Johannesburg, 03 Sep 2024
If you do what you’ve always done, you’ll get what you’ve always gotten. But adopting change in small increments can lead to quick, scalable and sustainable business growth. This is what we helped our client, Tourvest, to achieve. By making small changes to its back- and front-office systems, we enabled Tourvest to expand its business model into the low-cost, multi-hub market and improve the onboard food and beverage and duty-free shopping experience for customers. We also enabled Tourvest to help its own customers to reduce cash and stock losses.
The challenge
Low-cost, short-haul carriers don’t often provide complimentary refreshments, but they do sell drinks and snacks during flights, which generates additional income. Considering the nature of these transactions, many airlines use a cash-only model for their hospitality service, but this can be inefficient and time-consuming when it comes to reconciliations. Manual processes also make stock management extremely challenging.
Low-cost carriers that operate their hospitality service in this way find that cash and stock can often be unaccounted for, and the manual process of recording sales, accepting cash and finding change slows down the sales process and frustrates passengers. What’s more, having a cash-only, manual system means there is no effective way to track stock, sales or losses. Many airlines use spreadsheets and manual data entry to try and manage this part of their business, exposing them to risk, because it can be difficult to track stock and sales across hundreds of crew members and aircraft.
One of South Africa’s largest low-cost, short-haul carriers decided to outsource this function in order to stop heavy stock and cash losses. Opting to go cashless, the airline turned to Tourvest for help.
Tourvest found it had its own challenge in putting a solution together for the client. Although it has vast experience in the long-haul duty-free space and catering experience in domestic and short-haul flights, Tourvest did not have experience in the low-cost, short-haul market. And the bespoke point-of-sale (POS) system that the company had been using for years was approaching end of life. It was getting increasingly difficult to source parts for hardware components and the technology was becoming obsolete.
Before it could assist its customer, Tourvest had to address two major bottlenecks to expansion: it needed a better onboard payments system and a better process to restock its refreshment carts from multiple hubs. Catering cart replenishment is easy to manage when an aircraft returns to the same airport from which it departed. But, with short-haul carriers, there’s no telling where a trolley will end up. A flight could depart from Cape Town, land in Johannesburg, then fly to Durban. This complicates stock management.
“As our preferred development partner, we enlisted the support of iOCO to help us identify the best available payment terminal device and to develop a customised POS solution on top of that. They were also instrumental in tweaking our back-office systems, to enable us to restock refreshment carts from any airport,” says Gareth Forbes, Chief Information Officer at Tourvest Retail Services.
Our solution
Tourvest operates two very different business models: a low-value, high-margin one for food and beverage, and a high-value, low-margin one for duty-free products. There are a lot of moving parts to track, especially since its “shop” is a mobile trolley that could be in the air or at a warehouse, anywhere in the country. It needed a solution that allowed it to dispatch a trolley from one warehouse and return it to another for replenishment.
We developed a native Android ‘buy onboard’ application for a custom-built point-of-sale (POS) device with integrated chip and PIN, voucher acceptance and receipt-printing function ability. This was the first time an independent system had been developed for the third-party device in South Africa. The app enabled cabin crew to process sales and offline credit card payments in under 30 seconds, with minimal clicks. We also worked with third-party engineers, design teams and suppliers to create a charging station for the devices, as well as a protective sleeve.
“The charging station and protective sleeve are examples of two unexpected challenges that arose during the project. But they were pre-empted by the iOCO team, who found the right partner to assist. As with every tech implementation, there were some challenges with integration, but the team at iOCO identified them quickly, corrected them in record time and ensured there was no serious impact on delivery,” Forbes says.
The 3G-enabled device sends sales and stock data to Azure servers as soon as the plane lands, meaning all payments are processed before passengers disembark, and Tourvest knows what stock needs to be replenished in time for the next flight. To make this work, we made significant changes to Tourvest’s backend systems so that it could securely process card payments and still accept cash. It also had to adapt its operational processes: until now, it had replenished refreshment trolleys from a single warehouse. But since expanding into the low cost, multiple-hub market, it needed to replenish trolleys from multiple warehouses so that it could serve passengers all day.
