Iconic Swedish home furnishing retailer Ikea now makes $1 billion a year by selling food to its customers in its in-store restaurants.
For Bojan Kokic, chief executive and co-founder of Epteca, a new ancillaries marketplace, this fact epitomises why travel firms should seek to increase their earning power by expanding their product range.
Kokic describes Epteca as a GDS (Global Distribution System) for long-tail product – a massive virtual shopping mall for travel providers, stocked with all manner of goods.
It claims to be able to put the perfect offering in front of consumers who are ready to buy.Examples might include obvious travel add-ons like insurance, transfers, car hire, foreign exchange and excursions.
But what about sun cream, board shorts, a waterproof case for your smartphone or even nappies delivered straight to the customers’ room?
Other services could include fridge-filling food delivery options, both for when customers arrive in destination and get back home.
Kokic said: “The key word is perfect. It has to be relevant but perfect also means it has to be actionable.
“Ninety nine per cent of all content around us is not actionable – you get a lot of information but none of it is actionable. It has to be acquirable.
“We look at it from the point of what does the consumer need and then we solve that problem.”
In travel many suppliers and retailers are looking to expand their offering, Ryanair are just the latest to declare its intention to become the ‘Amazon of travel’.
Epteca says travellers spend $260 billion on products related to their trip post-booking, but Kokic said the key thing was not interrupt the booking stream by offering add-ons within it.
“It has to be post purchase. Adding it into the booking path is adding to the costs. You have primed the customer that the holiday costs £500 so they will say I do not want it.
“But if you ask the same question at the right time you get a yes. From a travel companies perspective it’s stretching the bounds of their brand.
“Apart from the revenues, more importantly they are talking to their customers at multiple touch points in a relevant way which they never had the option to before.
“If you are Thomson or Thomas Cook that’s why you have reps in destination, they were a brand extension but today you do not really have that option.
“For many companies this is a total non-starter but our technology enables them to be relevant to their customer after the booking and until they come home.”
Kokic used the example of excursions to illustrate the challenge travel firms have when focussing on this particular area.
“Maybe 80% of customers do not need excursions so then you have a dilemma. Either you go for the 20%, and only 1% to 2% convert or you say let’s throw it at everyone and see what sticks.
“As we do not offer just one product we can offer the right product to the right people at the right time in the right place.”
Epteca currently works with 38 brands in travel, including Kuoni and Opodo, and six week ago it launched with UK high street travel agent Dawson and Sanderson.
The firm is among 13 that has established itself in the London & Partners TravelTech Lab on the south bank of the Thames next door to City Hall.