New GfK research identifies opportunities for
marketers to engage today’s smart shoppers
A newly savvy and self-reliant breed of shoppers has developed a powerful symbiosis with mobile media devices -- forcing marketers and retailers to adapt, and presenting fresh opportunities for brands to engage and win over consumers.
GfK research released today identifies four key areas in which smartphones and tablets are assisting today’s shoppers: value seeking, information gathering, social media access, and transactions. These areas correspond to classic stages of the purchase process, from consideration to spending.
The study shows that, among consumers with a smartphone or tablet, 50% used a mobile device to compare prices while shopping, 44% looked for a coupon, 33% "liked” a retailer on Facebook, and 17% bought a product using an app.
The new findings were presented yesterday by GfK’s Rob Barrish (SVP, Digital Technology) and Alison Chaltas (EVP, Shopper and Retail Strategy) at IIR’s Market Research Technology Event.
"Using mobile devices for shopping is both a symptom and a cause of what we see as a larger trend – a desire for greater control over the shopping experience,” said Chaltas. "Product marketers and retailers can turn this challenge into an opportunity by becoming agents of learning, efficiency, and even creativity through their mobile efforts. By meeting the changing needs of shoppers, brands can inspire not just short-term sales but also long-term relationships.”
Barrish observed, "Mobile and online shopping are not just confined to big-ticket items; our research shows that the mobile trend is substantially impacting food and beverage, health and beauty, and even lawn and garden. Regardless of the brand, choosing the right mobile opportunities – from coupons to co-creation of new products – is essential to making digital efforts effective.”
The new study shows that owners of smartphones and/or tablets are more likely to say they feel "more in control than ever before” when it comes to choosing the best products and services (+9%, compared to the average consumer), that they are shopping more efficiently (+8%), and that they are using new sources to "find the things that [they] need” (+13%).
In addition, nearly one-fourth of mobile-enabled shoppers have used brick-and-mortar stores for "showrooming” – checking out a product in person, and then purchasing it online via a smartphone.
Younger adults – ages 18 to 34 – are the primary drivers of these mobile shopping behaviors; these consumers are more than three times as likely to report using a smartphone or tablet for shopping (34% vs. 10%), compared to those ages 50 to 64.
Ongoing GfK Futurebuy research into shopping dynamics suggest that today’s "extreme” shoppers will be tomorrow’s average consumer – as generations raised with mobile devices come of age and more brands make mobile platforms a top priority.
The new mobile study is based on 1,008 interviews conducted from March 16 to 18, 2012, as part of GfK’s online omnibus, OmniWebSM. Data were weighted to match the U.S. online population based on GfK MRI’s Survey of the American Consumer.
Millennials are a paradox. They value relationships, a team effort, and the accomplishment of a job well done. Yet, they manage to balk as financial services companies attempt to reach out to them in hopes of building, well, relationships. Much to the chagrin of marketing departments throughout the industry and beyond, Millennials are a difficult bunch to reach.
Perhaps this generation sees through companies’ overtures of relationships for what their true goals are – to build brand affinity and loyalty (read: $$$) – and doesn’t like it. A study released by the PEW Research Center in 2010 [1] found that only about three in ten people below the age of 30 believe that “most people can be trusted”. If Millennials do not carry much confidence in the people they meet on the street, it stands to reason that they will be just as skeptical in corporate interactions. In an otherwise socially and culturally accepting generation, Millennials will not tolerate the idea of ulterior motives.
Further, this young generation has marked its coming of age in a dismal economy which has made starting out on one’s own difficult, if not impossible. In a society that likes to point fingers, it is going to take a while for the financial services sector to reconstruct a rapport with a generation that feels wronged, if by nothing else than by happenstance.
Millennials might be marketing averse, but that does not mean that the door is entirely closed. Three quarters of 18 to 35 year olds think that they are about the same or worse off financially now than they were in the last year[2]. Conversely, nearly half believe that within the next 12 months they will fare better on the financial front. If their tides turn as anticipated, a large portion of Millennials will have newfound means to re-enter or initiate relationships with financial services companies. The companies that best harness this optimism now stand to gain a lot later, that is, if they are willing to play by a different set of rules that are yet to be written.
