Monday, November 5, 2012

Your Content, Now Mobile

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Published in: Content Strategy, Writing, Mobile, Mobile Design
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We are pleased to present you with this excerpt from Chapter 1 of Content Strategy for Mobile by Karen McGrane, now available from A Book Apart. —Ed.

When we talk about how to create products and services for mobile, the conversation tends to focus on design and development challenges. How does our design aesthetic change when we’re dealing with a smaller (or higher-resolution) screen? How do we employ (and teach) new gestural interactions that take advantage of touchscreen capabilities? How (and who) will write the code for all these different platforms—and how will we maintain all of them?

Great questions, every one. But focusing just on the design and development questions leaves out one important subject: how are we going to get our content to render appropriately on mobile devices?

The good news is that the answer to this question will help you, regardless of operating system, device capabilities, or screen resolution. If you take the time to figure out the right way to get your content out there, you’ll have the freedom (and the flexibility) to get it everywhere. You can go back to thinking about the right design and development approaches for each platform, because you’ll already have a reusable base of content to work from.

The bad news is that this isn’t a superficial problem. Solving it isn’t something you can do in isolation, by sandboxing off a subset of your content in a stripped-down mobile website or app. The solution requires you to look closely at your content management system, your editorial workflow, even your organizational structure. You may need different tools, different processes, different ways of communicating.

Don’t despair. There’s even better news at the end of this rainbow. By taking the time now to examine your content and structure it for maximum flexibility and reuse, you’ll be (better) prepared the next time a new gadget rolls around. You’ll have cleared out all the dead wood, by pruning outdated, badly written, and irrelevant content, which means all your users will have a better experience. You’ll have revised and updated your processes and tools for managing and maintaining content, which means all the content you create in every channel—print, desktop, mobile, TV, social—will be more closely governed.

MOBILE IS NOT THE “LITE” VERSION

It looks like you're on a train. Would you like me to show you the insultingly simplified mobile site?

—Cennydd Bowles (http://bkaprt.com/csm/15)

If people want to do something on the internet, they will want to do it using their mobile device. Period.

The boundaries between “desktop tasks” and “mobile tasks” are fluid, driven as much by the device’s convenience as they are by the ease of the task. Have you ever tried to quickly look up a bit of information from your tablet, simply because you’re too lazy to walk over to your computer? Typed in a lengthy email on your BlackBerry while sitting at your desk, temporarily forgetting your keyboard exists? Discovered that the process to book a ticket from your mobile was easier than using the desktop (looking at you, Amtrak!) because all the extra clutter was stripped away?

Have you noticed that the device you choose for a given activity does not necessarily imply your context of use?

People use every device in every location, in every context. They use mobile handsets in restaurants and on the sofa. They use tablets with a focused determination in meetings and in a lazy Sunday morning haze in bed. They use laptops with fat pipes of employer-provided connectivity and with a thin trickle of data siphoned through expensive hotel Wi-Fi. They use desktop workstations on the beach—okay, they really only use traditional desktop machines at desks. You’ve got me on that one.

Knowing the type of device the user is holding doesn’t tell you anything about the user’s intent. Knowing someone’s location doesn’t tell you anything about her goals. You can’t make assumptions about what the user wants to do simply because she has a smaller screen. In fact, all you really know is: she has a smaller screen.

The immobile context

Users have always accessed our content from a variety of screen sizes and resolutions. Data reported by SecureCube shows that in January 2000, the majority of users visited from a browser with an 800×600 resolution, but a significant minority (twenty-nine percent) accessed the site at 1024×768 or higher, with a smaller percentage (eleven percent) viewing the site at 640×480 (http://bkaprt.com/csm/16; fig 1.1). At that time, decisions about how best to present content were seen as design challenges, and developers sought to provide a good reading experience for users at all resolutions, discussing appropriate ways to adjust column widths and screen layouts as content reflowed from smaller to larger screens.

