The digital transformation as a challenge and opportunity
MICE Think Tank
19 Jun 2018

Six theses on the effects of the platform economy on the meetings and conference industry

The digital transformation as a challenge and opportunity

 

We are probably hardly ever aware of it, but the platform economy has a considerable effect on our lives. YouTube, Google, Facebook, Amazon, just to name a few; the globally most successful digital ventures are all platforms and the platform economy therefore is the digital economy’s core business model.

 

From Matthias Schultze

There are many advantages when customers and suppliers can easily come together on a platform. At the same time, it has disruptive effects on the status quo. In the context of the digital transformation, the platform economy will be the key challenge for the meetings and conference industry. However, it can also open up crucial opportunities.

Six theses on the consequences for our industry:

1. The winner takes it all

As in other industries, only a few platforms will emerge from numerous meeting portals to dominate the market in the meetings and conference sector and reduce the margins of all other competitors.  This consolidation is already happening for hotel booking platforms where essentially a small number of portals dominate the market.

Platforms will be established across different products and services and cover every client-side demand as one supplier, i.e., apart from accommodation and venues, transport, catering, content (speakers/moderators), organisation of experiences and programmes around events as well as all other smaller trades will be provided on ONE platform. Considerable market power will therefore be concentrated in only a few portals and create a “the winner takes it all” situation.

2. New players will not emerge from within the industry

Platform providers will not emerge from within the meetings and conference industry but be neutral providers, often with a technology and e-commerce background. They might not have the sector know-how about products and services, but they know exactly how to quickly and efficiently market products and services in the digital world and what customers want. As they are not suppliers to our industry and part of our sector, they can provide the widest possible range of offers in a neutral way and without any legacy issues. They do not need to protect an existing business model and can therefore be more customer-centric and successful.

3.  Events will be put together by end users themselves

End customers, i.e., anyone who organises events in a company or association, will be able to configure their own events: Platforms unite a wide range of offers in one place for individual needs; they can provide templates and solutions based on intelligent algorithms that can replace an intermediary “expert” or even go beyond the know-how of such an individual. We all know the scenario from Amazon’s recommendations and “customers who bought this item also bought” lists. This targeted marketing tool (collaborative filtering) plus user comments replace the advice traditionally provided by retailers and book sellers. 

In the travel sector, comparison sites have in many places already taken over the traditional business of travel agencies who advice their customers on where and what to book. In the meetings industry, too, there are already platforms that represent certain parts of the event organisation business and are in the process of extending their portfolio.

4. Services and offers become comparable and transparent

The platform economy enables a high degree of comparability and transparency when getting an overview of the market because, as described, offers are bundled by a limited number of suppliers. Customers who are presented with all product and service offerings in a comprehensive and neutral fashion can easily compare and, moreover, also easily buy. Platforms in the meetings industry will, for example, work with rating systems and feedback functions as they are used on hotel booking sites and these customer comments will help new users to make their decision.

5. User behaviour will change radically

This directly leads to our next point: Platforms will radically change the user behaviour of customers in the meetings and conference industry. It will be easier and quicker for them to find offers for a specific service or product. This will lead to considerably shorter lead times for meetings and conferences as organisers will be able to very quickly find everything they need on one platform. The supply side also contributes to this because it will be much easier for service providers to make offers available, e.g., an empty warehouse can be put in the system and the system then recognises the potential and different use options that the actual provider (as someone coming from outside the industry) would never have thought of.

6. Data profiling will be a key success factor

In the platform economy, data profiling is becoming the key success factor. Platforms will know what customers want because they analyse their data with ever more sophisticated tech tools and supported by AI. Intelligent algorithms can exactly determine appropriate offers for each customer. Based on the wide range of offers, customer profiles as well as ratings and comments, platforms are able to autonomously generate offers that meet every customer’s expectations and needs.

On top of that, the system will take advantage of user profiles to suggest alternative event venues, formats and destinations that customers would not have thought of themselves. Fulfilling individual demands is at the core of everything.

In the past few years, we have all seen how incredibly quickly things can change in the digital transformation process. The GCB is therefore taking a closer look at platform models and will produce a study on the opportunities and challenges of the platform economy for our industry, working together with EVVC (European Association of Event Centres) and VDVO (Association of Event Organisers) as cooperation partners.

Sechs Thesen zur Plattformökonomie in der Tagungs- und Kongressbranche
Sechs Thesen zur Plattformökonomie in der Tagungs- und Kongressbranche
The winner takes it all!
The winner takes it all!
New players will not emerge from within the industry
New players will not emerge from within the industry
Events will be put together by end users themselves
Events will be put together by end users themselves
User behaviour will change radically
User behaviour will change radically
Data profiling will be a key success factor
Data profiling will be a key success factor

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