Amit’s Agenda: To create an online channel that complements—not replaces—Thomas Cook India’s offline business model.
Talk about full circles. When online travel agencies first became popular back in 2006, a lot of people predicted the end of the traditional, brick-and-mortar travel agent. Yet, the folks at Thomas Cook, the big daddy of travel agents, with its 244 locations, weren’t too worried. That’s probably because they knew something the new kids on the block—Thomas Cook India, which has been around since 1881, has earned the right to call them that—didn’t. They foresaw that the value customers saw in booking tickets online would become a commodity, and that would, in turn, quickly corrode the online-only business model. The real money, they understood from experience, lay in planning big ticket holidays. And the customer wanted that done face-to-face. They were right. Already, an increasing number of online travel agents like MakeMyTrip have opened brick-and-mortar stores.
Suddenly, those brick-and-mortar stores, what experts called the albatross around the neck of travel agents, sinking them like bricks, made business sense again. And the folks at Thomas Cook smiled knowingly.
But, if they were so smart, why did Thomas Cook India create an online channel? To strengthen and complement the company’s offline business, among other reasons—not to replace the brick-and-mortar model, says Amit Madhan, head e-commerce, Thomas Cook India. It’s a view that run contrary to conventional wisdom.
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CIO: It must be scary for a brick-and-mortar player like Thomas Cook to see the growth of online travel companies. Your thoughts?
Amit Madhan: I joined the company only in 2012, but I can tell you that our team at Thomas Cook India wasn’t affected by the success of online travel companies. A lot of companies were getting into the online ticketing business and it didn’t affect us as long as they didn’t hamper our core business, which they didn’t. At the time, most offline travel agents were highly-dependent on travel ticket selling whereas our model dealt more with the international holiday package segment, specifically high-value travel packages. A number of our large customers are interested in booking big ticket travel packages for outbound travel. And, while the initial querying and itinerary preparation can take place online, the conversation quickly moves to a call center or to a customer touch point for order booking and processing.
If that’s true, why did TCI foray into the online travel business?
An online presence opens up avenues across boundaries, but it is the offline stores that provide the real connect with our customers. We have always had a strong foothold in the brick-and-mortar space and the idea behind venturing into a new channel was to ensure maximum customer centricity. Through the online channel we wanted to leverage the goodwill that the Thomas Cook brand had established in India.
The online portal offers an assortment of travel products and related financial services including flight booking, foreign travel insurance, hotels, cruises and Rail Europe passes. With the help of this channel, we have boosted our distribution network extensively. Going forward, the Indian travel market is only going to expand and our online channel will only bring us closer to our customers. We are growing slowly as far as the online business is concerned. But we realize how relevant the online channel has—and that it’s becoming a key contributor to our different businesses.
It’s not just about growing the percentage of our online revenues. A recent survey we conducted revealed that young Indian travelers want an option to connect with their travel service providers, online as well as offline, with over 66 percent preferring a flexible mix of online and offline touch points. So, we will continue to leverage our hybrid approach and serve customers in whichever way they prefer.
Can you describe your online model? How is it different from Makemytrip or Cleartrip?
It is essentially a hybrid model. Let me explain. Today, we are a brick-and-mortar plus clicks-and-bricks company. The main objective is to leverage our offline presence and branch networks. That’s our core strength and an important contributor to sales and profits. Instead of making it the center of our strategy, we would rather use the online channel to reinforce our offline stores. For instance, a significant number of our customers go online to book small packages such as domestic holidays. That’s where we push online, meaning, customers can book a travel package online. But with other high-value packages, we initially engage with customers online and then seamlessly transfer them to our physical branches for forex and visa-related queries.There’s a concurrent growth in both online traction and our point-to-point business; customers who have historically dealt with us, continue to come to us.
How else is IT fuelling growth at Thomas Cook India?
With an aim to enhance customer outreach, we are in the process of deploying a CRM that will give us a single view our customers. It will cut across different channels and lines of business. The main objective is to augment channel grazing: Customers should be able to seamlessly transact and talk to us through all available channels. The other important benefits include achieving greater customer centricity, and delivering better customer service thanks to the automation of core processes.
How do other channels such as mobile and social fit in your omnipresence strategy?
Mobile and social have become an integral part of our lives. In terms of leveraging it for business, it’s all about how to monetize and capitalize on that changing behavior. The technology behind mobile phones is changing constantly and the challenge is to adapt quickly. At Thomas Cook India, we have identified a mobile application strategy. We want to understand the behavior of a user on a mobile site and place all those learnings into an app. Therefore, the mobile site is helping us increase customer engagement and leads rather than transactions. Since in India, due to connectivity problems and unfriendly payment gateways, there are chances that we could lose out on customers.
We see that a lot of our customers search for travel packages on their mobiles and then fill in their customer details. We, in turn, call them through our call centers and engage with them. Seen from that perspective, the mobile platform is creating awareness as well. Since customers are online, we advertise our packages in order to engage with them and make them aware of interesting offers and packages.
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As far as social commerce goes, it hasn’t really taken off in India. However, we still want to use it to engage and interact with our customers, this includes gathering inputs and feedback on our products and services from customers, listening, managing our online reputation, and dispersing information on our products and services to to our Facebook fan base of over 4 lakh, and Twitter close to over 1,500.
Recently, you also launched a tablet application.
Yes that’s right. In order to boost the efficiency of our sales teams, we recently created an app in which we incorporated a host of travel packages, containing detailed itineraries and options, vibrant images, videos, maps, and invaluable visa data, travel tips, and destination information. The app also provides a virtual walk-through of an itinerary along with a handy comparison of various packages, thereby significantly enhancing a customer’s overall research-and-booking experience. And, it eradicates the need for paper-heavy brochures.
Finally, on a more personal note, how does a focus on an offline model affect your role?
I was one of the founding members of ICICI Lombard and helped setting up its e-business. When I joined Thomas Cook India in 2012, as its head of e-commerce, online was like any other channel for the company—the purpose of leveraging it was to increase customer engagement and lead management. This created a huge opportunity for IT, and as an IT-head, my role has been to administer the guiding principles and practices to leverage new technologies and trends. We are in the process of transforming a number of business processes and core systems within Thomas Cook India to suit today’s technological requirements.
Shubhra Rishi is senior correspondent. Send feedback on this interview to email@example.com