The Omni-Channel Challenge – Customer service and sales in a digitalised world

24 October 2014  •  Author(s): Kontiki

The theme of the 51st Kontiki Conference, which was held in Wuppertal on 16th – 17th October 2014, was the rapid development of digital electronic media and the way it has remodelled Public Passenger Transport. The omni-channel approach seeks to provide the customer with a seamless and concurrent access through all available channels. This brings enormous challenges to the organisation and the people, in order to ensure that passengers are able to use it. Pooling expertise and cooperating beyond corporate boundaries makes it easier to find quick solutions.

Kontiki Wuppertal Panel

51st Kontiki Conference Wuppertal, Panel discussion: Digitalisation in PPT
(from left to right) Nils Zeino, VDV eTicket Service, Markus Huber, The transport association Rhein-Main, Reinhard Reher, Project eSIM, Nils Conrad, KCEFM, Reinhard Schulte, Stadtwerke Münster, José Luis Castrillo, The transport association Rhein-Ruhr

The transport association Rhein-Ruhr (VRR) and KCEFM reported on the implications of current and future developments in digitalisation for eTicketing and EFM inside the VRR. The findings of a feasibility study on “Check-In/Check-Out in the VRR” in 2013/14, indicated that the CICO concept would not be suitable for all stakeholders. Rather than concentrating on the technology itself, the focus of transport operators shifted to marketing whilst taking into account the potential these technologies hold. A customer survey by the VRR reveals that digitalisation not only facilitates the use of PPT, but that conventional access offers customers what they have come to expect. They perceive digitalisation as an opportunity to connect information, ticketing and service while they place a premium on access to information. The key factors for a successful cooperation among all stakeholders are the convergence of their objectives and a strong cross-linking of the supply and transport tariff with systems with multi-client capability.

eSIM 2020 (system integration of EFM and migration for the target horizon 2020) shall bring Be-In/Be-Out onto the smartphone. The project benefits from funds provided by the Federal Government and its purpose is to take forward automatic passenger detection, “Be-In and Be-Out” and fare systems for occasional customers. The individual steps of the system are: boarding and activating app, riding with automatic passenger detection, disembarking and discontinuing of data communication, automatic data transfer from BIBO to background system. The system is based on the VDV core application. Passenger demonstrator and technology demonstrator will be ready for testing in late 2015. 

Münster continues to develop the 90 minute ticket into a multimodal eTicket.  PlusCard and smartphone shall grow together.  Offers which are already in place, such as FlexAbo, ParkPlus Service or RadPlus Service (BicyclePlus  Service) shall be complemented by a TaxiPlus-Service (cashless transactions using the eTicket). A restructuring of existing sales channels aims at dramatically reducing the number of single tickets bought on board local transport vehicles in order to improve their turn-around times considerably.

The established app for information and transport of Deutsche Bahn attaches prime importance to customer requirements and customer needs. The increased use of the DB Navigator reflects its growing importance. Passengers expect to receive necessary information about time-tables, ticket sales, delays, additional services, navigation, on-trip information and social media support along their entire travel chain using all end devices. It is part of the strategy of DB to respond to customers’ needs immediately, so that travellers receive the best possible information and enjoy a more comfortable journey. A relaunch of the DB Navigators is planned for June 2015.

(((eTicket Deutschland Newsticker: The VDV eTicket service, VDV-ETS, has already concluded more than 300 contracts with transport operators and associations for the use of the VDV core application. With eTT (lab tested) a new testing tool was launched for producers, transport operators and transport associations which, however, is no substitute for a certification. The initial subgoals of IPSI (Interoperable Product Service Interface) have been achieved. Real-time operation is scheduled for July 2015.

The core element of the presentation given by Wuppertaler Stadtwerke was the new sales strategy, which in the area of replacement alone uncovers a savings potential of approx. EURO 1 billion by 2017. Non-monetary measures comprise a strengthening of existing on-line distribution channels, fewer ticket vending machines, improved customer loyalty with occasional users and the CRM strategy “Abo” (subscription).

Six transport operators of the transport association Rhein-Ruhr have formed a sales alliance. They shall restructure sales inside the VRR and develop a common, future-oriented structure as well as an open platform for other business partners inside the VRR and beyond. A feasibility study provided the basis for a common background system. An analysis of the initial state of their sales organisation clearly showed that it “was not necessary for everybody to do everything”. The underlying idea behind this joint approach is to create more transparency inside the association and to progressively cooperate more and to develop more alliances. The system’s characteristics are modelled upon the client with his requirements and needs. It has multi-client capability and has been designed as an open platform.

In his keynote address, Ulrich Jaeger, managing director of WSW mobil, presented five mission statements to support digitalisation in PPT as well as the challenges resulting from it.

