NDC and the Donut Dilemma: A Sweet Analogy

Imagine you're the proud creator of a line of delectable donuts. For years, your goal has been simple: sell as many donuts as possible to as many people as possible. Naturally, you’ve partnered with big outlets like Walmart to ensure your donuts are available everywhere. These stores handle the logistics, and their wide reach ensures your donuts are front and center in communities nationwide. Sure, Walmart takes a cut of the profits, but the volume makes it worth it—millions of donuts sold, happy customers munching away.

Now, imagine that your creative spirit kicks in. Plain glazed donuts are great, but what if you added sprinkles? Or a chocolate glaze? Maybe a special, limited-edition blueberry crumble topping? You realize Walmart's shelves, with their rigid product displays and uniformity, might not be the best place to showcase your innovation. Customizing these donuts for every customer would be a logistical nightmare when done through someone else’s system. Walmart’s rules don’t exactly leave room for your creative flair.

So, you decide to pull your donuts out of Walmart and set up your own corner bakery. Here, you can experiment freely: add a dollop of whipped cream, sprinkle on edible glitter, or create personalized donuts with customers’ names on them. It’s perfect—for you, anyway. But here’s the catch: your bakery is tucked away on a backstreet. It’s not easy to find, and customers need to go out of their way to get there. Your die-hard donut fans might make the effort, but the average Walmart shopper? They’re likely to skip the trip, especially if they’re just craving a quick donut fix.

This, in a nutshell, is the airlines’ New Distribution Capability (NDC) strategy. For years, airlines sold tickets through global distribution systems (GDS)—the "Walmarts" of the travel industry. These systems made airline tickets widely accessible to travel agencies and consumers. But the one-size-fits-all approach limited airlines’ ability to differentiate their products. They couldn’t easily showcase their "sprinkles"—bundled offers, personalized deals, or ancillary services like extra baggage, seat upgrades, or in-flight Wi-Fi.

With NDC, airlines are building their own "corner bakeries"—proprietary platforms that give them full control over how their products are sold. They can now create unique offerings and personalized experiences, tailoring their "donuts" to customer preferences. It’s an innovative approach, no doubt. But by stepping away from the GDS "Walmart" model, airlines risk losing the sheer visibility and convenience that drove their earlier success.

The key challenge lies in finding the sweet spot. Airlines must ensure their fancy corner bakeries don’t alienate the masses who just want a quick, accessible donut. Perhaps the answer lies in a hybrid model: keep the plain glazed donuts on Walmart shelves to maintain visibility, while using the corner bakery to showcase the sprinkles, chocolate glaze, and custom options. This way, airlines can innovate without sacrificing reach.

So, whether you’re selling donuts or airline tickets, the lesson is clear: it’s not just about creating the best product; it’s about making sure it’s easy to buy. After all, what good is the tastiest donut if no one can find it?