Mobile disruption is fueling a revolution in how travel products are distributed. Given the speed of smartphone adoption around the globe, the future will certainly reward travel brands who invest in a comprehensive and tightly integrated mobile-first strategy but what does this mean?
“The inflexion point of smartphone adoption in the world has finally arrived” says Bobby Healy, CTO of CarTrawler. It’s an exciting trend that has transformed many industries and has been driven by larger screens, smoother buying experiences and big strides in commerce-enabled social media platforms. And although Healy believes the travel industry is “embarrassingly behind in the mobile race”, he is confident that it’s catching up very quickly.
In the past 10 years, the world has become truly digital and all we need do is look at the numbers to confirm this. According to recent United Nations statistics, the world’s population has reached 7.4 billion and there are also nearly 7.4 billion mobile subscriptions worldwide. This era of the smartphone has meant that people do far more in the digital domain than they ever did before. “Mobile mania is well underway and those not investing in their mobile infrastructure will be bypassed by a competitor who is”, warns Healy.
According to recent McKinsey research, 49% of companies surveyed are focusing their investment on the digitisation of marketing and distribution channels. It’s a sensible strategy given the impact digitisation has already had on how companies interact with (and target) their customers. However, Healy is keen to stress the importance of companies looking beyond their existing customer touch-points already in use. Some travel brands are in danger of simply creating mobile versions of their desktop distribution platforms and that is not going to work.
“The growth of mobile is a major digital disruption and one that requires companies to commit to fundamental change across their entire business model. It’s crucially important for them to think about mobile very differently”, says Healy. “Our own traffic is now composed of close to 50% mobile traffic and certainly for the last three years, we’ve treated mobile web and native applications as a totally separate architecture, use case and investment to our desktop products”, he explains.
Winning the new retail environment
Increased mobile traffic suggests that some users are bypassing desktops entirely or have become ‘multi-device’ users, accessing multiple devices to engage online and complete transactions. “Markets vary widely and it’s important that travel brands adapt their mobile strategies to reflect the variety and differences between geographic regions”, says Healy. For example, mobile app development for smartphone platforms is a standard strategy for most North American, Asian and European airline carriers. In fact, Asia-Pacific leads the way in mobile payments with over half (53%) of connected consumers using their mobiles to pay for goods or services, followed closely by North America (35%) and Europe (33%). In Africa, credit card penetration is low and a number of African airlines have responded to this by accepting advanced mobile money solutions as a form of payment. Meanwhile in Latin America, tech-savvy millennials are driving the trend of mobile payment adoption there.
Although internet-based retail remains important, travel brands should be aware that they must support the development of applications for smartphone. Simply put, mobile offers an unrivalled opportunity for continuous engagement with customers during all phases of the travel life cycle. Ignoring a mobile strategy means missing out on a growing proportion of the ‘travelling user’. And, in turn, missing the opportunity to connect with them on every possible channel it supports.
The attraction of the mobile app
A well-designed and architected mobile website has a number of inherent advantages over native apps, including broader accessibility, compatibility and cost-effectiveness. However, the drawbacks are that the user experience tends to be less rich, requires an internet connection for content display and often runs slower than the native mobile app.
Native mobile apps are therefore growing in popularity, particularly with airlines and for a number of reasons. For starters, they are capable of providing a better user experience and have access to new features such as push notifications and location based alerts. These aspects play into the functionality aspect – something that is of paramount importance to today’s customers who expect a seamless, multi-device service. That said, whilst enhancing the digital experience is critical, personalisation and upselling capabilities are where the real monetary value and relevancy of the mobile app comes in to play.
At the centre of all this change is the digitisation of loyalty programmes. By its very nature, the mobile platform is a personalised device that is ideally placed to facilitate loyalty programmes. Why? Because they are with customers at every stage of their journey. By linking ancillary services with the loyalty status of a customer, travel brands can more easily personalise ancillary products and services such as premium seating and a la carte dining menus.
In order to do this, travel brands are increasingly leveraging their own customer data to develop ever more sophisticated means of serving them. “This becomes increasingly important to travel brands when their customers are on the move and open to purchasing relevant solutions and ancillary products”, explains Healy. With good artificial intelligence, a travel brand has the ability to understand customers better and offer a rich and tailored loyalty service to serve their needs and keep them engaged with the brand.