Fig 1.1: We have plenty of experience delivering content to a variety of screen resolutions. Why do we assume that mobile screens necessarily indicate a different context?

What you didn’t hear designers talking about was the “640×480 context” and how it differed from the “1024×768 context.” No one tried to intuit which tasks would be more important to users browsing at 800×600, so less important options could be hidden from them. No one assumed that people’s mindset, tasks, and goals would be different, simply because they had a different-sized monitor.

Why do we assume that mobile is any different?

MOBILE TASKS, MOBILE CONTENT

I recently departed Austin, Texas, traveling with three friends. Since we arrived at the airport a bit early, I wanted to lounge in the comfort of the United Club, away from the teeming masses. I felt it would be rude to abandon my friends to a similar fate outside, and so I wanted to know how many guests I could bring with me to the club.

A simple Google search should clear up this problem. Sure enough, I quickly found a link that seemed promising (fig 1.2).

Fig 1.2: Searching for “United Club Membership” shows that the content exists on the desktop site. But because the mobile website redirects the URL, users wind up on the homepage of the mobile site.

Alas, following the link to United Club Membership just took me to the homepage for mobile.united.com. When users search from a mobile device, United automatically redirects links from Google to its mobile website—without checking to see if the content is available on mobile. If the content doesn’t exist on mobile, the user gets unceremoniously dumped on the homepage of the mobile website. Mobile redirects that break search—how is that ever a good user experience?

Sure, there’s a link to the full desktop site, but that too just dumped me on the desktop homepage. I could try to use United’s internal site search, but I’d wind up pinching and zooming my way through several search result screens formatted for the desktop. And honestly: why should I have to? An answer that should take me one tap from the Google search results should not require searching and tapping through several pages on both the mobile and the desktop sites.

I went and asked the representative at the desk. (Correct answer: two guests.)

I don’t bring this up just because I want to shame United for wantonly redirecting links to a mobile URL when the content isn’t available on its mobile website. (That’s a terrible thing to do, but it comes after a long list of other bad things I’d like to shame United Airlines for doing.) No, I use this example to illustrate a common misconception about mobile devices: that they should deliver only task-based functionality, rather than information-seeking content.

Information seeking is a task

Luke Wroblewski, in his book Mobile First, tells us that Southwest Airlines is doing the right thing by focusing only on travel tasks (fig 1.3):

The mobile experience…has a laser-like focus on what customers need and what Southwest does: book travel, check in, check flight status, check miles, and get alerts. No room for anything else. Only what matters most.

Fig 1.3: The Southwest Airlines iPhone application only has room for what actually matters…if what matters doesn’t involve looking up information.

Mobile experts and airline app designers don’t get to decide what “actually matters.” What matters is what matters to the user. And that’s just as likely to be finding a piece of information as it is to be completing a task.

Eighty-six percent of smartphone owners have used their phone in the previous month to look up information—whether to solve a problem, settle an argument, get up-to-the minute information such as traffic or sports scores, or to decide whether to visit a business like a restaurant (http://bkaprt.com/csm/27). Don’t believe me? Look at your own search history on your mobile device—you’ve probably tried to answer all sorts of questions by looking up information on your phone.

The Southwest Airlines desktop website includes information about their baggage policies, including policies for checked bags, carry-ons, and pets, as well as lost and found, delayed baggage, and a variety of other traveler information, such as what to do if you lose your ticket, need to rebook, or your flight is overbooked. It even includes information for parents looking to book travel for unaccompanied minors, and how Southwest accommodates disabled flyers and the elderly.

The mobile experience does not. Who are we to say that this content doesn’t actually matter?

It’s fine to optimize the mobile experience for the most common tasks. But that doesn’t mean that you should exclude valuable content.

Mobile is social

Have you ever clicked on a link from Facebook or Twitter on your phone? How about a link someone sent you in an email?

Fig 1.4: “No mobile content found. Would you like to visit the desktop version of the site?” asks The Guardian. Can you guess the answer?

