laptop shopping basket
691 days ago
 

What can travel companies learn from other online retailers? [hint: at least four things]

NB: This is a guest article by Kieron Branagan, CEO of OpenJaw Technologies.

Order a book on Amazon that you already own. What happens? Amazon reminds you politely that the book is in your possession and asks if really want to buy it again.

As you tut and berate your bad memory, the online retailing giant has just lost out on a sale.

Yet, using stored data about you and your purchasing habits, the store has acquired something much more valuable in the long term – your trust.

In the face of some of the serious sales challenges presented in the 21st century, we believe that the travel industry needs to emulate this regard for customer relationships.

Using this insight, industry companies should inspired by online retailers like Amazon to develop a new concept, t-Retailing.

t-Retailing is a blueprint for effective travel retailing, focussing on each customer’s complete travel needs — not least the need to trust their retailer –resulting in a greater share of their travel spend.

What is the first step to becoming a successful t-Retailer? Well, as a travel supplier, you should deem it unacceptable to offer your product with tacked-on ancillary offerings provided by white-label services.

If not, you risk your customer wandering off into cyberspace and never coming back. By using a white label provider for your ancillary selling, you are missing an important opportunity to gain the insight to address your customers individually.

Instead you need to own the relationships with your customers to mutually reap the benefits.

Key to this is to provide a complete, compelling and seamless online shopping experience via your website and other devices, such as mobile phones and tablets. Follow that up by adopting expert retailing strategies and successful outcomes will not be far away.

t-Retailing consists of the following four principles: inspiration, personalisation, differentiation and conversion.

1. Inspiration

Inspiration is all about increasing market awareness of your brand and product. To drive traffic to your site, foster a desire to travel, and stimulate shopping, you must create, curate and present compelling content.

To achieve this, you can use powerful tools such as dynamic calendar-based displays of product pricing and availability, plus location-based search and browsing capabilities.

This area is set to grow in importance. PhoCusWright research has shown that roughly half of discretionary travellers in developed markets do not have a set destination in mind when planning trips.

In fact, travellers show more interest in searching by budget, price and interest/activities than using the standard city pair/travel date search box.

Techniques like employing intelligent and searchable promotions can make a significant impact to inspiration by increasing the discoverability of relevant offers.

In the past, travel companies have been hindered by difficulties in featuring real-time pricing and availability in effective promotions. Now that these issues have been overcome, travel companies can make use of this powerful retailing technique.

Social networks and online communities provide significant opportunity for inspiring customers. Travel retailers must go where their customers are – for many Facebook, Twitter and Google+ are important channels.

Authentic recommendations made by friends and trusted people can impact whether a person selects your product or service, so travel retailers must embrace this channel by making it easy for people to hear and share reliable opinion.

2. Personalisation

The closer you get to communicating with a customer on an individual level, the more likely it is that person will make a purchase.

Understanding an individual buyer’s behaviour and having insight into what and why that person buys helps convert lookers into bookers.

Travel companies are sitting on mountains of valuable customer data, such as saved preferences, past buying history and Loyalty Program membership.

This can be used to deliver improved personalised services. With appropriate analytical tools, this information can help predict current and future buyer behaviour.

Technology should also be context-aware and able to modify what is offered to an individual depending on how that individual is currently behaving online.

Everyone is a multi-faceted individual with myriad needs: for example, a regular business traveller can also be an avid skier and a parent with a young family. Customers exercise these different personas while shopping, as any long history of past interactions will show.

Understanding this better will help us make more relevant offers which will increase conversion rates and boost customer satisfaction.

3. Differentiation

What separates your offering from that of your competitors? This is a question all travel retailers should ask themselves regularly. To create and leverage your USPs (unique selling points), it is useful to consider:

  • Offering a unique combination of supply from a collection of different suppliers.
  • Sorting and biasing products (hotels, packages, tours) in a way that benefits your customers. Do not rely on the biasing algorithms of suppliers that have been written for their own business benefit or a different market segment.
  • Exclusively contracting selected products, such as hotel properties. You should aim to provide some content which is unique or best value in the market.
  • Real-time control of price, promotions and margins. This will enable you to pursue effective inventory management strategies, such as selling your premium inventory last at the highest price, in order to improve margins and increase profits.

