The traditional divide between search and commerce is being closed by the deteriorating economics of generating organic traffic and drive to provide the optimal user experience.
Richard Harris, chief executive of Intent Media, told the Eyefortravel conference this week, that consumers don’t care about the business model of the company they are using.
“If you are delivering the best user experience the dollars will flow,” he said. “That means that at some point in time the user needs a transaction engine.
“At other times they are very much up-funnel, just discovering. Users increasingly demand an experience that’s a blend of search and commerce.
“They want to do it all in one place, they do not want to go back and forth between different types of companies. Mainly because they just don’t care.”
Harris said the transfer of wealth between search and commerce companies, that have to date co-existed in a mutually beneficial way, has started to break down.
He said Google’s dominance has increased the cost of traffic leading to change. “The ability to source traffic from search companies got more and more expensive. Organic SEO links started to disappear.
“It’s been replaced by monetising links in Google as it get deeper and deeper into the travel vertical, so there has been economic tension.
“It’s become more and more difficult to get traffic economically from search. The second and more important tension has made that untenable and that’s about the user experience.
“Consumers do not care how Google or Expedia make their money. They do not care about the DNA behind the companies they use. All they care about it getting the best user experience.”
Harris said this explains Amazon’s move from being purely a retailer to a discovery engine by adding sponsored links that take shoppers outside of the Amazon ecosystem.
“Amazon and Google are going to be quite competitive,” he said. “Amazon is trying to deliver comprehensiveness. They are a product search engine, a retail search engine.
“They realised that being a discovery and delivery engine and not just a retailer delivers an experience that delivers value to customers.”
Harris said five years ago he couldn’t have imagined that a French hotel company would be at the bleeding edge of technology and new business models.
But he said Accor is pioneering in this area in terms of delivering what customers demand. “They are thinking about themselves as a travel retailer and that’s driving their marketplace strategy.”
Accor has expanded its own product with the purchase of brands like Onefinestay and have even stated partnering with competitive brands to sell them on the Accor site.
“This would have been unthinkable only a couple of years ago,” Harris said. “They are thinking really about what their company needs.”
Ryanair is also talking about expanding its retail offering by becoming the Amazon of travel and Harris said the same trend can be seen with metasearch becoming commerce sites.
“People want to be able to book where they see prices. If you are trying to deliver on comprehensiveness, blend commerce and search experiences, you need to deliver the most relevant information to customers at that point in time.”
Harris warned that there is risk with this approach but that data science to determine the intent of customers as they shop means firms can avoid cannibalising their own core business.
“These [search and commerce] are two very different forms of business structure and business models.
“You need a lot of data to do this well. You need to understand your users and put them back at the centre. Understand what their needs are in real time.
“For that you need data science to predict what the optimal user experience is in real time. This is going to happen through digital partnerships.”
Harris said the secret to successful digital partnerships is access to bigger and better data, the ability to make real time decisions and not rely on old-fashioned segmentation, and a long-term approach to success.