Of course you have. Sharing content with our friends and colleagues is one of the bedrock ways we communicate these days. Users don’t distinguish between accessing email, Facebook, Twitter, or other social services on the desktop or on mobile—they choose them fluidly, depending on which device they’re closest to at the time. In fact, as of June 2012, nearly twenty percent of Facebook members use it exclusively on mobile (http://bkaprt.com/csm/28).

If your content isn’t available on mobile—or provides a bad reading experience—you’re missing out on one of the most compelling ways to get people to read it. Is your site littered with icons trying to get people to share your content? If your readers just get an error message when they tap on shared content, all the effort you put into encouraging social sharing is wasted (fig 1.4).

DESIGNING FOR CONTEXT

“Context” is the buzzword everyone throws around when talking about mobile. At the South by Southwest Interactive conference in 2011, the panel called “Designing for context” was the number one must-see session, according to .net Magazine (http://bkaprt.com/csm/29).

The dream is that you can tailor your content for the user’s context—location, time of day, social environment, personal preferences. Based on what you know about the user, you can dynamically personalize the experience so it adapts to meet her needs.

Today, we use “designing for the mobile context” as an excuse to make mobile an inferior experience. Businesses want to invest the least possible time and effort into mobile until they can demonstrate return on investment. Designers believe they can guess what subset of information or functionality users want. Everyone argues that they’re designing for the “mobile use case.”

Beware of personalized interfaces

Presuming that the “designer knows best” when choosing how to deliver personalized content or functionality is risky. We’re notoriously bad about predicting what someone will want. Even armed with real data, we’re likely to make incorrect assumptions when we decide to show some things and hide others.

Microsoft Office tried this strategy in the late 1990s. Office 97 offered many new features and enhancements, which made the user interface more complex. Long menus and dense toolbars gave the impression that the interface was “bloated” (http://bkaprt.com/csm/30). (Sound like any desktop websites you know?)

In response, Microsoft developed “personalized menus” and “rafted toolbars” which showed the most popular items first (fig 1.5). Although Microsoft had good data and a powerful algorithm to help determine which items should be presented first, it turned out that users didn’t like being second-guessed. People found it more frustrating to go through a two-stage process, hunting through multiple menus to find what they were looking for. Personalized menus violated one of the core principles of usable design: put the user in control.

Fig 1.5: Personalized menus in Office 97 attempted to prioritize only the options Microsoft thought users wanted. They were a failure.

Now imagine that instead of clicking a chevron at the bottom of the menu to expand it, the user has to click a link to “full desktop website” and then hunt around in the navigation while squinting at a tiny screen. If your website’s mobile version only offers a subset of your content, you’re giving your users the same frustrating experience. Only much worse.

You don’t have good data

Microsoft had a ton of data about which options people used most frequently. They developed a complex algorithm to present the default “short” menu based on the items people were most likely to want, based on years of history and research with multiple iterations of their product. And they still made mistakes.

The choices you make about which subset of content you want to deliver probably aren’t backed up by good data. They might not be backed up by any research at all, just a gut feeling about which options you imagine will be most important to the mythical on-the-go user.

Even if you do have analytics data about which content people are looking for on mobile, it’s not likely you’re getting an accurate picture of what people really want. Today’s crippled mobile experiences are inadequate testing grounds for evaluating what people wish they could do on mobile. As Jason Grigsby, Cofounder of CloudFour.com and MobilePortland.com, says:

We cannot predict future behavior from a current experience that sucks (http://bkaprt.com/csm/31).

If your vision for mobile is designing for context, then the first step you need to take is getting all your content onto mobile devices.

ALL OF IT? REALLY?

