Audio Transcript

Welcome to Let’s Talk Loyalty an industry podcast for loyalty marketing professionals. I’m your host, Paula Thomas. And if you work in loyalty marketing, join me every week to learn the latest ideas from loyalty specialists around the world.

This episode is brought to you by Collinson, worldwide leaders in loyalty, creating and orchestrating loyalty initiatives and programs for some of the world’s biggest brands and travel retail and financial services. Doing it globally for over 30 years. Want to know more, go to collinsongroup.com.

Hello, and welcome to episode 228 of Let’s TalkLoyalty, a conversation with the chief product officer of IAG Loyalty. Stephen Scott. Now for anyone who doesn’t know the brand, IAG stands for the International Airline Group, which was created in 2011 when British Airways and the Spanish Airline Iberia merged together as part of the formation of that new airline group IAG
also created a new unified loyalty currency called Avios for its airline partners, as well as a dedicated loyalty division, which has now been operating in
various forms for over 30 years. In today’s discussion, I learned a lot about some of the big ideas that are evolving right now for loyalty programs in terms of their new and emerging propositions for members. For example, the e‑commerce model, allowing members to earn and burn, even when they’re not flying or through to dramatically simplifying how members earn their Avios
using card linking. And of course, we also chat about some of the latest ideas like NFTs that we’re all beginning to wonder about for our industry.

I hope you enjoy today’s conversation and the latest insights on how loyalty models are evolving in my conversation with IAG loyalty.

So Mr. Stephen Scott or, I think affectionately known as Scotty. Welcome to Let’s Talk Loyalty.

Thanks very much, It’s great to be here.

Great to have you Scotty. So we have some wonderful topics to cover today a one year on from when your CEO, Adam Daniels talks to us. So a huge amount of stuff going on with IAG Loyalty. Before we get into all of that. Scotty, I want to ask you as always, please tell me, what is your favorite loyalty program?

Well, I’m actually going to go pretty retro on this one and say that my favorite loyalty program is Green Stamps by Sperry & Hutchinson. So let me quantify that a little bit. Um, the reason why I love it is because of the simplicity, it gave retailers a way of providing loyalty in 1896, and it was still going in the eighties. Um, and in the sixties it really created the first gamification. I know that everybody, anyone who’s been involved in digital, not me for the last 20 years or so thinks that we invented gamification, but gamification was there with green stamps where they, they essentially created this reward catalog and a family book. And you had to fit in the family book with stamps. And if you’ve got your family there, first, you competed with the enablers and it was a bit of a status thing. Everyone wants to compete and win. So they created a gamification in a world that wasn’t digital at all. And I love that. And
I think the coffee companies have done pretty well with it. I still like my Nero card by standard as well. So this is a very basic and very simple, but I
think there’s also a lot we can learn and look indigenous and experiences from that simplicity. And that’s, I think the basis of how we take things forward, if I think about reward app and things like that, we’ve really taken that forward and started to use some of that simplicity in the digital environment. So it’s great for our brand and it’s, uh, it’s good to get back to basics and continue to think
about simplicity and Green Stamps had all of that in droves.

Oh, totally, totally. When you’re preaching to the converted Scotty, because I think there’s a lot of us in loyalty, as you said, actually, we think we invented it particularly, I suppose, with our airline backgrounds. And, you know, certainly we know that, um, you know, points, I suppose, came through the airline industry, but I hadn’t realized it was 1896 the Green Stamp started.

It was a long, long time ago.

It’s unbelievable. That’s what 126 years if my math is correct.

Yes. Indeed.

Wow.

And I have a bit of trivia Scotty and I, you know, don’t normally have random bits of trivia, but I do remember reading that at one point Green Stamps in the
United States where there were more of those issue than the United States postal service,

Correct? Yeah, that is true. That’s true. There were more,

And they had lots of different names. It was there a UK version of Green Stamps under a different name or did they use the same brand name? I can’t remember it.

So good question. I’m not certain actually I think they use the same version for a period of time, but it was primarily known in the state right it was huge.

It was unbelievable. Yeah. Well, thank you. Now I do think we needed a visual retro, um, just to bring us back to basics. I love the concept of simplicity and
the fact that, you know, those Green Stamps literally were issued to, I think every significant retailer in the United States, as we said, you know, over a
hundred years ago was, is quite extraordinary and a testament to the power of how consumers actually want to be recognized for being loyal. So hopefully means we all have plenty of work to do to keep us busy.

