About 48% of millennials ages 25-40 prefer using mobile phones for online shopping, compared with only 34% of all shoppers globally (Photo: Bloomberg)

Why booking airline tickets on your smartphone is a bad idea

The trend is more pronounced among younger shoppers. About 48% of millennials aged 25-40 prefer using mobile phones to shop online, compared to just 34% of all shoppers globally, according to a 2021 survey of 13,000 shoppers from Klarna, an online payment company.

So, it looks like shopping for travel on an old computer will eventually go the horse and buggy way. In fact, some travel shopping services, such as travel search engine Hopper, offer in-app shopping only for certain reservations, leaving desktop users euphoric and dry.

However, while buying a flight over the phone is more convenient, it can also be more expensive.

Watch out for drip pricing

The rise in mobile shopping in the past decade has coincided with a drastic change in how travel brands make money. Addition Fee, including baggage fees, seat selection on flights, cleaning fees, and resorts with accommodations are becoming more common and expensive. US airlines raised $5.3 billion in baggage fees alone in 2021, according to the Bureau of Transportation Statistics.

However, a 2021 study in Marketing Science found that shoppers tend to make suboptimal decisions under “drip pricing” situations, that is, when hidden fees are paid during the checkout process. Shoppers tend to compare starting prices across competitors, which are lower, rather than the higher final price.

“When companies use a drip pricing strategy, the initial price is almost always lower than the competitor’s all-inclusive price,” Shell Santana, associate professor of marketing at Bentley University and one of the study’s authors, said in an email interview. Once they start adding amenities like checked bags, seat options, etc., that price difference between companies diminishes and sometimes even reverses.”

Anyone who has shopped for an airline ticket on a low-cost airline like Spirit or Frontier knows exactly how this “drip pricing” happens. Yet Santana and her colleagues were surprised how unwilling customers were to compare alternatives, even after the final price hike.

“Consumers see the higher costs of research associated with starting their own decision-making process, and they think they will save less money than they actually will,” Santana said.

Basically, shoppers tend to make it to the final checkout screen and reluctantly accept any fees that have been added. They assume that it will be very difficult to start over and find another option, even if doing so will save them money.

The wrong tool for the job

Mobile shopping is quick and easy for simple purchases, like ordering cat food or paying a bill. However, travel shopping is far from simple and usually requires switching between several tabs and apps to find the best deal.

Consider the common decision about purchasing a flight with either cash or bonus miles. This involves several steps. First, you’ll need to search the airline’s app or website for prize availability, most likely while switching to a personal calendar to check dates. Then, it’ll search a third-party airline tool, like Google Flights, for estimated cash fares before determining the dollar-to-dollar mileage redemption value. Once you select the best option, you will then need to go through the entire checkout process of both the cash and reward flight options to determine the true final price.

Perhaps some Gen Zers using the fleet can manage this task on a mobile device. But for many, this is too daunting.

In fact, a 2018 study in the Journal of Marketing followed nearly a million sessions on a shopping site and found that shoppers who switched from phone to computer completed their transactions with a higher conversion rate. Interestingly, the effect of a higher conversion rate was more true for higher-priced or risky products.

So, even if you want to scroll for flights on your phone, or feel overwhelmed by mobile-based options, follow the advice of experts who prefer booking travel — which can be expensive and risky — with a computer.

“I always shop for desktop travel,” Santana said. “I like to open several tabs at once and switch between them to make sure I understand the differences in pricing and drivers across companies.”

Pymnts surveyed 3,250 US consumers between February 7 and 14, 2022. The survey asked about shopping and paying behaviors when buying groceries, food, retail products and travel services over a one-month period.

Klarna’s Shopping App survey, in collaboration with research agency Dynata, was sent online to 18,000 respondents from 13 countries from October to December 2021.

This article was made available to the Associated Press by personal finance site NerdWallet

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