What’s this post about ? How Julian Richer’s business tactics selling electronics parallels how Retail Travel Agents can market themselves effectively.
There aren’t many retailers that compare easily to selling travel – infrequent, high value purchases. So it’s not easy to find examples of how other industries are tackling issues similar to our own and to heed their experience and advice.
Electronics – easily sold online, bought infrequently and at a high value is one Industry worth looking at. One such company is Richer Sounds, founded by Julian Richer.
His company – Richer Sounds, was not accidental in its success. It faced and faces the same business issues that independent travel agents face. In todays Sunday Times he writes about dodging the online retail asteroid – it’s well worth the read but I’ve taken his 5 Tips and translated them for Travel Agents here.
Note: Julian Richer (JS) points are numbered with my industry comparison below each one.
JS | 1: We would specialise in committing to ordering big quantities of a small number of lines, but we wanted better prices in return so we could compete and survive.
Richer told suppliers – “unless I can compete with the web and make a margin to cover my costs, I don’t want your product!”
[ Travel Agents can choose what suppliers they work with, choose ones that offer price parity with online. Make sure that your customer knows what basis you ‘select suppliers’ – you’re in the customer service game but you can’t be too far off in pricing because consumers are price savvy. If you are going to sell suppliers that don’t offer price parity, be sure that your margin can withstand reductions to match online competitors or simply don’t sell that product]
JS | 2: Retailers traditionally had higher costs to online competitors, the biggest being their properties,but we were also a considered purchase so we were a ‘destination’ (I.e. people would come and talk to us face to face) so we didn’t need prime real estate, we could be in secondary locations – ( SR – so long as they had marketing to be able to drive people to these secondary locations)
[ Travel Agents – you sell a considered purchase so expensive prime real estate locations also not usually required. Unlike electronics, your product is not physical so it’s not always necessary to have a physical high street location – you can sell via zoom and with personal meetings in shared office spaces just as well, but you are the destination!]
JS | 3: Costs were key when competing with the web, and we were very careful about opening more stores that we might not need as the web began to have an impact on retail – a point not heeded by some other retailers, which suffered accordingly and went out of business, like Comet and Maplin.
[ Travel Agents – maximise the turnover per store and be careful of opening new Stores unless you can be sure of getting the right turnover. But having physical locations / ability to meet face to face is important]
JS | 4: Service online (I.e.website) would be limited to text, photos and, ultimately, film footage. More expensive and complex items would still benefit from live interaction with sales people and be sold offline / in store.
[ Travel Agents – it’s important to have a website and online marketing that clearly tells your target audience what you sell / showcases products you sell / itineraries. Miss this and people simply won’t call. But don’t get mistaken about going down the online booking route, you’ll end up on a price discount spiral to zero margins]
JS | 5: If we could develop niche products or our own exclusive lines that weren’t sold on the web, we wouldn’t have to compete with the whole world. We could focus on value (which I define as “quality per pound”
[ Travel Agents – this is as simple as adding a pre or post trip element (be that a hotel / tour / cruise ) onto any holiday and pricing that up. You’ve created a bespoke product that can’t be compared online and there’s easy software available to be able to showcase this on your site, social media, email marketing and shop windows]
JS | The moral of this story is that businesses evolve all the time and if you don’t go forwards, you go backwards. As this example shows asteroids can sometimes be avoided if you spot them.
[ Travel Agents – some holidays can easily be sold online …. then it’s a race to the margin zero bottom. Lots of holidays require thought / expertise and face to face discussions to put together. Focus on the high margin products, focus your marketing on attracting customers who are looking for your service. Focus on what Richer says is “Quality per Pound”. The average commission on a Tours and Activities holiday is £900 + (ATAS statistic), the average commission on a mass market European holiday … less than £200, sometimes a low as £50. ]
The main article in the Sunday Times is well worth the read – but as your start the week and think about your market, it’s worth taking on board Richer’s pointers to stay relevant in a digital world.