Digital Transformation -Consumer Goods

Digital Transformation in Consumer Goods

by with No Comment Digital Transformation

The consumer goods companies are dictated by the unpredictable, cyclical nature of consumer demand. Consumer goods industry include subsegments such as food and beverage, footwear and apparel, health and beauty, and household care. The Digital transformation in consumer goods has been providing them with new opportunities for growth, better customer experience, improved operational efficiency, and business and cultural transformation.

The Beginning of Digital Transformation in Consumer Goods

It is difficult to pinpoint a specific date for the start of digital transformation in consumer goods industry as the adoption of digital technologies has been happening gradually over time. However, some specific events and developments that have contributed to digital transformation in consumer goods include: the rise of e-commerce, mobile technology, artificial intelligence, Internet of Behaviors, predictive analytics, and data analytics. The French beauty company L’Oréal possibly was one among the first in consumer goods industry to adopt a structured approach to digital transformation. L’Oréal first embarked on its digital transformation journey more than a decade ago. Today, it provides an excellent case study of effective, successful digital transformation. L’Oréal’s journey emphasizes the role of senior leadership in setting the vision for transformation and highlights the importance of linking supply chain digital strategy to company-wide digital strategy. [1]

The rise of digital technologies, such as social media and mobile apps, artificial intelligence, Internet of Behaviors, has enabled consumer goods companies to reach and engage with their customers in new and innovative ways, and has created new opportunities for companies to gather data about customer preferences and behavior. The soft drink giant, Coca-Cola is extensively leveraging data analytics, artificial intelligence, and Internet of Behaviors of data on various brands and products it offers. The brand across its vending machines is applying big data analytics and AI algorithms to interact with its customers. The brand on social media uses AI algorithms to understand when, where, and how its customers like to consume their products and derive popularity of individual products by location.

The growth of digital technologies and platforms has had a profound impact on the consumer goods industry. It has enabled new business models and customer experiences to emerge as an integral part of digital transformation in consumer goods. The biggest among all consumer goods industry, Unilever has embraced the journey of digital transformation in a structured manner. It has actively digitized all aspects of their business to leverage data and increase digital capability in everything they do. The company has implemented IoT, artificial intelligence, virtual reality, and digital twin technology to automate and optimize all aspects of business processes. The effective use of key digital technologies helped Unilever gain deeper insights into consumer behavior, optimize its supply chain, enhance its operational efficiency, and develop new products and services.

Digital Transformation in Consumer Goods Industry is Key to Growth Strategy

Consumer goods companies are experiencing unprecedented change – change in terms of not only how they connect with suppliers, customers, and consumers but also the technologies they use to affect these interactions.[2] It is observed that the new age consumers are less brand loyal than ever and are increasingly geared toward products aligning with sustainability, health, wellness, and lifestyle. These new age consumers are increasingly looking for experiences rather than just products. This change in consumer behavior is backed by the rise in disposal income and seamless access to the global products. This rise in the demanding consumers have forced most of the consumer goods companies to walk the path of digital transformation.

L’Oréal is one of the first consumer goods company to walk the journey of digital transformation.  In 2012, foreseeing their future challenges, L’Oréal launched – Connected Beauty Incubator – a division within the company’s research division dedicated entirely to technological innovation and industry disruption. [3] This division was the first step of L’Oréal towards its journey of digital transformation. In last one decade, L’Oréal also introduced many innovations in the space of personalization and increasing the proximity of interactions with the consumer. One such example is the Lancôme brand’s Teint Particulier foundation concept, which analyzed consumer skin tones at the beauty counter enabling a foundation to be blended on the spot to meet their needs. [4]

Today almost all major consumer goods company have embraced digital transformation. These companies are operating at different stages of digital transformation. The consumer goods companies increasingly focused on digital transformation to stay ahead of the competition and remain relevant; many companies in the space are rapidly embracing digital technology to provide the best products and services for their customers.

It also offers opportunity to work on a global scale, while maintaining flexibility, speed, quality, and innovation within their businesses. The most innovative of these companies are using the power of digitalization – i.e., the integration and information sharing among multiple digital technologies – to transform their businesses and better connect to consumers to drive innovation.[5] For example, Coca-Cola’s digital transformation strategies are primarily focused on operational efficiency leveraging data and technology, enhancing customer experience through both online and offline channels, and strengthening its digital culture. Coca-Cola, to achieve the set digital transformation goals is using several digital technologies including artificial intelligence, big data, cloud computing, blockchain, IoT, robotics, and behavioral analytics to achieve operational efficiency, and enhancing customer experience.

The Coca-Cola in its digital transformation journey focused on – How to create more relevant, more personalized experiences for consumers and the retail customers who serve them; How to make the company better from the inside by using data and technology to accelerate and remove processes and, ultimately, remove the barriers that exist;  How to create disruption within the company before external factors do, and How to change the fabric of a company that views itself as a traditional consumer goods company. Similarly, Nestle’s digital transformation strategy known as Vision2Life has four key priorities: bring value to the people who receive IT services; operate as one global IT team but with local expertise; interlock product management with business stakeholders; and make IT a technology differentiator not just a provider.

The enormity of the digital transformation opportunities and challenges absolutely requires that business and technology leaders immediately assess and adapt their IT investment priorities and map how they relate to the capabilities required for digital transformation – and it must be a collaboration between IT and the line of business. [6] Put simply, digital transformation is the integration of digital technology into all areas of a business, resulting in fundamental changes in how a business operates and the value they deliver to their customers. It’s about changing the way a business interacts with its customers and how they provide their customers with a consistent experience whenever and wherever they need it. For example, PepsiCo is developing a modernized data and cloud infrastructure replete with automated processes and workflows. To date the company has moved 5,000 applications to Microsoft Azure as it applies predictive analytics, AI, robotics, and process automation in many of its business operations. [7] Similarly, P&G with help from Microsoft, is also tapping into key disruptive technologies, including AI, big data, blockchain, cloud, IoT, digital twin, AI, machine learning and robotic process automation among others to digitally transform its operations.