Absolutely.

It definitely does Scotty. So listen to me when we had the conversation last year with them, as I said, your CEO, Adam Daniels was on talking about, I suppose, a lot of what was changing and evolving and coming
through in the midst of the pandemic. And we’re 13 months on, thank God we feel, I suppose, an awful lot better. Most of us what the was a couple of big
changes and evolutions that were very impressive. I think particularly, you know, from an Avios, and IAG perspective, things like e‑store coming through and lots of the behaviors really changing back then. So I thought it’d be useful just maybe to start by picking up on, you know, what do you say happening with consumer behavior in terms of loyalty currency through the likes of e‑store at the moment?

Sure. That’s a really good question. I mean, I’ll start by saying that we through the pandemic, just to sort of reiterate what Adam went through when we were
lost on me a year ago, but through the pandemic, we did see changes in buying behavior, and as much as loyalty programs, you know, we, we live by our reward
and experiences and our, and the flying behaviors. We’re also seeing a lot going on in retail and a lot of change going on across sectors in the, in the
adoption of the currency and, and how people use it. And I think a story is just an example of where people who are collecting every day and not always
collecting, flying are getting engaged and using an everyday mechanic. So collecting Avios, and we’ve seen that, seen that continue. So I’ll give you an give you to give you an idea of post pandemic during the first quarter at 22. E-stores is still growing, um, in, uh, in the same way as it was during the pandemic. You think when people start to find the travel coming back and
they can collect in other ways, maybe it was slowed down. It hasn’t slowed down at all. We’re up 7% versus the same period last year during the pandemic. And we’re up about 14% versus 2019. So even pre-pandemic
numbers were up. And that just shows you the level of engagement in loyalty and how people are using loyalty differently post pandemic is it’s still really going from strength to strength, particularly in the retail space. And I think the everyday angle of the loyalty program has grown throughout the pandemic. People have found different ways of engaging with loyalty during the pandemic that they couldn’t before. And we, you know, we’re, we’re looking at hopefully a great year as travel comes back as well. And that’s another lens
to that. And we get back to the numbers that we were seeing before on the travel side.

Yeah. That’s wonderful to hear Scotty and I know the e-store’s been around for a good many years now. Some wonderful brands yet. Was it 2006? Am I right?

Well, do you know what I can tell? It was 2005 that we first created it, but it had 36 merchants on it back then It was actually created a step. You may not know it was actually created in my team, but yes, it’s been around a long time and from strength to strength and it’s gone through many different guises during that period, as you can imagine with course, you know, the whole smartphone era coming out in the middle of it as an example.

Yeah. Yeah. And I think he made that point. Last time we talked Scotty, it’s almost like, I think there was that education piece where all of us need to, to
realize why we should change our buying behavior to start within an e‑store environment. And once you do that and realize you’re getting rewarded for something you wanted to do anyway, with incredible brands, I think you’re up over a thousand merchants. This is at this point, Scotty.

W we’re actually of the 1500. Now we grow, we grow about 20 to 30 merchants a month. And bear in mind when you’ve already got 1500 that’s really brand new brands or it’s people who have just become part of an
affiliate program who weren’t there before, but it is growing fast. You can pretty, you can pretty much get in touch with any brand, you’d want to, for any
products you’d want to. And I think what’s, what’s changed more is the simplicity of using it with the British Airways Rewards App. Um, we’ve got rewards apps with separate airlines that we run the e‑store
for. Um, it’s, it’s that passive behavior that you talk about when, when we were in a online and on‑screen environment, only as much as you, you would
go to a store if you were engaged, if you didn’t know what you still was, it was very hard to make that jump from searching on Google for a product you wanted to go into the store to look for a brand and then go back
in, in, in the stock owner environment, particularly in the rewards app environment that is really straightforward. It’s, uh, it’s, you know, it’s simple
taps and you’re through to the merchant and you’re buying your product. It’s much more statement used to be. And obviously with notifications on your phone, you understand when you’re receiving your Avios in a much more dynamic way as well. Yeah. But it’s really much easier. The fact that our simplicity point it’s surely much easier to interact with now and much easier to learn more and more obvious.

