Is the Rail Industry Ready for Digital Transformation?
In today’s highly competitive and cost-conscious environment, there are a couple of key characteristics that define a successful business, regardless of industry. I am talking about the flexibility to quickly respond to market demands, to adjust your offering to the ever changing customer needs and the ability to have a quick time to market, to name a few. How is the rail industry adjusting to today’s business landscape?
So far, the rail industry has travelled on a different track than the digital era. But now, the rail industry, one of the oldest and conservative industries, stands on the edge of change.
According to an Expedia Study on the impact of mobile devices on the travel industry, 94% of travellers bring at least one mobile device on their trips. Railways are dealing with an always connected traveller which is a click away from almost any information. This opens the door to endless opportunities for a railway’s customer engagement strategy.
But while passengers are constantly calling for a better journey experience and superior services, train operators are still mainly focused on achieving operational efficiency and on reducing maintenance costs. Balancing the current status of the railways requires a shift of priorities, with a better positioning of the customer within their business strategy.
Some railway operators have already equipped their trains to provide Wi-Fi on-board, to keep their passengers up to date with information about their journey, such as train’s estimated arrival time, status of the next connection, any expected disruptions. But disruptions are inevitable, and often out of the operator’s hands. In these cases communication is essential, and the right information at the right time will make passengers feel more valued as customers.
A lot of railways think that going mobile is the perfect solution. The smartphone adoption is large, it should work, right? But going mobile is simply not enough. Building the distribution strategy around an Omni-Channel approach is the one taking customer experience to the next level. The travellers must be able to have one view over the railway’s services & products, they expect consistent information across all channels, and of course personalised promotions and offers. These are crucial for a good conversion rate and customer retention. Railways must focus on keeping passengers engaged by starting personalised conversations with them, in order to make every single customer feel that their needs are heard and addressed in a unique manner.
People still very much prefer to travel by train
A traveller has lots of options when it comes to choosing a means of transportation. But you must agree that travelling by train has great advantages. Starting with the great comfort on a long trip, the ticket price and the service variety on board, a trip with the train could be much more appealing to travellers than one by bus or airplane.
Recently I participated at SUGRail in Vienna, a rail industry dedicated event organised by SAP, where we discussed with railways, industry experts and software companies about how to better serve the industry’s needs.
The general feeling was that a new way of doing business is required in order to respond to the market changes, and that digital transformation can help railways advance. Railway operators understand that digital transformation is no longer a fancy expression, but a necessity to bring their business into the 21st century. And such a transformation involves an effort to renovate business vision, models, and an investment for a new digital economy, not just IT. Digital transformation can help railways reestablish themselves as the transportation industry’s top choice.
During our presentation of our Rail Commerce Platform a lot of topics where raised and discussed, and I was very pleased to feel the energy and interest of the railways with regard to the opportunity of adopting digital transformation. It was obvious to me that there is a clear need for a new platform to support ticketing, inventory of seats and to help the business side create new services, new products, to bundle services together, and provide an Omni-Channel experience. Some of these railways are already starting programs to achieve that by 2020.
Starting a digital transformation project asks for willingness, courage and of course, the right platform to support you.
I am confident that the time will come when I will be notified on my phone about my next city break, powered by a railway.