Promotional marketing in the hospitality industry

expert roundup
-
October 21, 2021
Dirk Hoerig CEO commercetools
Johnny Quach
Chief Product Officer
6
Min to read

How have promotion marketing strategies in the hospitality industry evolved?

To learn more about new promotion trends in the hospitality industry we spoke with Johnny Quach, Chief Product Officer at Hostelworld. Johnny oversees product and marketing, and is responsible for a lot of key operational decisions at Hostelworld. 

The pandemic drastically changed the way hospitality and especially the travel industry functions. Mobility restrictions and lockdown presented an unprecedented challenge, and changing travel behavior forced businesses to adapt their hospitality marketing strategies. Limits on in-person interaction also spurred major changes in digital infrastructure across the industry. While it’s a shift that was already well underway, most businesses have now moved towards an ebusiness model.

The hospitality industry is still in the process of recovering from COVID-19, so now is a good time to assess the changes that are taking place from a promotion marketing point of view.

“COVID’s main impact on the hospitality industry and travel behavior in general was uncertainty,” says Johnny. The most striking change in consumer behavior, especially the consumer behavior of gen z, was a significant decrease in the comparative number of purchases being made, even though many users were still visiting the Hostelworld site.

But the pandemic didn’t just impact consumer behavior. Let’s delve into understanding the hospitality marketing strategies businesses used to attract and retain customers. According to Johnny, “to retain customers or create initial value for them you should always start at the most painful problem you can find”. Businesses essentially need to identify the core issue customers are facing, and build a solution that solves it entirely.

Effective paid user acquisition strategy in the hospitality industry

When it comes to acquiring new customers non-organically, paid ads are the go-to solution for many companies. They’re also one of the quickest ways to acquire new users because they direct individuals straight to your website.

Naturally, paid search ads are one of Hostelworld’s key user acquisition strategies. But, before you place all your bets on paid acquisition, it’s important to understand the challenges it may present. “The issue with paid ads is that they become more expensive over time. This is a force that you can’t stop”, says Johnny.

“The key thing to keep in mind when pursuing paid acquisition is your ability to convert and retain the user that you are paying to acquire. It all comes down to how good your product is, how much brand loyalty you can inspire, and how well you are promoting it.”

With any advertising platform like Facebook, Google or TikTok, the cost per click (CPC) will increase over time. This is because competition increases and inventory decreases.

A paid user acquisition strategy may be the ingredient you’re missing. But, if you don’t manage to retain the customers you’re paying to attract, it’s a wasted effort. As Johnny rightly says, “It’s your job to create the right experience, to maintain that experience and to repeat it over and over for the rest of the customer lifetime”.

How does promotion localization help drive customer retention?

Another critical aspect of attracting customers is the ability to set yourself apart with a unique brand personality. Your marketing and promotional strategies will vary depending on the personality and tone you set for your brand. You need a well defined brand image to create a cohesive marketing strategy. This is something Hostelworld does very well, and it’s a big reason they’ve managed to build significant brand equity. As Johnny puts it, “Unlike most travel brands, Hostelworld has a very clear identity and a clear personality, and that’s just the effect of being around for so long.”

Companies always face the dilemma of choosing between standardization and localization, or some balance in between. A global strategy makes sense in cases where there are minor differences in customer needs and other factors between countries. But localization becomes much more important when the customer’s needs differ depending on their location.


“Hostelworld uses a localization strategy when the effort put into it makes an impact”, says Johnny. For instance, localization strategy becomes viable with regards to payment methods because it’s natural for consumers to want to pay with methods that are familiar to them. In this way, localization helps Hostelworld make their content accessible and relevant for the diverse range of audiences they cater to. 

“Hostelworld uses localization as a strategy and a tactic, but only when it is in something that is physically blocking someone from making a transaction.”

Benefits of personalized promotion marketing in the hospitality industry

While geomarketing certainly can drive users, it’s not enough if you want to connect with your audience on a one-to-one level. In these situations personalized promotion marketing is key. “91% of consumers are more likely to shop with brands that recognize, remember, and provide relevant offers and recommendations.” - Accenture.  

Not only does it drive consumer engagement, it also increases repeat purchases. Take the example of the Starbucks Rewards Program. Starbucks has one of the most successful rewards programs in the world, contributing 50% of the brand’s revenue. With this rewards program, Starbucks offers customers personalized promotions via app and in store. Regular incentives are tailored to customers’ individual preferences, resulting in a significant increase in repeat purchases.

When asked about personalized promotions, Johnny said: “At Hostelworld what we are not looking for is a personalized experience for a user, but a personalized experience for the user’s point in the lifecycle.”

