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For more than 150 years, Thomas Cook was a household name – a mainstay in the travel industry. Like many retailers, though, they struggled to adapt to market changes catalysed by advancements in technology and, on the 23rd September 2019, entered liquidation.
The permanent closures of retail giants have been an identifying characteristic of the past decade. Comet, Toys R Us and Blockbuster are just a handful of the well-recognised names that have disappeared from our high streets post-2010. Like Thomas Cook, their collapses have been widely discussed and a multitude of potential causes have been put forward. The precise cause of their and Thomas Cook’s demise is unlikely to be fully understood. Few, though, would disagree with claims that failing to develop a digital transformation strategy – to leverage tech as a means of modernising ageing business models – contributed significantly.
In many respects, development in the digital sphere affected the travel industry in much the same way it disrupted other retailers’ models: consumers enjoyed increased choice and were able to locate goods and services that better addressed their exact desires and needs. Holidaymakers were, as a direct result, able to precisely tailor trips to their exact specifications. To arrange flights, accommodations and destinations themselves instead of relying on package holiday providers to do this for them. Whilst a growing number of consumers took advantage of this, Thomas Cook continued to offer package holidays to an increasingly uninterested audience.
Some will claim the unseasonably warm weather the UK has enjoyed over the last few years was the driving force behind Thomas Cook’s downfall. Others will point to the political unrest in popular destinations such as Turkey, Egypt and Tunisia. ROCK, though, are resolute in our belief that, had Thomas Cook embraced technology and formulated an informed digital transformation strategy, there’s a good chance they’d still be operational today.
Having not audited the company’s practices, infrastructure, culture etc. it is, of course, not possible for us to say precisely what changes should have been implemented beyond conjecture. ROCK works with a multitude of clients through numerous industry verticals and are regularly assigned the task of formulating a digital transformation strategy. Here, we share some typical changes, with an emphasis on any that would benefit the travel and tourism sector, for companies looking to stay ahead of the times:
Fewer business errors are quite as egregious as failing to listen to your target audience. In the travel industry – a sector so heavily reliant upon its ability to provide consumers with what they most desire – it’s certain to prove fatal.
Thomas Cook, therefore, would have benefited from strategies that leveraged big data and the considerable understandings that can be gleaned from it. A well-thought-out data collection and analysis roadmap would likely have yielded the findings they needed to better meet consumer needs or identify an appropriate niche within which they could have successfully operated.
Whilst big data and analytical tools would have helped Thomas Cook better identify what they should be offering their target market, it would not, in and of itself, have allowed them to launch new offerings successfully. Instead, this would have relied upon comprehensive experience design frameworks.
Examining findings would, of course, have resulted in the conception of superior offerings but, as far as launches are concerned, execution is much more important than conception. Once a new product has been conceived, it must be teamed to an experience design model encompassing market research, asset design and multi-channel marketing efforts. Furthermore, resultant strategies must be reviewed regularly and altered whenever necessary.
Embracing experience design would have allowed Thomas Cook to both identify and find a message that resonated with an audience looking for their new services.
In order for a digital transformation strategy to bring about palpable results, key stakeholders and decision-makers must be willing to embrace an agile approach. Plans, however well researched they may be, will not necessarily succeed and must change as a result.
If, for example, Thomas Cook had begun directing traffic towards its website via aforementioned multi-channel campaigns only to find that this did not result in bookings, they would need to consider why and make changes. This could have involved A/B testing, making changes to copy, reviewing website performance, altering their marketing channels etc.
Ultimately, remaining open-minded and adapting strategies to findings significantly increases the likelihood of offerings gaining traction.
A study conducted as far back as 2012 found that 80% of all holidays were booked online.1 Thomas Cook, though, maintained a considerable ‘bricks and mortar’ presence on the UK’s high streets. This, considering the ways in which the market had changed in the years prior to their collapse, was certain to have been generating considerable losses.
As well as liquidating unnecessary assets, Thomas Cook would have benefited significantly from frequently scrutinising all of their outgoings and sourcing more cost-effective alternatives wherever possible.
It should be noted, however, that spending more in certain areas in order to provide customers with a better service can, potentially, be more beneficial than finding a cheaper option. Cost reduction must be coupled with common sense.
It is impossible to conclude whether or not a digital transformation strategy would have saved Thomas Cook, but it’s reasonable to deduce that changing with the times would have significantly enhanced the likelihood of their survival.
The fate of Thomas Cook should long stand as a warning to businesses of all shapes, sizes and across all industries: embrace change or embrace failure – the choice is yours.