Platform Marketplaces & Data Analytics for Modern Travellers
In 1915, the South 9th Street Businessmen’s Association was formed in Philadelphia to promote the commercial development of 9th Street between Catherine and Federal Streets and its neighboring merchants on 8th and 10th Streets. During this time, the thought was to create an organization to support the merchants and facilitate a memorable experience for all their visitors. Fast forward to today, where the area known as the Italian Market on East Passayunk Avenue continues to thrive along with the support of the South 9th Street Businessmen’s Association.
This is not the only organization that supports it now, though. With the evolution of hardware and software that brings consumers smartphones, companies have formed in recent years to further benefit areas such as the Italian Market with extensions on mobile platforms. For example, I can request a courier to pick up some fresh vegetables for me at Michael Anastasio Produce so that once I am home for dinner I will have something to cook. If it were not for an online service such as this, perhaps I would not have stopped there myself for groceries. As one could imagine, services such as this have largely benefitted both businesses and consumers by creating an online platform for increased amounts of commerce. The food and grocer industry is not the only one positively affected by this idea, as transportation, arts, and even physical therapy have had platforms created to boost commerce in their respective sectors. An intriguing industry that has potential to benefit from platform marketplaces and increased commerce is travel and tourism.
The travel and tourism sectors can be divided into many different sub-sectors, but for the sake of brevity these pieces of the marketplace are always changing for the consumer’s eye to be attracted. Considering platforms have been created for the traveler, such as Airbnb, Trivago, and
TripAdvisor, the online platform idea is not a new one for this realm. These platforms benefit travelers and locals in their own respects and are great additions to the traveler’s journey of creating a memorable experience while away from home.
Though booking a hotel or flight may not seem like novelty ideas, they are technically very integral to letting travelers do what they want and offer a variety of options to not deter someone from getting to their destination. What is interesting for this area of commerce is that traveling is not an often occurrence for most people, thus change in consumer behavior and purchase frequency is relatively low. Though not necessarily a bad thing, travel and tourism have been slower moving industries in regards to innovative business models and unique platform marketplaces. Regardless of this, based on information gathered from the World Travel & Tourism Council, travel and tourism contributed approximately 10.2% to the global GDP in 2016. It is even more intriguing that these lucrative industries are perhaps some of the least caught up to speed in terms of innovation compared to many other industries in world economies. One must wonder if the reason behind this is because of a neglect towards innovation in technology for the sectors, or if these industries are so infrequently touched that consumer behavior truly is taking much longer to change for companies to realize and capitalize upon it.
It is no question that the increase in social media use has changed the way consumers are behaving in recent years. Along with this, mobile devices are playing a large role in the ways people interact with products and services daily. Companies like Facebook have paved the way towards creating a much more mobile-driven buying process for consumers on their network,
working with all organizations to make an impact on those interacting with each other online. Advocates of business practices such as these are leaning towards a focus in travel and tourism, now that it is more apparent that people are discovering on a more frequent basis. This can be very promising for travel and tourism in that the more discoverable and feasible it becomes to access intriguing destinations, the more we can expect the consumer to have the desire to act upon what they see online.
For example, Facebook and Instagram provide consumers with the information and visibility of unique travel opportunities, thus if the process behind actually reaching these destinations is simple and efficient there can be an increased amount of commerce. Smaller firms can use this to their advantage, as it is also becoming much cheaper to bring their products and services to consumers via social networks and online platforms than it has been in the past. Connecting these dots in the right ways is looking more likely to be the route that leads to further success in delivering quality products and services to consumers that are interested in spending, specifically in travel and tourism.
Further research and recent product releases have shown that software and artificial intelligence innovations are going to be major steps in bringing consumers what they desire. Companies are already using this technology to their advantage and making smart decisions on how to perfectly market their products and services to consumers, both in the right place and at the right time. By using previous purchasing behaviors and data analysis on spending habits, companies can take hold of this information to deliver a better experience for their customers. Over time, this kind of information could be used by travel and tourism companies to break the mold in regards to knowing how and when to market towards their target customers as well. The main difficulty of this process is a reiteration of the purchase frequency within these sectors. The only areas where it might become easier to make marketing strategy decisions is within the business and super-traveler customer segments. As one could imagine, these are the groups of people who tend to travel on a much more consistent basis than the average traveler, thus providing more data to companies to work from.
An additional perspective to take on this subject would be from the eyes of a consumer themselves. If a younger generation traveler who is ready to explore the world begins their search online, what will they find in terms of platform marketplaces and where will they make their final purchases? The answer to our question leads to countless possibilities of how these companies determined their marketing strategy and if this person falls beneath their realm of target customers. As a consumer, there are strengths and weaknesses to this convenience in which some would debate its ethics. Consumers are aware of the use of data analytics in certain realms, mainly with products and services that are more frequent bought. Think of how Starbucks knows what time you usually want your favorite coffee each day, or how Amazon pings you when the price drops on a related item to your last purchase.
Depending on how crucial the strategy is in determining the overall success of the business, consumers may be comfortable with it while trying to make their own buying decisions. For industries like travel and tourism where most consumers make these decisions infrequently, there could be a large upside to tailored recommendations or suggestions on where they should spend their money. In this sense, the convenience and value of using this information to help the consumer may outweigh the idea of using their personal information to target the consumer in the first place. In other scenarios where perhaps the consumer buying power is interrupted by recommendations and suggestions, one could easily be deterred from clicking that ‘Checkout’ button on a simple purchase.
A few of the key takeaways to include on this subject surround the positive impact of marketplace platforms on commerce, the use of data on consumer spending to benefit strategic business decisions, and how travel and tourism economies can too take advantage of these technologies. The strongest opportunity that I see for platforms within the travel and tourism sectors is utilizing social networks and the frequent travelers within them to better understand where these markets are heading in the coming years.
There is little to deny the fact that the more network externality that occurs on a platform, the more value it brings to the consumers that are using it. Along with this, the more consumers begin to use platforms for commerce the more data will be available for analysis. Smart business owners will move the spending needle towards business intelligence and data analytics in these sectors, especially if their business model is still in an infant stage compared to what consumers are used to seeing. The beauty of an infrequently purchased sector is that if a company does in fact make the proper decisions ahead of a change in consumer behavior they will most likely be seen and recognized as an innovator in the space. Ultimately, if an organization has the opportunity and resources to make a consumer’s life easier by making their purchasing process more efficient, their chances of becoming an industry competitor are feasible and probable.
References
- Economic Impact of Travel 2016. World Travel & Tourism Council.
- Schreiber, Svi. “How SaaS Is Bringing B2B Marketplaces Back.” VentureBeat.
- “South 9th Street Businessmen’s Association” South 9th Street Italian Market — Philadelphia, PA.
- Ting, Deanna / Sumers, Brian / Sheivachman, Andrew. “Interview: Facebook’s Head of Travel on Hotels Going Mobile.” Skift.