It is important to understand that digital transformation in consumer goods industry is a conscious movement from point solutions that deliver incremental value to integrated process and technology solutions that provide transformational outcomes in terms of customer experience, business efficiency, business innovation. The digital transformation does also help business transform culture. Unilever has 2.5 billion daily customers and runs 300 production facilities, operating across 190 different countries. The company decided to develop its data analytics infrastructure, by collecting more customer and behavioral data. In 2019, Unilever gathered 900 million individual consumer records, which was an enormous increase compared to the modest 200 million the year before. The brand having data and predictive analytics capabilities, can increase the accuracy of demand estimations and plan its production. This data driven approach helped Unilever launched many new data-driven brands. [8]

There are multiple case studies that confirms digital transformation in consumer goods helped companies to increase their revenues, improve their operations, better compete with other companies in the industry, and allowed companies to provide their customers with more personalized and interactive experiences. In addition, digital transformation in consumer goods helps companies to better understand their customers and create more targeted and effective products and services.

[1] L’Oréal: the beauty of supply chain digitalization; Ralf W. Seifert, Richard Markoff; 2022 in Innovation – imd.org

[2] IDC Industry Brief – The Consumer Goods Industry in the Digital Age; Simon Ellis – Salesforce; March 2017

[3] How L’Oréal Leads Beauty With Digital Transformation; Vance Duong; 2022 savvycomsoftware.com

[4] L’Oréal: the beauty of supply chain digitalization; Ralf W. Seifert, Richard Markoff; 2022 in Innovation – imd.org/

[5] Digitalization—Unlocking Unlimited Potential for Consumer-Products Companies; By Suzanne Kopcha, Vice President, Consumer Products and Retail at Siemens PLM Software; INDUSTRY BRIEFING: DIGITALIZATION IN FOOD & BEVERAGE

[6] IDC Industry Brief – The Consumer Goods Industry in the Digital Age; Simon Ellis – Salesforce; March 2017

[7] PepsiCo transforms for the digital era Feature;  Paula Rooney; cio.com -2022

[8]10 companies with successful digital transformation [examples]; August 2020; Future Processing | https://www.future-processing.com/blog/10-companies-with-successful-digital-transformation/

Digital Transformation in Travel Industry: The Role of Technology

Digital Transformation in Travel Industry: The Role of Technology

by with No Comment BusinessDigital Transformation

The journey of digital innovation was not only centered around the digital native companies the traditional travel companies have also embraced the digital technologies. In last few decades it is observed that the traditional travel companies to automate many of their processes, reduce the need for manual labour, save time and reduce costs have extensively used digital technologies. It has helped traditional travel companies to improve their operations and offer a better experience to their customers, which in turn helped them stay competitive in a rapidly changing market. One of the classic success stories of traditional travel company transforming itself into an innovation power house is  Royal Caribbean. The company has used a wide range of new technology solutions, and has rapidly build capabilities and expertise around IoT, AI, VR, machine learning, big data and robotics. The company has introducing a range of new features, such as an intelligent personal assistant for passengers, facial recognition for portside check-in, automated security features, robotic bartenders to mix and serve drinks, as well as virtual reality to more efficiently design new ships. Royal Caribbean’s WOWband, an NFC-enabled wristband enables individuals to be identified as guests moment they check-in, track luggage, help them pay for drinks, book meals and entertainment and move through ships. [1] Royal Caribbean is reimagines cruising business and transforming itself into an innovative travel company.

Mobile technology: According to the Travel Flash Report by Criteo, more than one-third of the world’s population uses mobile devices to book hotel rooms. But mobile apps are not only for hotel room booking. Travel companies across globe offer mobile apps-based services that allow customers to effectively plan and book trips, manage itineraries, access travel information while on the go. The new age companies like Airbnb, Uber, Ola, Lyft, and many other travel-based apps use mobile applications to make consumers book a room, a car or bike ride, order food. Mobile technology supports location-based services, such as providing real-time information on nearby attractions and services, personalised recommendations based on a traveller’s location and interests, provide a more personalised experience for travellers. Moreover, mobile technology help travel industry improve operations and efficiency of the company by monitoring and optimising various aspects of operations, such as inventory management, booking processes, and customer service.

Google maps has transformed the travel experience of everyday commuters. It offers travelers with a street view of the map of the world. It offers details like hotels, restaurants, petrol stations, hospitals on the defined route. It also details complete encyclopedia of historic building, monument of the area one is travelling. One of the best features of Google Maps best feature is predictive travel time. Predictive travel time uses historical time-of-day and day-of-week traffic data to estimate travel times at a future date. This makes it easier than ever to predict how long it will take to get somewhere and suggest the best route even when the departure time is far in the future. [2] It will be only apt to say that Google map is one of the biggest digital innovations of recent times in Travel Industry.

Qantas Airways launched its stand-alone lower-fare Jetstar to match the growing demand of the industry. The new brand is differentiated by lower fares and a better customer experience. Qantas Airways to win the market focused on intensive use of digital technology in booking, app-based loyalty programs, automated check-in, and baggage service. The Airways also worked on digitization in other service and operations arenas, prompted the creation of the Jetstar brand. To speed up its response time and disrupt (rather than follow) the industry, Qantas was open to cannibalizing its flagship brand. Today, Jetstar’s margins on its earnings before interest and taxes (EBIT) exceed those of the Qantas brand[3]

Virtual Reality (VR): The travel industry has observed that some of the progressive travel companies have started to use virtual reality to allow customers experience destinations before they indulge into actual travel. For example, Qantas Airlines has developed a VR application that allows travelers to explore their preferred destination beforehand. It is observed that not only travel companies actively using VR to connect with customers, but also digital tech companies are exploring VR based content. For example, Google already has a huge collection of virtual museums under Google Arts & Culture, such as, The British Museum in London, the Van Gogh Museum in Amsterdam, the Guggenheim in New York City. The Museum of Modern Art in New York (MOMA) is also offering VR installations as part of their exhibits. The travel industry has been especially quick to adopt Virtual reality technology. VR has been successfully creating and engaging immersive marketing and advertising campaigns for travel companies. It allows them to showcase their destinations and services in a more compelling way.