And I mean, you know, as I think about everyone listening to us, having this conversation, Scotty, I think there’s so many loyalty programs that may be
haven’t added in this kind of concept of an e‑store just yet. And, you know, as we said, it’s been around a long time, definitely maturing, I would say in my view, in the US and the UK, what still seems to have massive potential as something that’s almost every loyalty program should have as an option for
their members. Would that be fair to say, or am I going too far?

No, I think, I think what it brings to lossy members is, uh, and to loyalty programs as a whole is a regular day‑to‑day interaction. I mean, people are
buying in retail every day and you feel if your members are buying retail things every day, why shouldn’t they collect points on that and be rewarded for their behavior? And so I do think it’s a core part of any loyalty program. It brings your brand front of mind. It creates more engagement. It’s increasingly more interesting for your members to be able to reward, to be able to earn more points. And then, and then obviously that brings a reward closer and the whole cycle of loyalty then increases. So yeah, it’s definitely something that should be core, I think.

Wonderful. So a virtuous circle, I think we can call it Brilliant, brilliant. And the other one, which I’ve often said on the show is my favorite, I suppose, innovation as a consumer. So even if I never worked in the industry, this whole card linking proposition again, with the idea that I have to maybe once just
link my card as my loyalty identifier, but then that becomes a really simple way, I guess, to earn offline as well. So I’d love to hear how things are going with
card linking and on your side.

Sure. I mean, we treat them as one, right? We, we, we take the concept back to simplicity after we take the concept that all of our customers shop and because all of our customers shop, they want to shop in different ways and they don’t want too many things breaking into that journey. To your point earlier, the more we can be part of their natural, valid buying behavior, the
more likely they are to get to collect more points. And that’s better for them in terms of getting to a rewarding experience faster. So it’s, it’s a card
linked offers allows you to do that. You, you go into our reward app, you put your, you link your card once. And from that moment on all merchants that we are signed up with, you can use that you can use that card and you will earn Avios and it when you’re in an in-store experience. And it’s something we just didn’t have in the past. It’s just a much simpler mechanic for collecting the reward programs or loyalty programs themselves. Obviously, the challenge is
getting as many merchants on that, that work as you can, as many retailers involved on that network, as you can. And that’s growing really fast and, you know, Collinson and help us with our sales networks help us with that and continues to Be something they do very well. And we work very closely with them on that.

And what kind of brands do you have for example, Scotty using card linking and card linking offers specifically there?

Yeah, sure. I mean, it really ranges. We’ve got restaurants, we’ve got high street stores. We’re adding probably 10 to 20 a month at the moment. So quite a few people like Harvey Nichols, we’ve got Gaucho, we’ve got Spaghetti House, we’ve got JoJo Maman Bébé, there’s, um, there’s many different, um, offers in there. And as I say, it’s a growing network we’re growing all the time. So look out for more, as it comes in.

Definitely, definitely. And, and what I always feel like is, yeah, something in the offline world takes a long time, I guess, for, you know, to get the paperwork done, to get everything signed up. And I guess to educate the merchants as well on the reasons that they might start, you know, I suppose creating offers specifically for users and then the upside, once they get it, I think it’s, uh, it just multiplies the terms of their, their usage of it.

Yeah. I mean, I think the separation between us and the, and the mobile phone carrier propositions is that once vendors and registers it’s automatic, right? They don’t need to locked into the office each time the offers come available, they’re there all the time and it’s passive and that’s, you know, that that is
growing. How many people want to do it? You know, we’re 44% up year on year in members in members of link their card. So you can see there’s an appetite
for the product. And the total number of cars links is about 41% year on year. So it’s growing at a fair rate. People put more than one card in there, quite a few, quite a few of our members have got two plus cards in there.

Interesting.

It’s growing well.

Yeah, for sure. And again, in preparation for today, Scotty, I went on to the IAG website just to get a sense of, I suppose, the scale of where you guys are at. And I saw a wonderful number, very different to when I worked with Avios, 35 million collectors you guys have now.

That’s right. We do, we’ve got 35 million members globally. We were, um, um, across multiple programs. And I think that’s probably the biggest change with IAG  loyalty. We launched IAG Loyalty as a brand in 2020. And as you know, from when Adam was on here, we’ve got a rich history in, um, multiple different names across the company. But, uh, that was really to show that we wanted to run loyalty programs, multiple sectors and more airlines, and get involved much more as a broader loyalty program proposition level than just the currency. And we we’d been running the reward currency for many years and we’ve got a 30-year history in doing that, create millions of memories for members all over the world of which there’s plenty of stats and IAG loyalty expanding outside of that has given us, it’s given us a platform for growth really we’re in growth mode at the moment we continue to grow. We’re doing really well.

