Insight into travel & transportation

Slide 1 © Fjord 2012 | Confidential

Perpetual Motion

Why Travel & Transportation will never be the sameFjord StrategyAugust 2012


What we’ll cover

1. Setting the sceneThe landscape and how it’s changed

2. The new frontierKey themes for understanding the new landscape

3. What do we do now?Principles for travelling

4. Opportunity spacesAreas to apply these frameworks and principles


1. Setting the scene


We get around

Mobility is core to the human condition – we have evolved

based on our motion. At the heart

of this is a very simple cycle.

At home (or in a familiar base)

On my way somewhere

Somewhere else

On my way back


Simple concept, vast ecosystem


People are ruining everything(for traditional businesses)

Peer-to-peer services are cutting into territory formerly owned by industry giants

• Hotel chains • Guide books • Specialised Tour Operators • Navigation & Traffic

….and are branching out into public transportation and Car Rental too…

Businesses will need to drastically upgrade their value propositions if they are to survive.


And there’s no place like home anymore(these people may be rare, but they’re influential)Colocation for the non-wealthy.• As globalisation and the availability of low-cost intercity travel sends more and more

business travellers around the world for work, a growing number of these road warriors maintain multiple residences in the places they visit most often (or like the best). They challenge notions about what it means to be ‘at home’ – which home?

The 2000k commute.• The same low travel costs make it possible for people to live wherever they want to,

sometimes commuting a few hours by plane rather than by car or public transport – for example, the CEO of a London-based startup might live in the Alps to be close to his favourite hobbies and give his children the kind of upbringing he thinks best, and commute to London every week*. These people take the demand for commuting efficiency in air and long-distance rail travel to a whole new level.

Global Nomads are a real, and growing, segment.• “Global Nomads,” professionals who have no fixed address at all, have very

sophisticated preferences and advanced knowledge of the travel industries – what’s more, they have become hubs of travel knowledge and advice for their social networks.

* This is a true scenario involving a person known to Fjord.


These aren’t the right questions

Guided or Independent?

City Break or Adventure?

Business or Leisure?

Long or Short?

Budget or Luxury?

Family, Romantic or

Solo?

Old-school travel categories aren’t fluid enough to address the needs of today’s travellers, and create dangerous levels of fragmentation in a digital service environment. Different things are important to different people, and these questions don’t adequately capture context. So what does?

?


The critical question for travel

• Twice a day between Bethnal Green and Oxford Circus

• Once a month from Berlin to London

• Once a year from London to Thailand

• Somewhere I’ve never been

• Somewhere I usually visit alone or for business, this time going with family or friends

• A mode of transport I rarely use (e.g. road trip in a rented car)

Is it ROUTINE? Or is it an EXCEPTION?


This shapes fundamental priorities

ROUTINE VS. EXCEPTION

Delays Directions

Friends

Distraction

Efficiency

Places/Sights

Focus

Discovery


Routine Exception


Routine Exception


Routine Exception


Routine Exception


Delays Directions

Friends

Distraction

Efficiency

Places/Sights

Focus

Discovery

Personal context is the next layer

Routine vs. Exception is the foundation of context for travel and transportation. The next layer is personal preferences – including financial comfort, hobbies and interests, destination preferences, accommodation priorities, etc.


I am who I am, wherever I amPeople like to run, or enjoy art, or great coffee. These preferences travel with them wherever they go.


Delays Directions

Friends

Distraction

Efficiency

Places/Sights

Focus

Discovery

Social factors complete the picture

The topmost layer is the individual’s social graph – family, friends, trust networks and collective preferences.


My people are an extension of meFamily, friends, partners – loved ones are an important part of how we travel, whether they are with us or elsewhere.


Delays Directions

Friends

Distraction

Efficiency

Places/Sights

Focus

Discovery

A framework for opportunity

Taken together, these layers of context create a framework for evaluating service propositions and uncovering new opportunities for business and customer relationships.


2. This is a new frontier


Three keys to navigating the landscape

1. The Experience is as important as the destination.Car manufacturers have understood this for years. Whether the customer’s expectation is a quick and effortless journey, or the journey is the focus, an experience that extends beyond traditional boundaries can have massive value and impact.

2. Peer-to-Peer services are here to stay.No longer a supplement to traditional business, or a money-saver for students and budget travellers – P2P services now offer quality and professionalism equal to or greater than the industry leaders.

3. Everyone (and everything) is everywhere.Even when we’re not physically present, we’re virtually there. Aggregate data from the masses supports the needs of the individual. Mobile content sharing means we can take everyone on holiday with us. Review sites provide the means for instant global broadcasting of every delight – and every complaint.


Theme: The experience is as important as the destination

Whether it’s efficiency or exploration, experiences need to match with expectations.


