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Published on Friday, December 13, 2019

'Travel industry faces crisis of consumer confidence'

Mike Austin, CEO and co-founder of online marketing specialists, Fresh Relevance, believes the travel industry has a lot of catching up to do when it comes to the online customer experience. Here, he explores what travel companies can learn from the retail sector...

"Only 12% of UK consumers think travel companies are better at understanding and offering what they want than online retailers. What's more, with retailers from sectors such as consumer goods, fashion, and groceries continuing to grow their web sales, the shortcomings of the travel industry have been laid bare. With this in mind, we have looked at how online booking experiences compare to online shopping to discover how travel brands can improve their services to increase bookings and catch up with retail.

Deliver a convenient experience
Consumers prefer to shop online because it's more convenient than going to a physical store; this applies to both travel companies and other online merchants. But whilst retail has been quick to identify a seamless shopping experience as a driving factor and has tailored its services accordingly, online travel agents, hotels, and airlines have been slower off the mark. Frustration is particularly acute amongst younger consumers, with nearly one in four (22%) Gen Z (16-24 year olds) consumers stating that booking a holiday online is more difficult than making an online retail purchase.

To give an example, more and more retailers dynamically tailor their homepage to each shopper by prominently displaying the brands, product categories or styles that are most likely to resonate with the individual. To reduce lengthy decision-making, travel companies should aim to offer the same curated shopping experience, reflecting each shopper's views, searches, interests and location.

Another popular retail marketing tactic that makes a shopper's life easier is to send service-focused email notifications, such as an alert when products are back in stock or have reduced in price. Booking platforms can combat the consumer's comparison mindset by adopting these practices into their own services.

Present personal recommendations
Whilst many retailers have built entire business models around offering a personalised experience, the travel industry has widely adopted a one-size-fits-all approach, hoping to win over customers with a blanket approach.

However, this tactic is failing as our own research reveals only one in five consumers say that, whilst they don't have a preferred travel brand to book a holiday with, they do have particular online retailers they are loyal to. What's more, our research showed nearly a quarter (24%) of consumers say they feel frustrated by promotions for irrelevant holidays, for example for a type of holiday that they've never booked before.

To catch up with retail, the travel industry needs to embrace more tailored tactics. For example, rather than recommending their best-selling holidays to everyone, travel companies should suggest those offers that the shopper's most likely to be interested in based on their past choices, such as holidays with pets or beach vacations.

Inspire consumer confidence
A lack of convenience and personalisation means that the travel industry is now facing a crisis of consumer confidence. Only 10% of consumers feel more confident completing an online booking for a holiday than making an online retail purchase. Given the high price tag of booking a trip abroad, travel companies should look to retail for inspiration regarding how best to build consumer confidence.

Retailers often include user-generated content, such as customer images, product reviews, and ratings on product pages and in marketing emails. OTAs, hotels and cruise lines should look to expand their use of UGC to show shoppers which offers are resonating with their peers. This not only makes the brand appear genuine but also helps holidaymakers identify the offerings that are right for them.

It's clear that travel brands have a lot of catching up to do if they want to provide customers with the same experience they're used to receiving from retail, but where there are challenges, there are also opportunities. The companies that harness the customer data available to deliver a more convenient, personalised booking experience that inspires consumer confidence stand the most to gain.

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