[1] http://pewresearch.org/millennials/
[2] GfK MRI Doublebase 2011 (http://www.gfkmri.com/ConsumerInsights.aspx)
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April 30, 2012
Innovate or Die
What Facebook’s Instagram Acquisition Means for the Market Research Industry
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By now, you have probably heard the incredible news that Facebook bought Instagram for $1 billion in cash and stock. For the few of you who avoid the news and water cooler conversation, here is a recap:
Facebook bought Instagram – a two year old start-up, with about 30 employees, a single product (it’s a photo sharing app), and exactly zero dollars in revenue. Why spend a billion dollars on a company that has no revenue? Here is why:
As I’ve said before, the future is mobile. This is not some next generation prediction – it is happening NOW. We have officially hit the turning point in the US, with over half of us now owning smartphones (vs. dumb phones that do not have email or web browsing). Worldwide, smartphone sales and use are unprecedented, far eclipsing radio’s growth in the 1920s and 1930s, television’s in the 1950s and early 1960s and PC’s in the 1980s.
Why do you think Google gives away its Android software to hardware companies? Google knows the future is mobile and it is doing everything it can to be a major player. And it’s working. By one account, 700,000 Android phones are activated each day (according to TruthDive). Google’s mobile ad revenues are expected to more than double from an estimated $2.5 billion last year to $5.8 billion in 2012, and $10 billion estimated for 2013 (per Cowen analyst Jim Friedland).
Instagram accumulated 30 million passionate members – even though it was only available on the iPhone. Less than a week after launching on Android phones, it quickly added 5 million members, which is when Facebook jumped in to buy it.
Facebook is smart enough to know the future is mobile and they also have enough critical self-awareness to recognize that mobile is an area where they have significant weakness. More and more of their users are accessing Facebook on smartphones, but the company readily admits in their IPO filing that its smartphone app's inability to show ads or contribute "any meaningful revenue" continues to be a concern. When you cannot monetize an incredible driver of growth like mobile, it is time for something drastic – thus the Instagram acquisition.
So if the future is mobile, what does that mean? Well, it most certainly means that advertising is going to shift to mobile as well, because that is where the eyeballs are, and users have significantly higher engagement with their mobile device. Mobile advertising is estimated to grow exponentially in the coming years. According to one estimate, the ad revenue earned through mobile sites and app advertising is expected to rise to $20.5 billion by 2015.
What does all this have to do with the market research industry? I recently met with a very senior market research leader in a Fortune 500 company. He lamented that while he has the tools to track traditional messaging platforms, such as TV for example, he felt as if he could not accurately measure the newer platforms, such as digital, social, and mobile.
Unfortunately, I’d have to agree. As an industry, we have some pretty good “old-school” tools, such as brand tracking, and the like. But these methods increasingly feel outdated in a mobile world. The future belongs to the innovative market research companies that can figure out how to accurately measure digital, mobile and social, in addition to the traditional mediums. The companies that come out with breakthrough methodologies and brand frameworks suitable for the times we are living in, will reap the benefits.
John Chambers recently remarked that since 1995, when he became CEO of Cisco, 87% of the companies on the Fortune 500 are off the list. The implication is clear – you either innovate or die on the vine. The market research leaders of the future are those companies that can innovate and create tools to measure the new platforms that are the growth engine of tomorrow.
Millennials
Growing up in a computer dominated era, from the introduction of computers in 1980’s, the internet in the 1990’s, and social media in the 2000’s, Millennials’ behavior and attitudes are driven by the technology that surrounds them. Diverging from prior generations, the tech-savvy Millennials are in a unique position to actively participate in a dialogue and interact directly with companies and brands. With approximately $170 billion[1] in purchasing power annually, and growing, Millennials are increasingly becoming a lucrative segment for companies to target.
So, who are the Millennials?
