How Hotels Are Using Big Data To Help Guests Feel At Home

By Billy Turchin, Head of CRM & Customer Experience for InterContinental Hotels Group (IHG)

When most people think about the holiday shopping season, data and analytics are probably not the first things that come to mind. Images of long lines at the mall, holiday packages piling up at your doorstep and memories of quality time with family and friends are more likely. With so many people traveling around the holidays, this presents a significant opportunity for global hotel companies, such as InterContinental Hotels Group (IHG), to play a part in creating those memories. Doing this well requires putting relationships at the heart of everything we do and the key to it all comes down to better understanding our customers.

So where do data and analytics fit into the holiday experience? Everywhere. Our ability to unlock new data-driven insights is at the core of our commitment to building lifelong relationships with our guests and being the top choice for travelers worldwide.

Throughout most of the year, hotel companies see lots of demand from business travelers. But during the holidays, business travelers take fewer trips and stay closer to home. In place of these road warriors, there is an uptick in infrequent leisure travelers who might not have a loyalty to any specific hotel brand or even use hotel loyalty programs.

Well-established hotel brands with a strong reputation for consistent quality continue to be fundamental to a traveler’s final booking decision, but we’ve also found that price is the key hotel booking criteria for most leisure travelers. Through advanced analytics, we’re able to understand other important factors that influence leisure travelers’ hotel choices. For example, is breakfast complimentary? Do kids eat free? Does the hotel room have a sleeper sofa? Does the hotel offer a swimming pool or other family-related needs and activities? Are pets welcome? Is the hotel room fully refundable in case of bad weather or other travel issues? These benefits can matter even more during the holidays.
With many variables playing into a holiday travel decision, it’s critical that we, as a hospitality company, understand the unique needs of each traveler, enabling us to deliver the right offer at the right time on the right communication channel. Today, IHG leverages a rich enterprise data warehouse, where we store vast amounts of data that our customers have shared with us, to help us personalize our guests’ stays with us during the holidays and at any time of the year.

A large portion of IHG’s guests book their hotel room through our direct channels such as on our IHG App, or through our website, so we have a tremendous opportunity to further amplify this personalization with customers. We do this through IBM’s Smarter Commerce portfolio. The tool helps us take advantage of a nearly endless array of data points on each guest and helps us to build a personalized engagement roadmap based on their past interactions and travel preferences.

The tool also helps IHG personalize the guest experience during the holidays in many ways. Each traveler represents a unique combination of criteria and preferences that only analytics can unlock. This combination may include staying at IHG hotels, downloading the IHG App and fulfilling other relevant offers personalized for that guest. One guest may be interested in exploring different brands while another is content to stick with the tried-and-true.

This same personalization is later applied as the relationship between IHG and our guests continues to grow. While one guest may be interested in an international vacation of a lifetime, another may be more interested in electronics or concert tickets. For example, IHG recently launched a marketing campaign called “Into the Nights,” which offers members of IHG® Rewards Club; IHG’s free hotel rewards program, the opportunity to earn free hotel nights and bonus points.

To manage these variances, we constantly feed results back into our systems and adjust the offers to serve up what that guest values the most. Some members may get a bonus offer to earn a free night for staying with us during the holidays. There are literally more than 500,000 possible combinations of travel behaviors and loyalty program interactions that determine how a member can earn rewards.
This deep level of personalization is particularly important during the holidays where what we do through data, along with how we treat our guests, can create cherished memories that will last a lifetime. Every guest interaction during the holidays is a prime chance to create a life-long guest who will come back time and time again.

The key is balancing personalized experiences at each point in the guest journey, whether it’s during the check-in process or presenting compelling offers that our guests can use during their next stay. The way to find that balance is by using data to uncover what has worked in the past and adjust to new conditions in real time to achieve the optimal experience for each guest.

For this holiday and every other day, at IHG, getting to know the guest is essential. By tapping into the data they share with us, we can successfully deliver the items on their travel “wish list” for each and every stay.


Over 700 Million People Taking Steps to Avoid NSA Surveillance

There’s a new international survey on Internet security and trust, of “23,376 Internet users in 24 countries,” including “Australia, Brazil, Canada, China, Egypt, France, Germany, Great Britain, Hong Kong, India, Indonesia, Italy, Japan, Kenya, Mexico, Nigeria, Pakistan, Poland, South Africa, South Korea, Sweden, Tunisia, Turkey and the United States.” Amongst the findings, 60% of Internet users have heard of Edward Snowden, and 39% of those “have taken steps to protect their online privacy and security as a result of his revelations.”

The press is mostly spinning this as evidence that Snowden has not had an effect: “merely 39%,” “only 39%,” and so on. (Note that these articles are completely misunderstanding the data. It’s not 39% of people who are taking steps to protect their privacy post-Snowden, it’s 39% of the 60% of Internet users — which is not everybody — who have heard of him. So it’s much less than 39%.)

