The Digital Travel Summit is Europe s most seniorlevel

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2 The Digital Travel Summit is Europe s most seniorlevel ecommerce, digital, mobile, social and multi-channel customer engagement event for the travel industry.

3 TABLE OF CONTENTS Introduction The Ancillary Approach PART 1: Challenges and Opportunities PART 2: Performance PART 3: Ancillary Products About WBR Digital About Fusion

4 INTRODUCTION Digital has fundamentally changed the way we do business and the travel industry is on a digital journey all of its own. Competition amongst travel companies is hotter than ever, and in the digital age the most successful companies will be the ones who use a data-driven mindset to build a relationship with their customer which ensures a return trip! Leading up to Digital Travel Summit we interviewed 110 senior travel executives across Europe with job titles including: Vice President, Director of E-Commerce, Vice President of Marketing and Director of Digital Marketing. This report is designed to offer critical insight on some of the biggest challenges facing the online travel industry in 2016/17 as well as to benchmark the industry s response. 110 Senior executives from travel companies across Europe took part in the survey y Airline 36% y Online Travel Company 14% y Hotel 41% y Cruise Line 9% y United Kingdom 24% y France 15% y Germany 11% y Spain 7% y Netherlands 5% y USA 5% y Russia 5% y Italy 4% y Switzerland 4% y Turkey 4% y Belgium 3% y Finland 3% y Ireland 3% y Denmark 2% y Portugal 2% y Sweden 2% y UAE 2% y Norway 1%

5 THE ANCILLARY APPROACH By Bob Dufour, President & CEO of Fusion Ancillary sales present a tremendous opportunity for businesses to generate increased revenue while simultaneously strengthening relationships with their customers. This has consistently been the observation of Fusion in working with our clients and also when conducting our own market research. It s reassuring to see these U.K. survey results further reinforcing the facts. At Fusion, we know there are three components that will support successful ancillary sales: analysing data, personalising offers, and optimising across all digital platforms. Without a thoughtful strategy that addresses all of these components, ancillary programs can misfire. They can actually damage customer relationships by presenting the wrong offers at the wrong time. Or the ancillary presentation might disrupt the online sales process altogether. We ve seen these things happen, but the other side of the coin success! isn t hard to achieve. Successful ancillary sales are about making the right ancillary offers to the right customers at exactly the right time. They re about making purchases easier, and even pleasurable enhancements to the online shopping or booking experience. They re about understanding what your customers need or want and providing it to them in a way they can effortlessly accept by having the ability to analyse and act upon the vast amounts of data available to us today. And increasingly, as these survey results demonstrate, they re about providing better solutions to customers on their mobile devices, including smart phones and tablets. Thankfully, with the rapid evolution in technology and data analysis during the last several years, ancillary sales can consistently be harnessed and optimised to meet and exceed these goals. At Fusion, we encourage companies to find the right partner to create a strategic, optimised ancillary sales program that will delight customers and boost the bottom line.

6 PART 1 CHALLENGES & OPPORTUNITIES

7 YOUR BIGGEST FOCUS FOR THE NEXT 12 MONTHS 25% 20% 15% 10% 5% y Implementing data analytics 8% y Reducing online basket abandonment 12% y Re-platforming your ecommerce sites 14% y Determining new KPIs 18% y Mobile app marketing 23% y Customer acquisition 26% It makes sense that customer acquisition would be the number one answer to this question acquiring new customers, and retaining current ones, is always a top priority for any business. However, it s also notable that mobile app marketing achieved the second highest response and significantly higher than the other answers. It s important for us all to remember that mobile (and video) are the future of digital communications, and we must be responsive to customers who are increasingly connected via smart phones, tablets, and wearable devices. Bob Dufour, President & CEO of Fusion

