Interview: Innovator iCoupon reaches for travel retail’s ‘holy grail’

Introduction: Rapidly expanding UK company iCoupon is delivering incremental travel retail revenue streams to a global network of airports, airlines and retailers using its innovative digital vouchering platform. Senior Business Editor Mark Lane spoke to CEO Richard Bye to find out how his company cracked the code of delivering additional incomes across the entire passenger journey and hears why iCoupon’s impressive growth is set to continue.

Seamless collaboration between airports, airlines and retailers to generate incremental revenues across the traveller journey has long been considered an aviation ‘holy grail’, but it is one that has been difficult to execute in an industry of competing commercial interests.

The challenge became even more acute during the COVID-19 crisis, but in the background one company was already well on its way to cracking the code.

Step forward intelligent vouchering platform company iCoupon plus its serial entrepreneur leader and CEO Richard Bye and his team, which now finds itself in a position of remarkable market strength in delivering on this need after seven years of innovation and development.

The iCoupon network now extends to 250+ airports with more than 160 airlines clients and 200 retailers across more than 2,500 retail/F&B units, a base which is growing exponentially and without a direct competitor.

“Our aim is to create a comprehensive ecosystem where airlines, airports, brands and retailers can seamlessly interact and engage with passengers throughout their journey,” says Bye. “We are doing this by creating a ‘catalogue’ of passenger rewards that are pre-agreed between iCoupon and the retailers for airlines to select and promote to their passengers.”

He adds: “By harnessing data analytics and personalised offers, working with the airline, and without the need for any GDPR data to be shared with us, we can tailor promotions down to individual travellers, driving engagement, loyalty and revenue generation for all parties.”

The catalogue Bye refers to is growing fast following a series of successes since iCoupon’s original solution launched in 2016. It allowed airlines to compensate passengers for delayed flights at the airport without the need for paper vouchers, virtual credit cards or for the passenger to download anything. Instead, it used the boarding pass in a solution created for Ryanair to implement at an initial nine airports, where passengers could redeem digital vouchers in SSP Group food & beverage outlets.

iCoupon’s system is now embraced by all the major players in the global airport food & beverage sector, who support the use of the intelligent vouchering platform for promotions to passengers, in partnership with participating airlines, including many of the biggest names in the aviation industry.

In addition to iCoupon’s disruption business and following a recent F&B promotion using the scheme at Dublin Airport, which saw a healthy 25% of recipients redeem the offer, other innovations have been launched. These include a certified partnership with Uber to offer taxi services to airlines and their passengers around the world, underlining the potential of the iCoupon system across the entire travel journey.

Duty-free move

The next major development on the agenda is an initiative involving airport duty free, as iCoupon moves into retail promotions.

“Embracing intelligent vouchering technologies for duty free presents numerous advantages for duty-free retailers, the airlines and passengers,” explains Bye. “Imagine the airline being able to thank all their outbound passengers for flying with them, providing a reward to be spent in duty free for doing so. This will lead to additional ancillary revenues for the airline while the duty-free retailer receives substantial incremental revenue from people who would otherwise not have stopped in the retail stores.”

iCoupon is Bye’s ninth involvement in a start-up, and his most successful. It grew out of an IBM Business Partner company he acquired which had SSP as a key customer. Bye takes up the story. “We had worked with SSP for a number of years. They had this problem around vouchering in the airline industry where they were receiving millions of paper vouchers every year and they wanted to find a way of automating that.

“We got our heads together with another IT company that SSP worked with at the time and started to look at how we could use technology to digitise the whole vouchering process. We came up with the idea of using the passenger boarding pass and devised an integrated technology solution, which I can’t tell you much more about without giving away the secrets of how the magic works.”

Growth model 

Having implemented the solution successfully with Ryanair and SSP, Bye and his team immediately set their minds to how the technology could be used in a wider series of applications.

“We have executed our vision to grow the business vertically, and we now have a snowball effect from the disruptive passenger piece which means the business is becoming three to five times bigger every year, as our airline and retailer client base mushrooms. We have this intrinsic network effect for growth – the more airports we go live in, the more airlines we can activate within those airports.

“The way we are building our suite of solutions, a new airport doesn’t just result in one new revenue line, it might result in 50 new revenue lines, because of the new retailers and the new airlines that we can activate there. The network effects on our growth are considerable.”

That growth model for iCoupon has taken on powerful momentum. Bye says: “One of the real beauties about the collaborative nature of iCoupon is that once we’re active in an airport and with all of our airlines that fly into that airport, all the passengers are only going to the retail and F&B units that are activated with iCoupon.

“So if you’re a retailer in an airport and you’re not with iCoupon all of that revenue disappears and goes elsewhere – we get a constant stream of inbound inquiries from F&B companies and retailers who are not live with iCoupon in airports where we are trading. That’s a great thing because the passenger choice continues to grow as we feed more passengers into the ecosystem.”

He adds: “We even have one airline considering dropping onboard food altogether and instead simply applying the value of a meal to all boarding passes, for the passenger to pick up from any retailer of their choice and carry on board – the savings on pre-flight food prep and fuel could be considerable.”

On the F&B side, iCoupon now works with the big four in the sector, namely Avolta, SSP, Lagardère Travel Retail and Areas, plus The Restaurant Group and other big retailers in the UK. “We’ve got all the major players globally, then we’ve got the majority of the big ones regionally and we pick up the ‘mom and pop’ shops as we go along,” notes Bye.