The hospitality industry has definitely come a long way from a marketing and promotional standpoint over the last year and a half. It was quick in adapting to new consumer needs, like contactless check-ins and payments.

The pandemic has changed the way customers look at vacations, resulting in the emergence of trends such as ‘staycations’. Consumers are also now more likely to look for budget travel options than before.

With these changes happening across the hospitality industry, competitive offers and exclusive promotions are undoubtedly one of the best ways for businesses to stand out. For a promotion to be successful, it has to offer the customer something they want.

This means understanding your customers is now more important than ever.

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Hostelworld Fully Replace Their In-House Legacy Promotion System with Talon.One
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The benefits of open-source ecommerce platforms

expert roundup
-
September 9, 2021
Dirk Hoerig CEO commercetools
Tom Aniol
Head of Marketing
5
Min to read

The flexibility of open-source ecommerce platforms

Choosing the right open-source ecommerce platform has a great impact on the profitability of an ecommerce business. What online merchants are looking for these days is the freedom of customization in the functionality and design. This is exactly what an open-source ecommerce platform offers. It gives the user complete control over the source code and means they can alter it to meet their business needs and objectives. 

To learn more about open-source ecommerce we spoke with Tom Anioł, Head of Marketing at Vue Storefront. “Open-source ecommerce is where the ecommerce industry is headed”, says Tom. In the past years the ecommerce industry has seen a rush of open-source ecommerce platforms. However, what makes Vue Storefront stand out is bridging the gap between technology-oriented developers and business-oriented marketing. The open-source frontend platform can easily be placed on top of any headless ecommerce platform and connected with any 3rd party service via their API, facilitating the build-up of a headless commerce stack. This is one of the major advantages of headless architecture.

The success of open-source platforms has been achieved through technological innovation and commercialization. The commercialization has grown significantly with the high adoption of SaaS platforms. This interweaving with a commercial software platform has put a lot of skepticism around the viability of open-source to rest. 

As rightly said by Tom:

Engage with your customers by providing a seamless omnichannel solution

Talking more about the ecommerce industry, Tom emphasized the importance of how customer expectations are rising post-pandemic. Customers are essentially looking for a “zero-friction” digital experience. The key to providing a seamless user experience is an omnichannel marketing approach connecting the various channels of a company and guiding the prospects along their personalized customer journey. Consequently UX is one important differentiating factor in ensuring this. Stressing the importance of UX, Tom said:

The headless commerce landscape is moving towards simplification, info low-, or even no-code approach. Headless platform vendors are now working on offering even more flexibility and freedom to the developers. Thus eliminating the need to rely on them to make small changes in the web store. This agility offered by low- or no-code platforms helps businesses respond to consumer demands quicker. It is safe to say that “no-code platforms” are the new trend in the headless commerce landscape.

The pandemic has shifted the consumer mindset about ecommerce technology and this is the advice Tom would give ecommerce businesses:

Integrating an open-source ecommerce platform to your business

Today, customers expect a very high standard of UX from businesses.

And with an open-source ecommerce platform the initial setup and adaptation to your business can be resource-intensive. However, with the increasing number of granular solutions that compliment your core product it’s simpler than ever to provide seamless and personalized customer journeys that increase the likelihood of conversions. 

By integrating with Talon.One’s Promotion Engine our customers enjoy full flexibility and scalability to solve their promotional needs and desires once and for all, without wasting any additional developer resources.

Consequently, the whole open-source ecommerce market is winning from the ecosystem synergies that microservices are creating. In order to benefit from this development, B2C ecommerce businesses will have to remodel their strategy and place online channels at the top of their priority list. Even today, it’s not enough to simply be online, or to sell online. 

Online and offline channels must cooperate smoothly, as clients no longer separate the off- and online world. Customers jump between devices and channels and demand the same seamless experience in all of them. Therefore, all of your customer data needs to be stored and transferred across all of your channels. No matter which channel a customer uses to interact with your company.

Your customers’ desires are simple: They want to buy conveniently no matter where they are, from whichever device or channel they choose. And merchants have to meet these expectations. 

The obstacles in implementing an omnichannel strategy are the same as always: Technology. However, as technology is ever-advancing, open-source ecommerce platforms are improving and their interconnective design makes switching to headless architecture increasingly important for any company that wants to offer their customers impeccable user experiences.

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Building a Headless Commerce Stack From Scratch
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Discover the benefits of headless commerce
See how real businesses built their headless commerce stacks around their own requirements
Use our 3-part headless commerce model to plan your stack
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Voice marketing & voice commerce in 2021

expert roundup
-
July 15, 2021
Dirk Hoerig CEO commercetools
Kane Simms
Founder, VUX World
3
Min to read

Voice assistants have now become a familiar fixture in peoples’ homes. That means increasing opportunities for voice marketing.

