The new pathways to purchase in the world of networked consumers

The new pathways to purchase in the world of networked consumers Henry Assael - lecture at NYU October 6, 2011 Lee Rainie: Director, Pew Internet Project Email: [email_address] Twitter: @Lrainie

Implication: A New Consumer Decision Journey to Manage INITIAL CONSIDERATION: PURCHASE: POST-PURCHASE EXPERIENCE: ACTIVE EVALUATION:
Consumer starts with 1.5 brands in mind, influenced by previous trial and word of mouth
At the moment of purchase, the consumer has evaluated only 3.2 brands, and makes decision based largely on information learned before shopping 66% of consumers engage with their brand after purchase (e.g., online research), and this engagement has a meaningful impact on the likelihood of repeat purchase The consumer adds 1.7 more brands to consideration, based on packaging and sampling Source : Pete Blackshaw: CMO, NM Incite, a Nielsen-McKinsey Company

Where Social Media Fits in to the Mix 3 22 Friending the Social Consumer Most influential touchpoints
Company-driven marketing
Traditional advertising
Direct marketing
Sponsorship
In-store advertising
Consumer-driven marketing
Word of mouth
Online research
Offline/print reviews
Prior brand/ product experience Store/agent/dealer interactions Moment of Purchase 22 5 43 Active Evaluation 26 26 Initial Consideration 39 12 Source : Pete Blackshaw: CMO, NM Incite, a Nielsen-McKinsey Company

Your experiences -1
Smaller scale / impulse buys
Piece of music
App
Something off the shelf
Pew Internet findings in 2007 among music buyers:
83% find out about music from the radio, TV, or in a movie;
64% find out about music from family, friends, or co-workers.

PIP Consumer choice survey (2007)

Your experiences -2
Mid-scale products
Cell phone
Clothes
Pew Internet findings in 2007 among cell buyers:
59% ask an expert of salesperson for advice;
46% go to one or more cell phone stores.

Your experiences -3
Life-altering “investments”
Real estate – apartment hunting
College choice
Car
Pew Internet findings in 2007 among real estate shoppers (homes and apartments):
49% look at ads in the newspaper;
47% ask a real estate agent for advice

Digital Revolution 1 Internet (78%) and Broadband at home (62%) 65% 62%

Networked creators among internet users
65% are social networking site users
55% share photos
37% contribute rankings and ratings
33% create content tags
30% share personal creations
26% post comments on sites and blogs
15% have personal website
15% are content remixers
14% are bloggers
13% use Twitter
6% location services – 9% allow location awareness from social media – 23% maps etc.

Impact on shopping
Shopping is a “full contact” sport throughout its phases:
Research phase
60% of all Americans do research online about products
Purchase phase
55% of all Americans made e-purchases; 51% travel reservations
After-purchase phase
37% rankings and ratings; another quarter describe their shopping experiences

So what for brands?
The Bermuda Triangle
Markets are fractured
Marketplace is roiled
Metrics haven’t kept pace
Too much noise
Brands are co-owned by advocates /acolytes
Best of times - sanctuaries
Worst of times - #fail

Digital Revolution 2 Mobile – 84%

Mobile internet connectors – 63% adults

35% own “smartphones”

The networked consumer: cell phones Interesting tidbit: 17% of American adult cell phones owners have bumped into another person or an object because they were distracted by talking or texting on their phones.

56% of adults own laptops – up from 30% in 2006 44% of adults own MP3 players – up from 11% in 2005 52% of adults own DVRs – up from 3% in 2002 42% of adults own game consoles 12% of adults own e-book readers - Kindle 9% of adults own tablet computer - iPad

59% of Americans use TV and the Internet Simultaneously Dramatically More Cross-Platform / Media-Mixing Source: Nielsen Three-Screen Report

Impact of mobile connectivity on shopping
Just in time information
Where can I get a deal?
Price comparisons
“ Networked info” packed into the shopping experience
QR (quick response) codes
Announcement and validation of purchase
Sharing the shopping story

So what for brands?
Attention zones
Continuous partial attention
Deep dives
Info-snacking
Media zones
Social
Immersive
Streams
Creative / participatory
Study / work

Digital Revolution 3 Social networking – 50% of all adults

What does this mean?
Social networks are more influential and institutions less influential - 1
Sentries

What does this mean? Evaluators Social networks are more influential and institutions less influential - 2

What does this mean?
Social networks are more influential and institutions less influential - 3
Audience = New media are the new neighborhood

Impact of SNS on shopping
Purchasing can be group activity
“ Consumer cartels” arise (Groupon, Living Social)

With Dramatically Different Channel Preferences Source: Nielsen Consumer Channel Preference Study ‘09 Question : Those who would contact the company to… Discuss New products Complain Get Advice Make a Reco. Crisis Email 96 97 94 96 76 Call a live representative 94 95 92 90 95 FAQ on company website 94 NA 92 NA 74 Post an opinion or question on company website 87 80 77 82 48 IM through the company's website 81 78 78 76 71 Posting on a company message board 77 69 71 74 47 Posting on a blog sponsored by that company 68 61 64 68 41 Telephone - automated response/recording 57 57 62 59 52 Reading company's Facebook page 55 NA 53 NA 36 Sending photo or video to company 53 48 48 51 41 Posting on the company's Facebook page 50 42 47 47 31 Texting the company via mobile device 36 34 40 37 41

