TechTalk                                                              the retail edition                                  ...
the retail edition                                                                                     4                  ...
5                                          the retail edition   the retail edition                                        ...
7                                                                                                                      the...
9                                                                                                          the retail edit...
11                                         the retail edition   the retail edition                                        ...
13                                                                                                        the retail editi...
15                                         the retail edition   the retail edition                                        ...
17                                                                                                                the reta...
19                                         the retail edition   the retail edition                                        ...
21                                                                                                        the retail editi...
23                                         the retail edition   the retail edition                                        ...
25                                                                                                        the retail editi...
27                                         the retail edition   the retail edition                                        ...
TechTalk: The Retail Edition
TechTalk: The Retail Edition
TechTalk: The Retail Edition
TechTalk: The Retail Edition
TechTalk: The Retail Edition
TechTalk: The Retail Edition
TechTalk: The Retail Edition
TechTalk: The Retail Edition
TechTalk: The Retail Edition
TechTalk: The Retail Edition
TechTalk: The Retail Edition
Upcoming SlideShare
Loading in...5
×

TechTalk: The Retail Edition

1,009

Published on

The first 2012 edition of our quarterly magazine, TechTalk, exploring current trends, issues and market developments affecting technology organisations today. In this edition we take a closer look at the customer purchase journey for technology products, with a particular focus on retail.

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,009
On Slideshare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
31
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Transcript of "TechTalk: The Retail Edition"

  1. 1. TechTalk the retail edition 2Technology trends, opinion and insight | Edition One - 2012 the retail edition Welcome to our first 2012 edition of TechTalk which takes a closer look at the customer purchase journey for technology products, with a particular focus on retail. Retail, both online and offline, represents the part of the customer journey where value is ultimately generated and money changes hands. Understanding how this part of the journey works, and what challenges and chances arise, is the key to success for technology brands and retailers alike. It is hardly surprising that, given the current tough trading environment technology brands are facing across markets worldwide, there is so much interest in how retail is evolving. In particular, retailers are feeling the effects of disruption, as technology itself changes the way in which consumers shop for technology products. It is this which sets the topic for the lead article where we explore the nature of these changes and set out a vision for ‘bricks and mortar’ through an omnichannel approach. In a number of articles we then dissect different aspects of bricks and mortar including the importance of the sales person in the purchase process and the way in which smartphones are rapidly becoming indispensable shopping companions for many. Beyond this, we explore the entire customer purchase journey beyond the context of the traditional yet restrictive linear process, and review the significance of initial online brand relationships within this process in forming consumers’ purchasing preferences: the potential of the so-called Zero Moment of Truth. To put the customer journey in a broader context, we present five emerging consumer-led trends for 2012, a shortened version of our annual consumer trends analysis, ‘Tech Trends: The Harmonisation of Digital Life’. Enjoy the read…and the shopping! Anette Bendzko Global Lead Digital Technology, GfK Consumer Experiences anette.bendzko@gfk.com Sign up for future editions of TechTalk Copyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  2. 2. the retail edition 4 contents p.05 bricks clicks: the start of a budding relationship? p.11 What’s in store for the future of retail staff? p.15 how smartphones are changing the way we shop p.19 how customer purchase journeys stopped being linear p.23 becoming a hero at the zero moment p.27 Digital Psychology: what smart data says about you p.31 So what is Behavioural Economics? p.37 Tech Trends 2012 –Harmonisation of Digital Life p.41 RETAIL DISRUPTION THROUGH MOBILE PAYMENTS p.45 Disruption, and what consumer research can learn from Henry Ford p.49 contactCopyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  3. 3. 