Written by: Michèle Schiermann
Hello to business men and women, marketers, social media specialists or people who accidentally stranded here,
ROPO – research online, purchase offline – a trend, you might be familiar with. It is seen as the result of the development of the Web 2.0 phenomenon. Since the 21st century the web space has become more dynamic and is characterized by its user interactivity as well as network connectivity, highly affected by the rise of social media and content-sharing initiatives (Bell et al., 2014; Berthon et al., 2012). In a business context, companies experienced a shift from presenting themselves solely on their websites (used for information sharing) to a more customer-centric approach - being omnipresent and mediating between product and consumer – welcome in Web 2.0 (Bell et al., 2014). Hence, in the face of the internet age it is of importance to actively engage consumers into the whole process of decision making to 1) stay competitive, 2) raise brand awareness, 3) allow consumers to co-create and 4) benefit as a company from unique insights. Especially in the travel industry, tour operators fear the decline of travel offices as such that the vast majority of travelers is conveniently booking online. But there is a reason for big touristic firms, such as TUI, to keep the offline space alive and adjust it strategically to current online trends. In the following I explain what one has to focus on to communicate a brand successfully and to create a smart bridge between online and offline affairs.
Online-offline behavior in the travel industry
Due to globalization, technology innovations as well as mind set changes, the tourism sector has undergone a tremendous increase in travelers within the last decades. Speaking in numbers, there were 25 million international tourists in 1950 compared to 1,1 billion international tourists in 2013, accompanied by 5 to 6 billion domestic tourists. Furthermore, tourist numbers will experience a further increase of 3,3% from 2010 to 2030 to reach 1,8 billion tourists (UNWTO, 2014).
However, to support such growth it is of great necessity for tour operators to incorporate consumer behavior trends strategically into their firm strategy. Given the growing importance of consumers’ online research activities and the quantity of online transactions as well as the use of apps on all kinds of smart gadgets, does the offline travel office even have a chance to survive? – Yes, it certainly has! Studies have shown that 75% of the package tours (combination of transport, accommodation and lodging) are booked offline (Gondorf, 2015), even though most of the consumers perform an individual prior internet research. Potential consumers hope to decide online on a) location and b) tour operator to have a certain extent of control and knowledge when visiting a travel office (ROPO Initiative, 2008).
Goal: online brand strengthening / understanding the consumer
In times of interconnectivity and the ability to be online 24/7, you can imagine that consumer and brand stand very close to each other (Bell et al., 2014). Consumers impact the brand image and vice versa. But let me go more into detail and present you some scholars who propose the degree of impact one side has.
According to Barwise and Meehan (2010) brand strategies need to incorporate new media opportunities based on the following principles:
- Communicating a clear and strong promise
- Becoming trustworthy by the successful delivery of such promise
- Performing steady analysis of response-, success- or failure rate and being open for continuous improvement
- Innovative measures
Besides, marketers should emphasize the establishment of an interactive market place to generate continuous information exchange from both sides (Mulcahy, 2014). Accordingly, Kietzmann et al. (2011) advise to no longer overrun the customer with unnecessary promotion, instead, provide them with the feeling that firms listen to their needs and wants. Nethnography constitutes a good method to detect such demands. Here, firms actively monitor forums, feedback and review platforms to evaluate the overall satisfaction and determine points of improvement (Elliott & Elliott, 2003).
While these principles deal with the way businesses behave regarding new media opportunities (e.g. social media, ranking sites), Edelmann (2010) provides a consumer perspective and refers to the so called CEPEA decision journey, where the consumer passes the stages of considering, evaluating, purchasing, enjoying and advocating.
Since both parties, the brand/business and the consumer, actively seek to interact to pursue their individual objectives, marketers should nowadays emphasize customer-centric experiences that communicate the brand in a consistent manner to create “touch points” along such CEPEA decision journey. Here, marketers gain an insight into the individual consumer behavior and are able to create consumer files providing a 360-degree view on online-, research- and booking behavior. Due to the growing body of holiday offers, which seem to most rather confusing than helpful, it is of great importance to help potential consumers making smart booking decisions, simply by means of a clear message, a good overview and customer-oriented features (Edelmann, 2010).
Case: TUI – merging online and offline in practice
TUI (Touristic Union International) is the world’s leading multinational travel company and consists of group owned hotels and resorts, an own airline, cruise ships and travel offices. What makes them so successful is that they constantly scan the market and immediately react to natural disasters, economic crises and terror but also to the need for sustainability and the increased interconnectivity of their customers (ROPO Initiative, 2008).
