THOMAS DREXLER, director of rail and ground travel, Amadeus, reviews the changing competitive landscape in the rail industry, the battle for the customer and the shape of the future
The European rail industry is currently undergoing a transformation. Competition is fierce and technology is seen as an enabler for operators to stand out in a crowded market place. As new contenders are increasingly looking to compete with the veterans, rail operators are transforming their business models to ensure a stronger focus on the customer in this rapidly changing marketplace.
From competition to collaboration In Europe, the rail industry has traditionally been constrained by national borders. However increased EU-driven market liberalisation is attracting new operators into the arena.
In parallel, even though the very nature of rail limits direct competition between operators, competition between different modes of transport is growing increasingly. As a result, these market forces could be a very real threat to rail operators which are slow to adapt to a changing environment. However those rail companies which are quick to respond could encounter the greatest opportunities, towards stronger customer satisfaction and loyalty. It will be important to recognise the benefits of working alongside other transport providers with a common purpose: to provide the traveller with the best possible door-to-door travel experience.
Technology innovation and personalisation
What’s more, technology is providing the traveller with more choice than ever, creating innovations which are improving customer experience and reshaping rail travel.
For example, the planned High Speed 2 (HS2) line will significantly reduce journey times and increase capacity on popular routes linking London and the North. This will not only give customers an enhanced travel experience, but make rail a much more attractive choice versus airlines and other providers operating the same routes.
Rail operators can further extend their reach to customers by offering a more personalised travel experience, whether that’s through high speed Wi-Fi for all passengers or using data to understand the customer better to anticipate traveller needs prior to the trip itself. Technology will enable rail operators to re-direct every aspect of the journey towards the customer and offer an experience which is fully tailored to their needs.
The battle for the customer intensifies
This increase in competition has resulted in a greater focus on the customer. While other industries have already achieved maturity when it comes to customer centricity, rail operators are following in their footsteps and quickly catching up.
The complex nature of competition in rail is forcing operators to re-think their business models and pivot towards more customer-focused goals. Operators are turning their attention to technology as an enabler of increased customer focus. For example, operators can leverage data to better understand the needs and desires of the traveller, and then be able to create and adapt offers right from the point of booking through to arriving at the end destination.
The future – door-to-door travel?
This level of customer-centricity requires a level of collaboration between different travel providers. Rail operators could collaborate with airlines for instance to share data about each other’s routes and fares. Imagine you are travelling on business to Toulouse, an airline could offer a flight to Paris whilst at the same time suggesting a train connection to Toulouse, and even a taxi from the station to your final destination. This is a simple example that illustrates the convenience of booking an entire journey in one place before the trip takes place.
Rail can look to other industries as examples of great customer-centricity. Amazon and Netflix have responded to changing customer expectations about what good service means. If rail can adapt in a similar way, we will see it competing effectively against new competitors and even turning this competition into an opportunity.
As competition is now a given in the rail industry, there will be an increased focus on how different operators can adapt their own models to better suit the changing needs of the traveller, driving service innovation and personalisation across the industry. Collaboration will be key for turning door-to-door travel into reality and ushering in the next generation of rail travel – where the needs of the customer take precedence.