4. Conversion

Conversion refers to retailing strategies that increase booking volumes, as well as the value of each booking. Strategies include post-booking cross-sell, compelling cross-sell, up-sell, switch-sell and dynamic packaging.

We can learn much from our friends in the cruise industry, who have long been masters of the post-booking cross-sell.

They know well that there are many more customer touchpoints than simply the one where the customer made the booking.

Even after a person has already booked, there are still three or four possible customer touchpoints prior to travel, presenting opportunities for further compelling cross-sell.

For example, a customer who has booked a trip to Paris for the weekend is going to appreciate finding out about Seine river trips, just as much as an Amazon customer who bought a Dan Brown book will appreciate Amazon letting them know about the availability of his latest blockbuster.

Conclusion

To be a successful t-Retailer, it is crucial to keep in touch with the customer across their entire travel journey and maintain control of the booking path.

This way, you will maximise the commercial benefits from selling travel products online and satisfy your customers 21st Century needs.

t-Retailing provides a blueprint for thinking like a retailer and putting you on the road to travel retailing success.

NB: This is a guest article by Kieron Branagan, CEO of OpenJaw Technologies.

NB2: Laptop shopping basket image via Shutterstock.

 
 
Special Nodes

About the Writer :: Special Nodes

Special Nodes is the byline under which Tnooz publishes articles by guest authors from around the industry.

 

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  1. Alice Neves

    I agree with many of the points raised here. In general my impression is online travel retailers are often faced with a lot of challenges at the same time which are more basic than that – getting suppliers and a high quality inventory to sell, working out multi-currency payments, positioning their site in an increasingly competitive online travel market, creating unique content and travel packages that sell… In my opinion, it is a huge mission to have to focus on serving travelers well and acquiring suppliers in a highly fragmented and global industry at the same time. That is one of the reasons why many retailers choose to go for a white label solution, which means basically “outsourcing” supply sourcing, while they try to focus more on improving pre-conversion functionality and design. A growing trend is to use other ways of sourcing suppliers and inventory, such as an API connection. It requires more work on the retailer’s side for integration but it is well worth the effort, as it allows them to control the user experience and data to further analysis, cross-selling etc.

    I also agree that there are many opportunities for cross-selling in the travel industry so long as the retailer sells different classes of travel products – from flights to accommodation, from accommodation to tours and activities in the destination, from packages to insurance and extra services, etc. As more local inventory comes to the online market (such as tours and activities), this should be increasingly valuable, for sales channels and travelers.

     
  2. John McAuliffe

    I strongly agree that travel companies have much to learn from other online retailers even beyond the four principles outlined here. When shopping for a hotel, consumers are looking to understand the experience – from the atmosphere, to the amenities, to the feeling of being there. This hotel’s “story” is best conveyed visually. As the article suggests, hotels need to provide complete, compelling and seamless online shopping experiences via their website and mobile phones and tablets. I would like to add that these experiences need to be informative and visually-driven to capture the consumer’s attention during their shopping journey. This is a message we have been pushing for quite some time so I am glad to see the idea is being defined (t-retailing) and gaining more traction in the industry.

     
  3. Jeremy Head

    Interesting piece – I agree with lots of it. I’m always wary though of wheeling out the Amazon model as a comparison. Selling tangible objects like books, CDs etc is way way easier than complex bundles of product which is often the case in travel. No harm in taking learnings from Amazon but there as many differences as there are similarities. Amazon does a brilliant job of suggesting other books I might like based on my purchasing behaviour and as books are cheap I might well purchase them on a whim. Once you’ve bought that summer vacation you’re unlikely to buy another in a hurry. etc

     
  4. Gezifesto

    Fine work, thanks.

    One thing i may add for the “differentiation” part is;
    the personalization of the individual customer service,
    a customised unique experience (like amazon’s)

     
  5. David Thomson

    This is an interesting article. We did a presentation in May of 2011 at EyeForTravel about this exact issue.

