The Last Word

01.09.13

Nearly two thirds of travel purchases are digitally influenced; it’s time for change in the rail sector

Source: Rail Technology Magazine Aug/Sept 2013

Anna Holness, managing partner of O2’s Passenger Services Practice, discusses the digital innovation challenges facing the rail industry.

We live in a world where people are growing accustomed to working, shopping or keeping in touch from anywhere, at any time. Mobile devices have become the ‘remote control for life’. Our latest research indicates 80% of consumers plan their journeys using digital services. Passengers expect a quick, convenient online service – whether to check for train times, disruption to their journey, or to compare prices and book tickets. With smartphone penetration expected to reach 90% in the next three years and the advent of mainstream 4G services this summer signalling a faster, more ubiquitous mobile experience, this rise of the digital consumer is only set to increase. 

I believe these trends pose three crucial challenges for the rail sector. Firstly, the evolution of mobile technology and social media means there is increasing demand from passengers for rail operators to deliver immediate responses. Secondly, increased competition in the market means more choice for consumers and therefore pressure on businesses to differentiate. Thirdly, a complex digital consumer landscape means businesses in the rail sector will need to innovate and find new communication channels. But, all of these challenges are also opportunities for growth which can be met with innovative services, using clever technology and enhancing services with constant connectivity. 

Our research shows that 87% of consumers are frustrated at the lack of real-time information. Passengers are telling us what they want; a more informed, integrated experience, where they can manage tickets and access real-time information. Rail operators need to keep pace with the rapid evolution of mobile technology and ensure the right support is in place to adapt and ensure passengers can receive real-time updates on any device. 

Thanks to the internet, passengers today have greater control over their choice of travel and the price they pay. In fact, the majority of passenger spend – 64% – is now influenced by digital channels according to our research. It’s a tough marketplace and rail operators need to work even harder to keep their customers returning. The starting point for fostering loyalty is to truly understand passengers. Data and analytics tools can help rail operators understand more about their customers’ behaviour and needs than ever before. This new insight can help inform marketing plans and offer targeted promotions that benefit passengers, ultimately helping rail operators differentiate from competitors. 

Employees are crucial to delivering the best passenger experience too. Social media is becoming an integral tool for communicating with passengers, particularly in regard to handling customer complaints, but it needs to be integrated across organisations to be truly effective. Ensuring social media teams are connected with customer service employees will allow them to address problems faced by passengers faster. 

The arrival of ubiquitous connectivity through 4G offers the potential for businesses, including rail operators, to transform the way they work, communicate with passengers using new channels and boost revenue. The boom of ‘m-commerce’ is set to continue and more passengers will be shopping on their mobile devices, presenting a huge opportunity for rail operators to work with retailers in stations to generate new revenue streams. With the right digital engagement tools such as mobile marketing messaging services, rail operators can offer value-added services to passengers, such as incentive vouchers for refreshments, deals on taxi services or discounts on visits to local attractions at their destination. 

In today’s hyper-connected world, it’s important to remember that digital engagement isn’t just about products and services. 

It’s about inspiring change and introducing different, personalised ways of interacting with passengers – a seamless multichannel experience. The opportunity to understand more about passengers is out there, it just needs capturing and will allow rail operators to drive a closer relationship and deliver a more personalised experience. 

Rail operators that seize the digital technology available to create new revenue streams have a real chance to grow, contributing to a boost in the rail industry as a whole.

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