Tim Gunstone, EyeforTravels managing director, has been talking to top travel players and key innovators across the world about the next steps for a highly competitive, low margin industry. The customer experience, he finds, is at the heart of everything and getting it right will be the most lucrative thing you ever do.
For years the travel industry has talked about the customer experience. But often the customer seems to believe that our main aim is to deliver a ‘grab as much cash as we can experience’. Of course we are all in this business to make money but that should not be at the expense of the customer experience. Finally it seems that getting this balance right is possible; we can boost the bottom line by offering relevant, well-timed and perfectly delivered products and services that inspire and delight the customer.
To put all this in perspective, the travel industry became the biggest e-commerce vertical because it was driven by the desire to reduce costs. The innovators in the field then worked out that they could sell a lot of other travel ‘products’ at the moment of booking.
However, in the bid to cut costs and sell more, the industry forgot about the customer metamorphosis that happens between the booking process and the moment the customer is actually embarking on their journey. Let’s call this the ‘grumpy-buyer-versus-over-excited-holiday maker’ effect.
When I book a holiday I tend to feel concerned about what I am forking out; I do no want to spend a penny more than I have to. However, as the trip begins, and the excitement mounts, my wallet is far easier to access. Offer me a car in the booking phase and I will always pick the cheapest. At the car pick-up point, however, I often spend a bit – even a lot – more.
Those able to recognise this relatively common theme in customer behaviour, and apply it to recent trends will, I believe, be ready to battle it out in the next evolution in online travel.
In July 2012, EyeforTravel commissioned a Travel Consumer report based on interviews and surveys with over 8,000 people from five different countries. This allowed us to identify several key trends in how consumer behaviour is changing and how that impacts our industry. Among these were:
1. Everyone is going mobile
The way people access the web is changing very fast. Google says well over half their searches now come from a mobile device. Facebook users too are increasingly accessing the social network via mobile device, though this hasn’t been entirely good news. Its share price is not performing well because the existing advertising system does not display on a mobile device so they are not making enough money.
When it comes to mobile, it is also important to note that these devices are no longer just about looking; EyeforTravel’s consumer report reveals that in the US mobile devices (phones and tablets) account for over 20% of travel bookings. Although some would argue tablets are not truly mobile, at a recent EyeforTravel show one hotelier reported a 173% growth in tablet bookings. That is a figure that cannot be ignored.
Why is this so relevant? Because there are opportunities to inspire your customers to buy, not just at point-of sale but throughout all stages of the customer experience.
2. People are actively sharing their travel ideas and interests on social media
Not are they actively sharing their ideas, they are also influenced by those of others: 57% of Dutch respondents, for example, said they were influenced by positive user-generated content, according to EyeforTravel’s consumer report. Social media can certainly help our customers to share critical facts about themselves, which is very powerful tool for marketers. These can be used not only to sell more but also to communicate via a responsive medium. A large number of travel companies are working with the likes of Facebook, Twitter, Orkut, Baidu and Renren to sell travel but harnessing consumer intelligence from the social media interaction will be key.
3. Big data equals big brains
Travel is a low margin industry with multiple players so getting to grips with the true potential of big data has been a long-time coming. Travel’s complex products and convoluted supply chain makes it far more difficult to apply big data practices. For instance we still have not really cracked the ‘if you like this then you should try this’ recommender tool in the way that Amazon has. Fundamentally it costs money and a lot of expertise. But it’s working. Priceline and Expedia are two online travel agents that really seem to grasping this and their stock values are performing well above the rest of the industry (though the performance of many is pretty well hidden!). These are the issues we’ll be getting to grips with at ourSmart Travel Analytics show in New York this coming January. Here we’ll get to see how the industry is coping with influx of so much data and what the leaders – like Priceline and Expedia - are doing with it.
4. New sources of inventory as well as new products and services are key
What we have established in the course of our latest research is that industry-savvy experts are right now developing inspirational, easily bookable online products. These are travel products that the consumer has always been willing to buy. Think tours and activities, restaurants (with a menu), spas, bars and taxis. Over the last six months I have seen more and more of this type of ‘travel inventory’ being sourced with the view to putting it in a marketable, bookable format. Last-minute real-time inventory is proving hard to come by as the suppliers prefer to sell direct when they can.
However, after talking to the real innovators in our industry at our recent Travel Distribution Summit in Las Vegas and in the course of research for upcoming mobile and social events in Hong Kong, and San Francisco there seems to be a real desire to improve the consumer experience.
Forget weekly irrelevant emailed newsletters. You need to know how to send the right offer, over the right device to the right person and at the right time. Easy to type…very hard to do!
So what exactly happens when you analyse your consumer’s behaviour by looking at data from multiple points to build a real picture of what they want? And what happens you so relevant with that travellers open everything you send because it is an offer they want to receive on the device they want to receive it on? I am not sure anyone knows the score yet, though there is plenty of innovation going on. We may not be there yet, but for those that crack it, it is going to be lucrative!
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