THE
MODERN
RETAILING
ERA
EXPLORING DIFFERENTIATION
Travel was the original digital trailblazer.
But changing consumer expectations — accelerated by the pandemic — have created a new opportunity. It’s time for the travel industry to make the most of what technology today can do.
But where do we start?
To help agencies excel at modern retailing, we undertook research among almost 3,000 respondents around the world, in the US, Saudi Arabia, and Japan.
Here’s what we learned.
1.
CONSUMERS REMEMBER RETAILERS WHO OFFER GREAT EXPERIENCES
Effective retailing starts with brand recall. When customers feel good about you, they remember you. And that makes them more likely to come back for more. In the competitive landscape of online travel retailing, this delivers organic bookings and dramatically reduces the cost of securing repeat business. Plus, brand recall dissuades consumers from relying on metasearch, and gives online travel agencies (OTAs) a huge opportunity to shine.
Our research highlighted a meaningful correlation between brand recall and a superior customer experience. In other words, happy shoppers remember the retailer.
So, what makes for an excellent shopping experience?
2.
GREAT RETAILERS FOCUS ON VALUE OVER PRICE
OTAs are some of travel’s most modern retailers. They changed the face of travel, enabling billions of people to book their dream holiday without getting out of bed — or to find inspiration for their next trip without visiting dozens of different sites. And OTAs have been very successful, despite the rise of low-cost carriers and metasearch engines that commoditized the cheapest offers.
But differentiating on price alone can come at the expense of other things that customers care about (like not waking up at 3am for a flight, or making sure they scored a room with a view). Instead, agencies have an opportunity to provide value as the curator of numerous, complex offers — offering travelers not all of the choices, but the right choices.
We asked those respondents who could recall their OTA another follow up question: beyond price competition, why do they shop there again?
WHY DO YOU PREFER YOUR OTA?
Getting the right offer to the right customer at the right time is key to offering a valuable retailing experience. Respondents said that “choice” is the leading reason they return to their preferred OTA, followed closely by “ease of comparison” and “having their needs met.”
3.
GREAT RETAILERS SUCCEED BY BUILDING A STRONG BRAND
OTAs invest serious time and money in digital marketing. And the ones who focus on building a brand — as well as demand-generation campaigns — are really seeing the benefits.
Our research revealed agencies can grow loyalty by thinking beyond price and offering consumers the following things, listed in order of importance:
Guidance and offer-curation
Clarity and transparency about what's included in the price
Simple, easy-to-understand information and the right level of choice
Our research revealed agencies can grow loyalty by thinking beyond price and offering consumers the following things, listed in order of importance:
-
Guidance and
offer-curation - Clarity and transparency about what's included in the price
- Simple, easy-to-understand information and the right level of choice
4.
VALUE AND BRAND AFFINITY DRIVES REVENUE
Our research highlighted strong follow-through on OTA bookings when brand recall exists. This again shows that brand building and value substantially impacts revenue and has the potential to reduce customer acquisition costs.
RECALL THE OTA THEY USE
RECALL THE OTA THEY USE
5.
BRAND RECALL IS JUST AS IMPORTANT IN BUSINESS TRAVEL.
Our research showed that brand connection is just as important with business travelers as it is with leisure travelers. But although the trip itself is something travelers want a lot of control over, very few business travelers have a consumer-like relationship with their travel management company (TMC). Plus, our research found that a significant amount of corporate travelers are booking outside their company travel policy to ensure their needs are being met.
So, let’s get inside the mind of a business traveler for a moment. When it comes to planning a work trip, business traveler expectations are exceedingly high. This is because employers are asking their people to travel, taking time away from their personal lives. Plus, they’re paying for it. So business travelers expect a comfortable ride with great perks. Our research unlocked a better understanding of business travelers’ priorities in order of importance:
More choice
Comfort
Options that support their health and well-being
Options that enable them to rest and recover
So, let’s get inside the mind of a business traveler for a moment. When it comes to planning a work trip, business traveler expectations are exceedingly high. This is because employers are asking their people to travel, taking time away from their personal lives. Plus, they’re paying for it. So business travelers expect a comfortable ride with great perks. Our research unlocked a better understanding of business travelers’ priorities in order of importance:
- More choice
- Comfort
- Options that support their health and well-being
- Options that enable them to rest and recover
Booking outside a corporate travel policy causes issues for companies around expense management, duty of care, and supplier negotiations. But it doesn’t have to be this way. Business travel can become part of the joy of the job — and even a reason to stay.
TRAVEL AGENCIES CAN BE THE BEST MODERN RETAILERS
Modern retailing is easy to recognize. It’s quick and easy. It’s personal. It’s available any time. And it includes quality service. So instead of competing on price, competing on value is the key to real differentiation — and it’s the first step toward modern retailing. Travel agencies can be true retailers, because they can offer customers the convenience, choice, and service they desire.
AND HERE’S HOW THEY CAN DO IT
Travel was the first industry to go digital, and it’s still hugely innovative. But consumer expectations have been shaped by the digital transformation of other industries. Travel agencies can modernize the shopping experience in these five key areas.
Brand values and trust
Differentiation makes all the difference. To achieve it, travel retailers should be concentrating on adding value, not optimizing for price. Without that differentiation, trust erodes. And without trust there’s no transaction — or at least, no meaningful transaction. When buyers really understand your value, they won’t struggle to remember you, and that’s how you get loyal customers and cut acquisition costs. And it’s how we can change the perception that all travel retailers are “the same.”
Customer Experience and Service
Truly modern retailers prioritize the customer’s needs, behaviors, and wants over selling. The customer is at the heart of the entire experience. Travel has an opportunity to match the online and offline experiences that companies like Amazon offer, with easy-to-use self-service tools and round-the-clock support. Travel also must enable customer information to seamlessly flow from web, to app, to call center. And, we have to offer multiple (and effective) channels for support, not just chatbots for timesaving.
Content and Product
Modern retailing is about giving customers choices and helping them make decisions. Only agencies can do this really well, because only they can assess customers’ needs and help them find the right product. This prevents buyers’ remorse and disappointment by communicating what’s included. But to sell a complete trip, agencies need a continuously growing range of content, and the technology and data to curate and personalize it.
Merchandizing
Consumers expect brands to know them inside out. Modern retailers excel by merchandizing in the customer’s interests, and travel has an opportunity to improve in this area. We must make it easier for consumers to find the right products, provide clarity on the offer, and help the consumer refine their requirements. We also have work to do around personalization. This makes cross-selling and up-selling easier and keeps customers coming back for more.
Data and Technology
Data and technology are the big enablers for modern retailing. While travel is complex, it shouldn’t feel that way for the customer. They want to deal with a single point of sale, but to deliver on this retailers need to ensure all components of a trip are fully integrated into one customer experience. That also requires faster and simpler mobile and web interfaces, plus more data and analytics to serve customers in a fast, reliable, and scalable way.
We’ll be following these insights up with more on modern retailing in the coming months. And you can find out what we’re doing to move travel retailing forward on our next-gen platform, Travelport+.
