November 14, 2007

Orbitz - Steve Barnhart

Steve Barnhart just finished his talk on both the long tale and the long tail of Orbitz.

There are more demands for the long tail of travel then traditional customer products, like Amazon or iTunes.

Steve was really inspired by Chris Anderson's book on the long Tail of Distribution, and noted that the economics of the long tail of tourism require three unique criteria:

  1. Proliferation of stuff or democritization of production.

  2. Access or the democritization of distribution

  3. Niche Marketing or the Connection of S&D

1. The proliferation of stuff does not come out the the same in travel. It goes far beyond inventory access and focuses on customer risk aversion.

The big challenge of the long tail inventory is getting the consumer to access that inventory. Consumers try to avoid financial risk especially when there is a 'veto issue'. The 'veto issue' is when there needs to be something for everyone in the ravel group, this would allow a vacation package have a activities or services that would make all of the travel group to have a better vacation. He recommends making an offering that is applicable with more demographics.

More inventory won't move consumers along the tail.

2. Easy access - every step or touchpoint along the way. Orbitz is trying to ease the access of bookings with relevant information along the way and smoothly integrate all of the travel systems. Make search and transactions easier to use. They are making a multi-currency multi-lingual platform. Going beyond simple, but making relevant.

3. Niche markets - Experiences are infinite, but locations are finite. You must know that things in the long tail are in the fat tail for others. Travel has always had access to more then the best selling locations and activities, the fact that people want to go to key locations will not change. The biggest focus of any company should not be to convince customers to go to obscure product, but to make the long tail come to the fat tail. In other words, tell new people about old things.

The question period had one great question that related to Rezgo ; "How do long tail products fit into Orbitz?"

The answer was music to my ears "There is a wealth of opportunity, but not many suppliers, no desks for service counters, and lack of computer systems. There is more value there then anyone in the chain. We are looking into filling that niche"

Basically integrate with Rezgo.