Mobile’s facilitation of timely ancillary services or products should be seen as a unique opportunity to not only improve a customer’s experience as they have access to everything they need, but also to drive a company’s incremental revenue. “Ancillary sales are a major part of business development strategy for most travel brands worldwide – so they should be aggressively implementing mobile capabilities in the loyalty space”, says Healy.
Timing is everything
It goes without saying that timing is a hugely important factor – mobile consumers will naturally be more open to receiving targeted services or products at certain stages of their travel journey. “By adopting a data-led approach, travel brands can continuously uncover insights into customer location, behaviour and preferences, making the merchandising process so much easier”, he adds.
According to Criteo’s research, nearly one in two Smartphone travellers say they made an in-trip purchase via smartphone. Most travel brands are offering the basics which include mobile check-in, digital boarding passes and itinerary management but “there’s huge scope for improvement”, says Healy.
An important challenge for the travel industry is to keep people engaged every time they shop with them. Clever partnerships are key to increasing engagement through convenience. Having a better understanding of what customers want helps travel brands to deliver personalised merchandising techniques and journey-centric interfaces. “Success is being able to sell every single product the travelling customer may need on their unique retail journey. This includes the trip to the airport, an ancillary offering at the airport, and onward to the destination itself”, explains Healy.
“Location-based offers or rewards that can be redeemed with the click of a button have the power to surprise and delight customers. The convenience factor shouldn’t be overlooked – if you can foster behavioural change in customers that drives their engagement, you’re on to a winner”, says Healy.
Unfortunately, mobile apps do have their limitations with conversion lagging behind desktop browsers. According to Monetate, add-to-cart rates are highest for personal computers with a global rate is 10.4%. This falls to 6.4% for smartphones. A variety of friction points are to fault with screen size and security concerns topping the list. Customers also dislike the fact that Mobile Apps can take up storage space on their phones and don’t always provide enough access to everything they need.
The biggest risk is that customers will delete the app after making a booking. However, there are ways and means of ensuring the customer regularly interacts with the app. “It starts with making sure that you are offering customers the best, most comprehensive and relevant products for their needs”, says Healy. “In order to mitigate against this risk, you could ensure that the full booking and check-in flow (including any ancillary offerings) are available through your app. Paperless boarding is a perfect example of improving the value proposition of an app. The more value a customer can extract from it, the less likely they are to delete it from their phone”, he adds.
Social networks and the multi-device path to purchase
Social media mobile apps are proving to be key drivers in the rise of the mobile travel experience. “Customers are searching user-generated platforms such as Facebook and Instagram to get inspired before making a purchase. They want to be able find everything in one place and to be able to share it. They expect things to be easy and reach their objective within a few clicks”, explains Healy.
Approximately 2 billion internet users globally are currently active on social networks and these figures are expected to grow as mobile device usage and social networks increasingly gain traction. The added ‘addiction factor’ that tends to keep users coming back for more means that social networks have a decidedly strong part to play in this trend. The ultimate goal for a travel company wanting to make the most of mobile disruption should be to build a mobile offering that partners with a customer at every step of their journey.
Organising for mobile success
The ultimate goal for travel companies wanting to make the most of mobile disruption should be to build a mobile offering that partners with a customer at every step of their journey. If you’re a travel brand in 2017, there’s a pretty high probability that you’re building or indeed fine-tuning a mobile offering for your business. So what are the really important aspects you should be focusing on – the key differentiators that your customers will love? After all, tech-savvy customers can easily determine whether a mobile offering adds value. Those that make their lives better will be used, while those that do not will be quickly discarded. We’ve put together a best practices list by drawing on our experiences in innovating for mobile:
- Adopt a user-centric view from the start: Apps don’t live in a vacuum. Bring your users into the process early, even before the first line of code is written. “Professional external testing is not as common in tech companies as tech companies pretend. We invest quite a lot in it. It’s expensive as hell but we feel it’s worth the cost. We involve them in the initial development ideas and really listen to their answers. We don’t stop listening either as user patterns constantly change. Keep testing and listening- it certainly avoids the “Hippo effect”!!” explains Bobby Healy, CTO at CarTrawler.