    Our presentation is here: http://www.slideshare.net/MomentumDesignLab/add-to-trip-eyefortravel-presentation.

    If you look at slides 8-18 you’ll see how this type of behavior can be implemented into travel brand’s sites. The rest speaks to most of the other points.

    This is the core reason why we wrote our affinity recommendations engine that graphs your users and bookable objects to give recommendations based on either likes, past purchases, purchase intent, and/or browsing behaviors.

     
  6. Robert Gilmour

    A very important aspect of this is to undxerstand fully the differences between eg hotel sales and (other forms of) retail sales, especially on line.

    Many on line articles don’t differentiate properly, so make sure you don’t just take for granted what you read without ensuring first that it relates to your market segment. The same is true for social media, there are ‘engagement’ differences between hotels and other retail too.

    If only we could sell hotel rooms on a shopping cart! In fact some shopping cart style tolls and techniques might not go amiss for hotels, and would be potentially great for upsell.

     
    • Mark Lenahan

      There are a number of technology companies and hotel suppliers that support shopping cart sales of hotels, as well as dynamic packaging – placing hotels in a package based on real time availability and price.

      Hotels are a great cross sell oppertunity for an airline!

      Some of the things hotel suppliers / aggregators should support to enable the retailer to place hotel in shopping cart include:-
      * Products suited to the retailers market (whether it is demographic or geographic)
      * Good quality content (especially images and text)
      * Address and geo-location information for each property
      * An API (preferably based on OpenTravel XML standards) to check current availability and rates, and accept bookings -or- a mechanism to push these (preferably HTNG XML standards)
      * net / merchant rates for those retailers who want to be merchant for the hotel booking and offer a single checkout or packages with an easy reconciliation / settlement mechanism (e.g. monthly rather than individual invoicing)

      On this last point – the definition of “shopping cart” might vary depending on who you ask. In my view it isn’t a shopping cart if it can’t be checked out in the same shop. White label solutions are good intermediate for airlines or travel companies that want to focus on retailering one product and gain easy advertising revenue, but a true travel retailer will eventually try and own the complete booking experience right to payment.

       
  7. Jason King

    Actually Amazon says they do that but don’t I have several duplicate books in my library to prove this :-)
    Now I keep a list in my car and home with all the books I have read (Hundreds) in the last 2 years.

     
    • Kieron Branagan

      I just checked and you are right – Amazon not playing as nice as they used to. I am sure I saw this before but they appear to no longer warn me about repeating a purchase I made in 2009. They do stop you from buying Kindle books you bought before.

       
  8. Chicke Fitzgerald

    The “pack” focuses on business (25%) and vacation (8%). want to differentiate? How about the other 67%. Now that would be differentiation.

     
    • Kieron Branagan

      I agree (though 8% seems low for vacation – maybe there’s a broader definition of “leisure travel”?). Given purpose of travel passengers and guests have different needs on different trips. For example VFR (visiting friends and relatives) and student travelers are traditionally not looking for a hotel. One approach is to specialize – targeted marketing, sub-brands, special promotions – however a retailer still needs to broaden supply – and types of supply – to address as many market segments as possible. You also have to manage products – most suppliers just provide long lists of locations – leaving it up to travel retailers to know their customers and identify the right products: spa, adventure, romantic, family, gambling, city, commercial, back packer, sporting, gourmet, etc.

       
  9. Chicke Fitzgerald

    We can’t accomplish true personalization with single dimensional profiles that continue to focus on your preferences designed for business travelers traveling alone. 85% of all overnight trips are by car and preferences get complicated when you are with others, in different roles, traveling for different reasons.

     
    • Kieron Branagan

      Chicke – I agree, a single dimensional profile is not enough. This is quite an involved topic in it’s own right, so the words “how that individual is currently behaving” don’t really do it justice. We have traditionally called this “trip profiling”, though the concept of “persona” aims to address the same problem. The idea is to offer product depending on the consumer’s current behavior – using passenger mix, dates, destination, etc. in the shopping cart it is not difficult to distinguish the different types of trip: business, weekend with partner, family vacation, etc.

       
 
 

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