It is impossible not to notice the effects of the recession in the world around us, particularly on the high street where sales have slumped to record lows. However, what I have also noticed is that the Internet genuinely has the power to counter the downturn.
A combination of lower overheads, convenience and flexibility to react rapidly to market forces empowers online business to weather the recessionary storm.
Take for example the online travel industry. Various data and research shows that this industry is continuing to prosper even though it is one of the most exposed industries. First of all, major online travel companies Expedia and Lastminute.com have continued to increase profits in 2008, bucking the experience of many high street travel outlets.
Then there is the analytical evidence from online user behaviour. As we detail in the spotlight section of the UKFast December newsletter, the key trends remain positive.
- The travel industry’s overall percentage share of all internet traffic has remained constant.
- Searchers are looking for cheaper, domestic destinations.
- Online brands have strengthened and gained user loyalty.
The online travel industry continues to get as much traffic now as it did this time last year. This shows that users are as interested in making travel plans online as they were in pre-recession times.
Secondly, research on key words shows that online surfers have switched from looking at foreign destinations to domestic destinations. The motivation on the part of the consumer is cost savings. However, the data also shows that online companies have the flexibility to adjust their marketing easily to continue to capture the prevalent market.
Finally, point three is very encouraging for online travel businesses. The fact that Expedia and LastMinute.com have both seen a 10% increase in the success of their brand names in searches indicates that the online travel brands are becoming more familiar and trusted by customers.
So the conclusion that we can take away is that doing business online affords you opportunities that the high street cannot, opportunities to adapt rapidly to challenging conditions to remain profitable.