E-commerce
And Social Media
Business Models
 Business models are plans, activities, processes
designed to result in profit
 8 key elements
1.
2.
3.
4.
5.
6.
7.
8.
Value proposition
Revenue model
Market opportunity
Competitive environment (life cycle)
Competitive Advantage
Market strategy
Organizational development
Management team
E-COMMERCE Revenue MODELS
$ MODEL
$ SOURCE
Example
Advertising
Paid for messaging
Yahoo, Google, OTAs,
blogs
Subscription
Paid access to content
or services
WSJ.com,
consumerreports.org
Transaction fees
Commissions for
executing or enabling
exchange
E-bay, E*trade,
previously OTA fees
Sales
Direct selling of goods,
services information
Amazon, retailers
Affiliate
$ for business referral
MyPoints, others…
Technology is the Enabler
•
•
•
•
•
•
•
•
Ubiquity
Global reach
Universal standards
Richness
Interactivity
Personalization and customization
Information density
Social networking technologies
It’s the Technology, Sunny!
•
•
•
•
•
•
•
Hardware: Web servers
Software: OS and Server Software
Networking: Routers
Security: Encryption
E-commerce Software for B2C, B2B
Streaming and Rich Media, RSS
CRM Software
It’s the Technology, Silly!
• Payment systems – the technology behind
iTunes story, and PayPal
• Performance Enhancements
• Databases – the big ones Oracle, MS, IBM
• Hosting services – getting you on the
“highway”
• What might be next? Where?
Influences of Internet
Porter’s Five Forces Model
• Substitutes
– Pro: expand size of market
– Con: threats of substitution
• Power of Suppliers
• Rivalry among existing competitors
• Barriers to entry
• Bargaining power of channels
• Bargaining power of end user
Social media: select categories
•
•
•
•
•
•
•
More than Facebook
Streaming video
Media sharing, Pintrest, YouTube
Blogs and microblogs, Twitter
Review sites, TripAdvisor
Wikis, widgets
RSS feeds, message boards
Social Media & Distribution
• Social media contribute to search engine
optimization.
• Social media can improve travel experience.
• Social media is the new “PR”
• Social media can feed traditional media such
as talk shows, news programs, and vice versa.
• Most social media outlets are owned by
established media (newspapers, TV, other)
Facts about Social Media & Travel
• Features used while travel shopping:
•
•
•
•
•
66%: interactive maps
62%: consumer reviews
52%: professional reviews
47%: professional photos
41%: consumer photos
Facts about Social Media & Travel
• Features used while travel shopping:
•
•
•
•
29%: social network posts (FB, Twitter)
26%: professional video
23%: consumer video
20%: travel company’s social network (FB, etc)
• SURPRISED? (PhoCusWright 2012)
Attribution of Social Networks to…
•
•
•
•
OTAs – 3.5%
Airlines – 6.1%
Hotels – 3.3%
Cruise – 7.0%
• 89% of consumer “Like” or “Follow” brands
but on 29% do so for TRAVEL…..
Social Network Behavior
•
•
•
•
•
•
43% post comments or photos about travel
33% Ask for advice on travel using networks
28% share travel deals
30% search for deals for travel
42% post and share WHILE traveling
25% download apps to use on social network
pages for or about travel
• Thoughts?
CUSTOMER EXPERIENCE
Consumer Behavior Today
Dreaming
Sharing
Shopping
Consuming
SEO&SEM
• Organic Search
• Paid Search
• Local Search
• Retargeting Ads
REVIEWS & DIGITAL INTERACTION
T O P L I N E Revenue B E N E F I T S
Review Sites % of Total # of Travelers Reviews
2008:
OTAs – 53%
Review Sites – 47%
2011:
OTAs – 71%
Review Sites – 29%
Some Thoughts on Reviews
• 86.6% of all Reviews (NOT on OTAs) are on
TripAdvisor (watch TA)
• # of Reviews is Proportional to room supply in
Star categories
• When ADR (US$) goes up, positive reviews
(“Sentiment Index”) goes down.
• Economy & Luxury manage guest expectations
• 2, 3, and 4 Stars have challenges doing so
Hamilton Island Case Study
• Encouraged guest reviews
– 77 percent increase 2011 to 2012
– Cooperation between operations, revenue
management, and marketing departments
• Closely monitored and responded to reviews
– 60 percent increase in responses 2011 to 2012
Hamilton Island Case Study
•
•
•
•
Visits to Brand.com tripled 2011 to 2012
94% increase in room nights SOLD in 2012
Direct revenue from TripAdvisor doubled
Conversion
– Every dollar spent managing TripAdvisor
converted to $6 in direct online sales
R E V I E W S: More Reviews = More Positive
Scores = More Revenue
PROPERTY
2012
REVIEWS
TOTAL
ROOMS
R E V I E W S/
ROOMS
James NY Soho
60 Thompson
Mondrian Soho
The Standard
459
242
634
652
114
100
270
338
4.03
2.42
2.35
1.93
Hotel Gansevoort
Crosby St.
381
122
209
86
1.82
1.42
(Source: Revinate)
R E V I E W S Case Study: M O N D R I A N S O H O
per room
2012 Ratio
2.35
2012 Comp Set Rank
3
2012 Comp Set Average
2.29
2012 Reviews per Room Index
102.61
(Source: Revinate)
R E V I E W S: M O N D R I A N S O H O
r e s p o n d i n g t o r e v i e w s 2012
GROUPS OF
PROPERTY
REVIEWS
RESPONSES
%RESPONSE
All Properties
5470
2458
45%
Hudson
1225
440
36%
London Hotels
600
365
61%
Miami Hotels
1380
695
50%
Mondrian
1223
630
52%
Northeast Hotels
2531
1051
42%
West Coast Hotels
977
347
36%
(Source: Revinate)
R E V I E W S: M O N D R I A N S O H O
responding to reviews
GROUPS OF
PROPERTY
★★ ★
★★
★★
★★
All Properties
Hudson
London Hotels
Miami Hotels
Mondrian Hotels
Northeast Hotels
West Coast Hotels
48%
31%
61%
55%
51%
45%
33%
44%
36%
63%
48%
52%
40%
40%
★★★
★★
★
45%
38%
69%
48%
60%
41%
42%
45%
44%
86%
42%
53%
46%
32%
33%
31%
60%
38%
46%
31%
19%
(Source: Revinate)
R E V I E W S: A C T I O N A B L E I T E M S
•
Encourage additional
reviews from guests and
patrons

•
Increase total reviews
Respond to additional
reviews

Respond to 75 percent
•
Continue to monitor and
analyze reviews
• Monitor and analyze
Twitter and Facebook
chatter
R E V I E W S: I N C R E M E N T A L
BENEFITS
1.
2.
3.
4.
5.
Become leader in digital competitive set
Increase total digital chatter
Increase traffic to brand.com
Enhance guest experience
Increase room nights and revenue
Social media helps
1.
2.
3.
4.
Drive traffic to brand.com
Highlight brand distinctions
Increase brand awareness
Promote guest retention
Thoughts on Mobile
•
•
•
•
•
Hotel bookings: Last Minute
Travel experience enhancement
Destination Marketing opportunity
Business travel managers have not endorsed
BUT…..it is the device of social
• SO-LO-MO is here
How Mobile is Fueling Social
US Moms Buy & Buy Travel