Why purchase online?

A 2005 tourism management study sheds light on the purchasing habits of North American Web users with respect to tourism products. The two primary factors motivating them to conclude online transactions are the quality and accuracy of on-site information and a simple reservation process.

Study context

The main reason consumers have overwhelmingly adopted the Internet is that it enables them to shop 24/7 in the comfort of their home. However, there are a number of factors that differentiate Web user purchasing habits. For instance, those who purchase travel products online are influenced by the complexity of the product. Other important considerations include the ability to compare prices, discounts and a user-friendly interface.

With that in mind, experts have studied the relationship between the purchaser’s motivation to buy and the complexity of online travel products. Since Web expertise plays a significant role in this, consumers have been divided into expert users and novice users. The study aimed to prove that ease of navigation was the primary reason for variations in purchase decisions between online products.

Airline tickets, accommodation and car rentals are considered relatively simple travel products. All-inclusive trips, cruises and tours constitute more complex products.

In an attempt to simplify navigation, many sites have become « content aggregators » that offer one-stop shopping. This strategy has been extremely successful for such agencies as Travelocity and Expedia. Dynamic packaging, whereby Web users create their own package while retaining a certain degree of flexibility, have added a new twist to the tourism landscape.

Motivating factors for Web users

The study examined the top six factors that motivate consumers to make online purchases (see Tables 1 and 2). The factors are as follows:

1. The opportunity to earn points through a customer loyalty program. Some sites have even set up a special page for members to track their reward points (marriottrewards.com, for example).
2. The availability of the desired product.
3. Clear, detailed information that enables the user to make an informed decision.
4. A simple reservation process is a key factor in the online purchase decision. Especially in the case of more complex travel products, customers must be able to find the information they need to make a decision.
5. The reputation of the company or site’s banner, as this reassures the purchaser and may positively influence the outcome of the transaction. 
6. Consumers are more sensitive to the price of online products than they are to conventionally purchased products. This is partly due to aggressive advertising campaigns that have gradually led consumers to expect discount products.

The experts used data from a Canadian Tourism Commission study conducted in November 2001 that surveyed 1,161 Canadians and 1,145 Americans. Although Web user behaviour has admittedly changed since then, the study’s findings nevertheless constitute a valid basis for comparing and understanding travellers’ online purchasing habits, based on their experience with the Web and the type of product in question.

Behaviour varies according to sector

A user-friendly interface is a key factor in the decision to buy any kind of online travel product, regardless of the amount of Web user experience, leading experts to conclude that consumers want a simple reservation process. Competitive prices play a greater role in the purchase of less complex products, such as airline tickets, packages or car rental.

The quality and accuracy of the site’s information was a deciding factor for travellers looking for activities, events, tours, attractions and accommodation. Company reputation was less important to those making « simple » transactions -such as renting a car- compared to those purchasing more complex products. Finally, customer loyalty programs constitute a greater draw for expert users and mainly affect purchases of airline tickets, car rental and attractions.

Sources:
– Beldona, Srikanth, Alastair M. Morrison and Joseph O’Leary, « Online shopping motivations and pleasure travel products: a correspondence analysis, » Tourism Management, No. 26, 2005.
– Ham, Sunny, « The Use of the Internet for Hospitality and Travel-related Activities, » e-Review of Tourism Research (eRTR) [ertr.tamu.edu], vol. 2, No. 6, 2004.