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Online vs Offline Word of Mouth - What drives consumer purchase decisions?
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Online vs Offline Word of Mouth - What drives consumer purchase decisions?

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In this briefing we look into which recommendation source - online or offline - is more efficient in driving purchase decisions and how brands can measure both online and offline influence. …

In this briefing we look into which recommendation source - online or offline - is more efficient in driving purchase decisions and how brands can measure both online and offline influence.

The briefing answers the following key questions:

1. What is the number one source of recommendation that influences the US consumer's purchase decision?
2. Why do US consumers trust people in real life over online connections
3. What is the most trusted source of recommendation among millennial US consumers?
4. What recommendation source do Hispanic US consumers trust over everything else?
5. What is the most recommended category among global consumers?
6. What are the most recommended brands among US consumers?
7. Why is influence not a driving factor in the grocery category?
8. What is digital influence and how does it vary across categories?
9. Why is mobile the future of digital influence?
10. How can brands measure offline and online influence?

Charts included:

1. US Consumers' Biggest Purchase Influencers
2. Value of Excellent Recommendation, by Method
3. Millennials Trust in Various Forms of Media
4. Most Trusted Source of Shopping Information among Hispanics
5. Brand Advocacy Rankings
6. Influencers of CPG Brand Decisions by Age Group
7. Digital's Influence on In-store Sales, by Store Type
8. Mobile Shopper's Purchase Decision Influencers