5 the retail edition the retail edition 6 By Friedrich Fleischmann bricks clicks: the start of and Colin Strong a budding relationship? The pressure on offline retail is growing with online retail’s move onto mobile platforms creating instant price transparency. The GfK finding that customer journey patterns are mixing online and offline in the purchase process means that retailers now need to invest in a truly omnichannel approach where both online and offline retail complement each other. By taking this creative route, bricks and mortar will continue to have a successful role in the market for tech products. There seems to be gloomy news on often free. Indeed, online retail has been an almost daily basis concerning the getting progressively better at creating future of offline retail, which can often positive experiences for consumers lead to the impression that it struggles through innovations such as one-click to compete with its online retailing shopping, personalised recommendations counterpart. The accelerating success of and linkages to social networks to not only online retail is largely attributed to some see what your friends have bought but to undeniable advantages of the channel: show off your own purchases. it is straightforward to find what you are looking for from a vast selection of Yet we are now entering a new phase which goods, prices are very competitive, and it has the potential to impact physical retail is easy to shop around for bargains. Not spaces more than ever, thanks to the having to drag yourself out in the rain, no introduction of new mobile-based apps spending money on high petrol prices, and that enable instant price comparisons. no wasting time circling for a parking space Flow, for example, is an iPhone app when online delivery, and even returns, are launched by Amazon subsidiary A9.comCopyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  4. 4. 7 the retail edition the retail edition 8 which allows users to scan barcodes of items in store to display the Amazon.com technology products from bricks and mortar stores when there are so many “Whilst purchase 2. Increased complexity = need for guidance: shoppers often still want to see the fresh products before they buy, and clothing, product information. So rather than buying good reasons to shop online. We have journeys have The nature of the products which are where consumers continue to try them on the product from the store, shoppers can identified three key reasons why the offline dominating tech sales perhaps provides before they purchase. purchase immediately from Amazon. E-Bay retail environment is proving to be resilient clearly changed some clues about how traditional sales is among a number of other brands that for tech products: in response to channels may continue to have an In the technology sector this trend is have launched similar apps, and more will important role. GfK data shows strong also evident, with consumers increasingly inevitably be released in due course. 1. Convenience: cutting-edge growth in smartphone and tablet sales wanting to experience the products The spiralling costs of offline retail (rents, employee costs etc.) means that the Whilst online is certainly useful in terms of search and purchase, it can be hard to online retail whilst observing declines in sales volumes of other, more traditional, technology of interest. The Apple Store is the prime example of this with a theatre for increased price pressure this creates could beat offline for the convenience of other initiatives, the products such as satnav and plasma TVs. A presentations, a studio for training with make it even more challenging to compete effectively with online channels. aspects of the customer journey. Offline is, for example, the only way you will get overwhelming key feature of these growth product areas is that they clearly rely on ecosystems that Apple products, a Genius Bar for technical support as well as free workshops available your hands on the highly desired piece of majority of tech will typically interconnect devices in order to the public. Another example is the way So what is the role for offline retail? kit straight away without having to wait to operate optimally. Previous research in which shops selling gaming products Whilst purchase journeys have clearly for at least a day. And despite the ever- products are, from GfK has shown that consumers want frequently have zones that allow shoppers changed in response to cutting-edge online improving delivery speeds of online stores, still purchased to evolve the mobile experience and benefit to play with the latest consoles and games. retail initiatives, it is important to note this is clearly a tough one to beat. from accessing content across different The limited data available on the success of that the overwhelming majority of tech through offline devices. such approaches are compelling. A recent products are, in the end, still purchased through offline retail (see Figure one). Related to this, if there are problems with the purchased product there is an retail And it is surely here that there is a study (1) estimated that Apple makes $5,626 per square foot of floor space from Whilst online will clearly continue to undoubted ease when returning the device very clear role for technology retail as its US stores, thus making it more sales per encroach, GfK forecasts are not indicating a to a shop for refund and repairs compared consumers look