Voice commerce definition

Voice commerce is often defined as an extension or evolution of ecommerce. Simply put, it is a technology that enables you to shop online using your voice through facilitating a smart device through using the technology of natural language processing (NLP).

We talked to voice and conversational AI consultant, Kane Simms, for his opinion on the future of voice commerce and voice (search) marketing in general. 

Voice commerce has emerged as another big new frontier in the ecommerce industry, driven by digital assistants on smartphones and smart home systems like smart speakers and voice-controlled appliances.

The emergence of voice search marketing

According to Microsoft’s 2019 Voice report, around 72% of consumers have used digital assistants for voice searches — a great opportunity for brick and mortar retailers to create more touchpoints with customers 24/7. 

Kane said:

In general, we see a steady increase in voice searches and while customers are using voice assistants more, conversation with digital assistants still risks errors, and consumers are often limited in the functions they can perform via voice. Browsing or comparing products can be tricky. Last but not least, due to the lack of value-oriented voice marketing of companies. 

As a consequence, Kane sees the main task for the industry in learning how to design useful, proactive interactions with customers, and also for customers in how to use them. This way companies can develop data-based voice marketing strategies to meet their customers expectations.

Voice commerce trends

First things first, the voice technology is still in its infancy. Therefore, there are multiple voice commerce trends that are worth mentioning. All of them are based on facilitating natural language processing (NLP) to improve interactions with voice assistants. 

Brands are also using this technology to create hyper-personalized experiences. Amazon currently dominates the voice commerce space. Through their integrated shop system Amazon has a far-reaching impact on consumer behavior. This results in Amazon’s biggest advantage for voice commerce creating a pull factor for many ecommerce brands that are trying to integrate their products into the Amazon platform.

Kane said: 

Leveraging the potential of Amazon and Alexa, the BBC enabled a unique interactive voice news service in the UK. BBC News is now available via voice command on smart speakers. This is a great example of an organization using voice technology to make its service more convenient for its users. But how did this impact the BBC customer journey map?

As Kane states: “BBC has put the radio stations on smart speakers which means the customer journey and customer experience is exactly the same. They have just replaced the interface you use to access it.”

With the BBC news skill, its content was created specifically for the voice medium. In that sense, it’s changing the customer journey from passive consumption of news, to interactive, interest-based consumption where the user is in control of how much of a story to listen to - leveraging the engagement of their users. This highlights the possibilities for business, as technology evolves. Migrating a service to smart voice interfaces is now easy enough that any business can give it a go.

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Direct-to-consumer (D2C) ecommerce in 2021

expert roundup
-
July 15, 2021
Dirk Hoerig CEO commercetools
Matthias Steinforth
Managing Director, kernpunkt digital
3
Min to read

Mega trend: Direct to consumer (D2C)

In the past few years, we have seen an explosion of direct to consumer (D2C) companies. Selling directly to customers has become easier and eliminates the trouble of relying on wholesalers. Even popular brands such as Heinz, PepsiCo, and Coca-Cola have opened new direct to consumer channels. 

What is direct to consumer (D2C)?

D2C ecommerce refers to selling goods directly to the consumers without the involvement of any third party. This model has proven to be a phenomenal success. However, it has raised several questions for ecommerce companies: How has the emergence of D2C companies affected consumer perception? What problems has it solved? We talked at length about this topic and ecommerce in general with Matthias Steinforth, a serial entrepreneur and Managing Director at kernpunkt.

What risks does D2C pose?

For companies that have previously relied on traditional sales models and brick-and-mortar retail, D2C ecommerce is a major change, says Matthias. It may be a big strategic move but it poses risks not only related to logistics but also marketing. The business owners are solely responsible for the marketing of their products. But proactive marketing across multiple channels can be tricky for companies that previously used serviced retailers. As rightly said by Matthias: “In addition to the technological challenges from ERP connectivity to billing for B2C customers, D2C demands different marketing and customer retention.”

Many of the D2C companies are start-ups or retailers that have invested in the development of their own products. This is why they can effectively calculate the entire customer journey and learn about customer frustrations. This knowledge about end-users has attracted the attention of a lot of corporations that are now investing in or buying D2C companies to gain their knowledge of end customers as Matthias says.

User experience for B2C commerce

Matthias believes it is imperative for ecommerce businesses that customers have a uniform user experience across different channels. Mobile-first indexing by Google has changed the concept of website design. 

In general Matthias believes that anyone pursuing an ecommerce strategy in B2C today must think mobile-first and ideally invest in apps or Progressive Web Apps (PWAs).

