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Peter O'Connor - HSMAI Europe

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Peter O'Connor - HSMAI Europe

  1. 1. 24/02/15   ©  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!
  2. 2. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   2   Ten things to think about…..
  3. 3. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   3   >> 0 >> 1 >> 2 >> 3 >> 4 >> 10 Incredible pace of technological change
  4. 4. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   4   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.
  5. 5. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   5   Ubiquitous and instant access to up-to-the- second information >> 0 >> 1 >> 2 >> 3 >> 4 >> 9
  6. 6. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   6   Our customer is changing! Our customer has changed!
  7. 7. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   7   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……
  8. 8. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   8   Now they turn to the web….. And the Mobile Web
  9. 9. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   9   And Social Media Disruption !
  10. 10. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   10   Ineffective presence on online / mobile / social renders you invisible Only two things matter!
  11. 11. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   11   Question 1 How will people find your site(s)? Question 2 Why should customers book on your site (rather than elsewhere)?
  12. 12. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   12   >> 0 >> 1 >> 2 >> 3 >> 4 >> 8 Search positioning remains the critical issue
  13. 13. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   13   28 28Number of sites considered before making a travel booking
  14. 14. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   14   Less than one third of consumers start looking by searching for a brand
  15. 15. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   15   Gaining visibility is getting increasingly difficult
  16. 16. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   16  
  17. 17. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   17  
  18. 18. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   18   What drives search? Detailed Unique Organised Topical Content See me live……
  19. 19. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   19   See me live…… OTAs winning search battle •  Dominating SEO results listings •  Booking.com incredible strength in paid-search (particularly Google)
  20. 20. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   20   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
  21. 21. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   21   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
  22. 22. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   22   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
  23. 23. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   23   >> 0 >> 1 >> 2 >> 3 >> 4 >> 7 Conversion No point in getting them to your site unless you can sell to them
  24. 24. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   24   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?
  25. 25. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   25   Lack of merchandising = low conversions rate = high distribution costs
  26. 26. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   26   Both Macro and Micro level! Why would I book the more expensive one?
  27. 27. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   27   Merchandising works…. What can you do to encourage your customers to book?
  28. 28. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   28   Now! >> 0 >> 1 >> 2 >> 3 >> 4 >> 6
  29. 29. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   29   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%
  30. 30. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   30   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
  31. 31. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   31   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
  32. 32. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   32   The OTAs are coming to get you!
  33. 33. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   33   Billboard Effect Cooperation is key!
  34. 34. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   34   >> 0 >> 1 >> 2 >> 3 >> 4 >> 5 Magnificent meta-search
  35. 35. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   35   US$ 108 million in 2014
  36. 36. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   36   The Evolution of the Customer Booking Path
  37. 37. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   37  
  38. 38. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   38   OTAs dominating!
  39. 39. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   39   Promoted Hotels adding another distribution cost >> 0 >> 1 >> 2 >> 3 >> 4 >> 4
  40. 40. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   40   Today’s consumer
  41. 41. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   41   600% The Move to Mobile!
  42. 42. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   42   Mobile as a source of incremental bookings
  43. 43. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   43   OTAs ahead!
  44. 44. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   44   >> 0 >> 1 >> 2 >> 3 >> 4 >> 3
  45. 45. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   45   People are talking!
  46. 46. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   46   The testimonial is back! If UK Internet usage was just 1 hour September 20, 2011
  47. 47. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   47   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
  48. 48. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   48   Socially Connected
  49. 49. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   49   Have some degree of trust
  50. 50. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   50   Effective if you get it right!
  51. 51. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   51  
  52. 52. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   52   >> 0 >> 1 >> 2 >> 3 >> 4 >> 2 Understand your customer
  53. 53. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   53   Why bother?
  54. 54. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   54  
  55. 55. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   55  
  56. 56. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   56   Data is the new oil! >> 0 >> 1 >> 2 >> 3 >> 4 >> 1
  57. 57. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   57   Focus on the fundamentals Need to manage all channels (electronic & traditional) much more closely.
  58. 58. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   58   Prioritisation Clear Strategy
  59. 59. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   59   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)
  60. 60. 24/02/15   ©  Peter  O’Connor,  Essec,  2015   60   For a copy of the presentation, please email me on oconnor@essec.edu

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