Digital disruption: Travelling Millennials are breaking the pricing rules
Agile start-ups, challenger brands and large brands that understand the need to transform are using new technologies to ensure they have the advantage. Consumers of the services and products of these industries are evolving to expect a digital entry point to their purchase.
Millennials – the digital natives – have rocked everything we know to be true and companies competing for their mindshare need to remove any assumptions they had about the way they shop, interact and do business. Millennials also have influence over older generations and are redrawing the norms from food to travel.
Digital disruption is digital normality for millennials
A recent survey of 2000 Brits revealed that one in three never use travel agents to book travel and holidays. The digital age has taken a firm grip on this industry and it is not letting go. Travel businesses need to get on board the digital train, or risk losing out.
The survey also revealed that contrary to Ryanair’s CEO, Michael O’Leary’s view that there is no need for price comparison websites to exist, 50% of Brits in fact prefer to use these websites when it comes to booking their holidays. This is a universal truth, no matter what age, gender or area you are from in the UK. A further sign that digital is disrupting travel.
These figures highlight the change in holiday and travel shopping habits, and provide strong evidence of consumers’ increasing price sensitivity.
Millennials are breaking the pricing rules
Interestingly though, millennials are far less price conscious and are four times more willing to spend more on flights and travel during the summer period, versus a mere 5% of over 55’s who are prepared to spend more. This is evidence that traditional fixed pricing models are outdated and that dynamic pricing is accepted by younger generations in the age of Amazon and Uber. This is a game changer for many industries.
The travel industry has been at the forefront of dynamic pricing, with price flexibility based on certain variables, including demand, the time of year and public / school holidays. This model is accepted by younger consumers, and is shaping how we shop around for the best deal.
The ability of travel companies to react, in real-time, to the market and consumer desire is a crucial issue for the travel industry in the digital world today; dynamic pricing helps increase revenue and profits. By also using predictive analytics, travel businesses can ensure they have enough availability to cover demand during peak periods.
So what does digital disruption mean for the future of travel, retail and other industries? Behaviours are changing and pricing models are evolving as technology advances.
Retail, holiday and travel companies need to fully understand the shifting dynamics and utilise the technology available in the digital age, or risk being left behind.
Source: IT Portal