Really. Your content strategy for mobile should not be to develop a satellite to your desktop site, showing only the subset of content you’ve decided a mobile user will need. That’s not going to work because:

People move fluidly between devices, often choosing a mobile device even when they have access to a desktop computer. Don’t assume you can design for “the on-the-go user” because people use their mobile devices anywhere and everywhere.
Mobile-only users want and need to look at your content too! Don’t treat them like second-class citizens just because they never or rarely use the desktop. Even if you think of them as “mobile-mostly” users, remember that you don’t get to decide which device they use to access your content. They do.
Mobile supports reading content just as well as it supports functional tasks. Don’t pat yourself on the back just because you’ve mobile-ized some key features—there’s more work to do with your content.
Context is a cop out. Don’t use context as a rationale to withhold content unless you have real research and data about what users need in a given situation or environment. Unless you have that, you’re going to guess wrong. (And even if you do have that—given the crappy experiences most users get on mobile today, you’ll still probably guess wrong.)

Never force users to go to the desktop website for content they’re seeking on a mobile device. Instead, aim for content parity between your desktop and your mobile experiences—maybe not exactly the same content presented exactly the same way, but essentially the same experience.

It is your mission to get your content out, on whichever platform, in whichever format your audience wants to consume it. Your users get to decide how, when, and where they want to read your content. It is your challenge and your responsibility to deliver a good experience to them.

US Travel: Growth rate will slow in 2013

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02 November 2012
By Stephanie Wharton
Reporter
swharton@hotelnewsnow.com

Story Highlights

The total number of U.S. domestic trips taken in 2012 is expected to increase by 1.8% to 2.05 billion year over year.
Ramifications of the fiscal cliff issue being dealt with by the U.S. Congress are up in the air, causing business travel to slow significantly.
The U.S. Travel Association is expecting inbound travel to the U.S. to increase by 4% in 2013, in comparison with 3.8% growth in 2012.

WASHINGTON—The year in travel is closing out with some positive fundamental results, according to the U.S. Travel Association.
Specifically, the total number of U.S. domestic trips taken in 2012 is expected to increase by 1.8% to 2.05 billion year over year, surpassing the prior peak of trips taken in 2007, said David Huether, senior VP of economics and research at the U.S. Travel Association, during a conference call on Thursday.
Looking ahead to 2013, that number is projected to grow even higher, resulting in yet another record for the U.S. However, that growth will be at a much slower pace than the last few years, he said. “In 2013, the number of trips is going to increase by 1.1%,” he said.
One of the biggest factors that will influence that slowdown in growth is decreasing business confidence, Huether said. “There is some degree of uncertainty,” he said.
U.S. Travel is forecasting business trip growth to increase 0.9% in 2013, compared with 1.3% growth expected for this year.
Ramifications of the fiscal cliff issue being dealt with by the U.S. Congress are up in the air, he said, adding that “there are varying degrees of pain.”
Depending on what kind of deal is struck, travel industry leaders will begin to see some of the ramifications on the industry start to moderate a bit, he said.
“There are many forecasters … that think that if no deal is done, we could hit a recession in the first half of next year,” he said. “I think there’s going to be a significant motive to avert a disaster.”
The threat of a disaster still hangs, however, and that uncertainty is having an impact on travel planning right now. Because of that, business travel is going to slow down in the beginning of 2013, but “hopefully, we’ll see more activity going forward after that,” Huether said.
Domestic leisure travel will also play a factor in the slowdown of growth, he said. The amount of leisure trips will go up in 2013 by 1.2% to 1.59 billion in comparison with the 2% growth projected for this year.
It’s important to note, Huether said, that the growth of the last several years was pretty strong, and the slowdown on the leisure side can be seen as the market adjusting to that significant increase in such a short period of time.

Inbound international travel
U.S. Travel is expecting inbound travel to the U.S. to increase by 4% in 2013, in comparison with 3.8% growth in 2012.
And spending from international visitors will go up, too. The organization is forecasting that in 2012, 14.6% of all spend will come from international travelers, and in 2013, they expect international spend will account for more than 15% of all spending in the U.S.
“We see inbound traffic picking up a little in 2013 over 2012,” Huether said. “That’s on an assumption that the European economies are going to pick up a little steam in 2013.”
Although European visitors might account for the largest share of international guests, the fastest growing inbound travel markets will be Latin America and Asia/Pacific, he said. “As long as visa lines remain low in (China and Brazil), they will both provide a significant increase in trips this year,” he said.

