TDS16: High street presence helps reduce the cost of online acquisition, says Kuoni parent

Having an offline presence has a direct impact on the cost of acquiring customers online, according to Kuoni UK parent Der Touristik.

Having an offline presence has a direct impact on the cost of acquiring customers online, according to Kuoni UK parent Der Touristik.

Speaking at this week’s Travel Distribution Summit Europe in London, the German firm’s chief transformation officer Dirk Tietz said any firm operating in the consumer sector had to adopt an omni-channel approach appropriate for its business.

He defined this as being sales channels optimised for each company’s needs which are connected and consistent, allowing customers to consciously or unconsciously move between them.

Der Touristik has a significant high street presence in Germany where the law prevents differential pricing between online and offline channels, and in the UK it owns Kuoni which has adopted a price parity model since before it was bought last year and also supports a network of owned and partner retail stores.

“Retail presence helps brand awareness and brand awareness helps acquisition costs online,” said Tietz who added customers who engage in more than one channel are more valuable and clients encouraged online to make an appointment to come into store convert better and spend more.

“We believe the personal touch is part of the value proposition. For Kuoni UK personalisation actually means having a person talking to you. The value proposition is to have a premium service delivered by a person. Our focus is not to scare people off if they want to book online but also to bring them to the point where they want to make an appointment.”

Tietz said being omni-channel means that Kuoni stores will play a part in keeping distribution costs down by having online leads directed to them based on the understanding that a premium product is not a frequent purchase so shop staff may not always be busy with customers who have walked in off the street.

He said this will ensure stores can be kept open which would otherwise not be efficient. In the future the firm will be able to divert customers to the appropriate channel based on their profile, added Tietz.

“I see great value in personalising that, making it dependent on the consumer profile and also what product the person is looking for. We are not there yet, but I believe this will be the future,” he said.

In Germany, where up to 80% of sales are made in store, all agents have personal profiles setting out their areas of expertise.

Tietz said there were a number of potential challenges associate with its omni-channel approach including the risk that thinking becomes siloed between online and offline and he said analytics, particularly where offline is involved, remains poor meaning some assumptions about consumer behaviour have to be made.

He said the question remains whether pushing customers towards a more personal offline service means it loses out on pure online consumers who are not prepared to pay for a premium service.