Exciting times. It is great to see action within so-called traditional industries such as energy, banking and now aviation, as they race to transform in a digital consumer era. Enter Joon, Air France's new airline targeted at millennials. Here's the official web page.
Millennials are an enticing demographic I've been working with in the context of tourism, on an ongoing client project called Visit Arctic Europe. So here's some quick top of mind thoughts on this bold Air France product. (And I'll try to demonstrate why it is bold.)
- Millennials are a paradoxical market The millennial generation certainly seem to have consistent market characteristics, dominated by their bonding with digital technology. But spanning from 18 / 20 years of age, all the way up to age 32 / 34, means they present vast variations in terms of aspirations, lifestyle choices, spending power, and most importantly habits & behaviours. This is especially true at the edges of that age spectrum. 18 to 20-year-olds are very different people in terms of how they think of, approach and use products, services and brands - compared to their future selves at age 32. Further, the millennial generation has been lauded for being positive, confident and driven by values, while at the same time being overly lazy, narcissistic, self-centred and less than happy. They are known to care less about issues with pressing personal impact, such as their financial situation or the upcoming elections, and more about things further removed from their every day, such as the environment and space travel. Impulsive yet idealistic, they are demanding yet inconsistent. Confident, yet precarious. Armed with digital tools and the savvy to use them in a coordinated manner, they switch affiliations quickly. These practical and psychological paradoxes make them hard to reach and engage in a predictable fashion. If you think you can outsmart them, prepare to be surprised :)
- Which makes Millenials a new breed of traveller Millenials display never-before attitudes and behaviours while travelling. Look at this research. They will pay more for free flowing alcohol and for child-free planes, but will snatch up discounts on seats next to restrooms or in (future) standing flights! They consider and research travel longer and decide closer to the travel itself. All this boils down to one thing: they are flexible, and that means they like customisation. But, ironically ...
- Customisation is the one thing that's hard to deliver in the airline business I am not saying it isn't possible, I'm saying it has hard limits, unlike in consumer electronics, social media, fast fashion or entertainment. Airlines are high cost, low margin, high competition, highly regulated business with strong systemic and operational rigidities. The business is a nightmare to scale, and scarier to redesign in terms of services and experiences once the core is in place. That's the reason innovation in this industry is hard and slow, and the differentiation is always in pricing, routeing, better / bigger in-flight displays, and in adding conveniences or in removing inconveniences - all designed to make the flight experience pass as quickly and uneventfully as possible. Variation is the enemy in this business. In human experience terms, airlines are in the business of speeding up time. And customisation works better within experiences designed to slow down the passage of time. True, airline apps are getting better, but really only by becoming more usable and simple i.e. fast and convenient. And that's why Joon is a bold move by Air France. There is a real opportunity here - a market with differentiated attitudes and behaviours exists, which consequently means deploying a differentiated offering is possible, and potentially valuable. But Joon will need to go above and beyond merely branding the airline with a 'millennial' look, and actually cater to the deeper expectations and habits of a fickle generation, across the entire product and service experience of the customer lifetime, if they have to make good on their proposition.
- Ah yes, 'Connectedness' Connectedness is at the core of Joon's value proposition, and they are right that connectedness will matter hugely, as it certainly is the one consistent thread across all Millenial behaviour - their all-encompassing, ever-present bond with digital technology. However, it will be the kind of connectedness that Joon provides, the service layer, that will matter. Joon will have to consider every digital touch point - before, during and after the flight - to differentiate here. (Details on how exactly the connected Joon experience will feel are yet to come.) Also, note that 'connectedness' matters today to the vast majority of flyers, not just to millennials. So focussing on connectedness will have collateral appeal to other segments - for example to business flyers, who will pay more for connectivity-based services, especially when flying long haul.
- Variable pricing will be key Air France says Joon ISN'T a low-cost airline. That might not play well to over half of all millennials, who are famously known to be price sensitive due to several factors. But they will indulge in selective splurging for the right reasons. The design challenge for Joon would then be how to drive the perception of being desirable and then deliver an experience that justifies a premium - from a customer that would rather spend on things like food, accommodation, shopping or socialising. It might be hard to offer much variability in ticket pricing as the business faces such high operational costs.
- Loyalty woes The visual branding, if done right across the physical and digital experience, may well appeal to Millenials and drive them to try it. Once. But they won't go out of their way to come back (the loyalty of this shifty lot is hard won) if there isn't something in it for them. And I'm assuming loyalty (think airline miles) is a cornerstone of long term airline profitability. In building long term loyalty, I have a hunch that Joon would do well to tap into millennials' far-out-thinking. Branding and driving the experience around themes that inspire them, such as the environment, sharing, activism, equality, adventure, etc. A brand that rewards customers on holiday for their beliefs can have a powerful effect.
- A symbolic rather than experiential brand? It may be that Joon is really leveraging the positive symbolic value of the 'millennial' - young, connected, global, aware, autonomous, etcetera, to communicate qualities that will resonate across demographics in connected markets. Who in their right mind doesn't want to be young, connected, global, aware, autonomous, etcetera? But really, delivering an experience that will connect with and define a market of Millenials, and create the basis for recurring revenue is something else altogether. This raises the question: how long can a brand that symbolises millennial virtues but delivers experiences simply on par with other 'connected airlines' sustain?
- Who will come Essentially: connected + not low cost + blue branding = Joon will probably attract two groups the most: 1) business flyers aged between 27 and 50, and 2) retirees aged over 50 using social apps and tourism websites in the air on holiday. Sometimes called 'silver surfers' and 'empty nesters', this elderly group are rich and free Baby Boomers - typically from the developed West but increasingly also from prosperous parts of Asia - who, aspiring to a 'second youth', will dominate tourism spending in the decades ahead. Joon has said connectivity will be 'medium-haul flights from Paris-Charles de Gaulle this autumn, followed by long-haul flights in summer 2018', which should quite appeal to this elder demographic.