In today’s times, ticketed attractions such as ski resorts, water parks, and amusement parks need to be selling online. The shift to online purchasing has been a steady one since the late 1990s, with marketplaces like Amazon and Alibaba in China initially leading the charge. In 2020, e-commerce sales accounted for over 14 percent of all retail sales in the United States and were forecasted to rise to nearly 22 percent by 2025. But the global pandemic further accelerated the adoption of e-commerce by even the smallest local businesses.
When it comes to ticketed attractions, more recent research data has shown an even stronger trend. Present-day consumers are planning further in advance, with their top three sources of pre-visitation research happening online – search engines, online travel agency (OTA) websites, and the websites of the attractions themselves.
Additionally, almost half of these attraction ticket purchases now take place online, a 20% increase over 2019. The advanced planning mindset and changing consumer purchasing behavior presents an even greater opportunity for attractions to sell tickets using a thoughtful e-commerce strategy that better benefits their bottom line.
What is an E-commerce Strategy?
An e-commerce strategy lays out the course for a business to be able to financially transact online and to successfully fulfill those orders operationally. Just as no business should get underway without a business plan, no business should attempt to sell online without an e-commerce strategy. An e-commerce strategy must account for merchandising, retailing, pricing strategy, selling, and fulfillment, with an emphasis on selling. Without sales, after all, everything else is just an expense.
At this point, it’s important to distinguish between e-commerce strategy and e-commerce marketing strategy. An e-commerce strategy lays out how the business will transact online; an e-commerce marketing strategy details how that business will go to market to attract its customers and how it will retain those same customers over time. While both are needed for a business to be successful, this article will focus exclusively on e-commerce strategy.
Common E-commerce Terminology
Before touching on specific components of an e-commerce strategy, here is some important e-commerce terminology to know and understand:
- Buyer Intent (sometimes referred to only as “Intent”) – Buyer intent indicates a website visitor’s willingness to purchase your product or service. It includes actions and signals that businesses use to identify the likelihood of converting a visitor into a customer. In e-commerce for ticketed resorts or attractions, this is often measured by the number of dated searches a visitor makes into the e-commerce store.
- Conversion – Conversion measures the various steps by which website visitors ultimately turn into buyers. Website visitors who visit a product page have converted into a prospect or lead, for example. Prospects that place at least one item into a shopping cart have converted into a shopper, and shoppers who check out and make a purchase are buyers. “Conversion rate” refers to the number of visitors who turned into buyers over a given time period.
- Pricing Strategies – There are several strategic approaches and tools such as dynamic pricing, that can be put into play to impact e-commerce conversion, several of which will be discussed in further detail below.
- Enhanced Selling (Suggestive Selling, Upselling, Cross-Selling, Bundling or Packaged Deals) – Enriched selling features built into e-commerce software that work towards extracting more revenue per customer purchase (increasing average order size).
- Suggestive selling can range from simple if/then static suggestions of other add-ons to a purchase to sophisticated algorithms that suggest add-ons based on the items the buyer may have viewed or already placed in their shopping cart. For instance, a shopping cart containing an admission ticket to a water park might contain a suggestion to purchase the rental of a cabana as well.
- Upselling encourages a buyer to upgrade to a better version of a product already in their shopping cart. For example, “Consider buying the Admissions Plus ticket, which will get you a $25 food and beverage voucher for one low price!”
- Cross-selling encourages a buyer to add a product into their cart that normally sells alongside that item – a seasonal locker rental with a season’s pass. Bundling or packaged deals enables the sale of multiple items to be sold together for a single price – a ski lift ticket along with an equipment rental, for example.
Special Considerations for Ticketed Attractions
When it comes to e-commerce strategy, it’s important to consider the uniqueness of ticketed attractions businesses. As previously mentioned, while ticketed attractions have adopted online sales at a greater rate since 2019, they still lag behind other sectors such as airlines and hotels. That said, in 2019, online channels grew more than twice as fast as offline, driven by consumer behavior shifting to e-commerce and mobile bookings.
Attractions also have to be prepared for a range of consumer planning expectations. Pre-pandemic, the pre-visit planning window ranged from three to four months in advance by desktop to last-minute via mobile. While the pandemic saw pre-planning ranges shorten and last-minute purchasing drop, as travel continues to recover, the habits of last-minute purchasing will likely return.
To maximize revenues, ticketed attractions should discourage last-minute buying behavior through more sophisticated pricing strategies. In other words, the existence of an e-commerce-enabled website coupled with a thoughtful pricing strategy means more opportunities to provide the right price to the right customer at the exact right time.
