Perspective:WhatWorksinB-to-CWebtravelsectorshowsrisingtrafficandrevenue.March26,2001Layoffs,shutdowns,andde-listinghavebecomethetopicsofchoicewhenitcomestoecommerce,especiallyforthemuch-malignedcompaniestargetingtheonce-popularconsumersegment.Now,theacronym"B-to-C"isnearlyabsentfromcontemporarybusinessplans.Butwasbusiness-to-consumersuchabadidea?Clearly,manysectorsofconsumerecommerce,suchaspetsupplystores,havestruggled.ButlookpastthebadnewsandthereareseveralamazinglyvibrantB-to-Csectorsaccountingforbillionsofrevenuedollarsonevenamonthlybasis.Thesesectorsincludeapparel,travel,andauctions,tonameafew.Don'tbelieveit?Let'stakethetravelexample.DatadrawnfromtheNielsen//NetRatingspanelof70,000U.S.at-homeandat-workPCusersshowsthatonlinetravelmerchantshavehadabumpyride,butsawa43percentincreaseinshoppingtripsinJanuary2001versusayearearlier(seeTable1).ThisJanuary,14millionpeoplewenttotravelWebsitesfromtheirhomePCs,and11millionwentfromtheirworkPCs.Ifthatsoundslikealot,itis.Basically,30percentofallat-workPCusersand15percentofallat-homePCuserswenttotravelecommerceWebsites(seeTable2).Althoughusageinformationoffersinsight,thesuccessofonlineretailingisbettermeasuredbyrevenue.Nielsen//NetRatingsandHarrisInteractiveconductamonthlyecommercesurveyof33,000people,calledeCommercePulse,thatrevealsthat3.4millionAmericanconsumerspurchasedticketsonlineinDecember2000,spending$304each,bookingatotalofwellover$1billioninreservations.Ifthatweren'tenough,travelWebsitesdroveanother$445millioninrevenuethatwasactuallycompletedthroughtraditionalorderprocessessuchastelephonereservationsoron-sitebooking.Inthepastsixmonths,onlinetravelbookingsgenerated$5.6billion,atanaverageof$934millionpermonth(seeTable3).AndinJanuary2001,thefigurerosetoarecord$1.2billion.NowthatissuccessfulB-to-Cinaction.Theonlinetravelcategoryhasevolvedintoatrioofcompetingcategories,eachtargetingaslightlydifferentmarket.Travelsuppliersthemselves--AmericanAirlines(AMR),Marriott(MAR)Hertzandothers--aretargetingbrand-centric,rewards-centric,loyalcustomers.SouthwestAirlines(LUV)istheleaderinthiscategory,whethermeasuredintraffic,revenue,orcustomersatisfaction.Onlineagencies--suchasExpedia(EXPE),Travelocity(TVLY)andCheapTickets--targetthetraditionalsegmentseekingabalanceofpriceanddealsandtheabilitytomanageselectionsthroughouttheprocess.TravelocitynotonlydominatesthiscategoryintrafficandrevenuebutalsoremainsthelargestonlinetravelprovideracrossallWebsites.Finally,consumerprice-drivenmarketers(Priceline.com(PCLN),Hotwire,andsoon)targettheextremelyprice-consciousconsumerwillingtosacrificebrandandchoiceinfavorofrock-bottompricing.Priceline.comhasbeenthewinnerhere,butHotwireisgaining,eventhoughPriceline.comwastiedwithmightyTravelocityfortravelecommercebrandawareness.Stockpricesarereflectingthissuccess.Althoughbeatendownalongwitheveryotherretail-orientedstock,Expediastilltradesatabove$15,Travelocityatabout$20,andCheapTicketsatabout$10.Priceline.com,withitsrecentshutdownofWebHouseClubanditscorporate-widerefocusing,ofcoursetrailsthepack,tradingatabout$2.Despitethesesuccesses,onlinetravelmerchantshavelotsofopportunitiestogrow,lotsofchallenges,andlotsofroomforimprovement.Orbitz,anewagency-likeoperationstartedbyamajorconsortiumofairlines,threatensExpedia,Travelocity,andotherswhilepromisingbetterofferingsforcustomers.ThesatisfactionofuserswithsomeWebsitesiswo...