for good quality advice square foot than any other U.S. retailer. sudden decline in the offline channel. to having to package up the item and in the face of the growing complexity of This evidently raises the question of organise return delivery. the products they buy. More confident Rethinking the customer journey why consumers continue to purchase consumers who will typically figure it out So if we are right and these factors do themselves often want to go in store to indicate a clear role for tech products ‘road-test’ the technology and quiz the via offline retail, then how does this sales staff to make sure that it delivers interact with online retail? Discussion on the points that are important to them. of the consumer purchase journey often Less confident consumers will frequently appears to infer a fairly linear process, withFigure one*: Percentage sales of technical consumer goods by online vs offline in European markets** want to go in store to get reassurance consumers researching online, perhaps about their purchase. going in store to check the look and feel of the product, and then probably closing the 3. Touch and feel: transaction online. There is a long standing tradition among consumers of wanting to ‘touch and feel’ goods before they buy them. This is true in many categories such as food, where * 1) GfK Retail Panel and the figures are based on full year 2011 B2C sales for technical consumer goods. **European markets covered AT, BE, CH, CZ, DE, GB, ES, FR, IT, NLCopyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  5. 5. 9 the retail edition the retail edition 10 “Tech Companies making their purchase – why would they not expect this to be available in store as “Today’s shopping channel performs a complementary role for generating sales and that the success need to ensure well as online? experience means is measured in terms of total sales and not as a function of the source of the consistency of When it comes to making a purchase, that awareness sales. message across although there was no clear preference of products for purchase channel amongst the tablet Perhaps the biggest vote of confidence multiple channels purchasers, it is clear consumers need and increased in an omnichannel retail environment is which complement to be reassured they are getting the best deal regardless of which channel footfall can be the apparent move of previous Internet- only brands into retail. Microsoft has each other moving they purchase through. No matter how raised through been steadily rolling out a successful forward” useful and enjoyable the bricks and motar experience, there is still a significant risk online marketing experiential store format across the US, eBay is growing business drop-off stores that consumers will simply use the offline using tools such which support prospective sellers in the channel to try out the products and then physical world, and there has been plenty purchase online. as coupon codes, of speculation that Google or Amazon are However, recent research from GfK, which location-based about to launch a physical store. If brands tracked PC tablet purchase journeys of Adopting an omnichannel approach that are predominantly digital are seizing a representative sample of the online In this light, the challenge for retailers is to promotions and the opportunity then surely we can take population, challenges the assumption that understand how to ensure their online and offline channels are complementing each optimised search this as a strong signal that when combined effectively, both online and offline can this process is as undeviating as has been suggested. First, the study found extensive other, thereby leveraging their respective terms” continue to have a crucial role in boosting movement between channels with people benefits to generate sales. Today’s sales. switching from store to online and back shopping experience means that awareness again, and not necessarily in a consistent of products and increased footfall can be Sources and linear fashion. Indeed, the myth that raised through online marketing using There are, however, significant challenges 1) US firm RetailSails: http://retailsails. different channels deliver discrete functions tools such as coupon codes, location-based for brands adopting an omnichannel com/2011/08/23/retailsails-exclusive- was completely dispelled by the research promotions and optimized search terms. approach: ranking-u-s-chains-by-retail-sales-per- findings as consumers were found to be Products can increasingly be reserved square-foot/ moving across both online and offline online before going in store to check the • Developing an effective role for offline channels at each stage of their purchase product out and make the purchase. In is an expensive business: purchasing 2) GfK Retail Panel and the figures are journey. store online tools are becoming more the right space on the street, fitting out based on full year 2011 B2C sales for common providing more information to the shops, buying the necessary kit, and technical consumer goods. The implication of this is that tech allow customers to purchase items quickly training sales people to the appropriate companies need to ensure consistency of and efficiently without having to queue. standard all comes at a high price. message across multiple channels which This mix of channels enables retailers to Want more information on retail and