Digital businesses need to deploy a mobile-first approach for their websites which can then be scaled up for desktops and tablets. Not only does it help with the ranking but also supports the in-store experiences for shoppers. Consumers often check reviews on a mobile device before they buy products from a brick-and-mortar retail store. According to a study, internet users looking for more information in-store often skip approaching retail associates and go directly to their smartphones. 

With the increase in the use of mobile and tablets for online shopping, the number of touchpoints has also increased. In addition to the mobile web store, own apps, and the online store for the desktop, further integrations will emerge, says Matthias. There are currently rapid developments in the integration of ecommerce in social media platforms such as Facebook and Instagram.

When speaking of changes in ecommerce, marketers need to keep up with new promotion tactics. According to Matthias, promotions must not be limited to discounts and coupons.  It is important not to influence the customer experience in the checkout too much with discounts. If, for example, the options for entering discount codes are too conspicuous, the user may bailout in the checkout process.

The flipside of the growth in online shopping is an increase in competition and high consumer expectations. Amazon is definitely the undisputed leader when it comes to ecommerce. Not only does it dominate desktop retailing but has also aced mobile ecommerce. This is what Matthias has to say about Amazon and tackling the highly competitive market:

Amazon is becoming increasingly dominant as a sales channel in ecommerce. Companies, therefore, need to develop strategies to attract customers away from Amazon.

As a consequence Matthias believes that:

From the shift towards headless commerce systems to new ad tracking technology, and voice commerce, the ecommerce industry is witnessing some enormous shifts. Companies that embrace these trends stand to gain a significant competitive advantage.

Consumers are more receptive to new technologies than ever before, and they also expect a more convenient user experience than ever before — hence the rise of voice- and headless commerce.

Meanwhile, the changes we’re seeing in the digital advertising industry have been fuelled by consumers’ increasing awareness of the importance of personal data.

Ultimately, the way we do business is dictated by the people we sell to. So, remember to keep that in mind when planning your post-pandemic strategy, whether it’s promotions-, advertising-, or sales-related.

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Hypothetical business scenario to compare headless and monolithic systems
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The ecommerce customer journey in 2021

expert roundup
-
May 15, 2021
Dirk Hoerig CEO commercetools
Dirk Hörig
CEO at commercetools
3
Min to read

The pandemic made holistic ecommerce customer journeys mandatory

The past year has seen a monumental shift towards ecommerce. eMarketer research found that 2020 saw a 27.6% rise in retail ecommerce sales worldwide. Such a sharp increase in demand has placed an enormous amount of pressure on the industry but has also meant huge opportunities for businesses that have been quick to adapt.

With increased competition in an already crowded marketplace, digital advertising has remained pivotal. The high demand for online ads calls for new ways to acquire customers online, and businesses are having to adapt.

Innovation in ecommerce customer journey 

Dirk Hörig, CEO of commercetools, stressed the importance of the customer journey in the face of changing consumer behavior. Mapping out the entire (ecommerce) customer journey is one of the core challenges for all companies. Dirk said that one of the cornerstones of digital business is the ability to evolve and innovate. 

I’ve been fortunate to work with some solid companies and people throughout my career. One of the fundamental forces behind my journey is the opportunity to connect and collaborate with other designers. Building relationships is a crucial part of what we do.

The age of desktop-first shopping experiences is over, marking a phase shift in the buying mindset, as mobile commerce is now on par with ecommerce. In the third quarter of 2020, an average of 55.4 percent of consumers worldwide used a mobile device to buy online.

Consumers demand intuitive, easy-to-use shopping experiences across all devices. This calls for an evolution in omnichannel strategy and prioritization of holistic experiences - no matter if it's about B2B or B2C ecommerce customer journey. Due to this, Hörig says that trust in online shopping has skyrocketed.

For example, many businesses now run promotional campaigns that are designed to behave identically, no matter where or how customers interact with them. One such example is digital loyalty programs, which have become the go-to way to reach and reward customers for their business.

Evolution of ecommerce software

In terms of software, the market has shifted from using monolithic systems to providing software products as a service. As Dirk mentioned: “From the beginning of the mid-late 90s till the late 2000s, most of the software was monolithic. It was one piece of software providing everything end-to-end.” 

The evolution of software for ecommerce has been rapid since 2014 saw a rising wave of SaaS applications and a massive proliferation of third-party API companies. This is when microservices architectures came of age, and it spurred a new generation of customizability-oriented ecommerce software companies (and  included). 

Dirk explains: 

The new ecommerce software solutions offer a scalable technology changing the way ecommerce businesses operate by giving a holistic view of consumer behaviors while simplifying the service architecture for developers. Talon.One offers exactly this, giving marketers full control of their promotions through one centralized system that can be integrated with all kinds of other SaaS-solutions.


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