Big Interview: Gary Morrison, head of retail, Expedia

The travel industry has been one of the most interesting industries to watch adapt to the technology revolution. The online disruptors have swooped in and drastically taken marketshare from the high street travel agents, which have dramatically fallen in number over the last decade.

One of these disruptors is Expedia, which was founded in the mid-90s and acquired a number of companies in the 2000s, notably Trivago in 2012, and is now a leading global player in the travel industry. 

But Gary Morrison, SVP and head of retail at Expedia, says the eCommerce brand needs to keep evolving its offer to remain relevant to modern consumers.

"What's interesting about millennials is they have phenomenal spending power," explains Morrison. "And rather than spending their money on a car, or a house – those sort of things non-millennials do – they are really here to consume experiences."

Morrison says today's millennial shoppers – those born between 1980 and 2000 – want an authentic experience when they visit a new country. "They want to have breakfast where people in Buenos Aires go. And the authentic bit, which is slightly surprising, is the degree to which their choices are informed by their belief they will get some sort of social acclamation."

In order to gain the coveted Facebook and Instagram 'likes' millennials do a lot more research before they journey abroad. "It's almost living the experience before the experience actually happens," says Morrison. "Non-millennials would experience the joy of discovery, the not knowing what was going to happen and inspiration on the fly. And that's two very different behaviours."

He says social media and the economy has had a big impact on the way consumers now book holidays. "There's a sense that life is short, and while you have an opportunity, before you have a family, it's the extent you can cram in those life experiences," he explains. "The travel industry is very much related to the underlying economy, when it's strong people have more disposable income and you see more people taking long-haul trips."

But Morrison points out Expedia sees many different types of customers. "Whether it is people who are young and single, or in their 60s going for a long vacation for two months. But what's interesting about the millennial cohort is they have phenomenal spending power, and from that perspective the degree to which we can satisfy their needs using technology is very important to us, and the expectations of technology solutions are just going to continue to rise and rise."

Virtual reality

One area of technology Expedia is deploying to keep up with those expectations is virtual reality (VR) "Many years ago, it was what you read in a travel magazine, then the internet came along and it was what your peers had posted, then there were online versions of Lonely Planet and various other travel publications, but they all tend to be quite static," describes Morrison.

He believes there is a sweet spot between this static creative content and the user-generated holiday photos which are being posted online in their millions. "The next wave is how VR plays into that with its rich, 3D, immersive experience."

Morrison says Expedia won't be acquiring a hardware company to build the technology, because if you take innovations like Google Cardboard, all consumers need are their smartphones.

"The price points of being able to experience 3D is going to continue to come down and smartphone costs and screen sizes have gone up," he says. "But the issue is who is going to provide the authoritative content and I think we will have a role to play there."

Content and commerce

Expedia is thoroughly committed to online, with Morrison saying there are no plans for pop-up stores in the pipeline. But the eCommerce company is starting to make steps into generating travel content.

"What we see here is people – at least millennials – will make decisions based on what their peer networks think," he says. "And the reality is the world is a phenomenally large place, and the extent we can generate neutral, but very factual, rich content about the latest place you'd never even thought of, helps to make people even more informed."

In order to create this online content, Expedia is beginning to hire qualified travel writers and journalists to solve these knowledge gaps. But it is too early to know whether Expedia will launch an online magazine or just distribute articles through social media.

"As with everything else, it will be a test of our activity, we'll see how our customers engage with us and how much it gets shared," he says. "Ultimately, if the content we've put out there is accurate, fresh and relevant, and people are sharing it, over a period of time the consumers would see us as an authoritative source – that's the long-term objective, and we're taking baby steps towards it."

Test and learn

Agile methodologies and A/B testing is at the heart of Expedia, with the website's code changing every day thanks to its daily release drops from its 2,000 engineers, as well as analysis from 700 data scientists

Morrison says Expedia runs very small tests at high velocity to see how it can make the customer experience just a little bit better. "It's not just around the shopping and booking, but post-booking in terms of the feedback from customers and pain points," he says. "But in order to run that in velocity, you need a lot of traffic. So obviously the more people who come to the site, we have more traffic on which we can run tests."

Morrison says the more they test, the more incremental improvements can be made to satisfy customers and create repeat business.

Of course Expedia is not the only disruptor to the travel industry, indeed the business itself is under threat from the likes of newcomers likes Airbnb. Morrison says Airbnb traditionally fitted into the lodging market, but it has increasingly crept into travel through small boutique hotels.

"I think the line is a little bit blurred and the price points wouldn't be much different, while in the small boutique hotel you will get a very personalised experience and talk to the owner," notes Morrison.

He says Expedia wants to serve all travellers and with its recent acquisition of HomeAway, this is how the business intends to participate in this rental market. "So we'll be innovating like crazy on HomeAway," he adds, enthusiastically.

Tech innovations and data

Other recent investments have been into Expedia's data to ensure it understands how customers use various channels to research holidays. Using a technology, internally called Scratchpad, the travel e-tailer now understands how travellers move across smartphones, tablets, desktops and smartwatches, and they no longer have to start their journey when they change channel – by logging into the channel, customers are also given automatic price updates.

But Morrison wants to take this one step further and tie it up with its call centre systems. "The nirvana would be when an existing customer calls up using their mobile, by the time the call is answered, the itineraries are already there in front of the call centre employee. And then maybe within those itineraries maybe you'll be able to see what the issue might already be."

Expedia is also working on integrating flight check-in functionalities by talking to various carriers, as well as using mobile devices instead of keys in big hotel chains, while car hire and rail tickets will soon be built into the Expedia portfolio.

"But that's only one part of the experience, in-trip you will start to see us innovating on products and services we want to deliver to give travellers recommendations," he describes. "And we have a real-time reviews product, when you check into a hotel with a sad face or happy face, we give that information real-time to hoteliers, so by the time you get to your room, they have a notifications about what your first impressions are and can address them."

And with data roaming regulations – in the EU especially – putting pressure on mobile operators to reduce their charges, this type of in-situ experience with Expedia will only continue.

"I think it's a great thing for consumers, and the more it continues the better," he muses. "It's interesting when you look at the developing world, and they've almost gone from no internet to mobile internet, because of the costs of providing the fixed line infrastructure is prohibitively expensive, so I think a lot of governments providing basic internet is a good thing in terms of driving economy and reasonable mobile data charges."