Ten years ago I used to talk about “Click, Walk, Talk” distribution and the rapid migration from walking to shops, to talking by phone via call centres, driven by online research. Followed by the migration from calling to just clicking, once online technology matured. Given this view I have positioned the On Holiday Group business to be strong online, supported by call centres, without a high street shop in sight.
TenHowever, I have never predicted the death of High Street shops and believe independent high street agents could be in a strong position once the major operators have decimated their current over weight shop networks.
TenHarriet Green the new CEO of Thomas Cook comes from a background of modernisation, using the Internet as a key distribution platform to cut costs. I therefore think she will take a hatchet to Thomas Cooks 1,200 shops, cutting them to less than 400 over the next 5 years, as she maximises the benefit of the massively strong Thomas Cook brand online.
TenAlthough, Google click costs have escalated massively in recent years, reducing the cost effectiveness of the Internet for travel companies without a strong brand, for those who attract customers directly to their brand, the Internet is massively more cost effective than shops.
TenHence logically the big 2 UK brands Thomson and Thomas Cook will continue cut shops as Internet sales naturally grow or more rapidly if they drive this channel.
TenThis cut back provides a massive opportunity for independent high street shops or homeworkers if they evolve slightly. They are best positioned to offer customers independent advice on the whole travel market, across both the price sensitive commodity market driven by Dynamic packaging systems and the higher priced “Differentiated” product offered by the major operators. This will be a key advantage over the single product focused shops of the majors and may give them an advantage over the online players such as Travel Republic. Currently these only sell dynamic packages and it’s unlikely that the tour operators, focused on driving their own online sites, will allow other online players to sell their products.
TenHowever, Independent shops do need to evolve to make themselves more convenient for customers. Personally, I would look to make a shop the central point for a local network of homeworkers. Each homeworker would be rotated between staffing the shops, where they would deal with personal appointments or walk in enquires and offsite work such as house visits or out of hours phone support.
TenEach shop would have its own personalised web site where customers could review availability, but still look for personal advice before making their selection via the shop, on the phone or in their homes.
TenSo will I be putting my money where my mouth is and opening shops? Possibly, but more likely I will be partnering with people who have them and want to evolve. Know anybody?