Even so, I disagree with the “Edward Snowden Revelations Not Having Much Impact on Internet Users” headline. He’s having an enormous impact. I ran the actual numbers country by country, combining data on Internet penetration with data from this survey. Multiplying everything out, I calculate that 706 million people have changed their behavior on the Internet because of what the NSA and GCHQ are doing. (For example, 17% of Indonesians use the Internet, 64% of them have heard of Snowden and 62% of them have taken steps to protect their privacy, which equals 17 million people out of its total 250-million population.)

Note that the countries in this survey only cover 4.7 billion out of a total 7 billion world population. Taking the conservative estimates that 20% of the remaining population uses the Internet, 40% of them have heard of Snowden, and 25% of those have done something about it, that’s an additional 46 million people around the world.

It’s probably true that most of those people took steps that didn’t make any appreciable difference against an NSA level of surveillance, and probably not even against the even more pervasive corporate variety of surveillance. It’s probably even true that some of those people didn’t take steps at all, and just wish they did or wish they knew what to do. But it is absolutely extraordinary that 750 million people are disturbed enough about their online privacy that they will represent to a survey taker that they did something about it.

Name another news story that has caused over ten percent of the world’s population to change their behavior in the past year? Cory Doctorow is right: we have reached “peak indifference to surveillance.” From now on, this issue is going to matter more and more, and policymakers around the world need to start paying attention.

Related: a recent Pew Research Internet Project survey on Americans’ perceptions of privacy, commented on by Ben Wittes.


Taobao Online Sale Triggers Offline Shopping Rush

Attracted by big discounts during Taobao Marketplace’s 12.12 sale, Chinese consumers on Friday rushed supermarkets, restaurants and other brick-and-mortar retailers participating in the once-a-year online event.

Photos posted on Chinese social media sites showed packed stores, empty shelves and long queues as consumers sought to redeem discounts of up to 50 percent by using their mobile phones to pay for goods and services from some 20,000 offline merchants that joined the sale.

In Hangzhou, the capital of Zhejiang province, some supermarkets delayed closing times by an hour until 11 p.m. to clear out long lines of shoppers waiting to check out during the 12.12 sale. Bread and milk at participating local bakeries and dairy stores were reportedly sold out soon after the event began. At 70 Pizza Hut outlets in Shanghai, more than 11,000 payments were made around lunchtime on Dec. 12 after discounts of up to 50 yuan ($8.08) were offered on meals. Some 10,000 discount vouchers for car washes were sold in the first hour, according to Taobao.

Originally an online event geared for Taobao Marketplace’s small- and micro e-tailers, the last two 12.12 sales have had a heavy O2O (online-to-offline) component as Alibaba Group-owned Taobao seeks to encourage consumers to shop and pay for everyday goods and services using its mobile app and the Alipay Wallet e-payment app. More than 30 supermarket chains and convenience stores located throughout China, among them Wu Mart, Family Mart, KEDI and Lotus, joined the sale this year, as did restaurants, housekeeping service firms, taxi companies, real estate developers, auto parts vendors and dry cleaners, among others.

Taobao did not disclose how much consumers spent in total during the sale. Mobile transactions accounted for 45.8 percent of total transactions, the company said.

Random results from the 12.12 sale, according to Taobao:

• 24,000 housekeepers were hired online during the 24-hour period.

• 1,400 online-education courses were sold in 15 minutes.

• 4,000 housing units were reserved online.

• A dental practice with offices in Beijing, Shanghai and Tianjin booked 1,115 appointments in eight hours through Taobao during the sale.

• 7,000 pieces of jade and jewelry were sold through Tabao’s auction channel.

• 4.8 million people ordered food online.

• 70 overseas properties in nine countries were auctioned off in two hours.

Alizila reporter Susan Wang contributed to this story.

China on course to build world’s first trillion-dollar online retail market

With e-commerce giants Alibaba Group Holding and driving domestic sales, the mainland could be on course to become the world’s first US$1 trillion online retail market in five years.

The milestones set by the two companies on Tuesday of last week during the mainland’s “Singles Day”, the world’s biggest online shopping festival, were a likely harbinger of how the domestic market would further develop, analysts said.

Alibaba saw its gross merchandise volume – the total amount of goods sold online – on that day reach 57.1 billion yuan (HK$72.3 billion), with about 43 per cent generated from mobile transactions.

That broke the Hangzhou-based company’s own one-day online sales record of 36.2 billion yuan, posted on November 11 last year. It opened this year’s “Singles Day” campaign for the first time to online shoppers from more than 200 countries through international platforms AliExpress and Tmall Global.

JD did not provide merchandise volume numbers, but said it doubled the amount it recorded last year, with more than 40 per cent of orders placed through mobile devices.

