proportion of global air cargo capacity for instant booking. Put simply, cargo.one equips every forwarder with the most seamless booking experience for most of the world’s most important air cargo airlines.
By ensuring great depth and diversity of supply, combined with the best booking experience, we empower forwarders to do their best work for their customers. By continually adding new capacity and innovating with transformational digital experience, cargo.one continually drives digital transformation for forwarders and airlines globally.