The goal of travel companies that have started to use virtual reality is to offer a preview of what guests will experience as the next-best-thing. These players have been using the power of VR to offer more immersive and personalised travel experiences. For example, in 2018 the Japan-based First Airlines started offering the customers the ability to fly to a number of destinations in a mock aircraft just by using VR.[4] It is also observed that some of the evolved tour operators are using VR to create virtual tours of popular destinations. For example, Marriott Hotels has launched a VR experience that allows people to “stay” in one of their properties and explore the surrounding area. The travel operators are also using VR to allow travellers to experience destinations and attractions before they travel. The VR experience allow them to explore and plan their trips in a more immersive way, provide personalised and immersive customer service experiences, such as virtual consultations with travel agents or personalised destination recommendations. Moreover, VR is used to improve the efficiency of various aspects of a travel company’s operations, such as training employees, managing inventory, and optimising routes. The virtual reality training is powered to customize the simulations to meet the specific training needs of the airline. Avietra, specializes in safety training for airlines, offers virtual reality training environments with unparalleled realism and immersive experience. VR based training help employees get trained in a virtual reality simulation of an aircraft cabin including – pre-flight preparations, the boarding process, emergency and safety training. In yet another case, Airbus, in collaboration with Air France Industries and KLM Engineering, has created a virtual reality training course to optimize engine maintenance. This virtual reality training was created based on real aircraft maintenance processes and conditions. [5]

VR is rapidly changing the entire sphere of travel and tourism in and around the world. In 2018, the market size of the AR and VR market was around $18 billion. This is (was) set to rise to a whopping $209 billion by 2022. [6] The interest of companies and the customer reflects in the growth of market size of the AR and VR. This also reflects in the rise of metaverse, in last few years. The metaverse is the next defining moment for the travel industry. Emirates, a virtual reality pioneer in the travel industry, is launching signature metaverse experiences for customers. It is also developing non-fungible tokens (NFTs) both for utility and collectible purposes.

Artificial intelligence (AI) and Chatbots: Artificial intelligence (AI) is being used in various ways in the travel industry, such as to personalize recommendations and offers, to automate processes, and to improve customer service. Cirrus, a FLYR Labs platform compiles data from airlines and relies on AI algorithms to analyze the data and produce accurate forecasts on sales, booking activities and other travel factors. Travel companies can then anticipate loading levels of certain flights and determine prices that account for the rise and fall in demand. [7] This is one of the classic examples of AI optimizing the airlines operations. It also automates many routine tasks and processes in the travel industry, such as responding to customer inquiries, processing bookings, and managing itineraries. For example, Radisson Blu owned Edwardian Hotels has successfully implemented a virtual concierge, Edward. This AI-powered application provides the guests with customized data and necessary help.

AI in the combination with another technologies is defined as intelligent automation supports the idea of smart tourism. A global hospitality company, IHG has AI-controlled bedrooms that understand voice commands via natural language processing. It offers customers make a simple request to play music, stream a show and take other measures to make themselves comfortable during their stay.[8] One other global hospitality company, Marriott has been using AI-powered chatbots to do things like make reservation changes and check on account balances or redemption vouchers. The AI-powered chatbots and virtual assistants that provide instant answers to customer questions and help them to plan and book trips and optimise various aspects of a travel company’s operations, such as inventory management, pricing, and promotions. These intelligent chatbots have already become part of major travel reservation platforms like Booking.com, Skyscanner and Expedia. The travel companies are using such chatbots to communicate with their clients and are usually reserved to handle easier tasks such as finding booking details, travel information, setting price alerts, etc.

Moreover, the AI and chatbots are being used to provide customers with instant answers to their questions and help them to plan and book trips. For example, some airlines use it to provide customer service, while others use it to improve flight safety. Blue Bot is KLM’s chatbot powered by AI. In yets another case, GRT Hotels & Resorts chatbot – GReaTa talks to customers directly, collects contacts and helps users book a hotel. Hotels are also using AI to personalize the guest experience by offering custom recommendations based on past stays. A bright example of AI offering personalized experience is the chatbot called Rose utilized by the Cosmopolitan Hotel in Las Vegas. Rose was tailored to offer clients unique experiences by establishing an emotional connection with the visitors.  Rose can deliver recommendations to the guests if they want to book a table at a restaurant, visit a spa, or go on a spontaneous trip.

AI acts as an effective complementary dimension to the future of travel companies. As of now, Just 13% of travel companies have the AI maturity today to unlock its full potential. [9] We are in the early days of implementing AI in travel industry. The early success of AI in the travel industry suggest that it is poised to be a force of change, improving traveler experiences and operational efficiency, empowering employees, simplifying logistics and more.