For sure. And, uh, you know, I was looking back at your own career history as well as Scotty. And it’s almost like you’ve never gone far from either. Airmiles USA, Avios IAG. So definitely in your blood, I guess there’s this,

I’m actually, I’m actually traveling industry through and through, I guess, but what you probably didn’t read in my CV is I actually started off as a farmer and then moved into travel. I had a late career change in my late twenties. I moved into travel, but the, uh, yeah, I’ve been around the loyalty scene for about 22 years now. Um, majority of it is in e‑commerce and digital. So my first role was actually to start cash travel agency with a lot of programs. They wanted
to separate points and, and, uh, cash. And, and from there moved much more into, into Air Miles at the time was part of the team that created Air Miles that currently in UK. And the rest is history, as they say,

Oh my goodness, absolutely legendary. I mean, I still think, you know, one of the challenges of, you know, rebranding something as powerful as you had to
something new, like Avios, it’s just actually, nobody wants to let go of the old brand name because there’s still a lot of value in it, you know? And I think you,
you manage that rebrand as well. Didn’t just Scotty.

I was part of the team that works on the rebrand. Yeah, that was, um, obviously there was a team of a few of us that, um, senior managers that worked on it,
but it was a, it was a tough call, but essentially the, the MOS brand was a franchise brand. Um, and we own, we own the UK franchise. So when British Airways and Iberia merged back in 2010, 2011, We had to make a change if we wanted to run global currency and wanted to be part of running the frequent flyer programs continuously because it was outside of the UK at that point,

That make sense.

That drives the decisions around the ambulance brand.

That’s for sure. And a wonderful set of airlines then. So British Airways and Iberia you’ve mentioned, I know Aer Lingus willing, and most recently, um, I think in a slightly different way, but I was delighted to see the Qatar Airways have adopted Avios now as their currency as well.

They have indeed. That’s right. So we’ve, uh, we’ve been working with Qatar Airways over the years, as you know, and British Airways has a very strong
relationship with Qatar as well. Um, and we, we decided that, uh, we wanted to amalgamate the currency of the Qatar to start using the currency between us. Um, and that went live earlier this year, as you’ve seen, it’s an exchange relationship. So you can move your Avios also within, between the class using our exchange products. So you can use your, your Avios that you earned through the privilege club and your Avios that you earned through the British club. You can combine those and buy flights with them point of purchase, um, and also separately, um, on British airways.com using the exchange products

Super, super. And it really is, and Qatar is hugely well‑respected airline and certainly globally. And particularly, of course, living here in the middle east, I really get to see exactly what they’re doing, but of course, you know, a younger airline and Q miles, I don’t think ever really had the brand recognition. Of course, that’s something like Avios had. So it certainly was a big coup for you guys. So congratulations on that one.

Thank you very much. I think that, yeah, certainly the power of the Avios brand was part of that equation. And obviously, the global presence of the brand is growing as well, which is fantastic. I think for QR, they can offer their members a wide range of benefits now as a result of taking it. And it supports that, you know, they’ve got huge business development ambitions onshore and it supports those two.

Yeah, of course. And you mentioned the exchange as well There Scotty, this is something, again, I think consumers are increasingly excited about. So this is obviously something you guys identified as an important development for all of us, I guess, as loyalty program owners and members, I guess.

Yeah. I mean, it, it comes from a pretty sort of basic idea that within the group, within the group of airlines, um, IAG has, we’ve always offered the ability for what we call combined my Avios, which is bringing Avios from different programs together into one place, and then using them, what we’ve done
more recently is allow other currencies to exchange with Avios and bringing those into, um, the, Avios as well. So being able to we’ve got similar candidates, we’ve got one that just exchanges Avios from one account to another, and certainly the Qatar relationship using that, you can move your Avios from privilege youl got into, um, British Airways, Executive Club, etc., to use them, which I mentioned earlier, but also we’re using it to exchange other points into Avios as well. Probably the best example of that is nectar. Um, we launched with Nectar and Sainsbury’s partnership in January, 2021. Um, and you know, there’s strong online, strong retail behaviors of customers, and it gives members the opportunity to convert next points into Avios, Now they can plan some incredible travel memories, as well as the things that they’re doing with an expense in retail. And it’s built around the exchange product that was made possible by the exchange product that we’ve put in place. And we’ve had, uh, we’ve been going through a digital transformation for, for about three years
prior to building some of these things on top of the platform. And that has allowed us to create these different mechanics faster. We build everything as if we’re going to provide it to external partners, as well as internal partners. And that gives us the ability to move quickly when we do, wants to do partnerships with new, with new businesses.