tech? complement each other moving forward. • Breaking down the barriers between take a more targeted approach to different - Colin Strong For example, whilst both online and offline online and offline: brands will typically parts of the market, some of which will colin.strong@gfk.com channels are used extensively for all types use sales as the marker of success of a of research, we found offline-only tablet continue to be served in the traditional channel, with sales per square foot being buyers were much less satisfied with the manner, whilst others may need a focused a well known measure of the effectiveness level of detailed information available. effort to encourage consumers to visit of a particular store for example. The The online environment has geared stores more regularly. Brands are now in adoption of a successful omnichannel up expectations that large amounts of a much stronger position to craft multi- approach involves ensuring that each information will be available to assist in channel strategies to meet the needs of specific consumer segments.Copyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  6. 6. 11 the retail edition the retail edition 12 By Rachel White What’s in store for the and Matt Fisher future of retail staff? In an age when consumers research their purchases thoroughly online, talk to their friends for recommendations, and test out their potential purchases in store, exactly what role do store staff have to play beyond facilitating the experience? Recent research by GfK shows that the suitable mix of in-store recommendations and demonstrations, achieved by store staff training, can be highly effective at increasing sales. A new GfK research programme has So what are some of the key findings provided some unique insights into the ROI of this programme that are useful for of store initiatives by combining mystery marketes? shopping results with individual store-level sales data. The programme reveals how Recommendation drives market share, but the in-store experience translates into not all recommendations are equal sales and shows the average uplift in sales As expected, there is a significant resulting from different types of in-store correlation between in-store activity. This is highly useful for brands recommendation and share. However, this that want to understand how to prioritise is not consistent for all brands.; brands in-store marketing budgets, benchmark with a relatively high price point are more against competitors, negotiate better rates resistant to recommendation turning for display space, and calculate the ROI on into sales and brands with a very high in-store marketing spend. appeal will achieve a high share with low recommendation.Copyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  7. 7. 13 the retail edition the retail edition 14 The programme reveals that it is not Don’t bother to demonstrate the camera having a freestanding display unit which advocacy into market share. This data is enough simply to be recommended; what Even the most enthusiastic brand may well be cheaper to implement than a hugely useful to support brands in making is said is just as important. Consumers advocates can sell more if they are dedicated area. informed choices about how to spend in- are more likely to buy in store if they are trained to demonstrate the features that store budgets that would not otherwise be given a number of reasons to buy. On customers most want to see and use. Pile ‘em high? possible. The study is currently conducted average, advisors gave 14 reasons for Demonstrations can increase sales by 6.8 The research splits stores by high, medium in the UK but we believe it has direct recommending a handset, with the most per cent on average, although showing and low sales volume outlets . Whilst relevance for other markets. Future frequent reason being that the phone only the camera gains a feeble 3.9 per there are fewer high sales stores (they are research programmes will be exploring had good Internet access. However, when cent increase., consumers typically now likely to be flagship stores) the research other geographies. advisors recommended the brand itself, the know how a camera works. Where advisors perhaps surprisingly finds that advisors greatest uplift in sales was achieved. demonstrated how to use social networking in these stores are not always the most Sources sites, this led to a sales uplift of 8.3 per knowledgeable or enthusiastic. This may GfK study tracker piloted in 2011 and Additionally, knowledgeable and cent. Stores can use these sorts of findings be because they host a wider product range involved conducting mystery shopping at enthusiastic advisors sell more. The Holy to develop advisor training programmes to resulting in diluted advisor knowledge. 