No 2001-3 -Tuesday, february 27, 2001
|Will the new online strategy adopted by lastminute allow the site to survive in the eTourism battle?|
since lastminute acquired the French travel agency Degriftour.com,
it has put holidays first, even more so than it used to, and holidays
now constitute the main part of its business.
It goes without saying that when a business model is based on the last minute impulse, your home page must answer such expectation in the most efficient way.
You first need to express your identity in a clear way but you must also prove able to attract the consumer's eye on the essential parts of the page if you want your home page to be efficient.
lastminute's home page manages to express its identity successfully. Indeed, even though the name of the site itself does not leave any room for ambiguity, the other elements that can be seen on the home page help intensify such impression.
To attract the consumer's eye, the site uses coloured, piled up blocks, according to the strategic importance of the products that are presented within those blocks.
As a result, we get a vertical column in pastel colours that shade off into each other on the right hand-side of the screen, which constitutes the most important element of the page.
And yet, when compared to lastminute's business model, it is interesting to note that under the most commonly used format, 800X600 pixels, consumers can only see eTourism products... the gifts section being relegated to the bottom of the page.
This leads us to think that taking Degriftour over was more than a desire to extend part of lastminute's activities, as holidays now seem to be the sole trade of the site.
A home page often speaks for itself as far as the site's strategy is concerned. This is why, unless the site's strategy is not expressed in the best possible way, which would be rather surprising, there is no doubt that lastminute gift section will become a minor element in its business model and become no more than an extra asset for the site.
Should this tendency be confirmed in the coming months, I would no longer see a difference between lastminute and all the other online travel agencies that often have additional products to offer, such as entertainment tickets...
It goes without saying that its financial results do not prove very encouraging as for the profitability of its business, holidays apart, but the bend taken by lastminute shows a strategy change and raises a new problem for lastminute.
It probably was a good move to acquire Degriftour, but the site still needs to consolidate its positioning when compared to lastminute's own competitors.
As Degriftour did become more efficient but also more consumer friendly (cf: our last eIndice), we can hope that it will manage to keep its online market shares as it is, but this would mean ignoring the efforts displayed by its direct competitors in the last two years as well as the arrival of American web sites on the French market where Degriftour used to be one of the best.
My fear is that lastminute might well remain an average player in the eTourism business if it tries to focus on holidays only and it might not prove able to compete with its French and international competitors such as eBookers, Travelocity or even Expedia, despite Degriftour's help (which fame never really spread abroad).
What is more, its past losses weigh down the group's financial results and we do not see how it can keep on going forward since it will have to face ever increasing marketing costs to resist its direct competitors'attacks.
I also fear that the lastminute image, that was patiently built in the public's mind and specialised in a given type of sale, might in fact slow down the company's future development on the sole holiday business.
All this means that lastminute's challenge today is find out how to deal with its image in the most efficient way.
lastminute took a chance when it bought Degriftour: would it manage to deal with two different brands at the same time on the financial but also on the marketing level? This constitutes the first difficulty. Secondly, should the Degriftour brand disappear? There is no easy answer to such question. And finally, I think it might prove just as risky to change its business model and keep a brand that has lost its original meaning.
lastminute appears to be trapped in its own contradictions. What is more, everyone knows that Internet users are not quite mature enough for its original business model to appear profitable in the short term.
Besides, I do not think that the sole French legitimacy gained by Degriftour will allow lastminute to become one of the leaders in the eTourism business and keep on developing itself in the international level as it already started.
lastminute will have to answer all those questions in the coming months.