Interview with Ian McCaig, chief executive, lastminute.com

TDS Europe 2006 special: By EyeforTravel Correspondent

Commoditisation of some sort is inevitable in any market as it matures.  Each company has to take on that challenge and find ways to differentiate, says Ian McCaig, chief executive officer, lastminute.com.

“Those who get that right will survive and thrive, the others won’t.  It’s just how commerce is.  The difference with the web is that everything happens super-fast.  So you not only have to have the right plan, you have to execute with speed,”  McCaig had shared during the Travel Distribution Summit Europe 2006 held recently in London.

In an interview with EyeforTravel.com’s Ritesh Gupta, he spoke about his stint with lastminute.com, operations in Europe and much more. 

How do you assess your stint with lastminute.com since you joined the company in 2003? 

It has been an amazing journey so far. Fourteen acquisitions between 2000 and 2004 meant a big integration task, which took a lot of commitment from a lot of people in the organisation.

There are three great things about that process, though:
1 - It taught us a lot about managing change;
2 - It brought many great people into the lastminute.com family (most of our current management actually came from acquired companies);
3 - It delivered its intended strategic outcome of giving us scale in all our chosen product categories in all our chosen markets. 

That really led us into being acquired by Sabre/Travelocity in July 2005. On top of all this and obviously very importantly, we’ve grown tremendously over recent years - from just over £500m in 2003 to almost three times that in 2005.

The brand has gone from strength to strength and still retained its off-beat, innovative, 'insider' nature in spite of us being a pretty big company now.  We have always strived to keep the brand values focused on our customers. 

Other highlights have been to see our people grow and develop into big roles over the years and making big strides in just becoming a much more efficient company.  These last two areas - lastminute.com being a great place to work and being the most efficient company in the industry - are areas of ongoing relentless focus for us. 

To sum up the journey of the last three years, Brent (Hoberman), our Chairman and Co-Founder of lastminute.com and I always say that we’re just helping write the early chapters of the lastminute.com story.    

With increasing commoditisation, what do you think is key for a company like lastminute.com when it comes to expanding operations in Europe? 

I already mentioned the importance of brand values and having those at the heart of how we think about customers, but to be more specific the most important areas are to come up with differentiated ways of building, presenting and delivering product to our customers.  Maximum choice delivered through an easy interface will win. 

With 17000 suppliers and some of the best packaging technology around we have to be able to powerfully combine these elements to do that. Really understanding what it takes to build loyalty and keeping customers coming back (and investing your best thinking in that) is the other really important differentiation opportunity. 

As an established online travel company, what according to you is the best way to maintain your product’s brand and value?

I would take the key points from my previous answers and add that we always have to stay fresh and innovative. Find ways of looking after our loyal customers better and really think hard about our customers of tomorrow.

What major trends have you witnessed in the way customers want to find, research and buy their travel? Is there any striking change in the last six months in Europe?

The biggest change in Europe over the last six months has been the emergence and increasing importance of user communities and social networking.  This will have a big impact through the coming period.

Has consolidation in the online travel marketplace increased the threat of commoditisation? What’s your take when it is said that suppliers need to be wary of the loss of brand and distribution control that could result? 

Commoditisation of some sort is inevitable in any market as it matures.  Each company has to take on that challenge and find ways to differentiate.  Those who get that right will survive and thrive, the others won’t.  It’s just how commerce is.  The difference with the web is that everything happens super-fast.  So you not only have to have the right plan, you have to execute with speed.