The stratospheric rise of ecommerce has been a game changer for retailers and marketers. Twenty-five years on from the first online sale, the way people research and shop for products continues to evolve at a rapid pace. Consumers are empowered by the sheer volume of accessible information, comparison and choice.
While the most successful online retailers have developed sophisticated strategies to build and maintain their customer base, Travel lags behind. However, the increasing influence of the culturally curious millennial generation represents a massive opportunity. Millennials are expected to reach their peak earning and spending power in the next decade. From a marketing perspective, their buying decisions are strongly informed and influenced by friends through social media. Coming close on the heels of millennials, Generation Z, the first demographic to grow up entirely alongside social media, has spent up to $143 billion since the beginning of 2018, and will represent 40% of shoppers by 2020. The potential market represented by these two experience-hungry, digital generations is an exciting one.
Despite these opportunities, it’s still the case that travel websites consistently underperform when measured against retail ecommerce. This is partly because they require a unique approach. Even within the Travel sector, airports have very specific needs and must look for creative solutions. Around 50% of airport revenue is generated through non-aeronautical sales such as duty free, driven by a captive in-terminal audience. For example, Germany’s Frankfurt Airport has an annual footfall of 65 million passengers, making it, in essence, the country’s largest shopping mall. But buying patterns are moving away from impulse-led duty-free purchases. Increasingly, passengers are researching and shopping online for their travel retail products as well as flights and travel services. If they cannot find a suitable offer, they simply switch to channels like Amazon.
To catch up with consumer expectations, airports have begun turning to omnichannel platforms, which offer passengers a seamless digital experience, and targeted offers that add real value. London Heathrow has developed Heathrow Boutique, a digital marketplace specialising in luxury goods. Heathrow’s offering stands out from its competitors. Its product portfolio, pricing and tailor-made promotions helped the airport to achieve a best ever total retail revenue of £716 million in 2018. The potential of luxury retail is further boosted by the fact that millennials are expected to make up 50% of the market by 2025.
Passengers at Auckland Airport can shop online before they fly. There’s an exclusive range of products for International travellers and a collection point feature where customers can pick up products bought at off-airport duty free stores.
Alongside these retail offerings, airports are increasingly encouraging passengers to book direct. The one-stop-shop approach engages customers in brand loyalty and captures valuable data for the airport that can be used to develop the customer journey. However, every online travel site will have a few bookings that don’t sell, and there is not yet one tried-and-tested strategy to manage new and underperforming bookings.
Let’s take a look at some of the pain points and how airports can use these for growth…
In one 2016 survey, 55% of travellers said that that three out of every four travel offers they received via email were irrelevant.
Because of this hit-and-miss marketing approach, potential customers are wary of engaging with travel brands. Only 27% of travellers think that their travel experience will benefit from sharing personal data with travel brands. If you think about it from the point of view that the average professional American receives around 126 emails every day, it makes sense that irrelevant emails will just serve to irritate rather than engage.
Learning from Retail
Travel brands must consider their products in terms of the experience they offer. For example, on an ecommerce site, the flight is not the product, the destination is. For a normal traveller, the question is, “Where are you going on holiday?” and very rarely, “Which airline are you flying with?”
Central to improving customer experience is a need for context: Why, not how, a traveller goes from A to B. Without this context, you have little choice but to offer generic marketing communications. Think of the recommendations elements on websites such as Amazon. Customers respond to the high level of personalisation and actually appreciate relevant recommendations.
An aeroplane ticket is often the first purchase a customer makes when booking a trip. Therefore the airport is really strongly placed to create a great travelling experience by offering its customers personalised recommendations that are relevant to their interests, a seamless booking experience and exciting ancillary retail suited to the destination…
Yes. There are opportunities for travel to convert in the same way as retail!
The customer journey
The primary goal of marketing is to reach customers at the moments that most influence their decisions. These moments are known as touch points and are traditionally explained using a funnel diagram.
