The new consumer path to purchase in travel 1st International Tourism Conference of the 5 bilateral Chambers of Greece “Northern Greece: 365 Days of Tourism” Theodore Papakonstantinou, 1 April 2016
© 2016 Deloitte Business Solutions S.A.
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Contents
1. A confluence of multiple trends shaping the travel & hospitality industry 2. How the digital revolution has disrupted the consumer path to purchase 3. What travel businesses can do to adapt to this change
© 2016 Deloitte Business Solutions S.A.
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Overview of trends shaping the industry With the confluence of multiple trends, it is clear that the next five to ten years will be very different for the travel and hospitality industry than today.
Tourism sector
© 2016 Deloitte Business Solutions S.A.
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The digital revolution Digital has disrupted the consumer path to purchase and democratized the way consumers shop for travel. To better understand this change, Deloitte surveyed over 40,000 respondents about their travel activities. Key findings 1. The consumer journey has changed from a linear path to a cycle, where each consumer’s experience feeds into another consumer’s decision process.
2. Consumers have been empowered by review sites and social media and travel has changed from a seller’s to a buyer’s market. 3. Every consumer is a potential “evangelist” or critic. 4. Travel businesses need to adapt to a fragmented digital channel.
© 2016 Deloitte Business Solutions S.A.
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The evolution of the consumer journey The consumer journey has changed from a linear path to a cycle, where each consumer’s experience feeds into another consumer’s decision process.
© 2016 Deloitte Business Solutions S.A.
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The empowered consumer Consumers have been empowered by the product choice and information available online, and as a result travel has evolved from a seller’s to a buyer’s market.
© 2016 Deloitte Business Solutions S.A.
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The empowered consumer Consumer decisions are being influenced by metrics such as price, star ratings and consumer review scores. Travel products are at risk of becoming commoditized.
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Shifting sources of influence Consumers are most likely to be influenced by each other than by content created by travel businesses.
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Shifting sources of influence Consumers’ influence will increase as they move from consuming content to creating it by writing reviews.
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Shifting sources of influence Consumers’ influence will increase as they move from consuming content to creating it by writing reviews.
© 2016 Deloitte Business Solutions S.A.
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Multiple channels and devices A growing and disruptive challenge is that of fragmentation within the digital channel, as consumers use multiple devices through their purchasing journey.
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Multiple channels and devices Fragmentation has been accelerated by the popularity of using smartphones and tablets for research, while computers are still used for final booking.
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What travel businesses can do to adapt to the change Companies need to review their business model to ensure that the consumer perspective is at the heart of every business decision. To keep pace with changing consumer behavior, travel businesses need to: Consider the consumer perspective in every business decision. Offer memorable experiences and excellent value for the money spent by consumers. Offer a more personal user experience to differentiate and encourage consumers to look beyond metrics.
Create a recommendation culture. Word-of-mouth marketing is comparatively low cost and self-perpetuating and can help to reduce customer acquisition costs. Introduce an integrated experience across channels and devices (e.g. mobile wallet, “everything app” technologies).
Offer incentives to encourage users to sign in on every platform to track consumer activity across devices and within apps. Use analytics to understand consumer & client behavior.
© 2016 Deloitte Business Solutions S.A.
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