150 stores, for the top five handsets and Grail for a brand is to turn advisors into focus on the features of most interest to Nevertheless, these stores do sell more, comparing with sales data from the same brand advocates, and to get them to customers, thereby driving up sales. partly because they are in high footfall 150 stores. actually use and love their handsets. For areas, but also because they create an customers it is very powerful to hear an Pay and display exciting environment for brands. advisor say “this is a great phone, I have The area where most of the in-store one of these”. Such findings are crucial marketing budget goes is in visual Conclusion Want more information about the research in this article? to helping brands calculate the impact of presence. Any sort of visual presence at This programme clearly shows that - Rachel White getting their devices into the hands and point of sales results in an uplift in sales. recommendation is important and that rachel.white@gfk.com hearts of store advisors. As well as giving The biggest uplift of 10.9 per cent comes there are opportunities to maximise out phones, brands can work with stores to from having a dedicated in-store display return on investment in store, turning customise phones for advisors, and include area. However, it is interesting to note that free apps that will convince them to actually an uplift of 8.2 per cent can be gained from use the handsets.Copyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  8. 8. 15 the retail edition the retail edition 16 By Ryan Garner and Alex Kozloff how smartphones are changing the way we shop The irrepressible tide of smart, connected, mobile devices is changing the way we shop at every stage of the purchase process. This poses new opportunities and challenges for product marketers and retailers in both the online and offline world. The ‘always on’ nature of smartphones - be in conjunction with the PC or an aid to not just in your pocket but also connected the consumer while in store. Indeed, the to the Internet - makes them the perfect research showed that the most common companion for shoppers throughout the behaviour was for the smartphone and entire purchase journey, both online and PC to be used together in the purchase offline. Recent research by the IAB and process rather than independently. GfK shows that while PCs (laptops and/or desktop computers) are still the most used Shopping in a multi-screen world devices throughout the online purchase The smartphone and PC offer consumers process, smartphones are an increasingly very different but complementary benefits. important complement to existing With its larger screen, the PC is better methods of shopping. The number of suited to high value, high consideration shoppers using smartphones will inevitably research and purchase activity. In increase, but this usage will in many cases comparison, the smartphone is perfect forCopyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  9. 9. 17 the retail edition the retail edition 18 Figure one: Device usage throughout the purchase journey UK Smartphone owners who have purchased something in the last month (n=800) looking up information quickly and while on transaction through an online retailer (scan conduct an Internet search about products purchasing habits become. In particular, the the move. A great example of this is when the QR code below to watch the video). or services. Faster networks, more tactile way consumers are turning to their mobile consumers are watching TV. 44 per cent screens and localised information will phone in store should be a strong call to of respondents in this study stated that The most striking thing only accelerate this trend in the future. In action for retailers to get prepared to this they reach for their mobile when wanting to about this particular addition to Internet search, location-based growing trend. follow up a TV advert. In general, they are purchase journey is that services and price comparison apps will often looking for more price and product from trigger (seeing the provide consumers with almost complete For more information information to supplement what they have advert on the XBOX) price transparency while shopping. In terms about the IAB’s just been told by the TV advert. through to purchasing the of service provision we’re not quite there Mobile Online Journey game, there was not a physical retail store yet, however nearly half (49 per cent) of Observation (MOJO) study The introduction of the smartphone in or a PC involved. From a retail perspective, those who used their phone in store did so please visit their website the purchase process means that from Amazon won this sale through combining to conduct price comparisons with other by scanning to QR code to trigger through to transaction, the journey an easy-to-use optimised interface for retailers. the left or get in touch. becomes more complicated for product smartphones, convenient payment options marketers and retailers. When considering (one click) and pre-order promotions. The use of smartphones in the purchase - Want to contact the author? all the channels, devices, and information process is a very present reality which Ryan Garner sources the variety of routes through Smartphone: the perfect in-store shopping is affecting all brands and retailers to ryan.garner@gfk.com the purchase journey seem infinite. Take, companion a greater or lesser degree, and clearly for example, a young gaming enthusiast Today’s shoppers hit the high streets demonstrates the importance of a cross- who sees an advert for a new game on his armed with a wealth of knowledge in their device digital and retail marketing strategy. XBOX. He discusses what he has seen with pockets. The research shows that 38 per The greater number of connected devices his friends and decides to purchase the cent of respondents use their smartphone consumers own, the more their behaviours game, using his smartphone to make the in store and of this group, 55 per cent change and the increasingly complex theirCopyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  10. 