Archive for June, 2005

Travelers shop online to save time

Posted on June 10, 2005. Filed under: Uncategorized |

For someone who’s long advocated more of a focus by the online travel industry on value rather than price, this latest research published by PhoCusWright Survey: Travelers shop online to save time

is an indicator that customers will increasingly demand just that and expect more than only to find the cheapest price on a travel site. I assume this will especially be the case for the more involved purchasing of packaged vacations rather than shopping for single components.

This development is proof of basic marketing wisdom, which states that commodities are sold mainly, if not exclusively, on price (e.g. an airline seat, and certain chain hotel rooms) but the more aspirational the product or service the more complex it gets. Added value and branding gain in importance over pure price considerations. Other industries such as automotive face this marketing reality as well. After all, if all cars were only sold on price, we would all drive Yugos……

The challenge for online players will be how to make the online travel research and buying experience as pleasant and convenient as possible. Sites need to perform more complex tasks that require intelligence built right into them and simply pushing pre-packaged vacations based on the old offline brochure model won’t be producing the conversion rates needed. It will be interesting to observe how intermediaries as well as suppliers will solve the challenge to maintain profitable growth.

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Beware of complacency warn online travel industry gurus

Posted on June 2, 2005. Filed under: Uncategorized |

is the headline of this interesting article in EyeforTravel pointing to a number of issues developing in the online travel industry.

While nobody seems to dispute that continued growth is a reality in this already significant category, the jury is out on who the fastest growing players are going to be.

With the fast pace of development and change in today’s internet enabled world as the guide, it takes no guru to see that any intermediaries will be hard challenged to defend their position in the marketplace especially in an environment where the main focus seems to be on price with the resulting commoditization of product.

Pre-internet intermediaries were able to defend their role for decades now it will likely be only a few years, before efficiencies take over and only those adding value will remain in the game.

Also, with new technologies enabling any supplier to become a seller of the entire package of components, thereby becoming an online agency itself, the competition will get even tougher, especially with brand loyal customers that suppliers want to keep close to themselves and sell to directly if they can.

The cards are being dealt and it remains to be seen who will have the winning hand.

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Study: Online Shopping Not Just about Price

Posted on June 1, 2005. Filed under: Uncategorized |

This headline based on a new study of retail site conversion rates ForeSee makes me think how long it will take until this will hold true in the totally price focused online travel industry, dominated by meta search engine as the hot new development.

I can imagine a future when online travel sites will offer a truly compelling, customer focused shopping and buying experience, supported by intelligent user interface design and new technology that will allow mass customization of self-packaged vacations based on customer choices and preferences. This should lead the way away from purely price focus to value added focus.

It will be interesting to observe who will move in this direction quickest. A first attempt has been made by Travelocity in its recent advertising stressing their customer service making it right quickly and in favor of the customer, should anything go wrong.

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