Future of Travel Retail: Understand the ‘messiness of human decision making’

Ogilvy’s Rory Sutherland on the relationship between tech and psychology

Travel companies must understand how human psychology and emotion play a pivotal role in customer behaviour rather than trying to measure everything rationally.

This week’s Travelport Future of Travel Retailing in Dubai heard from non-travel industry speakers discussing the relationship between technology and customer behaviour.

Marketing and market research expert Rory Sutherland, vice chairman of Ogilvy UK, said firms must know what questions to ask and not always expect a logical, numerical answer.

“What really excites me particularly about this industry is the interplay between technology and psychology. Travel is a business of engineers desperately trying to pretend they are not in the entertainment industry. 

“Airlines are a mixture of hardcore logistics combined with the fact that you are dealing with a bunch of completely irrational customers.”

Sutherland said travel retail interfaces have not been designed for consumer choice but more for the business traveller who knows the answers to questions like ‘where are you going’, ‘when are you going’ and ‘how much do you want to pay’.

“To a consumer all the answers to these questions is, it depends. We need to have a much better way of looking for travel which acknowledges the messiness of human decision making as opposed to the neatness of business decision making.”

Sutherland quoted Ford senior executive Kumar Galhotra who said: “Car making is a hundred thousand rational decisions in search of the one emotional decision.”

He said: “A lot of the things we look at like technology and engineering ultimately boil down to psychology. 

“It’s deeply discomforting to an engineer because they are used to a world where you can quantify what matters – you have numbers for all the things that count.

“As soon as you enter psychology into the mix you enter a different world. If you look at a problem psychologically you might come up with different answers.”

Sutherland cited the automated vehicle pod parking service at Heathrow airport. 

He said users are disappointed when offered an upgrade to a more premium and convenient service when it is unavailable because they want to ride in the pod.

“If we only try to optimise travel and transportation using objective numerical criteria we will miss out on a lot of things. We do not yet have adequate numerical objectives for how we feel.

“The trick is to ask more, better questions. We need to explore. The trouble with market research is people like what they say but they do not say what they like, and they don’t understand what they say.

“Do not rely on people to tell you what they want. The parts of the brain that do the feeling are not really connected to the parts of the brain that does the talking. 

“You have to experiment, but not with everything. Established wisdom is established for a pretty good reason but you have to ringfence an area of about 10% to 20% where you are allowed to fail.”

Artificial Intelligence is developed to explore and exploit the trade off between what is already known and discovering what is not currently known either because the future is different from the past or because it’s not been discovered yet, Sutherland said.

“If you don’t have a certain degree of this optimisation built in you get too reliant on the past [as a predictor of the future], you do not get lucky, you do not have a system that allows to exploit lucky discoveries. 

“You are trying hard to innovate simply based on what you already know rather than by exploring what you don’t yet know. You are trying hard to make every decision a factor of logical deduction.”

Sutherland described many of the most successful brands of the modern era like Starbucks, Dyson, Airbnb, Zoom, Amazon Prime, Nespresso and Red Bull as an “act of psychological arbitrage” in which consumers apply an irrational assessment of their relative value.

This is why Rolls Royce has stopped exhibiting its vehicles at car shows, because it makes them look relatively expensive, and instead shows them at superyacht and private jet shows, said Sutherland.

Uber’s map addresses the uncertainty of waiting for a cab and turns the experience into a positive one even if the actual wait time is the same for a rival cab firm, he added. 

“Waiting for a taxi in conditions of uncertainty is agony for the human brain. There’s also an element of status where you time your departure from the building to exactly when the car is going to turn up. You feel like Louis the fourteenth. This is high status behaviour.”

In Dallas Forth Worth airport they are being deliberately ambiguous about where aircraft are due to leave from to stop people forming a queue to board too early. “The whole experience of waiting for a plane is messed up by the people who decide to queue early.”

Sutherland said travel firms should not base discounts on individual seat or ticket prices but to the people who are most price sensitive, like a family of five travelling as a group as opposed to a couple with two incomes. 

“About 20% of people would be motivated to go on a later flight if you put on your website that this is the least crowded flight of the day,” he said. 

“Economics and logic and numbers have taken over yield management, but there are lots of ways to direct human behaviour other than bribing them, which is an expensive way of doing it.”