Daily Press Special
Since the launch of the first iPhone 15 years ago, consumer buying habits have slowly but steadily shifted towards mobile devices. According to a survey of 3,250 US consumers from Pymnts.com, a website dedicated to analyzing the role of payments in new technologies, the majority of purchases of travel services (51.4%) were made on a mobile device in February 2022.
The trend is even more marked among young buyers. According to a 2021 survey of 13,000 shoppers from Klarna, an online payment company, around 48% of millennials aged 25 to 40 prefer using mobile phones to shop online, compared to just 34% of all millennials. buyers around the world.
So, it looks like buying trips on an old-school computer will eventually go the way of the horse and buggy. Indeed, some travel shopping services, such as travel search engine Hopper, only offer in-app purchases for certain reservations, leaving desktop users dry.
However, while buying a flight on a phone is more convenient, it could be more expensive.
BEWARE OF DRIP PRICING
The rise of mobile shopping over the past decade has coincided with a sea change in the way travel brands generate revenue. Additional charges, including baggage and seat selection fees on flights and cleaning and resort fees with accommodation, have become more common and expensive. US airlines collected $5.3 billion in baggage fees in 2021 alone, according to the Bureau of Transportation Statistics.
However, a 2021 study in the journal Marketing Science found that buyers tend to make suboptimal decisions in these “drip pricing” situations, that is, when hidden fees are applied throughout the payment process. Buyers tend to compare the initial prices between competitors, which are low, rather than the higher final price.
“When companies use a drip pricing strategy, the initial price is almost always lower than a competitor’s all-inclusive price,” said Shelle Santana, assistant professor of marketing at Bentley University and the one of the study’s authors, in an email interview. “But once they start adding amenities such as checked baggage, seat options, etc., that price difference between companies narrows and sometimes reverses.”
Anyone who has purchased plane tickets on a low-cost airline like Spirit or Frontier knows exactly how this “drip pricing” works. Yet what surprised Santana and his colleagues was the reluctance of customers to compare alternatives, even after the final price increased.
“Consumers perceive high search costs associated with restarting their decision-making process, and they believe they will save less money than they actually will,” Santana said.
Basically, buyers tend to go to the checkout screen and reluctantly accept the added fees. They assume it will be too much of a hassle to start over and find another option, even if it would save them money.
THE WRONG TOOL FOR THE JOB
Shopping on mobile devices is quick and easy for simple purchases like ordering cat food or paying a bill. Yet buying a trip is far from simple and usually requires switching between multiple tabs and apps to find the best deal.
Consider the shared decision whether or not to purchase a flight with cash or award miles. This involves several steps. First, you’ll need to check the airline’s app or website for reward availability, likely when switching to a personal calendar to check dates. Next, you’ll search a third-party flight tool, such as Google Flights, for estimated cash fares before determining the redemption value in miles versus dollars. Once you have determined the best option, you will then need to work through the entire payment process from flight cash and premium options to determine the true final price.
Maybe some fleet-fingered Gen Zers can handle this task on a mobile device. But for many, it’s too intimidating.
Indeed, a 2018 study in the Journal of Marketing tracked nearly a million sessions on a shopping website and found that shoppers who switched from phone to computer completed their transactions with a conversion rate. higher. Interestingly, this higher conversion rate effect was even more true for more expensive or risky products.
So even if you like scrolling through flights on your phone or feel overwhelmed by mobile options, take advice from the experts who prefer to book travel – which can be both expensive and risky – using ‘a computer.
“I almost always buy trips on a desktop computer,” Santana said. “I like to have multiple tabs open at once and switch between them to make sure I understand the price differences and factors between companies.”
This article was provided to The Associated Press by personal finance website NerdWallet.
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