8 THE TOP SEVEN ECOMMERCE PRIORITIES FOR TRAVEL COMPANIES Creating bi-directional engagements via social media Social media has transformed the way we communicate online. But it s not only changed the way that friends communicate, but also the way we interact and transact with companies. Marketers know that social media is a highly effective marketing channel, and not only that but it s the perfect way to provide social proof of the quality of your product. Travel companies are now trying to develop their social media strategy to ensure that communication via social media is a two-way street. The challenge lies in making the requisite resources available, developing or hiring in the expertise and managing your online communities on an ongoing basis. Investing/optimising personalisation strategies Personalisation strategies which transcend channel and device require well orchestrated multichannel strategies and a helluva lot of data. The data is where it gets interesting just how much are your customers prepared to let you know about them? Although the jury is still out on privacy vs. personalisation, there is little doubt that those who tailor their marketing to customer need will top the revenue growth winners list. Post purchase cross-sell/upsell In a similar vein to improving ancillary sales, post purchase cross- and up-selling is all about finding those little extras which make a trip extra-special. 4 3 This comes down to understanding your customer s travel habits as well as what kind of trip they are taking. Finding the right combination opens up many exciting opportunities for targeted post-purchase marketing campaigns designed to inspire travellers to sign up for those little extras Increasing ancillary sales There are a lot of extras that travellers might need, insurance, car rental, excursions and upgrades (think economy-plus seating) to name but a few. By selling these extras on their websites travel companies can boost their online revenue significantly. As a result, hotels, airlines and cruise lines are increasingly seeking a slice of the ancillary pie. Given the proven ability of ancillary sales to boost revenue, we can expect to see this persist as an important element of online strategy. Sending newsletters segmented by traveller type Getting personalised messages to the right person at the right time is the Holy Grail for any marketer. Segmenting travellers into types based on your customer data is a great way to achieve this. However, there are thousands of ways to slice up the data, from spending habits to preferred locations. Before travel companies can get to the serious business of crafting customised messages, they first need to get a handle on their data a big challenge for 2016/ Increasing bookings on smartphones/tablets The amount of travellers both researching AND booking their travel on tablets or mobile is going through the roof. However, formatting your ecommerce site for the sheer amount of different devices available can provide a significant challenge to travel companies. Ultimately, they know that getting the experience right for the customer regardless of device will be crucial to their success. Reducing online shopping basket abandonment Given the revenue-boosting potential of reducing basket abandonment it s understandable that reducing abandonment is the number one priority for travel companies in 2016/17. As many as 80% or more of shopping baskets end up abandoned. If travel companies can chip away at this number, then the financial benefits will be enormous. The question which creases everyone s brow why do so many people abandon their carts? Sure, a large percentage will be just looking, but providing clarity on fees and taxes, streamlining the booking and payment process and emphasising social proof (among many other things) will help travel companies to make significant gains over the competition.

9 HOW EASY IS IT FOR YOU TO EFFECTIVELY USE DATA ANALYTICS TO GAIN VALUABLE INSIGHTS INTO CUSTOMER BEHAVIOUR, PURCHASES AND CHANNEL PERFORMANCE? Extremely difficult 2% Somewhat difficult, could be better 47% Somewhat difficult, but manageable 51% Reflecting the urgent need for better data analytics systems, everyone responding to this question said it is somewhat or extremely difficult to use data and gain valuable insights into customer behaviors. This is the whole point of analysing data in the first place to be able to draw actionable conclusions to increase customer satisfaction and revenue. Bob Dufour, President & CEO of Fusion

10 Problems getting good customer behaviour, purchase and channel performance analytics? Answers taken from the Digital Travel Benchmarking Survey Complexity of the problem It s hard to analyse the changing habits of customers and draw conclusions in real time. The sheer amount of data available makes it difficult to form a cohesive strategy to optimise its use. The feedback which we receive from customers on our portals does not always give us an exact idea of their tastes or expectations. Incomplete data Our data is not always complete, it is sometimes immaterial, or not to the point. We cannot assume the tendency of the customers based on the information we have and data missing of the purchase orders and the feedback are not that appropriate to give an actual understanding of the customers. As the data information is never accurate, we are facing challenges using that data more effectively in order to personalise our customer preferences and provide satisfactory outcome. Cross device attribution Combining data from a large amount of different platforms and sources in order to draw meaningful insights on customer satisfaction and performance is the main challenge. Segregating data from various sources is complicated and involves examining different methodologies in detail and getting exact information on individual customers. Lack of technical skill Programming skills involving specific data structures are a big challenge for us, as it requires a lot of highly skilled people to get actionable customer insights. We try to use all possible tactics to analyse our customer behaviour data but we do not have the necessary in-house skills. Lack of skilled staff and a hesitant approach by management towards investing in proper analytics systems are significant challenges for us. Lack of sophisticated analytics tools The analytical tools that we have are not sufficiently up-to-date to handle the large amount of data that which we collect from different sources. We are unable to track customer information on real time basis. As a result, we are unable to predict the future customer insights on various factors. Differentiating useful data from junk data is a major challenge as there is a lot of data available which is not necessarily relevant to the topic, the process of doing this can be very tedious and time-consuming.

11 PART 2 PERFORMANCE

12 TO WHAT EXTENT ARE YOU USING DATA ANALYTICS TO PROVIDE DIRECT CUSTOMER VALUE AND INCREASE RETENTION? Airlines 0% 0% 15% 20% 65% Cruise Ships 60% 40% 0% 0% 0% Hotels 2% 0% 9% 22% 67% Key y We have a well developed system in place and we re happy y We have a system in place but we want something better y We re in the process of implementing a system y We re still some way off from using data analytics y No interest Online Travel Companies 40% 40% 20% 0% 0% We have something, but we want something better! Clearly, the industry s data analytical needs are not being met. Almost everyone is using data analytics, although a significant portion of the industry one in four is only now in the process of implementing a system. There s a lot of room for improvement here, with roughly 60% of the respondents looking for a better solution. Bob Dufour, President & CEO of Fusion

