Beyond Miles: Building true loyalty with Gen Z

Transcript

Peter Smith:Welcome everybody. Thank you for sticking around this morning. I know there's probably some tired people in the room after a wonderful evening last night. Raise your hands if you've ever used any of the kit on the screen here. Gosh, that's, that's a, that's a good proportion of you. I'm guessing therefore that you're not Gen Z. And if you're still sat here listening, you're possibly interested in how you can access and retain this next generation of travelers. As Marco said, I'm Peter Smith, Senior Vice President of Strategic Partnerships at CoverGenius, the InsurTech for embedded protection. And I'm here to talk today about how personalization through technology is the smart way, perhaps the only way, to win loyalty with this next generation of travelers. That should have played already. Well, that's the dial-up sound that goes with this, which many of you no doubt will also recognize. But first, let's take a little step back. Who are Gen Z? Well, my 13-year-old son just about makes it into this category. These are people born between 1997 and 2012. So they're currently aged between 12 and 27 years old. And guess what? They're not like us. Believe it or not. This is a generation that's interested in experiences, personalization, and instant gratification. So let's talk about how to win loyalty with this new up-and-coming emerging generation. First and foremost, they're not just consumers. They're actually curators of their own lives. And they, 75% of them actually, are much more likely to buy a product which they can customize. They're cautious adventurers. It's no surprise that in a very unsettled world, this is a generation that really values protection because they've grown up amongst a lot of global uncertainty. And crucially for this audience, they're brand agnostic. Forget the fact that we feel if we build an awesome brand that's trusted, people will stick with us forever. That's really not the fact with this generation. Only 30% of them are brand loyal. It's time to do away with old-school loyalty programs and think about how we can truly engage with this generation. They are the least likely generation to be enrolled in loyalty programs and the most likely to leave a loyalty program within a year. In fact, locally in the Asia-Pacific region, 69% are always on the lookout for the next cool thing. And this generation is truly the future of travel. They may be anxious, but they're naturally curious. We call them the cautious adventurers. In fact, 61% of this generation prioritize travel and experiences over consumer goods and material possessions. For us as airlines, of course, this represents a massive opportunity. And a third of the global population are in Gen Z. Locally in Asia Pacific, that's a little bit more pronounced in some markets. So in India, 40% of the population is Gen Z. In the Philippines, even more so, 45%. And a third of people from Indonesia are Gen Z. Would anyone like to guess what it is here locally in Hong Kong? Shout out from anybody? No, nobody wants to guess. Did I hear a 20? 20. Oh, it's pretty much spot on. It's 22%. But 22% of the population is still Pretty significant, right? And so as this generation comes of age and enters the workforce and their spending power increases, they have potential to drive huge value for our industry. But while Gen Z represents value, they also demand value in terms of their interactions, the purchases, and the way in which they deal with us as, as airlines and travel companies. Value to this generation means bespoke, personalized experiences. So with Gen Z, in order to unlock the spending power, we need to give them the power to choose their own adventure. We really need to think about unbundling options, products, services, and let them choose what's right for them. Proper flexibility. Give them peace of mind. Offer them protection and insurance that's right for them. We know already that 50% of this generation sadly suffers daily anxiety. So let's help give them comfort when they're making their purchases with you guys. And let's leverage technology to deliver instant gratification. Give them products and services that are tailored to their individual needs, that are right for them in the moment, and utilize your partners and their technology also to help you to deliver up on this. This is not a nice-to-have, folks. This is something the generation absolutely demands. It's really not an exaggeration to say that. And so think about the products that you're delivering to these customers as they move through the booking flow, the customer journey, and all their interactions with you. You've heard a number of these products spoken about over the last few days here. eSIM seems to be an up-and-coming product that's pretty hot in the market right now. I think there's a new startup in the eSIM category almost weekly, I tend to see out there. But you've got the traditional ancillaries such as car rentals and hotels and insurance even. They were always called the Big 3. But there are other things that you can think about in terms of really enhancing the customer's trip, enriching their entire journey, whether it be baggage tracking, eSIMs, experiences. We know that's really important to this generation. Wi-Fi. And then you might see in the corner there, food. And what I'm not talking about here necessarily is the sale of food on board. Hong spoke earlier about Delta and the fact that they're helping to personalize experiences by giving customers in business class the opportunity to preorder their meals so they know when they get on board, Mr. Smith, there's your pizza. I've actually never had pizza on a plane, but maybe that's the next one. Think outside the box in terms of the products and services. Zipair in Japan, for example, offer you the opportunity to purchase Wagyu beef as a souvenir. They deliver it after you've collected your luggage, which means that you miss out on having to go through animal control. Now I'm not suggesting you all go in and offer Wagyu beef to your customers, but it's just, it demonstrates that you can think outside the box to really enhance your customers' experience. We know at CoverGenius that this sort of approach works. Here on the screen I have an example with SAS Scandinavian Airlines. Scandinavian Airlines in the last couple of years increased their personalized offers by around 8 times for their consumers. They've had a huge focus on this. And what was the result of that? Well, before I speak about the results, they're on the screen here. We can see that in May last year They introduced personalized embedded protection with CoverGenius. And the combined impact of all of this is they've seen an increase in their revenue per passenger. That's what this graph is actually showing. So this is personalization and seamless embedded solutions really in action here. This is the impact that it has not only with Scandinavian Airlines but with many of our airline partners. We see a similar thing. Some of you may have heard me speak on the stage in CAPA Corner yesterday about how customers who purchase ancillaries typically have a higher Net Promoter Score than customers who don't because you're enriching their trip. But you must do that with the right products and services and deliver them in a bespoke fashion that caters to their individual needs. So really delivering personalized experience is the key to loyalty. So you're probably sitting here thinking, well, this is easy, I just need to go away and figure out my Gen Z personalization strategy. But bad news, guys, you're wrong. Because it's not just Gen Z. 80% of All consumers are much more likely to make a purchase when the experience is personalized. 71% of consumers expect companies to deliver personalized interactions. And importantly, 63% will actually stop buying from you if they have a poor personalized experience or none at all, of course. And so it's very important to consider it not just for Gen Z but for all of your customers, of course. The good news is that if you do embrace personalization like embedded protection, you can not only win their loyalty but you can unlock new revenue streams and drive business growth. At CoverGenius, we're doing this today with dozens of airlines. And online travel brands. And not only travel, but in fact fintech, retail, logistics, ticketing, and live events. We've broad experience doing this sort of strategy with many, many partners out there in the marketplace. So I'll leave you with just a few things to think about. It's an anxious generation who see flexibility and personalization as non-negotiables. It's an adventurous generation willing to try new brands and products seamlessly. So embed them slick— in a slick fashion on your site. But ultimately drive loyalty through hyper-personalization and embedded protection. Thank you very much for your time.

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