HOTELS

Scott van Hartesvelt

Improve Merchandising, Improve Production
May 23, 2008

I recently watched an interesting program on CNBC entitled Big Brother, Big Business. The show detailed how lots of entities, including big companies, are using surveillance technology to change customer and employee behavior. The example that stuck with me was Home Depot. They have a sophisticated camera and software solution that tracks each individual shopper as they move through a store. If customers consistently stay in a single aisle for too long, they are flagged by the software. The theory is if they spend too much time in an aisle, it means they can’t find what they are looking for. As patterns emerge, the stores evaluate and change their shelving strategies to improve their merchandising. They track the results from every inventory change, driving increased spending and more loyalty from their clientele. I was blown away that retail companies are devoting so much time and money to perfect their merchandising. The next day I was on the web site of an independent hotel. Their site featured a single package: 2007 Holiday Shopping Offer. It’s May! 

I believe the hotel industry has a long way to go to catch up with retailer’s merchandising practices. While the holiday shopping package is an extreme example, I doubt many of you are tracking the effective merchandising of your hotel through your web site. Amazon.com is an amazing model of effective online merchandising. When a shopper visits the site, their behavior is tracked and unique offers are delivered intelligently. Purchase a book and the next time you visit the site, similar books will be featured. Buy a great blues album and the site tells you what other people who bought that album are listening to. Effective merchandising has made Amazon a powerhouse online. 

The average hotel does not have high-end merchandising tools attached to their site. Central Reservation System companies have made great strides in the past two years to improve their platforms, but they have a long way to go to really capitalize on effective merchandising. In my estimation, they are a minimum of one year from being able to help in this process. In the meantime, here are a few easy tips that can help you bridge the gap between the 2007 Holiday Shopping Package and Amazon.com.

• Match your packaging to key market segments. If you are trying to attract a weekend leisure drive market, small groups under 30 attendees and budget-conscious business travelers, make sure you feature at least one package on your web site that appeals to each segment.

• Feature at least one offer on your homepage. The homepage of your web site is your most valuable online real estate. Use it. Feature a minimum of one key package or promotion with an immediate call to action. The sooner your web site visitor begins thinking about buying, the better chance you have of converting them into a reservation.

• Perform variant testing to improve messaging. Variant testing is a classic marketing discipline that few are using. The idea is to randomly deliver different packages and then track the consumer response. Their booking patterns will be instructive to your messaging, package components and pricing. Start this process with two simple packages and make sure you track and evaluate the results. Add additional packages and promotions to the mix. Over time, your merchandising will improve significantly as you learn what offers and messages your customers respond best to.

• Intelligently deliver packages. This one may be a stretch for many, but should start you thinking about where this could go. gCommerce works with clients to understand key feeder markets. Our average hotel consistently sees 70%+ of their leisure business generated from a 250-mile drive radius. With gas prices continuing to rise, backyard marketing becomes even more critical. By implementing some very simple programming, a hotel web site immediately can tell where a visitor is located and whether they fall in the local drive market. Armed with this information, your web site could deliver just to these local visitors a package featuring $50 gas cards. Imagine the possibilities! 

These examples and suggestions are not lofty. They are grounded traditional marketing practice and have an immediate and measurable impact on actual revenue production. The net result of improved merchandising will be more efficient web site production and an increase in web bookings.

Posted by Scott van Hartesvelt on May 23, 2008 | Comments (2)