However, with the growing complexity of the customer journey, the explosion of product choices and digital channels, and an increasingly discerning, well-informed consumer, the funnel concept no longer captures all the relevant touch points and key buying factors.
The booking journey that could easily be traced from awareness through purchase to loyalty is now more cyclical, incorporating active evaluation and post-purchase experience. Rather than the customer awareness of a brand being led by brand advertising, as many as two-thirds of the touch points during the active evaluation phase involve consumer-driven activities including online reviews and word-of-mouth recommendations from friends and family.
There’s also the decision-making process to consider, and this, described by Google as micro-moments, is specific to the Travel industry:
So how does a travel brand go about increasing conversion on less popular bookings at each stage of the booking journey?
The first stage of the conversion journey is awareness. If nobody sees your brand, campaign or product, there is little chance of converting.
Use consumer-driven marketing and remarketing to boost conversions. Push specific bookings with special offers and use customer segmentation to send emails that will genuinely interest the recipient. The key here is data segmentation so messages can be personalised and targeted. Rezcomm’s CRM software builds a holistic view of the customer, so the right message gets to the right person at the right time.
Email remarketing is a good way to create conversion out of abandonment. Sending the details of a ‘booking so far’, when a cart has been abandoned, increases the chance of a completed booking.
Omnichannel: Facilitate cross-device conversion
It’s vital to make sure your mobile site is up to speed. A key part of this is to facilitate a link between mobile and other devices. While the ideal is to convert mobile visitors there and then, customers will research before they buy, and mobile is becoming the preferred channel for research.
Linking mobile with other devices offers more opportunity to convert the browser into a buyer. For example, if you collect the user’s email address you can later email them with content or offers based on their browsing behaviour, and even take them back to the page they were looking at.
Use ancillaries as incentives
Ancillaries, supplements, freebies, call them what you like – whether it’s a glass of bubbly or a discounted spa treatment, these can make or break a conversion.
Secret Escapes is one travel company that makes regular use of ancillaries in their hotel listings. These extras are positioned as additional inclusive options that increase the perceived value of the booking. While breakfast or spa access won’t eat into the company’s margins, they appeal to the customer, offering a sense of luxury VIP treatment. Consider what might produce the same sense of luxury for your airport. A glass of champagne or an extra hour’s lounge time could make the experience much more enjoyable for your passenger.
Consider pairing current interest and depleting stock to create a highly motivating scarcity element. This even works on bookings that are perceived to be less desirable. Offers like ‘for 24 hours only’ build the same sense of urgency. Flash sales have become popular and everyone wants to feel they have managed to bag a bargain; so adding incentives such as ‘today’s deal’ will also raise conversion. Use overlays, homepage banners and email marketing to make these deals visible.
The success of TripAdvisor underlines the importance of reviews. If your underperforming booking has good reviews, promote it as a ‘hidden gem’ on the basis of genuine customer feedback. You can offer existing customers discounts or special offers in return for a review.
Price reassurance messaging and flexibility
Use best-price guarantees and hold-the-price deposits to reassure customers that they are booking at the best price. This level of confidence can help persuade a customer to convert. Similarly, the flexibility and convenience offered by deposit-based schemes and longer booking cancellation policies give your visitors an added layer of security when considering whether to purchase.
Increased conversion begins with visibility and optimisation, persuading website visitors to click the ‘book now’ button. Test campaigns until you see results, and use the reporting and analytics functions in your Rezcomm back office to analyse campaign reports and learn where there is room to improve.
Rezcomm offers the all-in-one solutions that take the guesswork out of airport ecommerce. Our world-first combined omnichannel platform for airport sales, marketing and customer-centric analytics can help you build your airport’s long-term growth. We already partner with airports that serve a quarter of a billion passengers worldwide. If you want to ask the experts about developing ancillary revenue and optimising customer relations for your airports, contact us for a chat today.
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