The Millennial Generation, also known as Generation Y, Net Generation, Generation C and Echo Boomers consist of the group following Generation X. Not only does this group go by many names, but commentators vary on the precise dates or ages that Millennials are categorized by. For the purpose of our discussion, we’ve elected to cast a broader net by defining the Millennials through snapshots of their characteristics and attitudes (while also using certain age and date ranges where appropriate). Millennials tend to be confident, early technology adopters, avid internet users, socially connected, and capable multi-taskers. They are highly educated when compared to prior generations (only 15% males and 12% females ages 18-28 have less than high school education, compared to 18% males and 16% female for Generation X-ers, and 21% males and 19% female for Boomers) [2]. Growing up in a world that is more educated about global warming and environmental effects, Millennials tend to be environmentally conscious. They are also socially conscious and embrace diversity, which could stem from the growth in non-traditional families.
What is the best way for the financial services companies to reach them?
While financial services decisions are thought to be highly rationale, those who have spent any time in the industry recognize that purchasing decisions often hinge on a relationship. That relationship may be with an individual (like a broker, banker or agent) or a trusted brand. In order to fully understand how Millennials should be approached with financial products – to understand what relationship means to them, we must gain insights regarding their attitudes and behavior. Four specific areas have been identified that need to be explored in detail:
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Brand Affinity: In today’s world, financial services need to go beyond brand loyalty. Millennials want to identify emotionally and morally with the brands they use. These “Echo Boomers” want to connect with brands/services that represent something personal to them. Financial services companies must do more than simply provide a service: they must consider how to meet the “emotional” needs of the Millennial.
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Buying without Selling: The ability to catch Millennials’ attention, keep it long enough to imprint a branding message, and prompt a purchase presents a huge challenge. Financial services companies must adapt their sales techniques for this unique generation – either by locating a weak point in Millennials’ uncanny resistance to advertising or by adopting an entirely new marketing paradigm.
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Life Stages, re-invented: Due to a variety of factors, Millennials are delaying critical life stages such as moving from their parents’ home, getting married, buying a house, and starting a family. Financial services will have to gain significant insight about this generation and the conditions to which they have been exposed in order to fully accommodate their new financial needs.
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Multi-cultural Millennials: Currently, there are more than 38 million foreign-born residents in the United States with close to 17 million of these being naturalized citizens.[3] Brand affinity and usage for the Multi-cultural Millennial population differs, sometimes dramatically, from Millennials that are born and raised in the United States. It stands to reason that financial needs and approaches also differ drastically for this segment of population.
In the upcoming weeks we will explore each of the four specific areas in-depth and invite your comments, questions and suggestions.
[1] http://video-commerce.org/2012/02/how-user-generated-video-reviews-are-convincing-millennials-to-buy-more-of-your-stuff/
[2] http://pewresearch.org/pubs/1501/millennials-new-survey-generational-personality-upbeat-open-new-ideas-technology-bound
[3] http://www.census.gov/compendia/statab/cats/population/native_and_foreign-born_populations.html
The Digital/Mobile Train – Is It Leaving Without You?
I have often felt that my grandparents and great-grandparents grew up at a fascinating time—at the turn of the twentieth century, a time just before cars and TVs and movies. So much changed during their lifetimes! Travel and communication were completely transformed in their era, and the impact on their lives had to be immeasurable. Looking back now, life seemed so isolated and quiet back then, and the pace of life so much different.
I wonder now whether my grandchildren will look at my lifetime like that. I think about the incredible developments in digital technology, and how they continue to transform the way we live and the way we connect. These days most everyone has a cellular phone, and now about 40% have a smartphone. Most are using it over an hour a day! Computers, phones and entertainment technology platforms are quickly converging. We can all see the digital/mobile train coming—real question is, are we really climbing on board… or are we just watching it go past us?
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Keywords:
Consumer, Interscope, Challange Brand, Specialty Brand, Outsourced Marketing, Plan Development, Strategic Assessment, Market Place Executions, Brand Strategy, Brand Vision, Landscape Assessment, Stragegic Vision, Change Agent, Marketing, Strategic Assessment
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