Elements of E-Commerce Strategy Design
These are the elements of e-commerce strategy design that should be consistently incorporated for a resort or attractions business:
- Defined Goals
- Defined Timeline and/or Milestones
- Defined and Described Various Likely Customers (“Buyer Personas”)
- Established Pricing Strategy/Strategies
- Understanding of the Conversion Funnel
- Optimized Experience on Any Device
Goals should address the why, what, and how – Why should the business conduct online commerce? What does it hope to gain? What specific goals/targets is the business aiming to achieve? How will its e-commerce strategy and performance impact the rest of the business? Articulate goals and then try to assign measurable terms to them. As a framework, use SMART goals.
Define Timeline and/or Milestones
When will the planning and implementation of the e-commerce strategy begin? When is the implementation set to end and online sales to begin? Over what period of time will the success of the strategy be measured and at what intervals? How will success be measured and by what metrics? Be sure to also build in milestones to review and adjust the strategy as needed to grow and maintain its success.
Define and Describe Various Likely Customers (“Buyer Personas”)
Buyer personas inform the e-commerce and marketing strategies. They go well beyond just understanding your customer demographics. Rather, they detail psychographics, which are defining behaviors and lifestyle markers, that help a business to better design marketing and e-commerce experiences that convert. Different personas may demand different decision trees on the consumer’s path to purchase or conversion funnel.
As mentioned earlier, pricing strategies take advantage of approaches and tools that can be put into play to impact e-commerce conversion. Revenue Management involves the use of data to more accurately predict and control demand and other consumer buying behaviors. Strategically, it can be thought of as selling the right ticket, to the right customer, at the right moment, for the right price, through the right distribution channel, with the best cost efficiency.
To achieve optimized revenue management, many resorts and attractions use a solution called Dynamic Pricing, which continuously adjusts purchase prices based on demand, season, day, time of entry, and when customers buy. Think of researching and booking an airline ticket. If hours or days passed since the preliminary research was performed, likely the price increased, as a result of dynamic pricing. Dynamic pricing teaches consumers to act immediately rather than to wait until the last minute to buy their tickets or suffer the consequences of higher prices. For a ticketed attraction, this learned consumer behavior means more inventory sold in advance and more predictable revenue.
Circumstances may dictate when dynamic pricing is not as appropriate as some other pricing strategies such as Variable Pricing, where the price varies based on the day but does not move over time for any given day. If the ticketed attraction is more of an activity that gets consumed repeatedly day after day but for which there may be limited inventory each day, dynamic pricing may be the more appropriate strategy.
The key point, however, is that a complete e-commerce strategy needs to include a pricing strategy, and the e-commerce system must have the technological capability of ingesting and displaying dynamic prices to consumers (e.g. different combinations of prices and quantities of tickets on different days across a season).
The conversion funnel depicts how traffic flows through web and mobile e-commerce sites and converts into revenue. At the wide top of the funnel is buyer intent. Intent may start outside the site in a search engine or on a third-party reseller website.
In the middle of the funnel is the conversion. Customers who visit the site may begin selecting products to purchase, or they may leave altogether without buying anything. The rate by which those site visits turn into final transactions is called the Conversion Rate. The conversion rate can be influenced by the ease with which the customers can find what they’re looking for, messaging and content, product pricing, and even the simplicity of the checkout process.
For ticketed attractions, after product identity and quality (what you are selling), pricing is the primary driver of conversion rate. Read more about other key metrics your business should be tracking.
Smart operators are always looking to make improvements to their conversion rate and consequently their revenue growth. They do so by frequently and regularly reviewing data and analytics and testing changes that can positively affect their conversion funnel. Changing the pricing strategy, implementing an upsell or cross-sell opportunity, or adjusting the purchase flow could radically improve both conversion and average order size per transaction.
What works in one season may also not work in another. The conversion rate should never be considered “settled” – there is always room to improve and optimize.
While the desktop e-commerce shopping experience still yields average online order values almost 30% more than those performed on mobile devices, mobile e-commerce cannot be an afterthought. A growing number of consumers make purchases through their mobile phones, so the e-commerce strategy must include an optimized experience regardless of the device the consumer uses. For instance, 70% of Winter 2022 user sessions for Catalate-powered websites were via mobile. The mobile experience needs to be able to deliver the same features as the desktop one for the business to maximize its revenues.
Wrapping it all up
The experiences and activities industry continues to evolve towards a digital shopping environment. Soon, e-commerce sales will define how well resorts and attractions run their businesses, period. Any successful ticketed attraction e-commerce strategy cannot overlook the ability to serve customers in ways they have grown used to: seamlessly, on any device, and with pricing and revenue management tools that positively affirm the consumer’s advanced purchasing behavior.
Now, go forth, build a winning e-commerce strategy, and grow greater revenue!
To learn more about how Catalate’s full-service Analytics, Pricing as a Service (PaaS) and Cloud Store products can help your business make more money online, schedule a demo today.