Consumer shopping habits have changed steadily since the launch of the iPhone 15 years ago. A survey of 3250 U.S. customers from Pymnts.com found that 51.4 percent of all travel service purchases were made via a mobile device. This website analyzes the role of payments within new tech.
This trend is even more evident among younger shoppers. According to Klarna, an online payment company, 48% of millennials aged 25-40 prefer shopping online with their mobile phones, while 34% of all global shoppers use them.
It seems that online shopping for travel will soon be obsolete. Some travel shopping services like Hopper offer in-app shopping only for certain bookings. This leaves desktop users stranded.
Although it is easier to book a flight via a smartphone, it can be more expensive.
Be aware of ‘drip pricing’
Mobile shopping has seen a dramatic shift in the way that travel brands make revenue over the last decade. The rise in add-on fees such as baggage and seat selection fees for flights, cleaning fees and lodging fees have made them more prevalent and expensive. According to the Bureau of Transportation Statistics, US airlines collected $5.3 Billion in baggage fees in 2021.
A 2021 study published in Marketing Science showed that shoppers make poor decisions when there are hidden fees added to the checkout process. Shoppers are more inclined to compare prices between competitors than the final price.
Shelle Santana (assistant professor of marketing at Bentley University) said in an email interview that the initial price of a firm’s drip pricing strategy is almost always less than the all-in price of a competitor. But once they add amenities like a checked bag or seat options, the price difference between firms decreases .”
Anyone who has ever purchased airfare on budget airlines such as Frontier or Spirit knows how “drip pricing” works. Santana and her colleagues were surprised by how reluctant customers were to look at other options, even after the final price rose.
“Consumers perceive high costs for starting their decision-making process over and think they will save more money than they will,” Santana stated.
The bottom line is that shoppers often accept any fees added to their final checkout screen. They believe it will be too difficult to go back and try another option, even though this would save them money.
The wrong tool
Mobile shopping is fast and simple for basic purchases like ordering cat food or paying bills. Shopping for travel can be difficult. You will need to switch between multiple tabs and apps in order to find the best deal.
You will need to make the decision whether you want to pay cash or with reward miles. There are several steps involved. You will first need to search the airline website or app for award availability. Next, you’ll want to switch to your personal calendar to verify dates. Next, search for an alternative flight tool such as Google Flights to find estimated cash fares. Then you can determine the value of your redemption in dollars or miles. Once you have chosen the best option, you will need to navigate the checkout process using both cash and award flight options in order to determine the final price.
Perhaps some Gen Zers with fleet feet can do this task on a smartphone. It’s too difficult for many.
A 2018 Journal of Marketing study found that shoppers who used a computer to shop online had a higher conversion rate. It was based on nearly one million transactions. This was especially true for high-risk products or higher prices.
Santana stated that she almost always shops for travel from a computer. “I like to open multiple tabs at once and toggle among them to understand price differences and drivers between firms .”
This article is by NerdWallet. It was originally published in The Associated Press.
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