10. 19 the retail edition the retail edition 20 By Iain Stanfield how customer purchase journeys stopped being linear There are some things that have to happen in the right order. You can’t build a house starting with the roof. Dinner is soup to nuts, life is cradle to grave. We tend to assume that a consumer’s decision making process is a similarly linear process. Classic market strategy therefore uses a funnel or pyramid model to assess brand and communication performance (see Figure one) but does this need to be updated? Logic dictates that consumers cannot An example would be as follows: consider a brand unless they are aware John goes online to look for a laptop. He is of it; they are unable to use a brand they interested in Brand A and Brand B, but he have never considered. However, we feel puts ‘laptop’ into Amazon’s search engine. that this model needs to be updated to As he scans the results, he sees that Brand reflect the way that today’s consumers C, which he hasn’t heard of, is getting 5 shop for technology products, entering stars in all the reviews. the brand funnel at any stage, and walking through it at any speed. This means that John has just gone straight to if your brand has a better consideration consideration of a shiny new Brand C score than a competitor at a certain point 2012XyZ laptop. He checks YouTube and in time, it no longer follows that you will finds a review video shot by a techie from sell more products. Disruptive elements Brand C development labs, which helps him are lingering all along the decision-making feel confident about the brand. process, leading consumers to deviate from the linear process, jumping stages, and He checks Pricerunner for some more going back and forth. reviews, and the best deal, and then he buys Brand C. Brand C was not even in the consideration set initially.Copyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  11. 11. 21 the retail edition the retail edition 22 Figure one: A traditional Sue is looking for a new smartphone it is worth switching. The new network brand funnel online. She knows exactly what make operator has just gone from passive and model she wants and she plans to consideration (I would not reject this stay with her current network operator. brand) to being actively considered and As she searches she sees that a rival purchased. network operator has a great deal on her chosen phone. She has signed up for 24 months on a high-end tariff. Sue has entered the She hadn’t considered changing but it brand funnel at ‘attachment’. is too good a deal and the rewards are appealing. Whilst she doesn’t know much about the new operator, she thinks Disrupting the linear decision-making are more likely to look for advice and How can brands control this non-linear 2. Use the brand funnel as a measure of process: reviews and recommendations reassurance when researching a purchase, decision making process? brand strength, rather than for driving Consumers have always trusted particularly as the number of available So does this mean that it is not important purchase and purely for focusing on sales recommendations from a friend, but products proliferates. And finally, retailers to develop a strong brand? Should all (Our suggested funnel does not include a now they have access to the aggregated play a huge role in this disruptive process. brand and comms activity be focused on purchase stage). opinions of millions of ‘friends’ via social driving recommendation and on search networks, price comparison sites and Disrupting further: the ‘Zero Moment of engine optimisation? And is the brand 3. Decide what you want to achieve at each specialist review sites, forums and blogs. Truth’ funnel dead? stage. For example, you may wish to In technology markets, recommendations It is not only recommendations and reviews redefine consideration as ‘My brand is the and reviews are becoming even more that can divert your potential customers Whilst understanding the purchase journey ONLY brand you will consider. important and can be a greater influence from their orderly procession down the in the category is important, we argue that on consumers at point of purchase than a brand funnel to become lifelong customers a strong brand is the only way to fight back. 4. Compare your performance at each stage carefully-crafted campaign. and advocates of your brand. Any purchase Technology is personal; your smartphone against your main competitors – this will journey that includes online research says something about who you are (or highlight any disconnects and show you The pace of technology development exposes your customer to a wealth of who you would like to be). In technology where to focus your effort. increasingly leads consumers to look for offers, promotions, search term results and markets where there is so much change guidance. Five years ago smartphones Google ads. (See next article, ‘Becoming a and choice, the goal for any brand must Rethinking the brand funnel in this way were mostly bought by early adopters who hero at the zero moment’) Each of these be to build a strong relationship, and not will help you to lay down the foundations understood the technology and compared is a touchpoint with a competitor. The merely to drive sales. The brand funnel is of a robust and strategic brand and brands according to features and functions. following is a good example. alive and kicking but what it consists of and comms strategy. Underpin the strategy Today, as high-end technology has gone how it is analysed must be considered in a with actionable research and you are on mainstream, a much higher proportion different light. your way to building profitable brand of smartphone buyers may well instead relationships with your customers. be attracted by the look of the handset. 