Some of the most interesting recent developments in travel technology concern big data and prescriptive analytics. The convergence of these technological developments and the possibility of identifying online consumers through unique IDs are going to be some of the most significant factors affecting the online travel competitive environment in the next few years.
Big data analytics will increasingly enable companies to target consumers in a more personalised and effective way through the whole marketing mix. This will mean higher conversion rates for companies and a better consumer experience for customers. But these developments will also see some companies gain ground in the online travel competitive environment thanks to their superior ability to collect and analyse consumer data, and other companies to become less competitive, not being able to target consumers in a more customised way.
From Mass Marketing to 1-to-1 Marketing: Providing a Personalised Consumer Experience
Today, companies have the possibility to collect a wealth of information about consumers which was never available in the past. This information is collected through internal sources, such as company websites and sales records, and external ones, such as social media, smartphones and tablets. This vast amount of information on consumers is increasingly referred to as big data.
When a consumer visits a website for the first time, a cookie is sometimes uploaded on his browser containing a unique ID, making it possible for the company to identify him during his next visits. Once identified, it will be possible to link the consumer to all the information the company stored about his profile, which makes personalised marketing possible.
A further step consists in the way data on consumers is analysed and used. In order to provide consumers with a personalised experience and ultimately increase conversion rates, companies need to move from descriptive to prescriptive analytics of the information they own on consumers.
Real-Time Prescriptive Analytics to Increase Conversion Rates
Descriptive analytics tell us what happened (in terms of consumer behaviour) and why (diagnostic analytics), while predictive analytics go one step further, providing predictions on future consumer behaviour. However, it is the following stage, prescriptive analytics, which enables companies to use information to suggest personalised options to consumers based on their past behaviour, enhancing the consumer experience and conversion rates. Today, thanks to prescriptive analytics models embedded into their operational systems, websites and apps can analyse consumer information in real time in order to offer personalised travel options instantly.
Revolutionising Online Travel Marketing as We Have Known It So Far
Travel marketing, and marketing in general, today mostly targets, according to the type of product, the general public or specific segments of consumers. This will be soon considered old fashioned and not effective enough in the online travel sector, and, given the importance of the online channel in travel, in the travel industry in general.
In the next few years, we will witness a gradual move to 1-to-1 marketing in the online travel category, with each consumer treated in a different way in terms of the whole marketing mix and therefore of: 1) the type of promotion and adverts targeting him when he is online; 2) the industry players targeting him more aggressively; 3) the products he is presented with when shopping online; and 4) the price ranges of the products he is presented with.
This will mean a revolution in online travel marketing as we have known it so far. In the second part of this article, we will discuss the possible impact of these developments on different players in the travel industry.