28 June 2017
John Gessau

John Gessau

John Gessau - ACI Worldwide

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Mobile is Transforming the Travel Sector: So What’s a Merchant To Do?

21 April 2017  |  4837 views  |  0

April in South Africa means warm days and seemingly endless sunshine, albeit that the nights are cooler as we start sliding toward winter. Temperatures are down from the 30+ Celsius levels of high summer (that’s mid-eighties for my American friends) to a more modest 20-25, but nevertheless nearly every day is deserving of a braai (that’s barbeque for the rest of the world). But I do spare a thought for my colleagues and friends in Boston, New York, Munich and London (amongst others) at this time of year, as they swing wildly between hopes of the pending summer and remnants of the long harsh winter. Who’s to blame them for seeking a bit of light escapism as they plan and book their spring and summer vacations?

For many travel operators, as well as airlines and hotels, these days are their ‘peak’ – a time period that demands careful planning, and ongoing vigilance in the face of fraudulent activity (much like Black Friday and Cyber Monday for other sectors). But the challenges for merchants in the travel sector are compounded by the fact that the way in which we plan and book travel has changed so dramatically in such a short period of time.

 

Mobile is transforming the way that consumers plan and book travel

In 2014, around a quarter of leisure travelers used their smartphone to book travel, up from only 15% in 2013.1 But when it came time to book and pay, the PC was still the device du jour. By 2015 that proportion had grown to 31%, according to Google, with 54% of business travelers having booked travel on their smartphone. Since then, the trend toward mobile has continued, in part driven by improvements in both native apps and mobile websites that have accompanied ever more powerful smartphones.

But these improvements do not take place in a vacuum – they are driven by consumer desire for convenience, speed and simplicity. Merchants in the travel sector therefore need to focus on delivering a smooth checkout and payment experience via their native app or mobile-optimized website, otherwise they risk cart abandonment. This means offering one-touch payment, a range of suitable payment options (including mobile wallets) and a suitable mobile fraud strategy that lets through genuine shoppers. Due to the complexity, we are seeing merchants turn to their PSPs and technology vendors to meet the demands of their customers.

 

There are more customer journeys when it comes to planning… journeys

According to Google, 94% of leisure travelers also switch between devices as they plan or book a trip, and it’s not as simple as “research on mobile, book on desktop.” There are many potential customer journeys that travel marketers need to account for, and can influence the final purchase decision – and they need to be able to process the payment wherever and whenever the consumer makes that decision.

Cross-channel visibility and data integration is of critical importance, especially as travel planning and booking permeates more of our mobile experience. From review sites (TripAdvisor etc.) to social media (such as Instagram) and tools such as Google Maps, a huge number of the apps we use and websites we visit can influence the purchase decision. Video marketing also plays a huge role – and virtual reality (VR) is waiting in the wings.

Those merchants that can integrate data and provide a smooth and seamless experience across platforms – allowing consumers to start a booking on one device and finish on another – are going to enjoy a bigger slice of the pie.

There are demographic forces as work too. According to research completed by Hipmunk, half of millennials describe themselves as “travel hackers,” meaning they know all of the best sites and methods to get the best travel deals. Meanwhile, only 26% of gen x-ers and 12% of baby boomers share that sentiment. Their mobile devices are at the core of this comfort with planning and booking online.

 

What’s a merchant to do?

Competition is particularly fierce in native apps, where growth outpaces that of mobile websites. The convenience of one-touch booking (based on stored payment details) and highly personalized experiences enable the kind of seamless experience that consumers are demanding. Payment providers are increasingly able to equip their merchants with tools that help them achieve this – such as mobile software development kits (mSDKs). Merchants should carefully evaluate the capabilities of these technologies, and ultimately work with those that are developer-friendly, saving them time and development effort, and also secure, reducing fraud but still letting through genuine shoppers. In addition to offering simplicity and security, solutions also need to be global by default – the travel vertical requires the ability to sell in countries all around the world, supporting an array of local payment methods that reduce friction. And technology that ticks these boxes should leave merchants some time to plan their own vacations, as the winter ‘peak’ subsides…

Oh, and did I say South Africa is a great destination at this time of the year?

Holidaying in the African bush TagsMobile & onlinePayments

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