Attribute-based Shopping - The Marketer’s Best Frenemy

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July 12, 2019
Marketing
Max Rayner - max.rayner@hudsoncrossing.com

A fair amount of context is needed to understand the buzz around attribute-based shopping (ABS). One of the key things to keep in mind is a mental model distinction between attribute-based shopping and attribute-based selling. One suggests prospective guests should be empowered to shop via attributes, while the other implies that marketers should use attributes to close the sale. Before we go there, a bit of context is in order.

Hoteliers have long wanted to emphasize a variety of room, rate or property attributes, and this has been a full employment bonanza for marketing teams. A room is not “small” but “cozy,” ambience is not “dark” but “romantic,” and the slanted ceilings are not a “health hazard” but “charmingly French.” This has been especially true with historical merchandizing patterns which have had four primary modes: lead with rate plan features, with room features, with property amenities or with the location experiences.
 
Of these the most common by far are rate plans and room features and marketers have worn down thesaurus after thesaurus looking for ever more attractive ways of pitching breakfast in a room with a view. It’s not uncommon to have furious debates about whether the brand tone would suggest something grand, luxuriant, sumptuous or sybaritic.
 
The problem is that the best weaved marketing yarn may be superlative in the abstract, and yet misguided for personas other than the target.
 
A number of solutions have been put forward, including highly personalized marketing: companies like Persado.com have proposed letting ever-learning AI engage in natural language generation, and essentially take over with mathematical certainty where marketers have long applied “art” instead. Other approaches include propensity modeling: Chaseintel.com applies rigorous analytics to personal behavior indicators and develops predictive modeling and segmentation that has been proven to drive significant incremental revenue across all campaigns and customer interactions.
 
These are both superb companies, but before jumping to solutions, hoteliers need to ask fundamental questions about how guests would be best served, rather than self-serving questions how to convert most efficiently. This requires an inversion of the common mental model:
 
Many hospitality companies think left-to-right: about themselves first, campaigns and distributors second, consumers last.
They should instead examine choices right-to-left: value prop to consumers first, campaigns and intermediaries second. Sustainable profitable growth follows right-to-left thinking.
 
 

 

Viewed “left to right” from a customer perspective, we might want to:
  • Eliminate current pain points around inability to request for, and get a near guarantee of fulfi llment of, the attributes that each person really cares about
  • Reduce the hassle most hoteliers put guests through around having to read endless blobs of fi ne print to confi rm whether desired attributes are available in a particular room type/rate plan combination
  • Enhance transparency around attributes and allow prospective guest to pay (and indeed pay more than they do today) for the attributes that really matter to them.
  • Create a memorable frictionless experience that lets prospective guests upsell themselves into the optimized frontier that maximizes both their experience and value creation for the hotel.
 
Taken from this perspective, it’s clear that awesome marketing, whether created by humans or machines, is not a critical element of customer value. At different times a prospective guest may have different personas, and the dominant mode for a particular person when travelling on business may be very different from what will do best for a high-spend vacation.
 
The more rigid approach we’re accustomed to is driven by inherent limitations of legacy central reservation and property management systems based on rate plans and room rates. In this shopworn model, marketing creativity takes the form of accepting as given the system constraints around room types and rate plans and going to town on words to describe bedding types, occupancy limits, and the peculiarities of various rate plans. 
 
For the adventurous, we end up with a “Fabulous Sky Room” or a “Flat Earth Suite” and there’s no denying that creative naming is part of the sale. Let’s stipulate that just about anything may be better than GDS room type codes, which normal humans don’t fully understand either. However, what the naming creativity achieves in removing dullness is visited on the prospective guest as uncertainty. “Fantastic” and “Cool” may be more attractive than “Two twin beds” or “King with sofa,” but they require a fair amount of reading or a call with a contact center to figure out if a couple and two small kids could sleep there or not. More often than not hoteliers assume that prospective guests understand industry lingo and will know the difference between room type, bedding, occupancy limits, etc.
 
A lot still needs to be done in the “plumbing” to get there, but positive signs abound: vendors like Above Property, Amadeus, and Sabre are all talking about delivering attribute-based shopping features. Some of the largest chains have announced ABS capabilities. Service optimization tools and the capabilities of better PMS systems have opened the door to adequate promise fulfillment. Enough progress has been made that some chains have begun to fake ABS via attribute-based “filtering”: The underlying reality for some of them is still around room types and rate plans, but they can use modern UX techniques to let customers filter by some attributes.
 
That “fake it until you make it” approach, though, is not as transformational as true ABS. A prospective guest is presented with the ability to become his or her own marketer and revenue manager. Rather than have to filter from a collection pre-arranged rate plans and room types that marketing, revenue management, and operations fought about in no-holds-barred intramural matches, guest are presented two fully customer-centric paths:
 
1. A collection of machine-learning-driven personalized, propensity optimized set of choices
 
2. An a-la-carte menu that allows prospective guests to select individual attributes and upsell themselves attribute by attribute into the tailored experience that will truly delight them
 
 
The implications are profound and perhaps most jarring to marketers and revenue managers:
  • Old notions of marketing text blurbs in a content management system need to be replaced with vastly larger amounts of structure data around every single room, every possible plan and their combined availability
  • Because of the data explosion, it becomes impractical to market by gut feel, and data science and machine learning needs to take over
  • At a most fundamental level, CRS and PMS systems need to have modern data models that focus on “items for sale” rather than thinking of a room type as the atomic anchor of each sale
  • Revenue management systems need to be refactored to yield attributes in a multidimensional availability model that maximizes hotel revenue in relationship to demand for desired attributes.

This world is not upon us today, but just as in society at large we can see that gathering signs of disruption that technology will visit on the world, in the hospitality realm the signs are clear as well. The future of shopping will rest with ABS. Rising guest expectations will force it on us whether we like it or not and we may as well start preparing. The concrete steps to enable this transformation for both chains and independents will be covered in the next edition of Hospitality Upgrade.
 
©2019 Hospitality Upgrade 
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