Flash Sales – We’re just scratching the surface | Interview with LivingSocial Escapes

Discovering travel and booking remains complex, perhaps too complex, says Nick Stafford, GM Europe, LivingSocial Escapes.

The flash sale space in the travel sector continues to get crowded, but there is a great range in what each player has to offer. Hotels have their task cut out and they now need to research the emerging players they are interested in, pick the ones they want to work with and decline the rest.

LivingSocial believes that the social commerce movement fills a gap in travel discovery and buying. It champions evocative travel stories and pairs these stories with transactional "buy" buttons like never before.

For its part, the company says at LivingSocial Escapes, it' all about inspiring travel buying.

"The term "flash sale" only just begins to describe the bigger merchandising and marketing idea here. If Facebook is where people share experiences, LivingSocial is where people discover and buy experiences," says Nick Stafford, GM Europe, LivingSocial Escapes.

Stafford, who is scheduled to speak at the forthcoming EyeforTravel's Online Marketing & Social Media Europe 2011 , to be held in Amsterdam (October 10-11) this year, spoke to EyeforTravel's Ritesh Gupta about the concept and its strength. Excerpts:

How do you assess the maturity level of flash sales and also the presence of so many players at this juncture?

Nick Stafford:

I think we are just scratching the surface and there's considerable innovation and maturing ahead. Today, LivingSocial's suppliers are delighted with a partnership that places their brand in front of millions and delivers material volume at no upfront cost.

It's clear though that differences will emerge. We're starting to see that already, based on whether companies bring travel industry expertise into the heart of the company, whether they inspire travel and whether they build a truly global audience the way LivingSocial does.

As far as the expectations of the buyer is concerned, it is being said that consumers want to know that they're getting the very best deal before they book, and they need more flexibility. In fact, a new private sale travel site unveiled recently says it has launched with the only Best Deal Guarantee in flash-sale travel. How do you assess the clutter in the marketplace?

Nick Stafford:

You're correct to say that customers want value, although it's probably more accurate to say that customers check both deals and non-deals sites in their selection process. In fact, at EyeForTravel London, Google stated that the average holidaymaker browses 24 sites prior to booking. So, it's clear that discovering travel and booking remains complex, perhaps too complex.

At LivingSocial, we focus on delivering unique travel experiences in a simple way, all at great prices. Our experienced travel team searches the globe to find those unique hotels, resorts, inns, B&B's and ski chalets for our customers. We continue to see that our members appreciate the uniqueness and value of our deals and trust LivingSocial with their cherished holiday time.

What according to you is your company's strength which places it in an advantageous position to make the most of this concept?

Nick Stafford:

Firstly, we believe that it takes a level of travel industry sophistication and creativity to get this right. That's why LivingSocial brought in a team with extensive travel industry experience to launch Escapes. Travel is an intrinsic part of the culture of LivingSocial and this enables us to engage closely with our travel partners. Many of us have worked on the supply side and we recognise that there are three parties involved in every successful Escapes offer. There's the hotel, LivingSocial and the traveller. We continue to build leading partnerships with the best hotels, resorts, B&B's and chalets in the industry.

Secondly, we have a fantastic group of global members. The Nielsen Company recently reported LivingSocial audience numbers that prompted one reporter to write that our customers are "younger, richer and smarter" than our nearest competitor. That said, I think what's most interesting about our audience is their mindset. They are sociable and adventurous. They like to try new things, they're curious about the new and unconventional, and they like to convince others to try new things as well. The LivingSocial member wants to get out from behind the screen and experience the world.

Finally, LivingSocial is also much more than just a travel business. Our audience demonstrates uncharacteristically high levels of daily engagement with our site relative to an OTA, or other travel vertical flash sale sites. The LivingSocial customer checks in regularly on local deals, finds lunch with LivingSocial Instant on their iPhone, and shares offers on Facebook. Escapes travel partners benefit from this heavy daily engagement. We've sold over 400k room nights for about 400 properties since launching just months ago.

Can you explain how typically you plan to go about offering deals/ exclusive offerings to your subscribers? How do you make it enticing for them to avail the same?

Nick Stafford:

It starts with our experienced team in the field, a team with deep travel and media backgrounds. They work with each individual property to develop ideas and packages. We do not believe in a "one size fits all" approach.

After an Escape idea has been crafted, we have an in-house editorial and design team that works with our partners to develop an offer page. The page presents the partner's story using rich copy, imagery and video. Once each week, we publish a collection of Escapes including both local getaways and destination trips, and our offers typically run for 7-days.

Importantly, LivingSocial's members subscribe for email or mobile alerts from a home market. That means we can intelligently feature Devon & Cornwall getaways to members in West London, promote Marrakech getaways on the back of an Easyjet promotion to Morocco from Manchester or hotels in the south of France to sun-searching Parisians looking for that August break. Of course, discovery of these deals is not limited to these markets as we've seen plenty of beach breaks purchased by our members around the world. Sometimes an escape means going a little further away so escapes.livingsocial.com is designed to encourage discovery of our entire collection – from near to far – each week.

Recently, in an interview with EyeforTravel, a senior RM professional mentioned it is very important though, for hotels not to fall into a trap of working with everybody and having discounts all over the place. It may prove too costly with all the heavy discounts and margins these players are requesting. What do you recommend hotels considering that so many options for flash sale initiatives are now available?

Nick Stafford:

Like all distribution channels, suppliers should choose their partners carefully and in line with their objectives. We believe LivingSocial Escapes provides an unmatched combination of 'smarter, younger and richer' members, true global scale and superior merchant support.

It's important to remember that the social commerce model comes with unambiguous marketing benefits. Escapes pages link directly to hotel websites, by design. We want to create direct engagement between our members and properties. We want travellers to engage with property brands, videos, content, and more importantly, that property's stories. Moreover, our voucher-based redemption model drives all reservations through the supplier directly. Enterprising partners report more than doubling their revenues before travelers arrive because unlike other online travel distribution, they own and control the opportunity to upsell at the time of reservation, and for the weeks leading up to the traveler's arrival on property.

For consumers, flash sale sites are becoming increasingly popular because they're an attractive way to access overstocked inventory, or to get introduced to new offerings. How do you expect this concept to shape up going forward?

Nick Stafford:

We know our members are looking for unique experiences, and that does not necessarily equate to the notion of overstocked inventory. In fact, many of the partners we work with are looking for certainty of demand, as opposed to addressing a shortfall in demand.

Escapes partners report selling as many room nights in a week with Escapes as they've sold all year with an OTA partner. This includes vacation destination & ski resorts, city-market properties, casino hotels and independents. The model is viable. It will change hotel distribution going forward. It's on-demand distribution for an increasingly on-demand world.