  • All solutions must have the customer in mind, not the technology. The technology is there to solve problems, not to create them.
  • Collaboration is essential. The technological challenges ahead can only be overcome by joint action. It does not make sense that everybody should develop everything individually. However, cooperation must not be limited to the cooperation between different companies, there has to be cooperation inside each company. Solutions must be developed jointly and in a spirit of partnership, before they are made accessible to everybody.
  • The diversity of services must continue to exist. There will be many different solutions, which do not exclusively rely on just one medium. Customers already benefit from a variety of different media and trendy apps.
  • Complexity should be reduced so that it does not discourage people from using these technologies. The simple solution is often the better one.
  • It is vital never to lose sight of what the customer pays for. Without the basic quality of the transport service everything else is worthless. PPT is not the problem but the solution. The goal is to make a good service even better.

The experience of MVG in Munich shows that – in some cases – it will be very difficult to replace manual ticket inspections by an electronic inspection system. Inspections are basically carried out to secure revenues for the operators. There are several reasons why the number of inspections has dropped from 70 passengers per hour in the 1990s to merely 45 today. Ever since mobile tickets and paper tickets were introduced it has been a must for an eTicket to be electronically readable. In order to ensure this, MVG and MVV have defined a whole range of criteria for inspection and security. Inspections are carried out using mobile data capture devices (MDEs) and boarding control systems via barcode scanners. Controlled front-boarding required the customer to be fully informed, drivers needed special training and both groups took some time to get used to the new process. Only by proceeding in this way would the system be accepted and confidence in its reliability was developed. The sales figures for etickets have almost doubled within 10 months. Since inspection times for barcode tickets are 1.6 times longer than for conventional tickets, it is absolutely essential to find another solution.  For some groups, smartcards will have to be used although the future is clearly that of the smartphone with NFC or similar features.

The world of payment methods has changed dramatically. Today’s diversity of eWallets and mWallets is no longer transparent. In addition, there is contactless payment via NFC. NFC market penetration in business is based on NFC cards and NFC smartphones. NFC Eco systems offer a range of different functions including payment, couponing, loyalty and advertising. Other examples from the US are Apple Pay using smartphones and the cooperation with banks or SoftCard Wallet as a partner of credit card providers. In Germany, mobile payment options using different systems are in place in approx. 200 companies. Germany is very resistant to mobile payment such that no breakthrough has been achieved in this field. The banks rely on NFC to prevail. However, business is still undecided. A 5% market penetration of NFC devices is required for them in order to introduce NFC-based payments. “NFC City Berlin”, a project which involves a number of chain stores, could become the trigger for a nation wide roll-out of the project.

A NFC Eco system for PPT does not yet exist. Data exchange via NFC has not yet been sufficiently standardized. Chips and NFC smartphones rely on different standards for data transfer (ISO 14443 and 18082/21481, resp.). Another factor adding to the problem is the different position of the secure element for both technologies and different size antennas. The security requirements for NFC applications vary considerably. The study “Mobile in Retail” has revealed the reasons why NFC is not being used. The major challenges to overcome are as follows:  “to guarantee sufficient safety” as well as “being accepted by the customer” and “to establish marketable solutions”. For PPT it is no longer viable to use barcode scanners for inspection purposes. The costs for NFC technologies are much lower.

When considering a NFC Ecosystem for Public Passenger Transport, it becomes apparent that quite a few questions need to be answered between the world of telecommunication and that of PPT. When opting in favour of a specific system solution it is obvious that SIM-Rental is going to be the most likely Ecosystem variety for Germany. Transport operators and associations now have to decide which system to use. This decision is going to be based on pricing requests from the VDV eTicket Service (VDV-ETS) to potential system providers of mobile communication providers. This information will assist transport providers and associations interested in adopting the VDV-ETS technology to consider their possibilities.

“Market place NFC” gave us the opportunity to test the NFC payment systems of different providers, which are already available. Telekom Deutschland, Vodafone and E-Plus Mobilfunk/Telefónica exhibited their products. “NFC technology – hands-on” was demonstrated using an electric car, which was opened and driven by smartphone.

There were three options for discussions and exchange to choose from. The forum “A public transport provider becomes an IT-expert thanks to eTicketing” shed light onto the challenge for a company and its employees of using IT. The issue of “Outsourcing versus in-house projects” and “Going it alone or together with others” was also discussed. The forum “Data overload and how to interpret it” addressed the data potential which is already available. The answer to the question: “Are there any business models in place for integrated mobility services”, requires a lot of innovative thought from the individual, a targeted approach and vision. There are sufficiently topics for the agenda of the next conferences.

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