24 Brand Credibility More Important Than Ever Source: Nielsen Consumer Channel Preference Study ‘09 Six Drivers of Brand Credibility Trust Authenticity Transparency Confidence Consistency Integrity Authority As Advertised Real & Sincere Real People Informal Let the Sun Shine In Easy to Learn Easy to Discover No Secrets Affirmation Listening Responsiveness Playback Reinforcement Search Results Accountability Empathy Welcome Mat Humility (we can learn) Absorbing Feedback Follow-Up Invitational Marketing Solidifying the Solution Dignifying Feedback

Implication: Bold New Questions for Companies Source: Nielsen Consumer Channel Preference Study ‘09 Issue The Big Question Credibility How to manage and protect credibility and trust in a highly transparent, 24/7 feedback environment? Influencer Management How to extend the notion of key influencer management to everyday consumers and even employees? Cultivating Earned Media How to generate earned media from customer service, and how service in general can be leveraged more strongly for brand and business-building via social media? Organization How to best manage day-to-day digital/social media operations, recognizing that social media breaks down geographic and organizational barriers. Listening & Measurement What are the right listening & measurement protocols to drive accountability, feed engagement strategy & investment?

Social Commerce Ecosystems Implication: Death (or erosion) of Web Sites

Consumer Relations Branded Media Channels Forum / Communities Consumer Outreach Influencer Outreach Brand Backyard Consumer Backyard Common Brand Site Contact Center E-mail Phone Web Site Engagement Blog Chat, SMS Phone Rate & Review Communities User-Contributions Ratings & Reviews Co-Creation Platforms Twitter Facebook YouTube Flickr, LinkedIn 3 rd Party Consumerist Edmunds WebMD TechCrunch 43 Implication: New and More Holistic Rules of Engagement

Implication: From Selling to Service Pizza Hut Convenient pizza ordering experience Experience B& J through peace, love and ice cream Discover recipes for any occasion. Communicate with co-workers for coffee runs Simulate your favorite choc. milk experience at anytime Ben & Jerry’s Kraft Hershey’s Dunkin Donuts Source: Nielsen Consumer Channel Preference Study ‘09 Relevance to BP Price Finders Product Info Travel Services Environmental Info

Implication: Rise of Consumer Cartels Source: Nielsen Consumer Channel Preference Study ‘09

Implication: Massive Levels of Retailer Innovation Source: Company websites; Progressive Grocer & Pittsburgh Post-Gazette Can BP empower its franchises and/or products around innovation? Source: Nielsen Consumer Channel Preference Study ‘09

Implication: The Rise of Real-Time Source: Nielsen Consumer Channel Preference Study ‘09 24/7 Real-Time War Room 24/7 Engagement Listening Beyond Borders All aspects of integrated, brand-monitored social media Deliberate effort to shape and manage messaging Listening tools cover multiple languages & regions

Looking Ahead Source: Nielsen

What’s Ahead / Next? Near Term Trends for 2012 Trend What It Is, What It Means Mass Socialization Social “earned” media & paid media become more intertwined Platform Proliferation New devices and multi-tasking abound Mobile Comes of Age Extends mass socialization & extends media to point of sale Apps Everywhere Disruptive growth in apps, fueled by games and service utilities Dominance of Facebook A juggernaut, rewriting rules + shifting attention from websites Rise of Social Commerce Redefining consumer retailer interactions, powered by GPS, etc Relevance & Privacy Cautious advance to addressability; heightened scrutiny Infrastructure Growth Increased access and speed expand digital opportunities “ Heads Down” Generation Dramatic consumer habit change; all eyes to wireless devices Digital Downsizing More filtering/control of apps, friends, followers, choices

What’s Ahead / Next? Longer Term Trends & Disrupters Market Trends Description Digital & Social From separate roles to unified and integrated (now one & the same) Mobile Disruption Re-setting the entire landscape Activism & Social Media Smarter, Creative, More Empowered/Linked & More Sophisticated Payments and Fees Friction-free and seamless (already in play with iTunes) Globalization of Social Creating huge opportunities….and huge operational challenges Organizational Trends Description Media Blending Increasingly sophisticated: Paid, Owned, Earned Brand Managers Moving to “Community Manager” Roles & Responsibilities Enterprise SM Dramatic expansion beyond marketing innovations Marketing + Service New synergy between marketing & operations Agency Integration Social prompting greater integration from agencies & suppliers Speedbacking Practice of immediately responding to key issues, crises

Things to watch
Content metering online – new media business models
Enhanced tech – 3-D
New attention research – Nielsen and Coalition for Innovative Media Measurement
Privacy debates
Net neutrality debates
Spectrum allocation debates
Rise of the “internet of things”

Thank you!

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The new pathways to purchase in the world of networked consumers

by Pew Research Center's Internet & American Life Project

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The new pathways to purchase in the world of networked consumers Presentation Transcript