How Eurail broke the mold to escape the same fate as Blockbuster
How Eurail Broke the mold
Eurail Pass, the world's leading Rail Pass for 64 years, has continued to evolve for over six decades to become the most flexible way to travel by train in Europe.
In 1959, visionaries from 13 European railways dreamed up a one-off paper ticket called ‘Eurailpass’ to temporarily fill empty first-class seats during the summer holidays. By joining forces to make this free-to-roam ticket, the railways fortuitously created an irresistible offer for the American market. One that initially provided unlimited train travel in 13 Western European countries for as little as $125.
Over 5000 early adopters from America flocked to Europe for a touch of luxury on the rails. By a stroke of luck, the initial prototype was so successful that the railways extended the offer indefinitely. And the highly innovative product was soon hailed as "The Master Key to Europe".
Vintage poster from 1962
The immediate success of the Eurail Pass was primarily due to the appeal and romance of train travel, and this one-off ticket became a household name in the United States. Therefore, what was intended as a first-class seasonal product for American adults is now available for all ages, seasons, classes, budgets, and the non-European market.
1972 marked another notable milestone when the member railways expanded their offer to the European market by creating a second-class product called Interrail for European youths (made available for all ages and classes in 1998).
To ensure the longevity of both products, the railways formed the Eurail Group in 2001 to take over the management of both brands. In 2006, Eurail and Interrail joined the worldwide boom of e-commerce. Making it possible for customers to buy a Pass via the respective online sales channels, which extended the brand’s reach to millions across the globe.
And since 2013, Eurail, the forward-thinking company behind the Eurail Pass, has been evolving and developing technology. Such as the Rail Planner app, to ensure that that product has a future in a world of change. In the early stages, the app was a basic offline timetable updated once a month.
It took a lot of innovation, MVPs, and masterminds to transform the humble offline app into a fully functional mobile Pass and timetable. However, due to constant collaboration, adopting the agile way of working, and willingness to invest in software engineers to develop the much-needed technology, the fully digitalized mobile Pass was launched in 2020. In less than two years, the customer demand for the mobile Pass has risen to over 80% of the overall Pass sales.
What did Eurail learn from Blockbuster?
Due to the introduction of e-ticketing in the aviation sector in the mid- ‘90s (mandatory for IATA members since 2008), Eurail’s leadership team knew that it was only a matter of time before the paper Pass would become redundant. Luckily, Eurail started to prepare for the future demand around the time Blockbuster crumbled. It realized the old-school paper Pass had some flaws and risked a similar fate if it didn’t prepare for the e-ticketing revolution.
Customer demand changes
Blockbuster’s mistake: Renting a movie from Blockbuster used to be a weekly ritual for families across America. However, Netflix started to dominate the market by making it possible to watch movies on demand at the click of a button.
Eurail paper Pass: There was a time when you had to travel with a pen, Pass Guide, railway map, and heavy Thomas Cook timetable. The paper Pass remains functional but needs to be stamped by a railway official in Europe to be valid (and you still need to record each journey with a pen).
What’s new with the mobile Pass: Everything’s in one app from the Pass Guide, rail network guides, and European timetable. Plus, the mobile Pass can be activated for travel anywhere and anytime within 11 months of purchase.
A business model needs to evolve to reflect new trends
Blockbuster’s mistake: Blockbuster should have revised its business model: you had to collect and return videos/DVDs within 24 hours. Conversely, Netflix dreamed up a hassle-free business model by offering its customers an abundance of extra value.
Eurail Paper Pass: You need to wait for the paper Pass to arrive by post, and countless American Pass holders lose travel days if they enter the month before the day on the Travel Calendar (Eurail uses the European date format).
What’s new with the mobile Pass: After purchase, the Eurail mobile Pass can be added instantly to your mobile phone with the Rail Planner app—swiftly offering travelers 33 countries at their fingertips and the option to easily plan their dream routes and record journeys in My Trip.
You can’t afford to resist change
Blockbuster had a chance to survive by competing with Netflix’s business model; however, it resisted progress and failed to restructure its operations. Conversely, Eurail embraced change by merging Eurail Group and Eurail.com in 2019.
Eurail paper Pass: Customers complained it could be deemed invalid if they forgot to record each journey in the Journey Details section of the Pass Cover or made a mistake recording travel days in the Travel Calendar.
What’s new with the mobile Pass: Eurail listened and made the mobile Pass easy to use: you can change your travel plans on the go by canceling a travel day in the app before the start of that day (00:00 CET).
You need to pivot to stay in business
Blockbuster needed to invest in technology to improve the customer experience. Netflix took a more customer-focused approach and made the offer and customer experience as attractive and easy to use as possible.
Eurail paper Pass: Some old-school Passes could not be processed for the essential revenue-sharing process as they got lost, damaged, or torn from excessive use (with no recourse for the customer).
What’s new with the mobile Pass: Customers can continue traveling by moving their Pass to another device if it gets lost, damaged, or broken.
Money matters
Blockbuster depended on late fees to boost its declining revenue stream when customer behavior changed. Conversely, Netflix created a subscription-based membership program with unlimited content to keep its members hooked.
Eurail Paper Pass: It was optional for customers to return their Pass Cover, and until 2020, Eurail manually processed around 4000 travel reports per week to calculate the kilometers (distance traveled) from the individual journeys needed for the essential revenue-sharing process (14% of customers returned their Pass in 2019).
What’s new with the mobile Pass: It’s now mandatory for customers to add each journey in My Trip to get a valid e-ticket for each travel day, which means Eurail gets 100% of the valuable data recorded in the Rail Planner app to calculate the coefficients with more accuracy.
The only way forward is mobile: Due to a responsive mindset and constant collaboration, Eurail continues to improve the customer experience by listening to its customers. Both brands are aligned, and the Global Pass is valid in 33 countries (not bad considering the original offer). Due to Eurail’s willingness to restructure, work agile, and prepare for the future of rail travel, Eurail is confident it will escape the same fate as Blockbuster and Thomas Cook.
Disclaimer: I wrote this editorial on behalf of Eurail for Travelmole. Unfortunately, the content was too specific to be published on this American travel industry portal. Therefore, I would prefer to post my work here than lose it on the cutting room floor (I had too much fun writing and researching this piece to waste it).