January 28 2016

What Lessons about Consumers and Mobility can Hotel Management Learn from Retail?

Back in 2009, Apple rolled out a mobile point of sale (mPOS) solution in its’ stores. Some say it revolutionized the retail customer experience. “Being personally approached by an associate, having merchandise hand-delivered and checking out anywhere in the store instead of standing in line at a counter were unprecedented, and Apple Stores became a case study for retailers seeking to improve customer service.” Jennifer Brown, Strategic Relationship and Program Manager, Infinite Peripherals, Inc.

Hotels must follow retail lead into successful digital technology

And they were right. Numerous retail stores across the country, including Nordstrom, Home Depot, Target, Barneys, along with many others now employ smart devices (more often than not, tablets) in their stores to engage and complete transactions with their customers. “We want to take care of customers anywhere in the store. We don’t have to take you to the cash register, and instead, can do that right there with you by the dressing room or when you’re trying on shoes – and then you’re on your way,” says Colin Johnson of Nordstorm, “That kind of ability to increase speed and convenience is increasingly important.”

And while convenience is very important, so are sales. A year after rolling out smart devices to employees, Nordstorm reported a 15.3% increase in retail sales with both the average selling price and the number of items sold increased in 2011 compared with 2010.

So, can we draw any parallels to the hotel world? Well, retail customers and hotel guests have some common interests; they are looking for service, choice, and convenience. And, similar to retail management, hotel management is wrestling with how to move their operational culture away from the having a fixed location for staff-to-consumer interactions. That said, hoteliers are quite aware of the sea-change that is coming. At the Hotel Revenue Strategy Summit in August (2015), mobility was listed as the number one disruptor facing the hotel industry. The challenge for some is to identify the business case for changing the way they should operate.

In the retail space, the immediate customer checkout and queue reduction are obvious benefits. For hotels, the primary benefit of equipping front desk staff with a mobile PMS is the ability to move to where the customer is. How does this concept translate to profits? Mobility is a catalyst for more interaction with the guests in the context of the guest’s stay. Besides far easier check-in and check-out, more interaction means more opportunities to up-sell guests on ancillary services and activities that may not otherwise be apparent (e.g. booking breakfast or a table for dinner, spa treatments, late check-out, etc.). The ability to engage “on-the-spot” conveys a higher level of service, which translates into higher guest satisfaction, which, in turn, translates into better online reviews. If mobility can create better reviews, then mobility has a positive impact on online conversion and REVPAR. That is motivation enough for many hoteliers.

Yes, retail and hotels are different. But both industries are interacting with the same customers who are expecting a higher level of choice and service because of technology. Retail has begun a transformation of its operational model to take advantage of this trend. Mobility has come to the hotel industry too, but who will be the Apple Stores of the hotel world?