Yeah. Well, I definitely want to talk about your experiences with digital transformation Scotty, because it’s such a hot topic. And I think so many of
us struggle with exactly, I suppose, what it means and what success looks like. But even just before that, um, for anyone listening who might not be aware, I
guess Nectar is probably the biggest loyalty program in the UK. Would I be, would I be right in saying that purely because it is a coalition model and owned and operated by it by Sainsbury’s now

It is a coalition obviously it was operated independently

When it first came out, It was the case mills himself, I believe, um, that 10 year, I think it was about 10 years to the day after he left the Air Miles business
created next up. Um, so yeah, it’s a, it’s a huge retail loyalty program. It’s a really important partner for us. I can give you a great stats on it. Actually, members who’ve converted Nectar into Avios, collectively traveled on enough reward flight to travel around the world 20,000 times or in the first year of launch.

Oh my God. That’s amazing.

So it’s going very, very well.

It totally is. You know, I think you’re speaking to somebody certainly who wants to fly around the world.

Yeah, that’s right, exactly. Quite regularly. I’m sure.

I certainly do my best. Yeah. Well, I often think, you know, with the, you know, the everyday benefits obviously of a coalition, like Nectar are extremely
powerful for people to collect, but you do need the aspirational travel benefits. I mean, it’s just, that’s what all of us, I think pretty much want in
some shape or form, even if we never actually redeemed for travel, if we’d redeem for something else, I do believe it has an important inspiration role to play. So we’re really cool to hear what you guys are doing with that with Nectar.

Yeah, it’s great. I mean, if you think of some of the barriers that loyalty program frequent flyer programs have had in the past is the time it takes for people
who aren’t frequent flying to build up their points and to get enough to do something meaningful. And I think all of the ways of exchanging using the exchange products, all of the ways that we growing in partnerships now, and some of them are mechanics we’ve got within the reward out for collecting just mean that you can speed that up much more than you could in the past. And that allows people through everyday shopping to get reward flights and to get experiences much quicker.

Totally. Yeah. I remember when I very first started collecting points and I was actually at Emirates at the time, and I remember kind of describing when I
noticed my behavior and it was on a credit card. I was, I was kind of like a points junkie, you know, I was just like fully hooked once I got it. I mean, there’s no going back. It’s, it’s an incredibly powerful driver of behavior change as we all know.

Absolutely.

Wow. So tell us about the digital transformation then Scotty. Um, I think listeners know, you know, I worked, you know, I suppose, um, on the outskirts and of Avios in Ireland on some non-airline partnerships and that was many years ago, so that was kind of six years ago and it definitely needed, I think, a digital transformation, which it sounds like has gone wonderfully well. So tell us about your journey with that over the last few years.

Yeah. I mean, I think I came in, I came back into Avios, um, about five years ago. It’s fair to say. When we, at that point, we were still very much a heritage business in terms of our systems in the state. I think we had, um, we have, we had all of the things you’d expect from a spending Avios and flying capability and hotel capability out, but it had been there a long time and the last, it was
very good in the time it was there. It was really built for, uh, for UK programs or for singular programs. And at the time we felt that we had the aspiration to become IAG Loyalty and to be someone who provides lots of programs for multiple programs and was able to interact with any sector and with many
airlines and airline base remember by that point, I’d grown quite significantly. We already had five hours on six hours in the group that we were starting to
interact with. So, so whereas beforehand, we needed to do things singularly. Now we need to do them on a much more broad scale. And now our digital transformation is really the enabler for that. So we said, we need to create a platform that is exposable to anyone and that our business strategy will drive who uses it, not the technology itself, being a constraint to how people can use it. And that’s what started the process. Um, it’s, it’s been a wholesale change across the company for us. Uh, um, it’s our, it’s been our finance process, our governance processes, our organizational structures, the way that we build in a more, much more agile way. Um, we run product teams, which are mixed
teams, um, with, um, when I say mixed teams, I mean mixed discipline teams, there are Business KPIs, technologists, marketers, and, um, product strategy
and developers and delivery all in one team. So you have much more speed of taking something from a, from a business goal or a value that you want to create right through to a deliver it. And that is ongoing, um, standing teams. So when you think of things like Easter, that’s why we’re able to deliver so many
merchants so quickly and continually grow what we’re doing in that space. The same as CLO the same with our spend capability, our reward app capability, we’re delivering features on a, on a continuous basis into market now, rather than doing these kinds of stops, starting three months, every three months, there’s something new it’s on a, either a continuous integration every day or in the apps case, obviously, because apps are a bit, take a bit longer to, uh, to
go through the editorial processes every couple of weeks. So it’s really, it’s really speeded up how we put value in front of our members faster. And that’s
really the goal of it is how it, the high quality things in front of customers faster than you could before.