Bye reveals that iCoupon’s initial involvement in airline passenger compensation only gives access to about 4% of passengers, i.e. those who have had flight disruptions. “Clearly, we wanted to find ways of reaching the remaining 96% of passengers. So, we developed the idea around how we can use that network to run promotions for passengers, where airlines and retailers would have the ability to improve ancillary revenues through what the passenger is doing in the airport.

“Now, with more than 2.5 billion people, and growing, walking past an iCoupon-enabled unit every year, we are beginning to provide the ability for OTAs [online travel agents] and other travel organisations to be able to offer promotions and do links with retailers in the airports for their travelling passengers, which nobody has been able to do before, largely because the issue of sharing of data between organisations. That was always the blocker.

“With iCoupon, there’s no sharing of information of that asset wealth whatsoever. We’re using a common vehicle, whether that common vehicle is generated by iCoupon or whether it’s using the boarding pass, to carry that voucher with the passenger, without the sharing of any personal data.

“So, everybody in the ecosystem gets to achieve exactly what they want to achieve, without having to give away any information. We’ve now got about 13 different applications for our solution, and more will follow.”

Airline and retailer collaboration

Explaining how iCoupon simplifies the relationship between airline and retailer, Bye continues: “One of the things we’re focusing on this year is building catalogues with retailers so that we can be the go between for all the offers that a retailer wants to support rather than an airline having to speak to every single retailer and say, ‘can we do a deal?’.

“We instead have a book of offers that a retailer is willing to support and we are just able to go to the airline and say ‘you can offer this deal to your passengers’. The airline can just do it and receive ancillary revenues for doing so. And we support the offer on the back end with the retailer – these are the kind of initiatives we’re working on. It removes that need for thousands of conversations to happen between retailers and airlines.”

Underpinning iCoupon’s success is that it is entirely self-funded and has never had to seek external funding. “We’re always growing organically,” remarks Bye, when asked about scaling-up challenges. “We don’t have any external shareholders trying to pull us in one direction or another. We don’t have any bankers or lenders, we’re profitable, we’ve got money in the bank which always allows us to stay ahead of our growth needs and continue to innovate for our customers.”

Innovation focus

Having a long-term vision and innovation is always driving the iCoupon business, Bye asserts. “Innovation is key. We have somebody in the business who is responsible for innovation, and that includes taking everyone’s crazy ideas – the retailers’, the airlines’ and iCoupon’s – and deciding what we’re going to do next.

“We address how we are going to introduce new features, what new products and new services we can offer, to build on those modules that we’ve already got in place. That helps to keep us focused at least six months in advance; we are always at least that far ahead of where the next brick wall is.”

He adds: “It’s very important from my perspective that we keep the pyramid the right way up, making sure we have enough support for the back end of the business to ensure that we can deliver against what’s constantly coming in from the front end of the business.”

All this business development is underpinned by a strong spirit of partnership, which Bye says is the most vital element of how the company functions. “We are in an age of collaboration. If you don’t have the confidence and open-mindedness to work with partners and take the strengths of other organisations and have a network and a platform where you can integrate those strengths, you won’t succeed, especially in the travel sector.

“We have seen a lot of organisations failing and struggling in this industry, because they’re trying to do it all on their own. And you just can’t, because there are way too many influencing factors which mean that you simply cannot do everything yourself.

“Fortunately, we have found that people in the airline industry are very customer-centric and open to partnership; they genuinely care about providing a good service, I almost compare them to NHS staff in that sense – everyone in it is focused on supporting the passenger journey.”

He continues: “We’re using our customers, our partners and our breadth to be able to pull in and consolidate the best of the services that are out there into that one, cooperative network. So, all the partners get the revenues and efficiencies that they expect, and everybody gets the value that they expect; iCoupon consolidates things into one central place.”

A long-term outlook

Asked if iCoupon could be threatened by competition, Bye is guarded, but underlines just how difficult rivalling what his company does would be. “Of course, there are things that can happen [on the competition front]. Right now, iCoupon is the only company out there that has an integrated global network of airports, retailers and airlines. There are some companies that have networks in the retail side, or companies that have networks in the airline side, but none that has both.

“But if somebody wanted to do what we do, then they’re seven years behind. They’d have to do something which was compelling enough to make the retailers and the airlines go to the effort of changing what they do right now. I do not wish to sound complacent, because that is not who we are as an organisation, but that is the reality.

“It’s an exceptionally complex, intelligent vouchering platform that we’ve built and if you want to try to replicate that, that’s one thing, if you want to beat it, then that’s another. If we miss a trick, and somebody else does come in and take it, then all credit to them.”

With the thousands of powerful companies out there whose businesses involve the passenger journey in mind, I finish by asking Bye – who has successfully sold several businesses earlier in his career – if there have been any attempts to acquire iCoupon, or if he has considered selling the business.

He concludes: “You can never say never obviously. We have had offers in the past and I can tell you that we’ve instantly rejected considerably more than we’ve engaged with because it’s crucially important that the fit is right for the future success of our friends and partners – after all, it is those who make the network what it is today. There’s nothing currently on the horizon and that’s no bad thing as we have so much more to achieve with our business partners, all of whom we know personally and consider friends.

“If we were ever to get to a point of having a serious discussion about somebody wanting to acquire, I would have to consider how it would affect those partners, who we remain committed to delivering to and growing solutions for.”

*This article first appeared in The Moodie Davitt Magazine. Click here for access and turn to page 122. ✈