Mobile arrives 25 years of online rail retail

Throughout the existence of online rail retailing so far, two themes kept climbing to the top of the “next big thing” list, only to never quite take-off.

One was cracking the commuter market, and the other was mobile. In at least one of the retailers it became the annual business plan joke, “so what is this year’s plan for cracking mobile?”

To put this in context, it is worth a quick recap of how the 2000’s had played out for mobile.

The decade started with WAP, following the launch of the Nokia 7110 in late 1999. This offered the ability to view very simple, predominantly textual websites on mobile phones. Mobile phones at the time were, generally, just phones with a monochrome LCD screen and a numeric keyboard. WAP generally had low take-up, but one of the few services to get traction was Railtrack’s timetable site, and later National Rail Enquiries real-time information site. Against this rather primitive capability, the decade also started with the hype of the UK’s “3G spectrum auctions” – where prospective mobile operators bid £22.5bn for the right to operate the next generation of mobile phone networks. These bids were built substantially upon the vision that mobile phones would become interactive digital devices, not just phones. As the decade progressed, the capability of phones slowly improved, but lagged somewhat the promises of the 3G licence bids. By the middle of the decade corporate users were awash with Blackberry phones, which although internet connected, primarily focused on email rather than commerce (and often had web browsing disabled by security conscious corporates). Consumers were adopting so called “featurephones” which allowed limited web-browsing, but typically still via a numeric keyboard making it difficult for many tasks. 2007 would mark the start of a change though, with the launch of the iPhone. Initially mocked for its size, cost and short battery life it took a while for the potential to be accepted.

Mobile foundations

Both GNER and trainline had launched basic mobile websites in 2007, which did allow customers to buy tickets. Both were a painful process to navigate, and at the end of it, you still had to collect the tickets from the station. A key problem was that device capability varied. The mobile website was designed to the lowest common denominator of devices in the market, and was like a trip back to the early 1990s internet. Volumes were low, and seemingly neither business saw the case to promote it.

trainline was, however, convinced that mobile would at some point play a key role. More mobile projects rumbled on – particularly looking at the capability of delivering tickets directly to mobile phones. This leveraged “digital rights management” concepts designed for selling ring tones and MP3s. These allowed content to be delivered to a specific phone, and locked to that device (hence preventing people from sharing their tickets). Like many things at the time, each handset implemented the technology slightly differently, and it was difficult to get a robust and scalable proposition. Nonetheless, it was possible to demo some pretty slick concepts, even if there wasn’t yet the customer demand nor ability to scale.

iPhone takes hold

2009 was a key turning point. The iPhone had been available in the UK for over a year, and the utility value of apps on the large touch screens was starting to dawn on people. In March 2009 Agant Limited launched an app showing live departure boards. It cost £3.99 to download, but nonetheless was an instant must-have app for all rail commuter iPhone owners.

Later in 2009 trainline launched its first iPhone app. At the time it did not have access to live running information, so positioned itself as a complementary app to the Agant app – allowing customers to plan their regular journey and download an offline copy of the timetable to their device. Therefore, it allowed customers to check their journey even if they were out of coverage, in the tube, or otherwise offline (inclusive data at the time was still rather limited).

trainline quickly became one of the most downloaded free apps. By the end of 2010, trainline had apps for iPhone, Android, Nokia, Blackberry, and a generic Java app for most other devices.

The functionality varied by platform, but many also brought the ability to have tickets delivered to the app as a mobile ticket. A mobile ticket layout had been developed by Masabi, and adopted by RDG as a standard in late 2008 alongside the standards for “print at home” tickets. This combined an Aztec barcode, with a dynamic visual security control. This allowed the tickets to work either with barcode readers, or with human eyeballs.

Figure 15: An early version of trainline's iPhone app

Masabi

At the forefront of mobile ticketing was Masabi. At the time a small start-up tech company it had identified the challenges of ticket security and multiple device types, and offered a turn-key solution to both. Masabi became the de facto supplier of both apps for consumers to buy tickets, but also apps for train guards to check tickets. Even large established players such as trainline commissioned Masabi to build many of its apps directly, and to provide a ticketing SDK for those it built in-house or with other partners. Masabi would use this springboard in GB rail to go on to become a sizeable global supplier of urban ticketing solutions.

More mobile

In 2012 trainline replaced its basic mobile website, with a new one firmly aimed at smartphones, and replicating many of the design elements of the iPhone app. It also finally reached an agreement to access live running information, so was able to offer live departure-boards, and in due course real-time journey planning as part of its proposition, becoming a one stop shop for the rail traveller.

Other independent retailers also launched mobile apps, albeit it was a market that rewarded scale and success: big brands stuck to the top of app store rankings and handset manufacturers wanted to ship their handsets with big brand apps pre-installed. For brands like trainline, it would frequently receive pre-release handsets, with a request from the device manufacturer to ensure the app worked well on their new device – such was the power balance that global handset manufacturers could not afford to launch in the UK, and not have a working trainline app on their device.

Mobile economics

For web sales, there was very active competition through search engine optimisation and PPC to attract customers. Many customers went via Google to an online retailer on each purchase, providing an opportunity for a new retailer to catch their eye, but also a cost for PPC on each transaction. Mobile broke this model, saving money on customer acquisition, increasing retention, but making it harder for new entrants to make inroads into the market. The lower customer acquisition costs on mobile, allowed for lower bookings fees on mobile (and in some cases none).

Mobile tickets

The technical capabilities were now in place for a customer to buy a ticket and have it instantly delivered to their mobile phone, enabling them to travel straight away with no need to collect tickets from a ticket machine. The app could even advise which platform the train would leave from, and any delays to the scheduled time. Consumer appetite was starting to grow following a predictable curve. The next key piece of the jigsaw was to get train companies to accept the new-fangled tickets. This typically followed a pattern of piloting with Advance ticket types on limited routes, before scaling out to more routes, and finally the full range of ticket types. In early 2016 Virgin was the first operator to accept mobile tickets for all ticket types. When Arriva took over the Northern franchise later the same year, it immediately accepted mobile tickets for all tickets on all routes. Both long-distance and regional operators had made the leap, and mobile tickets delivered a step change in the attractiveness of online rail retail.

Figure 16: A mobile ticket

Over the period of a couple of years, mobile tickets became a widespread feature of the rail network. It would take another decade, however, until barcodes were to be universally accepted across the rail network (with only Merseyrail opting out of the digital era). The key challenge was ticket gates. The regional and long-distance networks had relatively few gated stations, and the franchise bid cycle had allowed many to include the cost of barcode enabling their gates in their business plans. The south east, however, was more problematic. The commuter centric railway, with availability of Oyster and contactless payments, did not achieve the same benefits from mobile tickets, and had an order of magnitude more gatelines that would need updating. The solution was to create a scheme whereby the barcode readers would be funded by levying a transaction fee on the retailers that used barcode fulfilment. This same principle had been applied more than a decade previously to fund the growth in self-service machines needed to support ticket-on-departure.

Previously online had been primarily about pre-planned journeys – scenarios where customers wanted to plan up-front, secure cheaper Advance fares, reserve seats, etc. Now mobile was a convenience proposition, and alternative to the station ticket machine or ticket office. It would not be long until the majority of online transactions were made on mobiles.

Figure 17: trainline's mobile app was a prominent part of its 2011 marketing, featuring 1980s pop group, Black Lace

 

Chapter 7 - Digital maturity    Contents