Yeah. And would you say in the beginning, I mean, a lot of people would say that there’s, you know, cultural challenges particularly. So I don’t think it’s usually the technology that causes issues for companies or even the intention of wanting to work in an agile way. But how did you find the, um, I suppose
the, you know, adoption with people internally, who many of us again have been in the industry many years and very familiar with how the, the existing, um, technology stack perhaps works. How was that within IAG? Did you find that that was a Challenge?

Yeah, I think it’s, I think it’s always a challenge culture. You mentioned, this is always a challenge and I think there’s, there’s many ways you can approach
it. But I think our approach was focused on outcomes rather than the process. I think where people go wrong with digital transformation is they focus very much on the perfect process. They want to create a, not so much on the outcomes that you want to create. And if you focus on the outcomes, you tend to more iteratively, go about the process, more iteratively, go about the process. You give people more time to buy into it and understand it and see where it adds value to them. And you, you can’t do that. Try and do it too
fast, just try and get everyone to go into a new process or create a process without them understanding the value that it gives to them and to the rest of the business. We built a lot. The other thing that we did from a technology perspective, I’ll take your point on, you know, you, you can’t, um, it’s very hard with the technology stacks. You have. One of the things, the beauty of the loyalty program is it’s fairly light. And we had the ability to build new, um, new
technology in a new stack and then migrate, migrate to it rather than trying to evolve the old systems so that we know and love. So we very much built in the
new and then migrating to it, which gave us the ability to do a lot more in cloud. A lot more, a lot more modern technology sets, use the latest tools, bring in people who wanted to work on those late systems, which is obviously part of the challenge as well. And now I think we’re able to evolve our technology at
a fast pace and continue that evolution journey without it being any big step or big bang approach in future, because we constantly have all about our
technical products, but the ultimate goal is how do you get outcomes in front of your customers faster? And in order to do that, I believe you have to make a
holistic business change and work in totally different way across the business because that’s, let’s not, but it’s our business processes that dictate a lot of our
speed, as well as our technology, wants, as you say. Yeah.

True. Yeah, absolutely. For sure. And I know it predated COVID for example, Scotty, whereas for other people, I think COVID was the trigger for the transformation they had to go to e‑commerce. So they had to go to things that you guys were already doing. So would you say that the pandemic did accelerate even further in terms of your digital transformation or was that less of an issue given that you’d already, I suppose, started a lot along that track?

It’s a really good question. I think where it accelerated much more was we had we’ve we’ve been doing digital transformation in software engineering for some time. I think what, what accelerated during the pandemic and as for all of us was we were all on video screens for many times was the use of digital tools for our everyday life at work. Um, so people who weren’t necessarily involved with technology in their day‑to‑day started using technology much more for
video conferencing for how they interacted with people, for how they talk to people around the building. You know, the adoption of things like teams
chat, as opposed to email, just speed up the communication processes across the business. And there were met there’s many more groups and many more
things. Our people team particularly have been involved in creating a lot more communication through digital tool sets. And as a result, that communication
speed means things get done quicker, better, more collaboratively. So those are all better, definitely digital transformation inside the workspace and inside
the culture I think has been, uh, has dramatically changed during the pandemic. And it’s certainly grown out our digital transformation and our agile evolution as we call it within the company in terms of culture changes, definitely driven some of that, for sure.

