All of our lives have been affected by the pandemic. From restrictions on travel, postponement of large events like the Olympics, the need to homeschool to the way we shop and maintain relationships, the disruption is unprecedented.
In an instant, our reliance on digital technologies became more necessary than ever. Businesses had to push technological infrastructure to its limits, adopting new workflows to prevent disruption as soaring numbers of employees began working remotely across the globe. Digital transformation has accelerated at an exponential rate and companies like Slack, Microsoft Teams and Zoom have seen stock values grow as demand for remote working tools has surged.
Conversely the travel and OOH industries have suffered during the first phase of the pandemic. The clearest evidence of this is in the stark images of empty airports and notably quieter roads. 96% of countries have now implemented some form of restriction on mobility in a bid to contain the outbreak, grounding almost all of us in one way or another.
A financial crisis is likely to come next, undoubtedly resulting in more change to the global travel and media landscapes. So what will be the main implications of this on the future of mobility.
‘Staycations’ and 'Bubble Travel’
People are dreaming about travelling again, looking for that perfect destination when things are over but whilst dreams don’t cost, holidays and travel do.
Sensitivities around cost, coupled with health concerns and lack of opportunity for long-distance travel, mean that staycations and short-haul trips are likely to be the first green shoots of recovery for the travel and tourism industry. A recent survey of American ‘dollar flight club’ members revealed that over 56% plan on staying in the US over the summer - the return of the great American road-trip.
Short haul travel is likely to benefit too. “Travel bubbles/corridors/airbridges” are all things that are coming into force, or being discussed at a legislative level, to allow people to travel freely between two or more countries in a phased re-introduction of international tourism. Agreements such as the trans-Tasman bubble between New Zealand and Australia, and Vietnam and Thailand’s travel corridor are early signs of what is to come.
This offers a great opportunity for destination marketing organizations to engage with audiences closer to home however for others this shift in consumer travel habits will require a reevaluation of current global travel strategies.
Brands need be ready to adjust on a market by market basis, engaging audiences with differing strategies across the domestic, regional and finally international travel recovery phases. It is vital for brands to become adept at reading the recovery signals for each phase of the bounce back.
Touchless Retail and the future of mobility
Health is now key concern for travellers. Transport authorities and retailers are moving rapidly to implement new touchless technologies that allow safer engagement with consumers as restrictions are lifted. The push towards automation, contactless, click and collect, facial recognition and self-service technology brings with it a new “social distancing-friendly” end to end experience.
The immediate future is touchless, so brands must harness the power of data and technology, advancing the blurring of offline and online experiences. Many brands are turning to virtual and augmented technologies; Sephora and L’Oréal have led the way allowing shoppers to “try on” a shade of lipstick or makeup via virtual mirrors or their smartphone screen.
The ability to engage with the physical via mobile is increasingly being utilized by the OOH industry. UK OOH media owner Ocean Outdoor has announced plans to introduce touchless advertising screens, deploying mid-air haptics technology to digital out of home, replacing touchscreen activity with displays and interfaces which are triggered by natural hand movements in the air. This opens the way for ‘contactless shoppable billboards’, trailed at this virtual Subway Store in South Korea by Tesco’s Homeplus a few years ago
More than ever, consumers are ready to use these technologies to enhance their experiences. A recent study by travel market research company M1ndSet found that 70% of shoppers want to see more prevalent use of VR and AR technology in retail. Brands will need to adapt their digital strategy and drive robust omni-channel presence, blending offline and online engagement more effectively.
The rise of the ‘extreme travel segment’
Many companies, empowered by the effectiveness of virtual communication technologies throughout the pandemic, will look to capitalize on what they see as an opportunity to reduce travel costs and deliver on sustainability targets, so is this the end of business travel as we know it?
Whilst effective, the high usage of technologies such as Microsoft Teams and Zoom over these last few months has demonstrated their limitations. Human rapport and relationship simply cannot be built and strengthened by a complete reliance on conference and videocalls – there is no substitute for face to face meetings. A survey by National Car Rental showed that 81% of their sample believe business travel helps them build key relationships they otherwise couldn’t have without travel.