- Be secure and trustworthy: We know it sounds a bit basic but make sure you start with building good security infrastructure into your app. A mobile retail platform will almost certainly involve sensitive customer information which you need to keep secure. Provide sophisticated transaction security on all platforms, but deliver simple payment options.
- Functionality: Anticipate customer needs in order to produce a relevant experience. CarTrawler’s research reveals that 60% of customers abandon the sales funnel when presented with forms and 58% don’t even attempt to interact with them. “Customers want results right now. If they run into difficult-to-use pages, they simply abandon their shopping carts prior to purchase. The question we need to be asking is what we can do to simplify the transaction. Not by steps but by interactions and not by clicks but by decisions”, says Healy.
- Personalise your interface and service: Utilise wish lists and past searches to provide more passenger-specific offers that meet a customer’s needs and increase your incremental revenue. “Mobile is the most intimate way to interact with your customers as it allows you to tailor your offering at any stage of the travel process. This will help you better engage with your customers – driving conversion, revenue, profit and loyalty respectively”, explains Healy.
- Connect the dots: “Having a better understanding of the multi-device path to purchase is crucial as it gets you closer to mapping your customer’s journey from interest stage to final purchase,” says Healy. Invest in scalable cross-device tracking in order to understand the relationship between customers and their variety of digital gadgets!
- Remember the post-purchase customer: Think about how your mobile product can support your customers on their onward journey? The relationship doesn’t end at the point of sale. You have a better chance of mitigating against the risk of customers deleting your app by enabling useful post-purchase solutions such as digital ticketing.
- Don’t forget marketing: A mobile phone has become a standard accessory for all travellers. However, in order to drive a successful increase in your mobile product usage, you’ll need to entice customers with attractive deals and perks. Highlight how an app can be faster and easier than mobile web. Particularly for last-minute bookings and shorter trips.
- Don’t think screen size, think opportunity size: We often get caught up in the limitations of mobile such as smaller screen sizes or challenging connectivity, and we forget about the untapped opportunities mobile presents. “With desktop, we know which country the customer is in but on mobile, we know which street corner they’re on – the possibilities and opportunities are multi-faceted”, says Healy.
- Unlock the potential of clever collaboration: Your product is only as good as its inputs. Identify and work with companies who have similar strategic goals to your own so you can leverage synergies for mutual gain. Internal collaborative partnerships also count. By improving the way individual business units work together (e.g.: those responsible for loyalty, marketing, sales and pricing), performance and utility outcomes can be profound in the end product.
The mobile revolution is empowering customers with information and access to everything from flights to hotels and car-rental options. It’s enabling price transparency and comparative shopping like never before. The challenge now is about delivering a superior customer experience and for those who are ready to adapt, it is going to be a very exciting next few years.
 Ancillary Revenue Goes Mobile: The best Methods Used by the Top 25 Airlines https://www.cartrawler.com/ct/about/media-pr-centre/cartrawler-ancilliary-revenue-series/
 “The case for digital reinvention”, by Jacques Bughin, Laura Laberge and Anette Mellbye. http://www.mckinsey.com/business-functions/digital-mckinsey/our-insights/the-case-for-digital-reinvention#0
 “Asia Pacific leads the world in mobile payments”, Kantar TNS: http://www.tnsglobal.com/asia-pacific/intelligence-applied/asia-pacific-leads-world-mobile-payments-latest-study-kantar-tns
 New system to modernise mobile money payments for 5 African airlines. – See more at: http://techsahara.com/new-system-to-modernise-mobile-money-payments-for-5-african-airlines/#sthash.wHvCGnfo.dpuf
 Inside Latin America’s Mobile Payment Explosion: http://paymentweek.com/2017-1-17-inside-latin-americas-mobile-payment-explosion/
 Source: Criteo survey N=1,083 travellers living in the US who booked either a flight or hotel online in the past three months; N=355 / N=198 Travelers who shop for hotels / flights via smartphone
 Monetate eCommerce Quarerly Report, 3rd quarter 2016, reviewed at monetate.com