"You make me feel!": How Virtual Reality tools influence booking behaviour (part 1)
Aktualisiert: 30. Juli 2019
In my last blog post, I have described the benefits of VR for travel marketing. When talking about VR to inspire travellers and to support their planning process, it all comes down to the key question: do virtual experiences actually influence booking behaviour? If yes, how can VR be used to improve the customer experience and to increase turnover? (which is what most of us are paid for, right?) To make booking ‘wow’? (which we made VirtuallyWow’s claim, but that’s a different story :-)
A likely relationship - but scientifically proven? At VirtuallyThere, we have conducted a study to answer these very questions, on the mission to better understand how virtual experiences influence booking behaviour. The empiric analysis was my MBA thesis at the chair of Professor Jörg Königstorfer at the Technical University Munich. Working with him was fantastic by the way, I appreciate him a lot for his precise and instant responses when I came up with any questions!
Researchers as well as practictioners see VR technology as promising to improve cognitive imagination of a destination, to generate emotional arousal and to rise engagement of potential visitors. Immersive virtual experiences often address several human senses. Also, they can offer interactive elements and “action-supportive” information on what users can do when they are on holidays. It seems likely that this is a favourable precondition to enhance booking decisions and to increase conversion rates.
But can science prove that? Research in this field is mainly based on lab studies: potential customers are shown a virtual tour and are afterwards asked for their – hypothetical – intention to book. This is not necessarily be reliable, as they do not have to put real money on the table!
Professor Königstorfer: „The special approach of Carola Epple’s study is that the data are collected from real, VR supported booking decisions and not from an artificial laboratory situation.”
Analyzing real, VR-supported booking situationsFor that reason, we have decided to interview travel sales agents who use a VR tool for their daily work – they know best whether it makes sense to use the tool and whether it helps them selling, right? Additionally, they can also compare situations with and without using the tool. To conduct the study, we have partnered with Schmetterling International, Germany’s largest mid-sized, independent and owner-operated travel distribution company. It is specialized on technical solutions, purchasing and logistic services for travel agencies. Among these services, Schmetterling also provides a VR tool that is currently used by around 800 of their 4.000 network partners.
Schmetterling’s VR tool enables the sales staff to go beyond catalogues and offer their customers virtual tours at the point of sale. When they feel it may be helpful, Schmetterling travel sales agents can get out their VR goggles and let their customers experience cruise ships, hotels, beaches and other surroundings in advance. What customers can see when putting on the device are interactive, 3D 360°pictures. Navigation (e.g. from the lobby to the hotel room or to the pool) is performed via head movement. The tool is serviced by the travel agents, who can simultaneously follow on their desktop PC or laptop what their customers see via the VR glasses to give accompanying explanations. For the study, we conducted an online survey of 91 travel bureau sales agents and asked for their experiences with the tool.
Schmetterling’s VR tool enables the sales staff to go beyond catalogues and offer their customers virtualtours at the point of sale. When they feel it may be helpful, Schmetterling travel sales agents can get out their VR goggles and let their customers experience cruise ships, hotels, beaches and other surroundings in advance. What customers can see when putting on the device are interactive, 3D 360°pictures. Navigation (e.g. from the lobby to the hotel room or to the pool) is performed via head movement. The tool is serviced by the travel agents, who can simultaneously follow on their desktop PC or laptop what their customers see via the VR glasses to give accompanying explanations. For the study, we conducted an online survey of 91 travel bureau sales agents and asked for their experiences with the tool.
Drum roll ... the results: +26% turnover and more efficient selling
The tool indeed has an influence on three aspects on the booking behaviour of travel bureau customers: virtual tours increase the probability to book, the speed of decision-making and turnover - by 26% on average! So if you think of the equivalent of a quarter of a cruise ship trip for two persons, we talk about a tidy sum of money. In practice, this means that VR brings an increase in efficiency by saving time as well as a direct effect on turnover.
But how does VR exert its influence? Our results show that emotional activation, particularly enthusiasm and interest, play a vital role: the data reveal a direct effect on the analyzed aspects of booking behaviour. That means: if virtual experiences manages to evoke emotions and arousal, we see a positive impact on booking behaviour.
I have to admit that I was a bit surprised by the results! I had expected to find an effect of cognitive imagination on the analyzed outcomes of the booking process. If you can better imagine what to expect, it gives travelers more security, I had assumed. But Professor Königstorfer was perfectly fine with my findings: “It fits well in the context of other consumer research that emotional activation plays a key role. Often, emotional aspects are disregarded because they are difficult to measure. Yet, if they are measure, emotions often have a vital influence on purchasing behaviour.“
Translated into practice, offline as well as online
In practice, emotional activation can be evoked for example by a first person perspective and a storytelling approach as well as appropriate background music. Another possibility is to integrate recognizable touristic highlights and adapting the content to the respective target group and their expectations. We recommend to take these recommendations into account already when conceptualizing VR content.
If you wonder: VR does not only work for a personal sales situation in travel bureaus. As an example, travel giant TUI launched a VR app in 2016 that provides local points of interest as 360° photos. The content was produced in a way that the resorts themselves took 360° photos of the best sites on their excursions. They sent them to a TUI team in Mallorca who processed the content into an app. TUI made the experience that these VR apps improved excursion sales. They also use VR to sell tickets for a popular Mallorca theatre show: the tool provides a 360° view of the theatre room and shows people where they are going to sit and how they can improve their view if they buy a premium ticket. In effect, the tools give TUI the ability to sell the better views at a higher price and enables upselling (see http://www.instavr.co/customer-stories/tui-group).
To be continued ...
To make things even more exciting, I work with a “cliff hanger” technique here: Emotions are not the only factor that plays a role in that context. In the next episode, I will show you my path model: it will introduce two additional important constructs and reveil how all of them work together in explaining how VR influences the booking behaviour of travellers.