When it comes to the way customers find to TUI, they found out that around 50% reach the tour operator directly via their website, 30% via search engine (every 2nd consumer chooses Google here) and 20% through hotel recommendations. Those insights led to the conclusion that a differentiated website is one of the keys to consumer responsiveness. However, TUI is also successful in creating an intelligent connection between their online and offline channel (ROPO Initiative, 2008):
The tour operator stays innovative by redesigning their travel offices in such a way that potential customers can choose between the traditional desk consultation or instead, move to the lounge area equipped with iPads and ocean sounds. Here, TUI aims to create a unique experience already in the pre-travel phase. They are aware of the power of interactive media and address both, the growing elderly and newer generations who increasingly seek for the authentic experience (Bell et al., 2014). The biggest control reasons for offline bookings are, however, the desire for personal contact and staff competency. One’s decision journey might entail an extensive prior research, but the internet cannot replace a human, whom you share potential concerns with or ask specific questions (ROPO Initiative, 2008).
Where is the consumer vulnerable to marketing efforts?
Engaging with brands in a newspaper or solely in store is as mentioned not quite contemporary anymore. The modern consumer connects with brands in a way that cannot be controlled by companies: namely through interactive community channels online. Once proven traditional marketing strategies are no longer helpful, one needs to become aware of the power of reviews, rating services and word of mouth (hereafter WOM). Picking up the CEPEA decision journey, Edelmann (2010) argues that after the phase of consideration, consumers look for experiences from their peers to have the freedom to choose between several options to reach the evaluation stage, which lasts until the consumer goes to the store to buy the product. Eventually, the post-purchase phase consists of the consumer’s wish, or even urge, to advocate personal experiences to others to close the loop. WOM and the high pace of distribution, whether negative or positive, carries tremendous impacts on the product and brand. Especially when it comes to safety issues, consumers tend to pay more instead of living risky.
Having this said, Edelmann further advises to move the marketing budget from a media-centric to a customer-centric approach. Interestingly, consumers are most vulnerable and persuadable at the evaluation and advocating stages, and not at the consideration phase where 79-90% of the marketing budget is spent on advertisements.
What makes social media so powerful?
Firms need to be aware of the immense value creation through the interaction with their customers (Papasolomou & Melanthiou, 2003). One has to understand the whole social media complex to be able to influence customers’ decision-making strategically and integrate it efficiently (Hanna et al., 2011). Understanding this enables firms to design segment specific campaigns or actions, which trigger their specific target (based on an extensive prior research).
Furthermore, they need to bear in mind that WOM has more power than the best ad and that other consumers embody the perfect information source. While advertisements are oftentimes perceived as annoying, WOM is seen as voluntary and honest. No single company can control the way consumers communicate their product or service experiences, however, they are able to steer it to a certain extent and react (Armelini & Villanueva, 2011).
“What happens in Vegas stays in Vegas;
What happens on Twitter stays on Google forever!”
While positive WOM enriches the overall brand value in terms of image, recognition and reputation, negative WOM can cause some unforeseen, sometimes irreversible damage to the brand – both directions of course strongly correlated with sales numbers (Armelini & Villanueva, 2011).
Interestingly and coming back to the travel sector, we use to express our experiences about products and services more, when they are purchased rarely and applied publicly: holidays leading the list. In the case of TUI and their “loungy” travel office it is quite likely that such innovation finds attention in the web, which in return increases curiosity and stimulates the potential consumer to see such a travel office with own eyes (Bell et al., 2014). Hence, the gap between online and offline closes. Armelini and Villanueva conclude that social networks leverage traditional advertisement methods.
According Berthon et al. (2012) firms need to be aware of potential barriers when implementing social media:
- Attitude and tone should be personal, firm needs to listen to issues
- Employees have to be allowed using networks themselves to identify
- Bureaucracy can kill the interaction
- IT understanding necessary
- Senior managers have to understand the power of social media, not stick to traditions
- Digital divide as some countries do not have access to certain platforms
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Bell, D. R., Gallino, S., & Moreno, A. (2014). How to win in an omnichannel world. MIT Sloan Management Review, 56(1), 45.
Berthon, P. R., Pitt, L. F., Plangger, K., & Shapiro, D. (2012). Marketing meets Web 2.0, social media, and creative consumers: Implications for international marketing strategy. Business horizons, 55(3), 261-271.
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Elliott, R. and Elliott, N.J. (2003). Using ethnography in strategic consumer research. Qualitative Market Research: An International Journal. 6 (4), p215-223.
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Mulcahy, A. (2014) Interactive Consumer Engagement: how the internet has changed consumer engagement over the past 10 years, and how marketers can best adapt. [Available online] http://www.brandba.se/blog/2014/8/12/interactive-consumer-engagement-how-the-internet-has-changed-consumer-engagement-over-the-past-10-years-and-how-marketers-can-best-adapt Accessed on February 15, 2016.
Papasolomou, I and Melanthiou, Y. (2013). Social Media: Marketing Public Relations' New Best Friend. Journal of Promotion Management. 18 (3), p319-328.
ROPO Initiative (2008). Research online, purchase offline in der Touristik. Eine Impulsstudie. [Available online] http://www.peakace.de/wp-content/uploads/2013/03/suchmaschinen__die_touristikbranche.pdf Accessed on February 13, 2016.
UNWTO (2014). Tourism Highlights. 2014 Edition. Retrieved from http://www.e-unwto.org/doi/pdf/10.18111/9789284416226 on June 18th, 2015.