Flying highVirgin Atlantic has taken their experience well beyond the simple flight – in addition to award-winning seats and a swank on-board bar, their lounge, spa and chauffeur service extends the overall ‘rockstar’ promise.

KLM now offers a service that allows customers to select seatmates based on Facebook or LinkedIn profiles, giving passengers unprecedented control over their on-board experience.


The open roadSome people love to drive. Whether they’re focussed on getting there as quickly as possible, or on discovering something new along the way, in-car interfaces need to give drivers the freedom to configure the experience that suits them on that day – scenery or traffic, official or peer-to-peer.


Freedom of movement

At the opposite end of the scale is the self-driving car, which Google has been testing and could be on the streets in less than a decade. As drivers relax into only part-time (or less) responsibility, they’ll have more attention for content – email or documents on the way to and from work; games for old and young alike.


Precious momentsDelivering the right experience means understanding the unique needs of any journey –P2P services offer huge flexibility in terms of lodging, tours, activities, social opportunities. Big chain hotels with a ‘one size fits all’ mentality are finding it increasingly difficult to compete.

Boutique and design hotels, meanwhile, have gained ground because they offer another kind of value – free high-tech amenities like WiFi and iPod docks, sometimes even iPads, combine with beautiful design and personal service that travellers remember, value and recommend.


Don’t make me think!With the proliferation of review and price comparison sites, many travellers – especially those with less experience – are feeling overwhelmed. This has led to a sharp increase in the use of travel agents over the past 12-18 months (including niche agencies such as Black Tomato, shown here), and also explains the rise of curated collections like Tablet Hotels and Design Hotels.

These businesses provide a service that assures travellers the experience of their journey will meet their desires and expectations, without them having to do the legwork.


A vehicle for every journeyAutomobile manufacturers no longer stop at cars – in an effort to capture a consumer market more concerned with environmentally friendly, healthier transport, many manufacturers (VW, BMW, Mercedes, Maserati, etc.) are now making bicycles as well. Some have also engaged with the short-term car hire market through programs like BMW’s DriveNow.


Theme: P2P is here to stay

We are only at the beginning of the Peer-to-Peer revolution.


Pro-sumer evolves into pro-merchantFlat sharing, once relegated to bare-bones listings sites like Craigslist, has become a legitimate business – and it’s not just about flats anymore. People are now sharing all sorts of things – houses, bicycles, flats, boats, unoccupied land.

P2P services stay competitive by taking a smaller cut than traditional agents, but equally importantly they observe the behaviours of their users and adjust the experience accordingly. Gidsy and AirBNB both provide a framework that’s strong enough to enable and encourage both merchants and buyers to engage, yet open enough to flexibly accommodate users’ unforeseen ideas.


P2P technology catches upThanks to NFC technologies and marketplaces like the Apple and Android app stores, high-end security infrastructure is no longer the exclusive domain of the manufacturer or major auto rental agency. The P2P service Getaround offers its customers proprietary technology similar to that used by DriveNow or Zipcar.

Equivalent security from a neighbour and a megachain? This completely alters the terrain, capitalising on the basic human desire to connect with others. Provided the service and technology are up to par, many will choose P2P over corporate for emotional reasons alone.


The personal touchWhat sounds better: a one-size-fits-all tour around town, led by a bored and underpaid guide, or a customised and intimate walk focused on what *you’re* interested in, led by someone who’s passionate about it, in your native language?.

Humans will almost always choose the more personalised, intimate, tailor-made engagements. This is why services like Gidsy are so successful – they faciliate the connections between those willing to offer experiences and those who want to partake in them. No large corporation could offer a comparable breadth of choice.


Something for every budget

Because P2P service platforms are inherently flexible, they tend to contain a much broader range of cost options. Renting a flat that sleeps 10 on AirBNB could cost less than a double room at a high-end hotel; borrowing a car from the guy down the street will almost certainly be cheaper than agency rates.


Theme: Everyone (& everything) is everywhere

We take more than luggage with us when we travel.


Everybody’s holidayGone are the days of the awkward post-holiday slidshow. Nowadays, thanks to Twitter, Facebook, Instagram, EyeEm, iCloud etc., we can take our friends and family with us when we travel. While many people still create photo books (physical or digital) when they get home, increasingly people share their travels on the fly and let their whole social network participate in the journey.

The other side of this is that we can take anything with us on the road – whether that’s work to catch up on, or our entire library of beachside fiction.


Safety in numbersThe flipside of P2P services are aggregate data services. Large-scale review sites like TripAdvisor, Yelp and Qype have been helping people for years, but newer services are taking things further.

Waze uses data from millions of users to generate realtime traffic alerts and navigation, as well as show drivers useful tips like speed camera and speed trap locations, accidents, and who offers the best fuel prices.


Mash it up!Banjo, Sonar and Circle use aggregate data from multiple social platforms to provide connections and suggestions.