Robots: The Henn-na Hotel in Nagasaki Japan is recognized as the world’s first robot-staffed hotel, with robots being used at the front desk, as customer information points, and for storage purposes, using voice, facial recognition, and AI technology. [10] The use of Robots is rapidly gaining popularity within the travel industry. The growing use of robots are partly motivated by changing consumer habits who is actively seeking self-service methods which is making use of robots an appealing proposition to hotels, travel agents, and other travel companies. In recent times, robots are being used in the travel industry to assist customers in booking trips and managing their itineraries, either in person or through virtual assistants. Hilton has deployed robot technology in the form of Connie, an artificially intelligent concierge developed in collaboration with IBM. To respond to their queries, Connie can interact with visitors, using speech recognition technology. It also learns from each interaction, meaning the more it is used, its responses will improve. [11]

Robots are also used to automate routine tasks and processes in the travel industry, such as handling luggage, cleaning hotel rooms, or processing bookings. For example, the Heathrow Airport in London has already employed such robots to guide passengers in terminals. Moreover, robots are also used to improve security in the travel industry, such as by monitoring access to buildings or tracking luggage. For instance, Knightscope robots are used in some airports to detect concealed weapons and other hidden items that are not permitted on flights. Knightscope Robots is not the case in isolation, robots are now increasingly replacing human agents in the travel industry. Some of the international airports like Beijing Capital, Hong Kong, and Pittsburgh are making use of robots and ultraviolet (UV) technologies to clean and disinfect their spaces.

Robots are one of the most exciting technological developments in recent years. As on date, robots are not widely used in the travel industry, the travel industry has the potential to be useful in a number of ways, and their use is likely to grow as the industry continues to evolve.

5G: In December 2018 Helsinki became the world’s first 5G airport and its operator Finavia partnered with Finnish telco Telia to introduce a robot customer service agent called Tellu. Tellu not only helps passengers find their way around and get information about their flights, its on-board cameras send real-time footage to security teams to provide eyes on the ground.[12] 5G is the next generation of mobile network technology. It is expected to provide faster and more reliable connectivity than previous generations of mobile networks. 5G can provide faster and more reliable connectivity to travellers, allowing them to access information, book trips, and connect with others while on the go, and it offers real-time information on nearby attractions and services, and personalized recommendations based on a traveller’s location and interests. The technology is designed to provide the fast and reliable connectivity needed to support immersive virtual and augmented reality experiences, such as virtual tours of destinations and augmented reality guides to attractions.

It supports the development of smart cities and connected tourism, allowing travel companies and destinations to offer more personalised and seamless experiences to travellers. Moreover, 5G combined with AI and robotics, can supercharge personalization and enhance customer service touchpoints via smart robots and also reduce potentially virus-spreading interactions. 5G creates significant potential for improving the in-destination experience via mixed-reality applications that bring the destination to life. The technology is enabling operators to revolutionize their offerings with cutting edge in-room and cross-facility services. Hotel operators are using 5G technology to enhance the guest experience. For example, Eccleston Square Hotel is an example of a hotel with innovative technology — offering in-room smartphones, electronically adjustable beds, and a 4K Chromecast that allows a guest to mirror their device to the suite’s Smart TV to screencast their personal streaming services. [13]

Gatwick, for instance, through its partnership with Pointr, was the world’s first airport to install 2,000 beacons that help passengers navigate its terminals and get accurate updates to flight and gate information. [14]

5G’s promises of faster, more reliable connections to consumers. This new technology is proving out to be key to local businesses growth that rely on travel and tourism revenue. The 5G networks are not only helping holidaymakers explore destinations more easily and help them discover hidden treasures that are off the beaten track, but is also transforming many industries including – travel, airlines, airports, and hospitality.

Internet of Things (IoT): The Internet of Things is used in the travel industry to collect and analyse data on customer behaviour and preferences, and to offer more personalised and tailored experiences. For example, Miami Airport, with the presence of over 500 beacons, is providing detailed information like gate details bus as well as shopping and dinner details to the passengers at its various terminals. The IoT is not only used to providing location-based services to travellers, such as real-time information on nearby attractions but is also used  to provide a more personalised and seamless experience to travelers, such as by automatically adjusting room temperatures or providing personalized recommendations. Hotels like Marriot have already been using the technology to manage temperatures and lighting from reception desks. IoT is also used to monitor and optimize various aspects of a travel company’s operations, such as inventory management, booking processes, and customer service. For example, Hertz use IoT to monitor their fleets. IoT devices is also used to improve security in the travel industry, such as by monitoring access to buildings and tracking luggage.

The Airbus Connected Experience seeks to keep the airplane cabin connected. They have seats, bathrooms, etc connected in a way to IoT helping the cabin crew to get real-time updates about seat positions, food availability, bathroom shortages, etc, enabling them to provide the best services to the passengers using data collected. [15]

IoT allows for greater urban efficiency through a data-rich tourism industry and support for smart tourism, as it increases operational and resource efficiency while reducing environmental impact. The smart city of Malaga, Spain is prominent example where the streets are fully equipped to accommodate people with disabilities, the public transportation system is optimized, and parks are installed with automatic watering systems. IoT is just not enabling smart cities but also helping airways bring efficiency. For example, EasyJet has adopted wearable technology for its crew and staff members use tech-enabled uniforms. Their suits are equipped with inbuilt microphones for direct communication between crew to passenger and crew to crew on various occasions.

IoT data facilitates businesses to know their needs, their demands, travel habits, and some other characteristics so that they can convey to potential customers the information they know the customers care about. It creates a wealth of data from tourism companies, which in turn allows them to create highly personalized services. It is extensively used for tourism marketing and management, as this can improve the visitor’s experience.

Big Data Analytics and Machine Learning: The Hopper app has helped hundreds of million travelers find and secure the best price on flights, hotels, homes and car rentals. The app logic is based on machine learning algorithms. It uses a flight database to predict optimal hotel prices and flights while offering users personalized recommendations about the most suitable time to book a flight. When a traveler is tracking a flight, it provides recommendations on whether he/she should buy it now or wait for a better price. Just like Hooper there are many other travel companies using big data and analytics to better understand their customers and their preferences, and to improve the way they do business. Data and analytics are used in the travel industry to understanding customer preferences and behaviour. Travel companies use data and analytics to better understand their customers, such as their demographics, interests, and preferences. It helps them to tailor their offerings and improve the customer experience. It provides personalised recommendations and offers to customers based on their preferences and past behaviour. It helps to increase customer engagement and loyalty. It is also used to analyse market conditions and customer behaviour, and to help travel companies to determine the most effective pricing and promotional strategies, monitor and optimise various aspects of a travel company’s operations, such as inventory management, booking processes, and customer service.