Employment increases
The growth the U.S. is projected to see in domestic and international travel will enable the travel industry to add 98,000 jobs to the economy by 2013, Huether said.
The unemployment rate stands at 7.9%, but the important thing to the travel industry is the unemployment rate for people who have completed some portion of a college degree, he said.
“College graduates’ unemployment rate is 4.1%,” he said. A high percentage of leisure travelers stems from this segment of the population, which spells good news for the travel industry.

Social Media Users Expect Great Customer Service

By Paul ShreadNov. 05, 2012Add a Comment

There’s no question that social media has changed the way customers interact with companies.

The downside is that there’s a lot more pressure to respond to customer complaints that are aired on public forums like Twitter and Facebook. But the upside is that a well handled complaint can create a ton of goodwill.

A recent survey from NM Incite notes that consumers seeking customer service via social media channels – or “social care” – have very high expectations. They expect a response from the company the same day – and they expect their problem to be resolved.

Nearly half of social media users have sought customer service via social channels, and 71% of those who have a positive experience are likely to recommend the brand or company, compared with just 19% of those who get no response. That’s a lot of potential reward for having a good social care program – and a big risk for companies with poor social care.

Admittedly, social media can take up a lot of time that a small business can ill afford. But if you have a public-facing company, it’s something you need to be doing, and if you do it well, you should see plenty of positive results.

Adapted from Social Media Users Have High Expectations at BaselineMag.com.

Thursday, November 1, 2012

Defining lifestyle/boutique needs broad canvas

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24 October 2012
By Jeff Higley
Editorial Director
jeff@hotelnewsnow.com

Story Highlights

Individualistic, unique and experiential are three essential components for any lifestyle or boutique hotel.
A focus on luxury makes a big difference.
Plenty of secondary urban markets are ready for this type of property.

Jason Pomeranc (center) of Commune Hotels & Resorts makes a point as Patrick Goddard (left) of Trust Hospitality and Jay Coldren of Marriott International listen during last week’s Lifestyle/Boutique Hotel Development Conference.

MIAMI BEACH, Florida—Lifestyle hotels and boutique hotels are and will remain closely associated because they overlap in so many key areas, according to speakers at last week’s fourth annual Lifestyle/Boutique Hotel Development Conference.
Panelists participating in the opening general session agreed such hotels need to be individualistic, unique and experiential.
“Label it what you’d like, for us it’s about having a local experience as a traveler,” said David Duncan, president of Denihan Hospitality Group, a New York-based privately held, full-service hotel management and development company that owns and operates 14 boutique hotels in major U.S. urban markets.
Patrick Goddard, president and CEO of Trust Hospitality, a management company with 27 hotels in its portfolio, said guests see the definition “as a reflection of themselves.” His company spends time developing a brand identity with a voice that caters to that.
He said things such as high-end finishes, personalized experiences from pre-arrival to post-departure, sensory elements and community engagement also are critical components.
“A boutique hotel or lifestyle hotel is a big hotel trying to be small, and that’s OK,” said Jason Pomeranc, co-chairman of Commune Hotels & Resorts, a management company formed by a partnership between Thompson Hotels and Joie de Vivre Hotels & Resorts that has more than 30 assets in its portfolio. “This sector is less about branding the hotels than letting the guest brand themselves. … Hotel brands and hotels individually are a similar reflection of one’s individuality.”
Large hotel branding companies, such as Marriott International, see the segment as a lucrative opportunity to augment their portfolios.