Yeah. Yeah. And I know you have this passion for innovation as well, Scotty, and again, when I looked a bit back in your, I suppose, history with IAG in other
roles, there was also what I remember really liking at the time, which was purely focused on innovation, which was Hangar 51. And I actually just remembered that I wondered if it’s still operating or, you know, is that program, which I think was literally designed to see, you know, how can we innovate the whole travel business, I guess, and, or journey for customers? Is
that something that said that’s still in operation?

It is indeed. Yeah. It goes from strength to strength. It’s been an amazing journey. So we keep, we keep taking 51 off just to, to interact with startups and
give startups a front door with their technology to talk to airlines because it’s very hard. If you’re a new business, it’s very, very hard to know who’s to
speak, to and get passed around the houses within larger organizations. Um, once that front door was created, we had, uh, we had many people jumped through it. We got, I think, I think the first program was 2016. We got about 650 applications from memory. I think it was about, It was really, really, really successful program. And, and that led to many other things. That’s incubating
with startups. Our carriers do quite a bit of incubation with startups. And by that, I mean, sort of more longer, more six months agreements where they’re
trying to prove a prototype or understand whether something sort of modern technology can work for our businesses some way. Um, and we also started, um, we did made some, and you probably would have seen in the press, we, we made some investments in startups, Hangar 51 as well. And it has a, it has a corporate venture capital arm, which was, um, which has also made some
good investments and had some really good learnings for us in seven spaces actually. So yeah, it’s been, it’s been really successful, really enjoyed the time
setting that up. It was really exciting seeing a lot of the innovations out there as well. I mean, there’s so much out there.

I think it’s a, it’s a clever strategy. Yeah. I mean, to me, it’s probably the only way that we can save ourselves from our own legacy mentality, I guess, you know, we know how things work and we’re probably skeptical of anybody really trying to rock the boat too much. And when there’s so much at stake, but I
guess that is what the startup community brings to, to the whole world of business. So I have been watching it with interest. I’m delighted to hear that it’s
still up and running and sounds like it’s just a huge success for you guys.

Yeah It’s gone very well. Hopefully it will continue for, for much longer. I mean, it’s a, it’s a great way of interacting with the business and to get, to get a foot in the door to understand you get to work on some really interesting projects. I mean, the, the, as you know, the industry has many different facets and many
different parts to it from logistics in cargo through to the way we process data and how we do, how we use data to the customer experience as a commercial end to the airport operations. I mean, there’s so many different fields that startups can try and bring innovation. So, and it just helps do that

For sure. Yeah. And I think we all know the travel journey is never as perfect as we’d like it to be. So, I mean, every time I go through an airport, I’m looking for ways that, you know, how could it be easier for us because you know, whether it’s safety, security or shopping, you know, all of the various pressure points that happen in that kind of travel environment, there’s just amazing opportunities to make it better all the time. So yeah, definitely tuned into that.

Definitely.

On the subject of innovation then Scotty, I know we briefly talked about NFTs last time we met and I’m still I going to say I’m on the fence, Scotty, in terms of whether, whether I want to go rush out and build something, buy something, sell something. I don’t know what Totally. I mean, I think I’ve got the deck dictionary definition so far, so I haven’t made much progress, but it’s clearly a hot topic. And one that I know that you’re excited about it. So tell us, yeah. Tell us about NFTs and in the world of loyalty.