The hotel chain Marriott uses digital technologies to prioritize customer relationships and personalize customer experiences. It believes that data drive great customer experiences. It aims to build 360º customer profiles and make them available to personalize the entire travel journey, which requires accurate data collection and analysis. To further drive customer satisfaction, Marriott automates processes such as booking, check-in and checkout, to free up employees for more sophisticated engagement with customers. As a result of these initiatives, Marriott has experienced stronger customer loyalty, boosting its revenue and market share.

Machine learning algorithms is being used to analyse customer data and provide personalised recommendations and offers based on their preferences and past behaviour. It is also used to optimise various aspects of a travel company’s operations, such as inventory management, pricing, and promotions.

Blockchain Technology (BCT): Blockchain is used in the travel industry to improve the security and transparency of transactions and to provide more secure and efficient ways to manage data and contracts. Empire App, a blockchain-powered mobile application that helps our customers solve the challenges of double booking, incorrect data, data security, cost issues, and more. It is also used to fill security gaps within baggage management, as airlines seek to automate luggage screenings that identify and locate luggage security issues in real-time, better preventing security incidents. Blockchain with its value-added features is emerging as an important part of the digital transformation in the travel industry. It also helps companies to improve the way they do business and offer a better experience to their customers. For example, Travelport is using artificial intelligence (AI) and Blockchain to create a system that helps enterprises manage their corporate travel expenses by tracking, analyzing, and predicting spend accurately.

Blockchain is used to manage contracts and transactions securely and transparently in the travel industry, such as booking contracts, insurance policies, and customer agreements. Companies like Webjet have been increasing their reliance on blockchain technology in order to locate and eliminate real-time data problems, provide lower fares, and streamline communication between the vendor and the user.

Blockchain provides a more secure and transparent way to store and manage data in the travel industry, protecting against unauthorized access and breaches. It also helps to manage and track customer loyalty rewards, allowing travel companies to offer more personalized and rewarding experiences to their customers. For example, Singapore Airlines has deployed a Blockchain based loyalty program to convert one’s travel miles into payment units. These units can be used with the airline’s partner merchants to redeem a variety of goods and services.  It also helps streamline supply chain management by allowing multiple parties to securely and transparently access and update data on the status of bookings and reservations. The insurance leader, AXA has launched Fizzy, a 100% automated and highly secure platform that works on the Ethereum network to take tracking to a new level and provide insurance against incidents like flight delays.

It is early days for Blockchain in travel companies. It has the potential to promote sustainable tourism and can be achieved with the cooperation of all stakeholders.

Cloud Computing: According to the GlobalData emerging technology trends survey 2019, approximately 81% of travel and tourism companies are currently investing in cloud computing whilst 18% plan to over the next three years. It has emerged as a valuable tool for the travel sector as the players in the industry deals with large amounts of personal data. It offers players in the industry an efficient way of storing, evaluating and collating critical data. It provides more secure ways to store and manage data. It helps to protect against data breaches and other security threats.

In 2016 Airbnb migrated to AWS to improve responsiveness and flexibility; Expedia with help of AWS is able to develop apps faster, scale easily, and troubleshoot issues quickly; Hilton Honors chose Google Cloud to enhance the booking process and customer experience; Hyatt uses Adobe Marketing Cloud for better delivery across platforms and digital asset management. Travel companies across globe is using cloud computing to store and manage data, and to provide scalable and flexible computing power to support the operations of a travel company.

Cloud computing is an important part of digital transformation in travel, and it can help companies to improve the way they do business and offer a better experience to their customers. It allows travel companies to store and manage large amounts of data, such as customer information, booking records, and travel itineraries, in a scalable and flexible way. For example, mobile app Hopper helps travelers find deals on hotels, flights and rental cars. Hopper’s cloud platform employs AI and machine learning models that analyze years of travel data and price products accordingly. [16]

Cloud computing spending in travel and tourism was worth $8.6 billion in 2021. Cloud computing in travel and tourism is forecast to grow at a CAGR of more than 15% between 2021 and 2026. The use of cloud computing application is on rise in last few years. In the recent years industry has also started to use cloud-based service for cloud entertainment. Lufthansa makes use of a cloud-based service to allow its passengers to choose selected content before departure, which can then be accessed on-board using the airline’s internet. Moreover, the travel companies also use cloud-based tools such as email, messaging, and project management. The platforms help travel companies to collaborate and communicate more effectively, both within the company and with external partners.

Social Media and Search: Kayak is a travel meta-search engine that searches hundreds of travel sites from all over the world, including the sites maintained by airliners, hoteliers, car rental firms, and even the e-travel agents, to provide the information to the searcher in an easy-to-use display and send him directly to the source to make the purchase.

Social media and search have changed how people document and remember their trips – rather than waiting until they get home to develop a photo album or write a blog post about their journey, they can share highlights as they happen. They have played an important role as information and engagement tool and is used for creating the brand awareness for regions, enterprises, destinations and attractions and also for building relationships with travellers before, during, and after travel.  Social Media and Search also offers customers an opportunity to share their opinions quickly and on social network platforms such as Facebook, Yelp, TripAdvisor, or travel websites.  Tourists can use information from review platforms like Expedia, TripAdvisor, and Lonely Planet to avoid problems while planning and going on a trip. For Example, Norwegian Cruise Lines launched a social media campaign encouraging guests to join a virtual staycation from their homes. The campaign was promoted via video across social media, including Facebook and YouTube. The virtual experiences transported guests to popular cruise destinations like Alaska and the Caribbean through high-quality video. [17]

The future of the travel industry is difficult to predict with certainty, as it is influenced by a wide range of factors such as economic conditions, advancements in technology, and shifts in consumer preferences. But, the travel companies can benefit greatly from using sentiment analysis tools as Qualaroo, HubSpot Service Hub, MonkeyLearn, and others. These tools help companies improve customer experience and builds a positive impact during the trip.