Jay Coldren
Marriott International

“When we think about our lifestyle portfolio, we really think it’s people who crest over from wanting space, state and rates to wanting to define themselves by their choice of where they stay,” said Jay Coldren, Marriott’s VP of lifestyle brands.
According to STR, parent company of HotelNewsNow.com, the segment includes 797 U.S. hotels. However, defining it can prove elusive, which means numbers tend to be exaggerated, Pomeranc said.
“We just see everything else being called ‘lifestyle,’” he said “There are lifestyle tires, lifestyle this, lifestyle that. It’s becoming a meaningless term. It’s being watered down in the world. We sort of struggle with, ‘OK, what does it mean? Where do we break the category, so we’re firmly in this sensory, experiential boat? Where do we really focus on consistency and quality and comfort?’”
“We’re all struggling with the title,” Duncan said. “How do you put it into a box? Call it what you may, but what we are trying to do is achieve outsized room rates on a design that is not overly expensive but is exceedingly appealing.”
The size equation
Duncan said size is an important factor when determining a boutique hotel. Denihan’s hotels range in size from 100 rooms to more than 600 rooms.
“Our sweet spot is really 200 to 400 rooms. It’s all about guest experience,” he said.
“It gets more complicated to personalize when you get above 300 or 400 rooms,” said Goddard, who added that Trust prefers hotels with between 60 and 250 rooms. “It’s not impossible, but it’s a little more challenging to personalize because then you get into automation. And when you get into automating personalization, it feels less like personalization.”
Coldren said Marriott’s lifestyle hotel portfolio ranges from the 3,000-room The Cosmopolitan Las Vegas that’s part of the Autograph Collection to a 15-room retreat.
“It’s a different psychology and a different attention and personalization in the boutique segment,” he said. “We see lifestyle spanning a wide gamut of hospitality options.”
Driving rate
With the repeated use of the word “luxury” throughout the 75-minute discussion, it was clear the panelists had a high expectation on their return on investments in the boutique segment. Data provided by STR indicates the segment’s year-to-date metrics are on the rise: room demand (+5.4%), occupancy (+3%), average daily rate (+4.5%), revenue per available room (+7.7%) and room revenue (+10.1%).
“The trick is not only building beautiful hotels that are not only consistently appealing from a design perspective, but achieving room rates everyday for 365 days a year,” Duncan said. “You see a tremendous amount of compression from the big hotel companies. Every one of them is launching something like this because they recognize that the local developer who built these beautiful hotels may or may not have the underlying platform of revenue management and business intelligence and underlying digital platforms to drive revenue.
“So if there’s something to been learned here,” he added, “it’s just because you built it doesn’t mean they’ll come. And just because they come, doesn’t mean they’ll continue to.”

David Duncan
Denihan Hospitality

Like traditional hotels, the market plays a major role in establishing rates.
“I’m in a lot of markets where weekends are stronger than weekday,” Pomeranc said. “If you can yield those shoulder days properly, there’s a lot of money to be farmed out of that.”
“Some of our smaller hotels in non-primary cities don’t have function facilities and don’t have meeting space, and that does hurt you on weekends,” he said. “Realistically, you have to accept that reality that you might have to kind of shift that, and you could be doing $500 a night Monday through Thursday and $249 on weekends.
Some secondary major markets also present better opportunities for expansion possibilities, the panelists said.
“The gateway cities are highly competitive,” Goddard said. “So if you don’t have the capital to execute properly, look for a secondary market. We’ve had incredible success in places like Milwaukee and St. Louis, where we had RevPAR penetration levels well north of 150% compared to our branded competitors.”
Because the level of sophistication changes in secondary markets, the amount of capital on a per-key basis changes, and it’s a different investment in many ways, he said. “It’s hard to find financing in those secondary and tertiary markets.”
Goddard and Coldren said there are dozens of cities in the U.S. that could absorb the boutique type of product. Goddard pointed to Portland, Oregon, and Tampa, Florida, as prime examples. Duncan said that while his company is partial to coastal cities, markets such as Chicago and Austin, Texas, are quite appealing as well.
“Chicago has a big upstart in lifestyle, boutique product in a lot of areas,” said Pomeranc, whose company has two projects in Chicago in development. “What’s interesting is that it is a repositioning of Chicago; it has been a traditional hotel market or conventional hotel market, but they’re opening up to a different type of product.”
Pomeranc said Seattle, Washington, will “see a surge” and Sacramento, California, has been a strong market for Commune’s Citizen Hotel. He said secondary markets such as college towns, research centers and medical centers are prime candidates to add lifestyle hotel inventory.
Coldren said Marriott’s ambitions, particularly with the Autograph Collection, stretch beyond U.S. boundaries.
“We look at the opportunity for the entire continent of Europe is about boutique hotels and what that means for us …” he said. “Asia is a gigantic open field, and there are a lot of things you have to overcome to operate in those markets, but we see amazing potential there as well.”

