Amadeus paper discusses rail innovation to win the battle for customers

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Amadeus has released a Reinventing Rail in Europe: The Battle for the Customer paper bringing together leading figures from across the European travel industry to discuss how the rail industry can win the battle for the customer.

The Battle for the Customer explores how rail companies can strengthen customer focus and look to other industries for best practices in terms of the strategies and mindsets that drive change.

According to the paper, one particular area to watch is rail versus long-range bus services. Here, bus has a strong price advantage which means it presents a “new and very real challenge to rail” said Antoine de Kerviler, Director of R&D for Amadeus Rail. Indeed, so strong is the advantage that traditional rail operators have quickly moved into the space with offers such as DB’s (Deutsche Bahn) IC-Bus or SNCF’s OUIBUS.

At Eurostar the focus is on competition from air. There has been a dynamic and significant shift over time.

Darren Williams, Eurostar’s Head of Global Sales, said: “This is the most competitive environment I’ve ever seen. When Eurostar launched we went head to head with Air France and British Airways on the London to Paris route. Then the low cost carriers arrived to challenge the legacy carriers and that put pressure on us. Today we have something like seven carriers competing with us – the low cost carriers can challenge us on cost so we have to not only meet this but also focus on the customer experience.”

Not everyone is convinced that competition between air and rail will remain so fluid. According to Jean Noel Lau Keng Lun, Senior Director Global Product Marketing at Egencia, a competitive balance can emerge: “Some companies really push the air-rail comparison – but travellers only need to ask themselves this question once or twice, and then they stay with what works best for them. If you live in Central London and need to get to Paris, you’ll do the research and then take the Eurostar from then on. It would be a hard sell to convince you to go out to Gatwick or Heathrow.”

Amadeus Rail Reinventing Rail whitepaper FINAL 13

New factors can reset the balance between competing modes of transport. The opening of a convenient new rail link or the introduction of extra airport security measures can overturn the traveller’s personal choice. Technology always has another surprise up its sleeve, as SJ’s (Statens Järnvägar, a Swedish rail operator) Thomas Silbersky notes: “So far the customer has had limited choices. If they wanted to get from Amsterdam to Berlin they would probably have compared air with air. But the choice is changing, with high-speed options and, in the near future, driverless cars, choice is becoming more complex. OK, maybe rail loses against air when it comes to time. But it wins on environment and the ability to work and use your time. The driverless car can challenge rail on all those core benefits.”

Amadeus paper emphasises that traditionally, technology advance has been the primary driver for innovation in rail. Technology remains a powerful change agent, but today the emphasis is on using technology to increase customer focus.

“On routes where they have a choice, our customers prefer high-speed rail for the inner city connections, the space on the trains and the comparative lack of stress and hassle at check-in,” Ned Booth, General Manager Flights & Rail at online leisure and travel retailer lastminute.com, explains.

The paper also discusses how forward-thinking rail operators are exploring how they can take advantage of online channels.

“It is important to consider that today’s consumer expectations of good service are defined by the likes of Netflix, Amazon and sharing-economy brands such as Airbnb and Uber. Therefore it is vital that the rail sector looks towards these brands for inspiration in merchandising. Consumers are now able to book restaurants, buy flight tickets, download music and films in minutes using their mobile, tablet, laptop or in some cases, their watch. But it is not just a case of ease of purchase. Customers expect to be serviced in a way that works for them, based on their needs, preferences and chosen method of communication.”

According to Amadeus, data-driven customer insights can enable rail operators to anticipate traveller needs and be a key factor of differentiation. If customers are late for a train, operators need to use technology to be proactive and propose solutions that get them to their destination. Using these same insights, rail operators can anticipate what services the customer needs on a journey and what revenue-boosting services they can offer the customer prior to their trip.