Published in: Business, Self Improvement

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  • 1. Online vs Offline Word of Mouth What drives consumer purchase decisions? An analysis of offline and online influence on US consumer’s purchase decision and how to measure it
  • 2. • 44% of US consumers said that recommendation from friends, family members and known acquaintances highly influenced their buying decisions with 42% saying it had a medium impact on their buying decision. ! • Only 22% of US consumers said that online reviews and recommendations highly influenced their buying decision with 46% saying it had a medium impact on their purchase decision. ! • The US consumer's average lift in purchase incidence from a strong positive in-person recommendation was found to be 10.6%. In other words, an excellent in-person recommendation increases the consumer's perceived value of products by an average of 10.6% over a neutral in- person recommendation. ! • The lift in purchase incidence from in-person recommendation is well over the lift from online consumer ratings (6.3%), online consumer reviews (7.3%) and online shares via email or social media (9.5%). ! • 74% of US millennials trust in face-to-face conversations about products and brands with their friends and family compared to 56% who trust in conversation with friends/family via email, text & g-chat. ! • 83.2% of US Hispanic consumers trust real life friends & family for information on shopping needs. In comparison, only 55.7% of US Hispanic consumers trust their Facebook friends for information on shopping needs and 43.1% trust online ratings. Key Findings
  • 3. • Globally, consumers recommend non-luxury cars above all other categories. Non-luxury cars scored 50% points in the Brand Advocacy Index (BAI). In the US market, the three most recommended car brands were Kia, Honda and Hyundai (63% each). ! • Smartphones come in second behind cars with a score of 46% points in the Brand Advocacy Index. In the US market, Apple’s iPhone is the most recommended smartphone brand with 54% points. Samsung, coming in at second place, scores 43% points - just below the industry average score. ! • When it comes to purchasing basic everyday goods such as groceries and pet food, US consumers do not care much for either online of offline word of mouth, but look for brands that deliver value in terms of savings. 48% of US consumers say coupons influence them, and 44% say loyalty card discounts influence them when making CPG brand decisions. ! • Digital technology influences 36% of in-store sales on average. Electronics and Appliances is the most influenced category where digital impacts 58% of all final purchases. ! • The biggest driver of digital influence is mobile which influences 19% of in-store sales on average. Mobile’s influence on in-store purchase decisions increased by almost 4 times within one year – from 5% in 2012 to 19% in 2013. ! • 50% of mobile shoppers said search results via smartphones influenced their purchases, followed by 42% who said they were influenced by ratings & reviews. Key Findings
  • 4. Click to read the full briefing Online vs Offline Word of Mouth What drives consumer purchase decisions?
  • 5. 75% 70% 66% 58% 57% 57% 52% 49% 46% 45% 43% 43% 40% 29% 32% 14% 19% 22% 27% 36% 33% 37% 38% 41% 42% 43% 47% 44% 46% 51% 46% 42% 6% 8% 7% 6% 10% 6% 10% 10% 12% 12% 10% 13% 14% 20% 22% 44% High Medium Low US Consumers’ Biggest Purchase Influencers % US consumers aged 14 and above, asked to what degree the following influence their buying decisions Source: Deloitte, Digital Democracy Survey, April 2014 Recommendations from a friend/family/known acquaintance Online review and recommendation from someone within your social media circle Television ads Online review by someone you do not know in real life A reseller or channel partner website Magazine ads Products or services mentioned/featured in a TV show or movie Manufacturer or vendor website Newspaper ads An email from a company/brand Radio ads In-theater advertising (pre-movie) Billboards and posters Ads delivered through social media platforms Video game advertising SMS/text message ad
  • 6. 10.6% 10.2% 9.5% 7.3% 6.3% 9.3% 10.0% 9.2% 8.1% 5.7% 9.3% 10.5% 8.1% 7.6% 7.1% 13.2% 11.2% 6.2%6.0% Supermarket Mini-Tablets Automotive Overall Source: ShareThis and Paley center for Media, April 2014 Consumer Ratings Consumer Reviews Online Shares Professional Reviews In-person recommendations Value of Excellent Recommendations, by Method % increased perceived value of product from an excellent recommendation vs a neutral recommendation
  • 7. Millennials Trust in Various Forms of Media % online millennials Source: Crowdtap & Ipsos Media CT, Social Influence: Marketing’s New Frontier, Jan 2014 19% 28% 34% 37% 40% 44% 48% 49% 50% 56% 64% 68% 74%Product/brand conversations with friends/family Peer review (e.g. e-pinions) Professional/Industry reviews (CNET, etc.) E-mail, text, gChat with friends/family Social networking & content (FB, Instagram, LinkedIn) Product info/buy products from a co. website Blogs, bulletin boards, forums etc Print magazines or newspapers Online magazine or newspapers Radio On TV At the movies Banner ads
  • 8. Most Trusted Source of Shopping Information among Hispanics % US Hispanic Consumers Source: BIA/Kelsey, Consumer Commerce Monitor: Hispanic Consumers Buy into Digital for Local Shopping, Feb 25, 2014 26.4% 28.2% 38.3% 38.9% 41.3% 43.1% 55.7% 83.2%Friend/family Facebook friend Rating Social friend Third party Google+ Business blog Stranger’s comments
  • 9. 10% 20% 24% 46% 50% Source: Boston Consulting Group, The Most Recommended Brands 2013, December 2013 Automobiles (non-luxury) Smartphones Grocery Mobile telecom Retail banking Brand Advocacy Rankings Brand Advocacy Index based on survey of 32K+ consumers across US, UK, France, Germany and Spain 63% 63% 63%Kia Honda Hyundai 38% 43% 54%iPhone Samsung Motorola 42% 48% 49%Trader Joe’s Wegman’s Publix 27% 35% 43%Virgin TracFone Verizon 23% 24% 44%USAA Ally American Express
  • 10. Influencers of CPG Brand Decisions by Age Group % of US consumers Source: IRI, May 2014 8% 28% 42% 48% 44% 15% 37% 46% 53% 54% Millennials (18-34) Total Population Shopper loyalty card discounts Coupons from home In-store circular Sings or displays in the store Online advertising
  • 11. Digital’s Influence on In-Store Sales, by Store Type % of digitally influenced conversions Source: Deloitte, April 2014 2012 Mobile ! Influence Factor 2013 Mobile ! Influence Factor 2013 Digital ! Influence Factor Electronics / Appliances 8% 31% 58% Furniture / Home Furnishings 4% 26% 56% Sporting Goods / Toys / Games / Hobby 5% 27% 50% Clothing / Footwear / Accessories 6% 24% 47% Home Improvement / Gardening Supply 5% 22% 42% Miscellaneous 3% 19% 38% health / Personal Care / Drug 4% 19% 35% Convenience Store or Gasoline Station 3% 18% 34% Grocery 6% 16% 29% General Merchandise / Department / Warehouse Club Store 7% 14% 23% Average 5% 19% 36%
  • 12. Mobile Shopper’s Purchase Decision Influencers % of smartphone owners Source: Local Corporation, Unlocking today’s mobile shopper: What drives them to buy, March 2014 9% 19% 30% 31% 42% 50%Search results listings Ratings and reviews Mobile search results with local availability Emails from retailers where you have opted in Group buying/coupon codes Mobile apps
  • 13. Click to read the full briefing Online vs Offline Word of Mouth What drives consumer purchase decisions?
  • 14. contact@data-charts.com Contact if you have any questions Freddie Benjamin

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