Conclusion

The travel industry has been at the forefront of digital disruption. The digital transformation in travel has been ongoing for several decades, but it has become increasingly important in recent years as technology has advanced and made it possible to do more with digital tools and data.  Today’s travel agency customer expects a more personalized offer, and the companies depend on the use of technologies such as the mobile technology, Internet of Things, location-based services, artificial intelligence, robots, 5G, augmented and virtual reality, big data analytic, and blockchain technology to offer a more appealing, efficient, inclusive, and economically, socially, and environmentally sustainable tourism offer.

[1] How digital transformation opened new channels for growth; ey.com

[2] Predicting future travel times with the Google Maps APIs; Elena Kelareva – Product Manager, Google Maps APIs; November 11, 2015

[3] Responding to digital threats; siječnja; McKinsey Quarterly – 2018

[4] 7 Use Cases of Virtual Reality in Tourism; Hoppin’; February 21, 2020

[5] The 22 best examples of how companies use virtual reality for training; vrowl.io

[6] 7 Use Cases of Virtual Reality in Tourism; Hoppin’; February 21, 2020

[7] AI in Travel: 10 Examples to Know; Matthew Urwin; builtin.com

[8] AI in Travel: 10 Examples to Know; Matthew Urwin; builtin.com

[9] The art of AI maturity in travel; Sergiy Nevstruyev, Rafael Pérez Martín; NOVEMBER 8, 2022, accenture

[10] 8 Examples of Robots Being Used in the Hospitality Industry, https://www.revfine.com/robots-hospitality-industry

[11] 6 Examples of How AI is Used in the Travel Industry, hotelmize, https://www.hotelmize.com/blog/6-examples-of-how-ai-is-used-in-the-travel-industry/

[12] 11 ways 5G could transform travel and tourism; Victoria Woollaston;  5gradar – December 11, 2020

[13] 5 Ways 5G Will Transform the Hospitality Industry; Verizon + Skift – skift.com; August 2021

[14] 11 ways 5G could transform travel and tourism; Victoria Woollaston;  5gradar – December 11, 2020

[15] 8 Applications of IoT in Aviation Industry; analyticssteps – Muskan; 2021

[16] AI in Travel: 10 Examples to Know; Matthew Urwin; builtin.com

[17] 9 Examples of Great Social Media Marketing Campaigns; Carla Vianna; Xola University; 06/08/21

Digital Transformation in Travel Industry

Digital Transformation in Travel Industry

by with No Comment Digital Transformation

We are in the era where the travel industry is rapidly digitizing the business operation and innovating business model, and customers are increasingly using digital technologies to plan their travel. The travel companies to gain the advantage over others are constantly evolving their digital offerings. It is observed that travel companies innovate to gain competitive advantage.

In today’s world, the travel industry is one of the prime revenue contributors. The industry, in the last three decades, has gone through a series of digital innovations. The industry has witnessed – rise of digital-native companies, such as Airbnb and Uber, and the rise of digitally transformed traditional travel companies. The traditional travel companies have reimaged businesses and adopt digital solutions, processes, and technologies to remain relevant and competitive. The travel industry is at the forefront of digital innovation and continues to transform in every aspect of its operations, which reflects in the market size of digital transformation initiatives. The World Economic Forum’s Digital Transformation Initiative (DTI), suggests that digitization processes in the travel, tourism, and aviation sectors will be worth up to $305 billion between 2016 and 2025. The report estimates that digital transformation will generate benefits valued at $700 billion for both the customers and society.[1] The report also suggests that digital transformation initiatives are also expected to migrate $100 billion of value from traditional companies to their new digital-native competitors.

It is believed that for travel companies it can be challenging to meet the tourists needs and provide innovative and creative services; however, digitalisation and technological development provide significant opportunities to be competitive in the global market as well as to be able to reach markets it was not possible before.[2] It will only be apt to say that the travel industries to keep up with the changing customer demands, expectations and preferences are embracing the journey of digital transformation. The industry leaders understand that the digital transformation journey is not a one-day activity. In fact, it is the sum-total of multiple digital initiatives backed by technologies such as the Internet of Things, location-based services, artificial intelligence, augmented and virtual reality, blockchain technology and many others. It will be apt to say that one of the key digital innovations of the last three decades in the travel industry is online travel booking platforms, such as Expedia, Yatra, makemytrip, Booking.com and others.

Digital technologies transforming travel industry in last three decades.

Phase 1. 1990-2000

  • Electronic cash registers
  • Financial software
  • Mobile phones
  • Email
  • Intranet
  • Internet banking
  • Office software
  • Video conferencing
  • Websites Destination (city) cards

Phase 2. 2000-2010

  • Smart phones
  • Computer graphics software
  • Property management systems
  • Computerised ticketing systems
  • Computerised stock control systems
  • Online booking systems
  • Customer reservation systems
  • Email marketing
  • Customer relationship systems
  • Augmented reality

Phase 3. 2010 onwards

  • Virtual reality
  • Mobile Apps
  • Cloud computing and online data storage
  • Wearable technologies
  • Social media
  • Google analytics
  • Review websites
  • Collaborative online environments
  • Web 2.0
  • Chatbots and instant advice
  • Peer production, e.g. platform collaborative economy; commons collaborative economy

Adapted from: Xiang, Z. & Fesenmaier, D. (2017) Big data analytics, tourism design and smart tourism. Cham: Springer[3]

Digital transformation in the travel industry is led by a variety of companies, including both traditional travel companies and new digital-native startups. On one hand, Airbnb is a digital-native Startup that has disrupted the traditional hotel industry by offering a platform for people to rent out their homes and other accommodations to travelers. On the other hand, a traditional airline company KLM has embraced digital technologies to improve the customer experience, such as by offering mobile check-in and boarding, and by providing virtual assistants to help customers plan and book their trips.

