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On board with the millennial rail traveller

July 26, 2016
Author: Thomas Drexler

As we look to the second half of 2016 and beyond, I wanted to turn to a topic that is much-discussed in retail and leisure industries at the moment, and that is going to become increasingly important over the next few years: generational change.

Millennials*, or generation Y, are an ever-growing proportion of our society and workplaces: a recent study from EY forecasts that by 2025 millennials will make up 75% of the workforce. Flexible, adventurous, values-driven and tech-savvy, millennials are making their impact felt on virtually every consumer industry.

EY’s report also points out that, over the next few years, more and more millennials will be moving into management roles. What does this mean for us in the rail industry? Well – apart from the fact that we might expect to have a growing number of millennial colleagues! - this heightened responsibility will often entail a degree of business travel. At the same time, the millennial emphasis on experiences over possessions will encourage others to travel for leisure. I believe the time is ripe for us to consider what rail travel in particular can offer millennial travellers. 

 

Time to start sharing

One of the things that really makes this younger generation of consumers and travellers stand out is its preference for new and disruptive modes: whether it’s shopping, working, or travelling, millennials are open to doing things differently. As ‘digital natives’, they’re comfortable with companies and services that reach them through mobile apps and new technology platforms. In particular, millennials show strong interest in using sharing economy suppliers such as Airbnb, Uber, and BlaBlaCar.

On one hand, this poses a competitive challenge. But on the other, it has opened up a new stretch of uncharted territory, with opportunities to create products, services and processes that answer the expectations and needs of this growing customer segment and leverage its willingness to try new approaches and experiences. Ultimately, by moving to respond to millennial travellers’ needs and preferences, rail companies will ensure they are one step ahead of the evolving traveller. Enhancing the traveller experience will allow rail companies to benefit from new revenue opportunities and increased customer loyalty.

I’ve noted with interest that many rail companies have, in fact, already embarked on this process and are now innovating with new products and services inspired by sharing models - exploring new ways to create a millennial-friendly rail travel experience.

For example, Renfe offers customers the opportunity to buy four seats at a table at one time, allowing the customer to fill the spaces either with friends or family, or by sharing the available seat space with friends on social media platforms such as Facebook – a service that will appeal to the millennial traveller’s instinct for social sharing.  SNCF, meanwhile, invested in Ouicar, a car-sharing service, in 2015.   

These are great examples of the kinds of products and services that are complementary to traditional rail offerings, and which I think will appeal to this growing consumer segment.

 

Personalising the experience

Merchandising and personalisation are also key means of delivering a journey experience in line with millennial expectations. For example, one frequently-referenced millennial trait is a heightened concern about maintaining a healthy work-life balance, whilst at the same time blurring the lines between the personal and professional lives. Bearing this in mind, millennial travellers could be more likely to explore ‘bleisure’ opportunities, adding leisure days onto their business trip - so rail companies could team up with other travel providers, tourist boards and retailers to create and offer tailored packages for the millennial business traveller.

Personalising such offers effectively will require a deeper understanding of the traveller, their preferences, motivations and behaviours. The Amadeus-commissioned Future Traveller Tribes 2030: Understanding tomorrow’s traveller report, published last year, is a useful resource for those thinking about future traveller needs, outlining six ‘future traveller tribes’ defined by their behaviours and values - from Cultural Purists to Reward Hunters.

 

An intuitive and seamless journey

Generation Y is the most technologically fluent generation, and this in itself poses new challenges and opportunities. Millennial travellers expect to be able to do anything they want or need to from their mobile device, anytime and anywhere – whether this is buying cinema tickets, sharing photos on a social network, or researching holiday options. Booking a journey is no different: the modern business traveller expects to be able to book an entire journey- including air, ground transport and accommodation, in one place, and to make changes to this on-the-go if need be.

Millennials expect simplicity when it comes to transactions and processes. Greater integration of transport modes from door-to-door, both at the time of booking and on-trip, will help to build travel experiences that meet these expectations and encourage generation Y travellers to put rail at the heart of their journey. Ensuring consistent visibility of rail across all distribution channels is vital to achieving this.

Millennial travellers are challenging railways – and other travel providers - to innovate. The rail companies that respond with flexible, mobile, personalised services and solutions are those that will succeed in capturing the loyalty of this increasingly prominent and important traveller segment. I look forward to working with our partners as they create rich, bold travel experiences for the next generation of rail travellers.

 *NOTE: Gallup defines the millennial generation as those born between 1980-1996.

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