Whilst business travel is usually less impacted by health concerns, recent history has forced many to rethink their future travel needs. Although we expect lower levels of business travellers overall, we believe that a more concentrated level of c-suites taking necessary travel will shape the recovery of this segment, bringing with it an opportunity for b2b brands to engage this elusive audience.
A similar trend is likely to be seen in leisure travel, from ultra-high net-worth individuals (UHNWIs) to those needing to visit friends and relatives (VFRs) overseas, the immediate rise of concentrated ‘extreme travel segments’ are likely to shape the recovery of global travel. Prior to widespread global lockdowns, private jet travel saw a jump (+40% YoY since March) in demand as passengers looked to avoid lengthy waiting times across major global hubs. Driven by similar motivation, we expect private jet and cross border trains will likely be the first to benefit from the immediate rise driven by these extreme travel segments.
Brands will need to adapt engagement to reflect these changing profiles, across environments and media touchpoints.
The growing importance of China and the Free Independent Travelers (FIT)
China, having just broken the 50% recovery mark for domestic air travel, is poised to lead the stabilization of international travel along with other Asian markets.
The power of the Chinese traveler on the international stage cannot be underestimated both in terms of passenger numbers but also spending power. Currently the second largest passenger market, China is expected to overtake the US by 2031. However, with recent events, and the speedy Chinese domestic recovery, it is expected that this rise to top spot will come earlier than previously predicted.
Chinese International tourists spent $277.3bn in 2018, making them the most valuable travel audience to many travel retail brands, spending almost four times more than any other passenger audience. Luxury brands such as Burberry, LVMH and Hermes have in recent days all experienced the power of pent up Chinese consumer demand, with reports suggesting Hermes made $2.7 million in the first day it reopened its store in Guangzhou. These brands have all deployed effective engagement with their Chinese consumers throughout the crisis, highlighting the power of ‘purpose over profits’ when it comes to advertising during these times.
This audience is key to the recovery of global travel, and a segment within this - Free Independent Travelers (FITs) - is recovering faster than any other sub segment. Whilst group travel makes up the largest share of Chinese travel currently, as the FIT segment continues to grow, we expect the overall profile of China’s traveler will become younger, digitally reliant, and more internationally minded.
The speed of recovery in Chinese travel coupled with these new segments requires smarter communication strategies to effectively engage with these influential consumers outside mainland China.
From environment to audience, OOH is going programmatic
Volatility is the new normal for the travel industry: geopolitical events, terrorism, and more recent global pandemics continue to significantly influence international travel and our mobility patterns.
This volatility has led many in the OOH industry to challenge the long-standing minimum guarantee commercial models that have been favoured by many landlords and transport hubs for several years - 92% of airports reported utilizing minimum guarantees in their concession agreements. These models guarantee income to landlords based on a stable historical audience that media owners can price and offer to advertisers. However, recent events have brought into sharp focus that volatility in people’s mobility pattern means a more flexible audience-led approach must become standard practice.
Advances in data, analytics and the digitalisation of OOH infrastructure are empowering global media owners, and PSI, to adapt to this future, allowing for new sophisticated and flexible audience-led buying in OOH to become a reality.
This approach is paving the way towards the possibility of global programmatic OOH solutions. Allowing campaigns to be planned, bought and served to diverse audience profiles, minimising wastage and maximizing the potential for personalized communication strategies for brands across the world.
The way we navigate our world has sustained its fair amount of disruption throughout the years, but nothing has made us question its future more than the current crisis. Industry resilience remains strong and, in time, recovery will be evident. Flexibility, innovation and adaptation are the new battlegrounds. Agencies, brands and advertisers that adapt most effectively to these shifts in consumer behaviour and mobility will be the ones who shape the long-term future of the travel and global OOH industries.