Will influence USD42 billion sales overall”, says Facebook-KPMG in India report
Facebook, today, launched the fourth research report under its programme called Zero Friction Future, this time for the Indian travel industry. Authored by KPMG in India and based on the primary research and insights from a survey conducted by Nielsen, the report, titled “Eliminating friction in travel path to purchase”, defines frictions at each stage of the travel purchase journey and highlights the significant role mobile and Facebook can play to influence Indian travelers' purchase journeys.
The report suggests that nearly half of the total consumer loss in airline ticket purchases (11 per cent out of 23 per cent) and hotel bookings (16 per cent out of 32 per cent), is on account of media friction. It reveals that by 2022, around 9 in 10 airline ticket purchases and hotel bookings will be mobile influenced, creating a USD 19 billion and USD 12 billion sales opportunity for airline and hotel brands respectively. Additionally, the report reveals that mobile-influenced journeys for airline ticket purchases are 24 per cent shorter and for hotel bookings are 19 per cent shorter than offline-influenced journeys. In fact, mobile can help airline brands and hotel brands tap into a potential sales opportunity of ~USD9 billion and ~USD 2 billion by reducing media friction.
Speaking on the launch of the report, Pulkit Trivedi, Director, Facebook India, said, “Today, mobile plays a significant role in most travel purchases, making it imperative for brands to optimize their media mix and explore different marketing pathways. At Facebook, we want to help brands convert better by connecting better with their consumers. Our latest report aims at assisting travel brands and marketers in designing relevant mobile marketing strategies, which can help them reduce friction in consumers' path to purchase and consequently increase sales.”
As per the findings of the report, mobile can help reduce consumer friction and aid increased conversion for travel brands at a lower cost. In the airline category, increased role of mobile in media mix can help increase 2pp of purchase conversion totaling to ~USD 9 billion sales opportunity for brands by 2022, at ~30 per cent lower cost of acquisition. In the hotel category, mobile can help increase 3pp of purchase conversion totaling to ~USD 2 billion sales opportunity for brands by 2022, at ~15 per cent lower cost of acquisition.
Speaking on the report findings, Arvind Gupta, Head – Management Consulting, KPMG in India said, “Engagement and the way of consuming digital today is redefining the way in which consumers are making travel choices. In today’s competitive environment, travelers expect a near identical experience from one device to the other, from one website to a mobile app and from a travel brochure to the destination. This is why it has become critical for brands to engage with travelers with one comprehensive message and all the information they expect, in a timely fashion. Any disruption in the journey impacts the purchase decision of the traveler. It is important to understand what leads to dropouts in the path to purchase of travel essentials like airline tickets, hotel bookings etc., known more popularly as friction. The report/ study aims to understand this very aspect and stages of purchase journey in the travel path and also elucidates on the possible means to eliminate friction and improve conversion rates in the travel space.”
“The study was conducted with the intent of measuring the influence and impact of individual media touch-points on the consumers' path to purchase route – right from their need identification of booking an airline ticket or making a reservation in a hotel, to finally completing said reservation. Given the dynamic nature of the travel category with a vast presence of aggregators and existing online presence of all prominent players in the marketplace it was imperative to better understand the current interactions of consumers with both online and offline touch points. As intuited, Mobile has increasingly become a prominent presence in the consumers’ journey across stages. Mobile being ones preferred medium for interacting with the category, enhancing mobile's role in the media mix not only gives marketers the opportunity to offer their consumers a seamless purchase journey but also gives them the opportunity to capitalize on the enhanced earning potential.” said Ashish Karnad, Executive Director, Marketing Effectiveness, Nielsen India.
“We hope this study will give advertisers and consumers alike the current category landscape while also providing a bird's eye view on the possible opportunities being missed by marketers due to media friction and bring in further optimization.” he added.
According to the research, the top friction areas for different demographic cohorts vary and hence marketers need to customize their marketing strategy accordingly. Some key consumer friction areas across touch points include:
Gender: In airline ticket purchases, nearly 70 percent of men are impacted by the friction at the top of the funnel leading to dropouts early in the purchase journey. Most men believe that offer communication shared by the brands are either not clear or don’t capture sufficient details. Women, on the other hand, seek more information and assistance with the purchase as they are likely to ignore advertisements on offline mediums such as print and radio. Whereas, in hotel bookings, lack of ‘relevant ads’ and ‘clear call to action’ are top friction areas for both men and women at the top of the funnel. In fact, over 70 per cent of men drop out due to these friction areas at the awareness stage itself. Towards the end of the purchase journey, men expect more relevant information and leave the purchase funnel as they find it difficult to express interest in the property of their choice. While, most women exit the purchase cycle at the last leg due to lack of credible advice, not enough information, unclear payment terms and offer communication.
Age: For airline ticket purchases, clear offer communication, emerges as the common ask for all groups. Although airline advertising is often targeted towards older age groups, a similar number of potential consumers in 18 –24 years old also enter and complete the purchase journey. Young prospective travelers (18-24 years old) are a lucrative customer segment and are characterised by their familiarity with new technologies. Nearly half of the aware decision makers in 18-24 years old are lost early in the purchase cycle as they are not guided to the next stage. For hotel bookings, a significant proportion of visitors on travel portals seeking information on hotels and resorts are from 18-24 years old age group. This age group travels more often and seeks more information throughout the travel purchase journey. Nearly a fourth of the aware decision makers dropout at last leg of the purchase journey due to trust issues or a lack of transparency in package/costing details.
Socio-economic: For the airline category, while friction points faced by NCCS A and NCCS B consumers such as the need for assistance during the purchase journey, clear communication of relevant information and offers, were similar across the purchase journey, an NCCS B consumer considered unavailability of payment options and schemes as a major friction point while moving from awareness stage to consideration stage. NCCS A consumers on the other hand dropout due to information gaps at consideration and intent stage on issues such as offer communication, difficulty in browsing information, lack of relevant information, etc. Similarly, for hotels category, nearly half of NCCS A consumers are lost at the top of the funnel as they fail to find clear and requisite information on relevant media. NCCS B consumers require adequate purchase assistance across the stages as they face issues related to unclear offers, guidance to move to next stage, more clarity on payment schemes and options, etc.