Many companies in the travel industry across the globe are now using digital tools and data to improve their operations and provide better experiences to customers and offer personalized experiences. Some of the digital native companies, such as Airbnb and Uber – have changed the way we travel. They have improved people’s lives in different ways as well as in the traveling process. The extensive use of digital technologies such as mobile apps, online booking platforms, and virtual reality can help travel companies to provide a more personalized and seamless experience to their customers.

[1] Digital Transformation Initiative – Maximizing the Return on Digital Investments; World Economic Forum; May 2018

[2] Digital Transformation In Tourism: Opportunities and Challenges; Inita Kindzule-Millere, Sandija Zeverte-Rivza ; Latvia University of Life Sciences and Technologies;

[3] Digital Business And Entrepreneurship – Digital Transformation In The Tourism Sector; Emre Dirlik University of Salford; October 2020

Digital Transformation in Travel

Digital Transformation in Travel

by with No Comment BusinessDigital Transformation

Digital Transformation in Travel

Resort’s customer data – personal information and behavior data, help sales team send promotional messages to Mr. Ramesh Sharma. The programmatic campaign offered the guest whether he would like to make another booking this year – and offered a free spa treatment as an incentive. The campaign also offered him the corporate discount for his personal booking.

Ramesh decided to go on a family vacation.

Marketing team, on reaching the resort, offered him champagne of choice as a welcome gift. Mr. Ramesh was delighted by the hospitality of the resort. This journey of customer delight was backed by the digital innovation initiatives of the resort. Digital system at the resort reports that Ramesh visited a specific resort twice a year during the last one year. The data pulled from the system details shows that he used a specific booking site to book the last two stays and the previous stays were booked by a specific travel agency. The customer data at the resort also shares that the first two visits were sponsored by the corporate, and the other two visits were with college friends and with family. The guest’s old digital records help resort management know guest behaviors and areas visited – for example, the spa, coffee shop, and others.

In the current age travel companies collect massive amounts of data about their customers during every single step of the journey – flight paths, bookings, food and drink preferences, every movement inside premise, etc. This wealth of information helps travel companies design a programmatic campaign with specific offers for the customer. The idea of a personalized campaign of this nature would be impossible without the company’s capability to capture, store, and process data. This is just one of many wonders of digital innovations.

Digital Transformation in Travel Industry

We are in the era where the travel industry is rapidly digitizing the business operation and innovating business model, and customers are increasingly using digital technologies to plan their travel. The travel companies to gain the advantage over others are constantly evolving their digital offerings. It is observed that travel companies innovate to gain competitive advantage.

In today’s world, the travel industry is one of the prime revenue contributors. The industry, in the last three decades, has gone through a series of digital innovations. The industry has witnessed – rise of digital-native companies, such as Airbnb and Uber, and the rise of digitally transformed traditional travel companies. The traditional travel companies have reimaged businesses and adopt digital solutions, processes, and technologies to remain relevant and competitive. The travel industry is at the forefront of digital innovation and continues to transform in every aspect of its operations, which reflects in the market size of digital transformation initiatives. The World Economic Forum’s Digital Transformation Initiative (DTI), suggests that digitization processes in the travel, tourism, and aviation sectors will be worth up to $305 billion between 2016 and 2025. The report estimates that digital transformation will generate benefits valued at $700 billion for both the customers and society.[1] The report also suggests that digital transformation initiatives are also expected to migrate $100 billion of value from traditional companies to their new digital-native competitors.

It is believed that for travel companies it can be challenging to meet the tourists needs and provide innovative and creative services; however, digitalisation and technological development provide significant opportunities to be competitive in the global market as well as to be able to reach markets it was not possible before.[2] It will only be apt to say that the travel industries to keep up with the changing customer demands, expectations and preferences are embracing the journey of digital transformation. They understand that the digital transformation journey is not a one-day activity. In fact, it is the sum-total of multiple digital initiatives backed by technologies such as the Internet of Things, location-based services, artificial intelligence, augmented and virtual reality, blockchain technology and many others. The journey of digital innovation that started in the 1990s has matured now and we are witnessing one of the most digitally transformed industries. In the 1990s the progressive companies in the travel industry started to use electronic cash registers, financial software, mobile phones, email, internet banking to digitize their operational process. The decade of millennium witnessed Property management systems, computerized ticketing and stock control systems, online booking systems, customer reservation systems, email and mobile marketing, customer relationship systems, augmented reality, among others. In last one decade the industry has witnessed rise of digital marketing, social media marketing, virtual reality, mobile applications, cloud computing and online data storage, use of wearable technologies, google analytics, review websites, collaborative online environments chatbots and instant advice, platform collaborative economy; commons collaborative economy, Internet of Things, location-based services, artificial intelligence, augmented and virtual reality, blockchain technology and many others.

One of the key digital innovations of the last three decades in the travel industry is online travel booking platforms, such as Expedia, Yatra, makemytrip, Booking.com and others. The rise of online booking platforms has made it easier for customers to compare prices and book trips, and they have put pressure on traditional travel agencies to change the way they do business in order to stay competitive. It will be apt to say that the online booking platform was one of the first major digital innovations that transformed the industry in the last three decades. It has also given the industry some of the first digital native companies.

Digital transformation in the travel industry is led by a variety of companies, including both traditional travel companies and new digital-native startups. On one hand, Airbnb is a digital-native Startup that has disrupted the traditional hotel industry by offering a platform for people to rent out their homes and other accommodations to travelers. On the other hand, a traditional airline company KLM has embraced digital technologies to improve the customer experience, such as by offering mobile check-in and boarding, and by providing virtual assistants to help customers plan and book their trips.