These services provide value by translating masses of data into useful, actionable information - without the need to read dozens of reviews and suggestions.


How are you feeling?

A new bumper crop of objects are coming onto the market to help soften the effects of distance. These appeal to road warriors with partners and children at home, as well as to parents whose adult children and grandchildren live far away.

Visceral and simple, these objects evoke a sense of togetherness that traditional technological services – texts, emails, even photos – cannot.


3. What do we do now?Principles for travelling through the new landscape


Let people be the inspirationWe’ve already established that the traditional categories of travel and transportation are not relevant anymore. The only way to successfully negotiate this changing landscape is to put people first.

Observing human behaviour – and there are ample opportunities at every airport, hotel lobby and train station to do so – is the surest way to uncover opportunities to improve existing services and invent new ones.


Make it pleasant, not seamless

Clever services make the transition from one step to the next feel pleasant and understandable – but not invisible. Particularly when moving around, we need to understand where we are and what’s going to happen next.

Research has shown that something as simple as notifications of delays to a flight significantly increase customer satisfaction and trust – and these SMS are not seen as an intrusion, because they provide relevant information.

Different destinations have different immigration and security requirements – services that help travellers know what to expect can gain a lot of goodwill, and businesses that strike a balance between making things run smoothly and managing customer expectations will continue to win in the travel landscape.


Match complexity to context

Travel can be hugely complex – every transit station, airport and road system has its own peculiarities, and this can be stressful for seasoned travellers and occasional holidaymakers alike.

Then again, frequent travellers are easily irritated by superfluous information about places and systems they already know.

Taking note of which journeys are routine and which are exceptional, and adjusting the default information settings accordingly, will go a long way to improving the experience of travel.


Balance the measures of success

Know ‘what’ but not ‘why’ Confusion

Single point of focus Focus on many areas at once

The trick is to choose a framework of KPIs that work together to show you not just what your customers are doing, but why they might be doing it; not just how your business is performing, but where the opportunities lie to improve.


Look at the whole ecosystemPeople engage with many hubs of the travel ecosystem on every journey – think if it as a series of interconnected parts that can work together.


When you put people first, great things can happen for business.


4. Opportunity SpacesPlaces to apply our thinking


Think laterallyOne of the most prominent patterns in all this change is the blending of concepts that used to be kept separate. Gidsy, for example, is a combination of a number of existing ideas; it’s the combination that’s innovative.

Looking acoss contexts of use to find new value in existing information opens up great opportunities for service based relationships.


Everywhere is homeConnected objects and the app ecosystem open up the possibility to make anywhere – any car, any airplane seat, any hotel room – feel a bit more like home.

Auto manufacturers have already begin to embed personal preferences in an NFC or SIM based keyfob. What if my entertainment, food and sleeping position preferences could be saved and applied to every airplane seat I travel in?

Or what if every hotel room I stayed in had a lamp that connected to my daughter’s night-table at home?

Personal touches like this are precious to people, and offer an opportunity for larger players – hotel chains, airlines, railways – to establish deeper value in their passenger relationships.


No more ‘us vs. them’All this P2P trading has made many traditional businesses nervous, but it doesn’t have to be such a pitched battle.

What if the big players helped to facilitate P2P interactions? What if cities funded and facilitated local experts and tour guides? Or auto manufacturers facilitated shared-ownership schemes? What if a hotel chain co-branded with like-minded flat owners to create a hybrid service that brought the best of both worlds to the consumer?

Opportunities exist to break down boundaries and establish new business models that allow businesses to do what they do best – and people to do what they do best.


The portable selfOne of the most common causes for stress amongst travellers is remembering all the things we’ll need for the journey. These are remarkably similar from person to person, and indeed hotel chains have long provided toiletry kits for an additional fee.

What if a service could learn what I need for which kinds of journeys and transmit that information to anyone who could use it?What if a hotel (or an AirBNB host) provided not only basic toiletries and WiFi, but also chargers, and perhaps even a card for the local Public Transit System?

Something as simple as chargers for laptop, phones and cameras saves up to a kg or more in packing weight, and lightens the mental load as well. And anticipating a customer’s needs can feel, to them, like magic.


Interpreters neededAs new mash-up services begin to resolve the crisis of choice and travellers become more comfortable with P2P options, the market for travel agents and package operators will contract again.

But people will still need guidance – whether that’s someone to help them plan their entire journey or simply someone to show them around once they get there. P2P services that offer end-to-end planning could be the next big thing, and businesses that help to facilitate this could establish themselves for a long-term win.


Personal data brokerage

As customers become more savvy about their data, new opportunities open for merchants to barter discounts or freebies in exchange for access to personal information. This means opportunity for deeper, more meaningful relationships with customers.


Remember:It’s the system, not the part.


The end.

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Insight into travel & transportation