“Singles Day is the most influential e-commerce event in [mainland] China, and Alibaba showed in its Double 11 campaign that global expansion can accelerate online sales,” Forrester Research senior analyst Vanessa Zeng said. “In addition, we see substantial potential for mobile transactions to dominate online sales in next year’s Singles Day campaigns.”

Forrester has estimated that total online retail spending on the mainland will reach US$1.09 trillion by 2019 from the forecast US$440 billion this year.

“The traditional retail market in [mainland] China is underdeveloped and scattered. Consumers in lower-tier cities and remote regions have very limited access to a variety of brands and products,” Zeng said. “Few retailers have a nationwide logistics network or array of physical stores. There’s no Chinese version of Wal-Mart or Macy’s that can be found across all of the country’s geographic regions or from top-tier cities all the way through to smaller towns.”

Alibaba and JD, meanwhile, lead their industry in marketing online shopping to both large and small mainland cities; building a network of warehouses and distribution centres; signing up global brands to release products on their platforms; and expanding mobile sales in the world’s biggest smartphone market.

Internet consultancy iResearch reported on Monday that the mainland’s third-quarter e-commerce gross merchandise volume – comprising business-to-business, online shopping and online travel – rose 17.7 per cent to 2.95 trillion yuan from the same period last year.


Black Friday – Cyber Monday Weekend: Mobile Traffic Soars But Overall Sales Down

Tis’ the season for shopping predictions and consumer surveys. In the week-long run up to Thanksgiving and Black-Cyber weekend there was a veritable tsunami of PR-driven consumer surveys anticipating a shopping boom.

Most of these made similar-sounding upbeat projections about overall consumer spending, with a focus on Black Friday. At the highest level of generality the online predictions were directionally accurate. However everything didn’t quite go according to the bullish forecasts.

Coming off the shopping bender, we’ve got another deluge of data with some disagreements. On one side are data from the National Retail Federation (NRF) and ShopperTrak, which measures retail-store visits. They tell a somewhat muted story of a mildly disappointing weekend. On the opposite side are Adobe, IBM and a number of others trumpeting booming online sales.

ShopperTrak speculated that Thanksgiving store hours likely took a bite out of Black Friday store visits. The company estimated that shoppers in the U.S. spent just over $9 billion in stores on Black Friday, representing a 7 percent decline from last year. However, ShopperTrak data do not include online sales.

The NRF, which looks at both in-store and online sales, also reported that the total number of in-store and online shoppers was down from a year ago. The trade group said over the weekend that “55.1 percent of holiday shoppers were or will be in stores and online over Thanksgiving weekend, down from 58.7 percent last year.”

The NRF added that average spending over the weekend was “$380.95, down 6.4 percent from $407.02 last year. Total spending is expected to reach $50.9 billion, down from last year’s estimated $57.4 billion.”

Looking purely at online and e-commerce, Adobe reported that “Thanksgiving Day and Black Friday set new [online] sales records with $1.33 billion and $2.4 billion, respectively.” IBM said that Thanksgiving Day and Black Friday e-commerce was up over 2013 but acknowledged that average order value was down for both days.

IBM further explained that “Black Friday online sales were 63.5 percent higher than Thanksgiving Day. This is a decrease from 2013, however, when it was 70 percent higher, as Thanksgiving online sales continue to eat into Black Friday shopping.”

Both IBM and Adobe highlighted the impressive impact of mobile devices over the long weekend. Adobe said that “smartphones nearly doubled their share of total online sales on both days” and IBM observed that on “Thanksgiving Day mobile traffic accounted for 52.1 percent of all online traffic – the first time mobile devices have outpaced their PC counterparts for online browsing.”

Black Friday mobile traffic was just shy of 50 percent, while “Black Friday mobile sales accounted for 27.9 percent of total online sales, up 28.2 percent over 2013,” according to IBM. Adobe similarly reported that “29 percent of sales on Thanksgiving Day came from mobile devices . . . and 27 percent of sales on Black Friday” were generated by smartphones or tablets.

There was some conflict among the various data sources about the growth of tablet-generated e-commerce. However most sources agreed that iPhones and iPads were responsible for several times more transactions than Android devices.

Over the coming days and weeks we’ll see much more data. However, based on this initial Black-Cyber weekend dump, I would say the following:

  • The distinctions between the various shopping days between Thanksgiving and Cyber Monday have broken down for consumers (though not for retailers)
    The notion that Black Friday is a day for in-store sales, while Cyber Monday is for online shopping is totally outdated
  • Some people consciously shopped in stores Thursday or online to avoid the Black Friday mania
  • Consumers are being selective and using store-visits, PCs and mobile devices to find the best deals
  • Within the next couple of years we’re likely to see the end of these specific X or Y day distinctions and the emergence of a single long holiday shopping weekend that kicks off on Thanksgiving. This is how consumers are already approaching it.