Standardized or Choice – What do you want?

Some years back I happened to attend a Holiday Club presentation. We were explained how we can save by committing to annual holidays with their chain of holiday resorts for next 20 years. The sales guy took pains to explain, among other things, how each of their resort standardized services and amenities, so we are sure what to expect. Now that got me thinking, do I really value standardization (with claimed financial benefits) for a vacation or would rather want to have choices?

In hindsight, I am glad not to have taken that offer as in last few years ventures like AirBnB and TripAdvisor have uncovered so many choices my family has for vacations. But that begs a question – Is choice better than standardization? In India, impressive amount of capital has been raised around offering standardized services in long and short stay businesses – Oyo, Treebo, Nestaway, Zolo, Stanza, Coho and a few more. They have a clear customer value proposition – without a doubt. People want standardized budget hotels (ex. business travelers) as they do standardized PGs & Hostels (ex. students, working professionals). How do you see this in perspective of our need for choice?

In my view, the difference lies in whether the service in question is utilitarian or experiential. That defines who uses it and how. Let me explain. Standardization works best if you want to use something utilitarian – all that a business traveller wants is a clean room for the night along with breakfast. Branded budget hotel chains offer good value there. However, standardized vacation hotels don’t make any sense at all – its an experience. That’s where an AirBnB has created so much value by offering non-standardized (but transparent) choices. Families, groups of friends on a vacation want choice – as per their custom requirements. This holds true for long stay rentals as well.

Students and individual working professionals work just fine with standardized options. Their stay requirements are largely standardized – a room, standard furniture, wardrobe, laundry, and meals. That’s not the case with families or a group of bachelors. Their needs are extremely varied – from furnishing to floor size, vicinity to amenities – and hence they want choice. At FastFox, this is the category that we serve. The category that demands choice, not standardization – families & group of bachelors. That’s more than 85%* of all households in urban India.

It’s important to understand your customer & her requirements. Standardization and choice are two fundamentally different categories and FastFox stands for choice. Frankly, both the categories have tremendous demand and a lot still needs to be done. FastFox will continue to strive to make various options available to our customers and make it easy for them to evaluate in a transparent environment. Having said that I remain bullish on the standardized options space – but that’s not our play!

*source: India Census 2011

Pallav Pandey

Author: Pallav Pandey

Passionate about building tech-enabled businesses in emerging markets. Excited to work with young companies in their journey from 0 to 1.

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