The travel industry has been at the forefront of digital disruption. The digital transformation in travel has been ongoing for several decades, but it has become increasingly important in recent years as technology has advanced and made it possible to do more with digital tools and data.  Many companies in the travel industry across the globe are now using digital tools and data to improve their operations and provide better experiences to customers and offer personalized experiences. Some of the digital native companies, such as Airbnb and Uber – have changed the way we travel. They have improved people’s lives in different ways as well as in the traveling process. The extensive use of digital technologies such as mobile apps, online booking platforms, and virtual reality can help travel companies to provide a more personalized and seamless experience to their customers.

[1] Digital Transformation Initiative – Maximizing the Return on Digital Investments; World Economic Forum; May 2018

[2] Digital Transformation In Tourism: Opportunities and Challenges; Inita Kindzule-Millere, Sandija Zeverte-Rivza ; Latvia University of Life Sciences and Technologies

Industry 4.0 and Digital Transformation

Industry 4.0 and Digital Transformation

by with One Comment Business

Industry 4.0 is a huge deviation from the traditional manufacturing setup. It is the total integration of manufacturing systems, production processes, digital communications technologies and automated machines. It effectively uses expertise of IT systems, internet of things (IoT), adaptive manufacturing systems and other new age technologies.  As I understand, Industry 4.0 revolutionizes the manufacturing ecosystem, bringing greater agility through improved data analyses and digitized processes.

Samsung has taken the role of digital transformation with Industry 4.0 very seriously. For example, the surface inspection systems for digital TV production by Samsung reduces human operator intervention in the production line, increases throughput and reduces errors in the product inspection. System operation supports capturing TV surface image from high-resolution camera devices. This helps Samsung not only improve the quality of production but also reduces the human intervention in production.

 The Industry 4.0 team of Samsung has also developed a post-processing system for an image captured by the camera to make it amenable to automatic detection. The IIoT machines at Samsung uses automatic surface defect detection algorithm to distinguish a real defect from a false one on the digital TV. These were two of many such initiatives undertaken by Samsung to lead the benefits of digital transformation with Industry 4.0.

The integration of digital transformation with Industry 4.0 is not just a technical process, it is the sumtotal of internal integration which includes technology, cultural integration, resource optimization, financial inclusion, and services integration, and external integration which includes political, economic, social, legal, and many other external environmental issues.

Digital transformation with industry 4.0 has efficiently bridged the gap between physical and digital worlds. A few forward-thinking companies have done amazing things using the Industrial Internet of Things (IIoT) and data analysis. They hook up with others with whom they can create new ecosystems of value. Here, it is important to talk of how Nokia and BSNL have collaborated for Industry 4.0 and have transformed traditional wired factory networks to wireless networks leading to improved equipment mobility for enhanced flexibility of manufacturing infrastructure.

BSNL was one of the early adoptions of IIoT applications in industry. This exercise has improved productivity and operational efficiency of the telecom operator, but it failed to cash in the momentum. As I understand, BSNL could not manage to transform the softer side of the transformation. It failed to integrate the key internal and external transformation elements. It could not improve on the services for the benefit of consumer.

Business success today requires a customer centric digital transformation strategy. It starts with prioritizing a superior and relevant customer experience and aligning the organization, processes, employees and technology to empower it.

In this ever-changing consumer centric economy, the needs of the customers keep on changing. It is responsibility of the management to script the digital transformation journey to match the pace of the change. All leading companies are re-imagining customer experience with a strong focus on digital.

The successful managers of our times are fully aware that digital is not just about being technology-led but also about recreating new experiences and service models for transforming their business. They understand that digital transformation helps organization shortened  time  to  market  to  develop; produce  and  market  new  products  and services; increased  customization  to  satisfy  individual  consumer  demands; manage higher product individualization; offer higher flexibility  with  faster  and  more  versatile  production  processes; offer expertise to produce smaller lot quantities with high quality and a cost-effective way. Managers at Rockwell Automation were one of the first few who understood the benefit of integration of digital transformation with Industry 4.0. The impact of Rockwell Automation’s digital transformation has been very encouraging. It has helped Rockwell Automation in increasing delivery from 82 to 90 per cent, reduced its lead times by fifty per cent, increased productivity by five per cent and reduced capex by thirty per cent.

The integration of digital transformation with Industry 4.0 in the manufacturing setup produces both short- and long-term benefits. It offers – transparency, manufacturing agility, improved productivity, improved efficiency, staffing flexibility, reduced costs, reduced training time and expense, improved quality, end-to-end manufacturing, as some of the key benefits. The effective integration of digital transformation with Industry 4.0 also helps organization in the decentralized decision-making process; pave the way for lean organization structure; help build base for the technology innovations; help develop innovation capability and culture; provide opportunities to increasing mechanization and automation, digitalization and networking, decentralized production and supply.

Organizations who have already embarked on the road to digital transformation are making impressive advances. They are shifting organizations’ goal, changing how people work and deploying technology to achieve value.

As I understand planning a customer journey blueprint, organizational cultural changes and the right operating model are often the most challenging elements to tackle in the journey of digital transformation. The path of digital transformation is not an easy journey. It demands organizations to define the digital landscape; establishing connection with customers; understand what customers’ feel about their brands; explore what customer expectations are; building momentum amongst management to lead the transformation journey; enable collaboration with partners; educate employee about the change; reengineer the organization culture; enable sense of digital accountability, among many other challenges.

The initial deployments of digital transformation with Industry 4.0 have offered us benefits in term of reduced costs and improved efficiencies. The next wave of digital transformation with Industry 4.0 calls for significant business value in terms of delivery efficiencies, new revenue streams, customer experiences, etc. However, in order to reap the benefits and potential, it’s not enough to understand what one can do with these technologies.