After a short handover period, where we ‘trained the trainer’ on how to use the next-generation solution, it was effectively rolled out to Tourvest’s first customer. The custom-built system was such a success that most of South Africa’s low-cost carriers are now using the Tourvest POS solution. Having already developed the necessary components of the solution with iOCO, Tourvest is able to onboard new customers in a very short space of time.
Providing a centralised flow of reconciliation, the solution allows airlines to accept cash, cards and vouchers, and can also offer complimentary products if the need arises. Stock levels and sales information are captured in the system, and everything is accounted for, tracked and fully reconciled. The system is also being used to provide carriers with insights to help improve the service they offer customers. They now have access to in-depth data about what products are selling, in what quantities, allowing them to ensure they have the right stock on every flight. Using live dashboards, the airlines can access accurate data and reports, at any time.
Carriers using the Tourvest solution have found stock and cash losses diminishing significantly and credit card transactions have increased. Many are aiming to stop accepting cash entirely. In the future, Tourvest will also allow carriers to accept payments through live electronic vouchers and electronic wallets.
Change for better
“Having worked with iOCO for the better part of 10 years, the team had an intimate knowledge of our industry and the challenges that are specific to our business, like facilitating offline credit card transactions,” says Forbes.
“They were already familiar with our back-office solution and the changes that needed to be made, from a logistics perspective, to service hundreds of aircraft every day. iOCO also has the right mix of skills. They can develop and deliver on our back-office solution, create good user interfaces and can cater for all solutions and platforms. Most development houses specialise in one or two platforms. iOCO can deliver across all of them and their broad scope of capabilities shows in what they deliver.”
Tourvest was presented with an opportunity to expand its footprint into the low-cost, multi-hub market. Leveraging this opportunity meant it had to change its back-office systems and operational processes. This was key to the success and sustainability of the solution, along with the technology, design capability and effective change management. But this project wasn’t only about enabling new business for Tourvest. It was also about providing a better experience for the crew members facilitating the sales, and a better, more comfortable onboard shopping experience for passengers.
“Our biggest learning from this project was that, if the technology is properly planned and well developed, you’ll have a relatively smooth implementation. Choose a partner who understands your unique circumstances and can develop technology to account for these. The right technology and the right partner will result in a good experience. iOCO has given us cutting-edge technology. I honestly believe we now have some of the best technology in the world in this industry, and this has been confirmed by local and international customers.”
Change doesn’t have to be drastic to be effective. But it must be configurable and scalable – that’s what makes for a good DevOps process. By implementing change in a small, constrained environment, we were able to secure user adoption and demonstrate return on investment for Tourvest. All it took was a single proof point, the right partner and an agile approach for Tourvest to replicate this model to other airlines. The success of this solution has also prompted Tourvest and iOCO to partner in developing similar innovations to assist low-cost carriers in improving their cold chain and waste management.
Benefits include:
- The ability to serve more passengers, faster.
- Reduced cash handling fees.
- Drastically reduced cash and stock losses, because sales can be traced to a specific credit card or voucher-based transaction.
- The ability to add new and ‘higher-risk’ products to the refreshment cart, like alcohol, which was previously unavailable on flights.
- Better insight into sales and stock data, so Tourvest knows what items are popular and what to stock less of. It’s also able to track commission and losses.
Tourvest's journey demonstrates that transformative change doesn't always require a complete overhaul; sometimes, small, strategic adjustments can drive significant growth and innovation. By collaborating with iOCO to upgrade its systems and processes, Tourvest has revolutionised the low-cost, short-haul in-flight retail experience. This partnership has not only enhanced efficiency and profitability, but also improved customer satisfaction and operational agility.
As the aviation industry continues to evolve, the ability to adapt and innovate will be paramount. Tourvest's success story serves as a testament to the power of incremental change, the importance of choosing the right technological partner and the impact of a well-executed DevOps strategy. This project has laid a strong foundation for future advancements, enabling Tourvest to remain at the forefront of in-flight retail innovation. The benefits realised today are just the beginning; with continued focus on scalable and sustainable solutions, the future holds even greater promise for Tourvest and its airline partners.
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