D2C challenges: The travel industry

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Building blocks for excellence

Tour operators need to put themselves back in the driver’s seat of the
travel industry.
They can do this by systematically striving for excellence in the field of D2C. We identify ten building blocks for achieving such excellence: a shared internal understanding, a powerful web address, a truly dynamic website, effective
customer retention management,
a multichannel approach that combines physical retail and e-commerce, the ability to create stories and become a social media player, a strong marketing budget (especially during the D2C ramp-up phase), potential horizontal or vertical strategic partnerships and alliances, organizational adaptation, and an intelligent KPI and steering system. These ten elements form the basis of a power play that can help companies take back control.

Each of the ten building blocks listed above merits a detailed discussion. To take one example, customer retention management – or CRM – should include a number of distinct elements, such as commitment to the continuous expansion of consumer accounts through diverse entry points, effective strategies for capturing consumers who initially come through other channels,
AI-based
customer segmentation that focuses on individual needs, an in-depth understanding of consumer preferences, behaviors and desires, and an attractive loyalty program that encourages repeat business. Crucially, tour operators should view customer relationships as multiyear or even never-ending connections, not one-time interactions.

Actively embracing D2C

By implementing a D2C strategy, consumer-oriented companies not only ensure their independence in the face of aggregators but also unlock unprecedented opportunities to connect with their customers. We recommend a four-step initial approach to overcoming the challenges. First, look into the mirror, reviewing your past performance, checking out what competitors are doing and determining your need for D2C in the light of your current e-commerce business. Second, find answers to strategic questions – such as where to play and how to win – and define an overall distribution strategy that includes D2C as one of its key parts. Third, devise an operating model that has all the capacities, capabilities, tools and structures needed to deliver the chosen distribution strategy. And finally, commit to a roadmap that indicates clear responsibilities and actions.

Interested in how D2C can transform your business? Download our full report below.

We would like to thank Severin Bischof for co-authoring this article.

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