MIAMI BEACH, Florida—Hotels that fit the definition of being a lifestyle hotel or boutique hotel are attracting consumers from all generations and countries, although some are more lucrative than others, according to panelists at the fourth annual Lifestyle/Boutique Hotel Development Conference.
Jay Coldren, VP of lifestyle brands for Marriott International, said Generation Y during the next five years will be double the size of the baby boomer generation and become the most influential generation in terms of buying power.
“We know this generation … they look for these lifestyle segmentations and these lifestyle experiences, more sensory travel experiences, discovery travel experiences, so we see a seismic shift in the industry to a more lifestyle preference,” he said.
Jason Pomeranc, co-chairman of Commune Hotels & Resorts, said he agreed with Coldren but there’s a big caveat: Don’t count out the baby boomers just yet.
“You have people in their 50s and 60s who are discovering that they don’t want to be in what they perceive as their parents’ hotels at this stage of their lives,” he said. “Internally, we call them the Grateful Dead (population). … The best part is they’re established financially so they’re going for the luxury end of the sector.”
David Duncan, president of Denihan Hospitality, said the “Grateful Dead traveler” doesn’t bat an eye at a $1,200 nightly rate, but they expect perfect service. That’s where the personalization aspect should be maximized.
“If I were a developer, I wouldn’t do it by myself,” Duncan said. “If you want to do it by yourself, I will introduce you to a handful of folks who have, and most of them have converted in their thinking to moving with partners like us.
“I would just leave you with the following: I hope (the business plan) is not only on revenue and (revenue-per-available-room) index, but net margin,” Duncan said. “If you had to pay 10% more to get 10% more, you’re not better off.”
The segment is appealing to travelers worldwide, the panelists said.
Duncan said inbound international travelers to the U.S. are prime targets for boutique hotels because they are 15% less likely to pick a branded hotel when planning their trips.
“This concept of self-expression and expressing yourself through your lodging is becoming increasingly commonplace,” said Patrick Goddard, president and COO of Trust Hospitality.
He said it’s prevalent in the Caribbean and Latin America.
“It’s the type of product we as developers need to put out there,” he said. “The outlook is extremely bright for the segment.”
—by Jeff Higley

Niche vs. Mass Market Product Strategies

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OCTOBER 25, 2012 · BY DALE TRAXLER

In "Multichannel Selling a Necessity," I addressed the need for ecommerce merchants to utilize multiple selling channels because that is where the customers are. In this article, I will focus on matching your product strategy to the appropriate channel.

Niche vs. Mass Market

In marketing, there is a product continuum from "niche" to "mass market." If you have a large market share selling niche products, you likely realize good margins and have a viable business model. Your volume of sales is probably less than a mass market reseller, who likely sells more products in higher quantities. But your gross margins are likely higher.

The mass market reseller has a much larger target market. The drawback to the mass market segment is that gross margins tend to be very slim. Nonetheless, mass market retailers with a high market share also have a very viable business model.