13 WHAT ARE YOU DOING TO HELP CUSTOMERS HAVE A POSITIVE BOOKING EXPERIENCE VIA A MOBILE DEVICE? y User reviews 44% y Identifying how your 26% customers are using mobile ie. search, comparison, booking etc. y Improving navigation 14% capabilities y Incorporating UX/UI best 9% practices y Streamlining ancillary 8% product offers The customer is king. Employing user reviews, by far the highest response to this question, shapes the mobile booking experience. Understanding exactly how customers are using mobile devices is also critical in improving the booking experience. As we ve seen in multiple other survey questions, mobile is driving the industry s future, and creating the positive experience, including other user experience best practices, will help generate the best results for the customer on a hand-held device, and the business selling to them. Bob Dufour, President & CEO of Fusion

14 PART 3 ANCILLARY PRODUCTS

15 SALES FROM ANCILLARY PRODUCTS ACCOUNT FOR HOW MUCH OF YOUR COMPANY S TOTAL ANNUAL REVENUE? 20% or less 48% 21 40% 41 60% 10% 42% Ancillary products account for a significant percentage of revenue for surveyed companies, for some it s up to as much as 60 percent. This is astounding and important. It means that all companies should be doing more to understand and optimise ancillary sales, in order to build immediate and long-term revenue and keep-up with marketplace competitors. Bob Dufour, President & CEO of Fusion DO YOU THINK THIS WILL INCREASE OR DECREASE IN THE NEXT 12 MONTHS? Increase 79% Decrease 21% Ancillary sales will only increase over the next year, and this is a continuation of the rapid growth which we have observed over the last several years. We ve witnessed this trend continuing to grow for several years. Businesses need to get on the ancillary sales bandwagon to keep pace with industry trends. Otherwise, we re all leaving revenue on the table and failing to meet customer expectations. Bob Dufour, President & CEO of Fusion

16 WHICH OF THE FOLLOWING BEST DESCRIBES THE METHOD YOUR COMPANY USES TO MARKET ANCILLARY PRODUCTS TO YOUR CUSTOMERS? y We select ancillary products 35% based on their customer profile. (demographic / firmographic) y We offer the same ancillary 32% products to all customers y We select ancillary products 23% based on past searches and / or preferences y We offer ancillary products that 7% are related to the other products in their shopping cart y We select ancillary products 4% using a real-time ranking and decision solution 7% 4% 23% 35% 32% Just over a third of companies choose which ancillary products to offer based on customer information (such as demographics). Sadly, an additional 32 percent are currently offering the same exact ancillaries to all customers. These responses indicate a lost opportunity the opportunity to optimise and personalise ancillary sales to better serve customers while improving the bottom line. An effective ancillary sales strategy is never a one-size fits all approach, it s constantly evolving and being fine-tuned to produce better results in various customer segments over time. Bob Dufour, President & CEO of Fusion

17 ON WHICH OPTIMISATION CAPABILITIES ARE YOU PRIMARILY FOCUSING OVER THE NEXT 24 MONTHS? Mobile optimisation 82% Streamlining the cross device experience 61% Deep personalisation Real-time reporting and customer insights 52% 51% Product recommendations Improved post-purchase sale opportunities Optimising the customer journey 43% 41% 39% Ancillary product filtering for customer personas Dynamic machine learning 26% 31% The discussion starts and ends with mobile. Eight out of ten respondents said mobile optimisation is the top focus over the next 24 months. This is a logical conclusion, given all the discussion around mobile channels throughout the survey. I m also pleased to see a continued focus on streamlining the ancillary sales experience across devices; deep personalisation; real-time reporting; and mining customer insights. All these activities can only enhance the customers purchasing experience. Bob Dufour, President & CEO of Fusion

18 ABOUT WBR DIGITAL At WBR Digital we design and execute bespoke content marketing campaigns all year round, delivering our clients unparalleled access to the wider WBR event audience. We believe in creating rich content that engages and inspires. We conduct in-depth industry research, then add analysis and a double-shot of creativity, before marketing it for you, to targeted audiences of your choosing. It s industry research, it s thought leadership, it s quality content it s the perfect opportunity to generate qualified sales-ready leads. Contact us to find out how your business could benefit from: v Lead generation campaigns that fit your priorities v Bespoke webinars, benchmarking reports and whitepapers v In-depth research on current fast-moving issues and future trends v The opportunity to position your company as a thought leader Contact: Tanyel Crossley Head of Digital Publishing Tel: +44 (0) Tanyel.Crossley@wbr.co.uk ABOUT FUSION Fusion brings together cutting-edge data science, an all-encompassing ancillary product suite, and ongoing merchandising test strategies to deliver targeted, relevant e-commerce product offers. By delivering a personal customer experience, Fusion converts shoppers into buyers faster, better, more accurately, and more profitably. Fusion works with leading brands across more than 40 countries in the travel, healthcare, auto, entertainment, and insurance industries. To find out more, visit or follow Fusion on Twitter and LinkedIn.

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