Liberty Travel's drastic reduction of brick-and-mortar stores in favor of a "network hub" model represents a move by parent company Flight Centre Travel Group to address changes in how travelers are shopping for and buying travel.
Flight Centre, No. 6 on Travel Weekly's 2019 Power List, announced the change this month, along with news that Marc Casto would lead the operation as president of leisure brands in the Americas, a new role.
While the coronavirus crisis was not the impetus, it has accelerated the project.
"For the last year, really, we've been looking at what we need to be within the retail space in the leisure marketplace, where the marketplace is trending toward and ensuring that we're aligned not just with present reality but also with future realities, too," Casto said.
The company's new model encompasses the brands Liberty Travel, Flight Centre Canada and host agency Independent by Liberty Travel. It will reduce the parent company's North American storefront agencies to about 30 in the U.S. and 30 in Canada, down from about 125 Liberty Travel storefronts and 150 storefronts in Canada.
The remaining brick-and-mortar agencies will keep the public-facing brand they had prior to the change. But internally, they will become what Flight Centre has dubbed network hubs. Leisure travel advisors will be affiliated with a network hub, where they can work; many will work from home.
Online, too, Flight Centre's leisure brands will remain in place. Casto said he recognized they have "tremendous cachet" and "very, very positive brand association" in their markets.
From an internal perspective, he said the realignment will help the organization be more flexible and responsive.
For Flight Centre, that means an emphasis on technology and flexibility in operations.
Casto said the networks will be responsible for utilizing Helios, a communications platform and supplier-interaction system that was developed internally. It will be focused on lead generation, the shopping experience and the inclusion of digital data elements. It fully engages with consumers' online experience, as well.
A focus will be how leads are funneled to individual agents and independent contractors, Casto said. That will enable the company to better understand the types of products and services clients are interested in. For example, it wants to apply individual net promoter scores -- a metric often used to gauge customer loyalty and satisfaction -- to each of its clients based on their agent and the product being shopped.
"I would love to know which suppliers are better able to communicate with our clients in a way that is beneficial for the client's needs, so we can then take the information back to our suppliers and say, 'Hey, this is working really well for you here but not so much here; here's how we can improve upon the experience for the shopper,'" Casto said.
Another key part of the leisure model change-up is creating physical spaces in its network hubs for travel entrepreneurs and potential travel disruptors to work.
"We recognize that we're not going to always be at the very forefront in the industry in everything," Casto said. "A lot of the innovation occurs on the margins. ... We want those people to come and engage with us."
Among the retail trends Flight Centre identified was the idea that a retail shopper needs a digital experience that can function alongside their physical experience, "a digital core to their shopping," Casto said.
That meant improving the way products are digitally displayed visually and packaged together as well as the traveler's full experience. Flight Centre's 2018 acquisition of the itinerary management tool Umapped speaks to the latter.
Casto said the online shopping experience will continue to improve, especially since consumers will increasingly judge companies and their brands by their digital presence.
In its 2020 retail industry outlook, Deloitte said consumers continue to shift to digital shopping platforms. Important elements include a personal experience, interactive engagement and convenience.
"As retailers become more digitally forward, it is imperative to keep in mind that digital enablement across all aspects of the customer journey is important," it said.
The National Retail Federation's winter 2020 Consumer View states that consumers are looking for convenience, and data indicates both online and in-store shopping experiences are important at different phases. For example, online shopping is typically more important at the beginning of a shopper's experience, when researching. An in-store experience is typically more important just before making a purchase and at checkout.
Especially in the U.S., Liberty Travel is a brand known for its physical storefronts. Casto acknowledged that has been an important aspect for employees, but staff also has been receptive to the changes.
Casto said he believes Liberty and Flight Centre Canada will be able to make up for the loss of real estate, "the most expensive form of brand generation," with other marketing initiatives to keep the brands strong.