The companies that typically struggle fall somewhere in the middle. They end up in feature and price competition with mass market resellers. At the height of a product lifecycle, when the demand is highest, all retailers — niche and mass market — promote the same item. You see this every day on Amazon, where the price competition is intense. There are many price changes done on Amazon.com every hour by thousands of vendors on mass market items.

Retailers of niche products tend to target a smaller market segment and frequently offer features that are not found in a mass market product. They tend to be higher priced, sold in more limited distribution, and branded. Niche products lend themselves to specialized stores that understand their customers and are able to develop loyalty to their store brands.

Travel Products: Niche vs. Mass Market

Consider travel products as an example. RedOxx.com is a fast growing retailer that manufactures its own line of rugged, high end travel bags. It sells a carry-on bag for $185 called "Safari-Beanos Bag PR5." It’s rated five stars by roughly 85 reviews on the Red Oxx site, which promotes it with excellent content — including videos, images, FAQs, warranties, and more. The store provides this information to differentiate that niche product from more mass market offerings. Safari-Beanos Bag PR5 is not at the high-end of the price range for duffels. That is probably because Red Oxx manufactures and distributes it. Hence, it can sell at a more moderate price and still make a high margin. That’s an effective strategy.

Red Oxx's Safari-Beanos Bag PR 5.5

Now, consider similar carry-on bags at Ebags.com, which is more of a mass market retailer, but still fairly niche in that it only carries bags. In fact, when search at Ebags.com for "carry-on luggage," you receive more than 1,000 results, ranging from niche bags to mass market ones. Prices range from $14.99 to $1,600. A middle-range bag that is similar to Safari-Beanos Bag is "Victorinox Avolve Carry-all Duffel." Its suggested price is $239, but it's listed on Ebags for $119. Ebags sells it own brand of bags, too. Like Red Oxx, that allows Ebags to sell goods for a more moderate price and retain high margins.

Ebags' Victorinox Avolve Carry-all Duffel.

Finally, look at Walmart.com. It carries a few more niche oriented bags, but most of them are clearly mass market. It offers 1,000 carry-on bags, ranging from $10 to $450. A carry-on duffel similar Red Oxx's Safari-Beanos Bag and Ebags' Victorinox Avolve Carry-all Duffel is called "Protege Expandable Duffel Bag." It sells for $10. This is clearly a mass market item. It's low margin, low cost, and, in this case, probably not terribly durable or well made.

I found Victorinox Avolve Carry-all Duffel also available at Amazon from four vendors priced identically at $119. The market is clearly dictating the price. We will see more of that, as automated pricing systems begin to manage multi-channel selling.

What Is Your Strategy?

The reason I list this level of detail is to encourage you to consider various product strategies. A true niche store like Redoxx.com can be competitive because it manufactures a high quality product that is differentiated from competitive offerings. It also does not have to support a distribution channel, allowing it to sell at lower costs. That strategy is effective if you can afford the marketing expense required to garner traffic.

Ebags.com is successful as the destination for people shopping for bags of any type. It has a wide product strategy to meet all needs and to price-match other online stores. It also manufactures its own brand of bags to help increase its margins. I consider Ebags mainly a niche store because it is focused on bags.

Walmart.com is as mass market as it gets. It assumes it will sell more of a particular item than anyone else. It buys cheap, sells cheap, and targets the frugal buyer — at all income levels. It carries few niche products, largely because the makers of those products likely do not want to be associated with selling in Walmart.

Finally, Amazon.com is a true marketplace. It buys and sells its own inventory, but the fastest growth within Amazon is from its marketplace resellers. Amazon's own item sales are growing at a much slower rate. As an Amazon seller, you certainly can be successful selling niche products there. But, your volume will likely be low since there are so many similar mass market products there. If you sell on Amazon, you’ll likely need to buy cheap and sell cheap to garner any volume.

Conclusion

Think about where your products fit overall. If you sell mass market items, be prepared to price accordingly. If you have a niche store, seek out niche products so that you can maintain a higher margin and appeal to buyers who differentiate themselves by the products they buy, wear, and use