Post on 03-Aug-2015
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© Peter O’Connor, Essec, 2015 1
Online Distribution Is the chaos clearing or continuing?
Dr. Peter O’Connor Essec Business School
Distribution is a battle field!
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Ten things to think about…..
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10
Incredible pace of technological
change
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How Americans Use Their “Cell Phones” • 18 to 29 year olds more
likely to use their phones as personal computers, digital music players, cameras, gaming devices, social media or internet access devices rather than as a telephone!
• No longer a talking instrument – now a lifestyle device.
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Ubiquitous and instant access to up-to-the- second
information
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9
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Our customer is changing!
Our customer has changed!
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The Post-Dot-Com Customer Chief characteristic of new consumer
is that they act differently, think differently, buy differently, and are early adopters of new technology.
In the past, consumers may have sought expert advise……
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Now they turn to the web…..
And the Mobile Web
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And Social Media
Disruption !
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Ineffective presence on
online / mobile / social
renders you invisible
Only two things matter!
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Question 1 How will people find your site(s)?
Question 2 Why should customers book
on your site (rather than elsewhere)?
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8
Search positioning remains the critical issue
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28
28 Number of sites considered
before making a travel booking
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Less than one third of consumers start
looking by searching for a
brand
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Gaining visibility is getting increasingly difficult
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What drives search?
Detailed Unique
Organised Topical
Content
See me live……
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See me live……
OTAs winning search battle
• Dominating SEO results listings • Booking.com incredible strength in
paid-search (particularly Google)
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OTAs winning search battle
• Dominating SEO results listings • Booking.com incredible strength in
paid-search (particularly Google) • High X0,000 of Affiliate and White-label
deals, also heavily engaged in search
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OTAs winning search battle
• Dominating SEO results listings • Booking.com incredible strength in
paid-search (particularly Google) • High X0,000 of Affiliate and White-label
deals, also heavily engaged in search • TripAdvisor
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OTAs winning search battle
• Dominating SEO results listings • Booking.com incredible strength in
paid-search (particularly Google) • High X0,000 of Affiliate and White-label
deals, also heavily engaged in search • TripAdvisor • Both Expedia and Booking forecast to
increase online marketing spend in European marketplace in short term
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7 Conversion
No point in getting them to your site unless you can sell to them
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Do you have sufficiently deep
content, written in a sales orientated
manner, to convince the customer to buy?
Will this encourage the guest to buy?
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Lack of merchandising = low conversions
rate = high distribution costs
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Both Macro and Micro level!
Why would I book the more expensive one?
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Merchandising works….
What can you do to encourage
your customers to book?
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Now!
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6
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OTA dependency a problem
0%
5%
10%
15%
20%
25%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Brand.com
OTAs
OTAs Continue to Gain Market Power
2006 2010 Online Penetration 11.71% 21.71%
Online Direct Penetration 5.37% 7.76% Online OTA Penetration 6.34% 13.95%
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OTAs Continue to Gain Market Power
2006 2010 E2014 Online Penetration 11.71% 21.71% 34.66%
Online Direct Penetration 5.37% 7.76% 9.10% Online OTA Penetration 6.34% 13.95% 25.56%
Which Companies? Average Monthly European Visitors for selected European OTAs
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Awful Affiliates
www.SexAndBondageInLondon.com
Which Companies?
European Hotels US$ billion 2006 2010 2014 Total European Hotel Bookings 102.5 101.8 115.4 OTA European Hotel Bookings 6.5 14.2 29.5 Brand.com 5.5 7.9 10.5
Priceline / Bookings 1.3 7.5 19.9 Expedia 1.2 2.0 4.2 Orbitz 0.3 0.3 0.7 Other OTA 3.7 4.4 4.7
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The OTAs are coming to get you!
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Billboard Effect
Cooperation is key!
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5
Magnificent meta-search
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US$ 108 million in 2014
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The Evolution of the Customer Booking Path
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OTAs dominating!
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Promoted Hotels adding another distribution cost
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4
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Today’s consumer
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600%
The Move to Mobile!
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Mobile as a source of incremental bookings
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OTAs ahead!
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3
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People are talking!
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The testimonial is back!
If UK Internet usage was just 1 hour
September 20, 2011
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0 50 100 150 200 250 300 350
www.skittles.com
www.facebook.com/skittles
Thousands
Visitors, March 2012
Social profiles are outpacing branded websites
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Socially Connected
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Have some degree of trust
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Effective if you get it right!
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2 Understand your customer
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Why bother?
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Data is the new
oil!
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1
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Focus on the fundamentals
Need to manage all channels
(electronic & traditional) much more
closely.
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Prioritisation
Clear Strategy
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Dr Des O’Mahony, CEO and founder at Bookassist
New skill sets needed (Yield and revenue management, electronic
distribution, search engine placement, online merchandising and online selling - all
constantly evolving and changing)
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For a copy of the presentation, please email me on
oconnor@essec.edu