WorldConnect 2012 Day 1 Session 1 - Delta Chris Phillips

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The Perils of Being a Visionary

October 25, 2012


Audience Participation I

• Raise your hand if you have heard of a Segway Personal Transporter • Raise your hands if you have used a Segway

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The Future Of Transportation: In 2001 Segway PT “Personal Transporter” • Invented by Dean Kamen • Introduced in December 2001 Insiders predicted that the Segway would: • Revolutionize urban transportation and design • Reduce overdependence on oil • Have a more profound impact on humankind than the development of the personal computer

Sources Photo: Time Specials, “The 50 Worst Inventions” (http://www.time.com/time/specials/packages/article/0,28804,1991915_1991909_1991902,00.html) Quotes: The Guardian (http://m.guardiannews.com/ms/p/gnm/us/view.m?id=15&gid=/world/2001/dec/04/engineering.highereducation)

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The Future Of Transportation: Reality

2001

2002

2003

2004

2009

Today

•Introduced

•Trouble with local laws on usage (sidewalk vs. roadway)

•Recalled all scooters (6,000 total)

•Losing money; all original funds have been depleted

•Acquired by U.K. businessman, James Heselden

•Low adoption

• Segway currently exists as a novelty • Primary uses include tourist attractions and use by local police and other mobile security forces Sources Timeline: Wall Street Journal Technology Blog , “Digits” (http://blogs.wsj.com/digits/2010/09/27/from-hype-to-disaster-segways-timeline/)

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Audience Participation II

• Raise your hand if you have heard of the internet

• Keep your hand in the air if you have used the internet in the past year

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The Future Of The Internet: In 1995

“I predict the Internet will soon go spectacularly supernova and in 1996 catastrophically collapse.” Robert Metcalfe • • •

1995 InfoWorld column Founder of 3Com Co-inventor of Ethernet Technology

Sources Photo: Computer History Museum (http://www.computerhistory.org/fellowawards/hall/bios/Bob,Metcalfe/) Quote: Scientific American (http://www.scientificamerican.com/article.cfm?id=pogue-all-time-worst-tech-predictions)

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The Future Of The Internet: Reality The Internet has survived without a major collapse, and has seen the number of users worldwide increase 358% in the last 10 years

Source Chart: International Telecommunications Union [ITU] (http://www.itu.int/ict/statistics)

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So What Does This Mean? Was the 80% direct channel share prediction wrong?

8 Source Photo: Tech Hive (http://www.techhive.com/article/244601/geeky_magic_8_ball_serves_up_fortunes_still_gives_vague_answers.html)

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Why Haven’t We Reached 80% Yet?

Mergers Bankruptcies 9/11

Financial Crisis/ Transformation

GOAL: Sustained Profitability Self-reliance Manage The Business Invest In The product

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So What Does This Mean? Airlines want to solve two financial challenges

Transparency and consumer options Direct channel sales are cheaper than third party sales 9


Delta Is Looking To Differentiate Customer has the option to login and be recognized

Economy, First/Business and Basic Economy options are presented

Search can be customized

Customers are able to see aircraft amenities

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Is 60% Attainable? It is aggressive, but attainable – Is it necessary? If third party channels can…

Third Party

Direct Sales

– Evolve – Innovate – Be flexible – Be cost-effective – Deliver value to customer and supplier …they have the potential to thrive

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4 D’s Of Delta’s Distribution Strategy Do no harm

Deepen customer engagement

De-commoditize

Differentiate

Do not disrupt back office functions you rely on; do not negatively affect managed travel programs

Invest in, and provide, a superior customer experience – better recognition of the customer during the shopping experience Develop and implement new, innovative technology that enables a shift from “commodity” minded distribution to more customized “merchandising” Across all channels, enable the consumer to quickly and easily recognize the product and service value provided by Delta 12


Thank You!

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