I think, I think innovation is exciting in general because you never really know if you’re on the cusp of something or if it’s a crazy idea that needs to go away
again. And these things are rarely just an idea, right? They’re always constructed from something. So I think my, my view on it at the moment is what we’re seeing in the market is a generation coming through that their main social interaction is online. It’s not in person. And we see that through the social media channels. And we also see it through the gaming platforms and the how, you know, an example would be my teenage son spends most of his time communicating with friends through his gaming platform, they have
headsets and they’re talking to each other, then they’re often not even playing the game. They’re just talking to each other as part of an evening, so everyone can join it. And if you, if you take that as a concept, it’s not too much of a leap to say that generation will, if there was a virtual world that they could actually see versions of themselves, avatars whatever you want to call it together at the same time that they’re talking together, it’s not too much of a leap for them. So when you think of things like Metta going on in Facebook, and you think of the types of things that are going on in the market around the metaverse, you know, concerts, retail, restaurant, cooking, whatever it may be, you can start to see that this new world is being played with. And I think
that’s the way to describe it is in gaming. It’s probably getting a bit bits a lot, bit more serious, a bit more mature, but I certainly see a lot of retailers starting to play with how could this world work for us if it does become something that’s
mainstream. If people are going to be meeting in a virtual mall rather than in a real mall, my shop needs to be there. Right? So What’s that going to look like?
And I think there’s, there’s some strategic stuff going on in companies around the message guys for that reason. Is it webs-free? Is it, is it the next generation? Is it how the next generation is going to interact online rather than looking through flat‑screen websites? It’s a much more immersive experience. And then you’ve got the more tactical part of it, which is NFTs, Which is, it seems that it’s not tactically in the sense that it is part of that metaverse and it’s probably part of the currency conversation about which currencies are going to be used in there, but you see retailers testing it with selling things for an NFT’s selling virtual items, as well as physical items, buildings, stores in the
metaverse and allowing people to go and experience their products in a virtual way. And also I think, you know, we, we are, we pride ourselves at IAG Loyalty on being low pioneers. And if you’re a loyalty pioneer right now, I think you’ve got to be looking at pioneering things. And this is something that everyone’s grappling with and trying to find where their hook is and how they need to be involved. And I think for us, it’s a really exciting place to be too. So where we’re having a look at, you know, how does, how does, how does the retail experience with a currency or with a loyalty cards fit within the metaverse? And there’s lots of potential in there. We’ll see once the technology advances and there’s more tech providers in there, but I think, you know, Ethereum’s at the center of it and crypto’s at the center of it at the moment. There’s some interesting things going on with, you know, what I’ve described as pure digital currencies, essentially in that space. So something that we’re really interested in, I’m particularly interested in just because it’s fun as well.

It’s fun to explore these new things and see what they have held for us.

And I do remember talking to somebody outside of the industry who was just a bit of a Bitcoin expert about five years ago has gone. And, you know, and again, exactly, to your point, I thought, why don’t I buy one just for fun? And, you know, and in all sincerity, I thought that I could afford one.

Even back then. It was, it was I think, 6,000 us dollars. And I don’t know where it is today. I mean, I’ve seen it go crazy.

Yeah. I think you’d have been up on your $6,000 today, although it’s taking a bit of a pounding the last few weeks, but I think it’s somewhat somewhere around 20,000 pounds today, somewhere around 25, 20 5,000 pounds today. So what’s up 33, 30 $5,000 somewhere around there.

Oh my God. Lesson learned. She says, yeah, who knows good this yet? No equally it’s um, as you said, it’s, it’s one to take, you know, alongside all of the
things that we know work in the current world. And I liked your analogy, actually, Scott, you know, living in a gaming universe, you know, as a, you know, maybe a teenager, for example, and using that as your default way of, of socializing and that leap into the, the metaverse actually, it does make a lot more sense when you think about it that way. So, so thank you for that perspective. I was reading something recently, which basically said, if you’re in business, you should be, you know, kind of partnering with, you know, a mutually respectful relationship with like a 20 something, for example. And I think that’s exactly the kind of mindset that you guys have to kind of go, let’s look at what these behaviors are that are not native to us, but certainly for people who’ve grown up as digital natives, it’s inevitable that they’ll spot
the opportunities sooner than we will.

Yeah, absolutely. I think it’s, I think it’s important part of any team, right? You need, you need to really, really good mixture of experience and those that are
coming through with really good new ideas. So we’re living in a slightly different way to you are because they’re younger and they’re seeing things in different ways and experiencing the world in different ways. And I think holding that, holding that diverse range of skills and capabilities together, the inclusion so important to us, right. Because we have, we can, we can gain so much more from having all of those different types of ideas and backgrounds and cultures in the pot when we’re making decisions.

Exactly. No good point. So with all of those said, are there any other, I suppose, open coming ideas that you guys are working on, an IAG that you can share or is it all still under wraps at the moment?

It’s pretty much on the wraps at the moment, but all I say is there’s much more to come where we’re very much in growth mode. We’re very much looking at the currency growing globally and in our home markets as well. It’s an exciting year for us. And so we’re really looking forward to what the future holds.

Great. So I’m going to put a note in my diary to check back in and do another, uh, another conversation maybe next year Scottie and see where everything’s got to.

Fantastic. I look forward to it.

Great stuff. Okay. With that said Stephen Scott, Chief Product Officer at IAG Loyalty. Thank you so much. Let’s Talk Loyalty.

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