1. The brand funnel should be a flexible These less knowledgeable consumers tool that should be tailored to meet the needs of your product category. Want more information on branding and retail? - Iain Stanfield iain.stanfield@gfk.comCopyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  12. 12. 23 the retail edition the retail edition 24 By Wendy Jones becoming a hero at the zero moment 70 per cent of buying decisions are made at the shelf…or so we are told. This information has been at the forefront of retailing strategies ever since PG expounded the idea of the First Moment of Truth (FMOT) in the Wall St Journal back in 2005, but a new theory is now challenging this accepted mantra as a result of the rise of the, largely unforgiving, online brand relationship. The FMOT concept is that whilst brand mouth on purchase decisions, traditionally communications serve the dual purpose consumers would only talk to a small circle of raising awareness and increasing of friends and family. Other sources of propensity towards the product, it is information such as PR, reviews and expert ultimately in the three to seven seconds recommendations, whilst also influential, after a shopper encounters the product were usually controlled to some extent by on a store shelf that the brand has the the brand. best chance of converting a considerer into a buyer. It is then down to the product However, in the last few years, the digital performance to convince the consumer revolution has changed the balance of that they made the right choice, and power between brands and consumers. to repurchase the brand at a later date This has led Google to assert that the Zero (otherwise known as the Second Moment Moment of Truth (ZMOT) is now the killer Of Truth). moment in the purchase decision making process. ZMOT refers to when a consumer Underpinning this idea is the notion encounters a brand online, often in the that the brand itself controls the vast form of others’ opinions, which influences majority of messages a consumer their perception of the brand, thereby receives. Whilst marketers have always affecting the decision they go on to make been aware of the influence of word-of- at the point of sale. This is not to say thatCopyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  13. 13. 25 the retail edition the retail edition 26 subsequent interaction with the brand half of those who sought information did from a friend or family member early in Other companies take it further and is unimportant but that initial contact so online. Despite this high level of activity, the journey were less likely to conduct use the digital arena as a platform for is potentially much more pivotal than 51 per cent claimed they did not find all of extensive research in the first place, co-creation, which increasingly involves previously thought. the information they required . suggesting that ultimately, a personal ‘gamification’. This can be as simple as The majority of product comparisons in recommendation from someone you trust the game on a leading ice-cream brand’s Exploring the role of digital tablet purchase journeys were conducted is still the most powerful form of word-of- website that invites visitors to create their Consumers have growing access to a using retailer websites: a great one-stop- mouth. own flavours, or as complex as the energy proliferation of brand touch-points, shop for finding and comparing the range company that gives visitors the opportunity both official and unofficial, which are of products and price points available in the Nonetheless, it is important to recognise to play a SIM-style game creating their own reforming the way brands are perceived marketplace, for reading user reviews and that online word-of-mouth (or what is now eco-world with the objective of saving as and considered. These changes manifest ratings, and for the ability to purchase if all often referred to as earned media) is an much energy as possible. themselves in three key forms: buyer conditions are met. It seems retailers increasingly influential tool, in particular The Internet offers brands the opportunity offer a certain level of objectivity that for those whose category experience, or to conduct a two-way dialogue with their 1. the ability for consumers to find and manufacturers cannot always lay claim to, that of their friends, is limited. Indeed, our consumers that can deepen the brand compare detailed product descriptions but it is still the opinions and experiences study showed that most tablet buyers only relationship beyond product experience and other information they require to of those deemed to be ‘in the know’ that received advice from one source or the and conventional marketing stimulus. support their decision making. are perceived to be the most trustworthy. other. Customers benefitting from this type of brand relationship are significantly more 2. the broadening of word-of-mouth Importance of online word of mouth Becoming a Hero at the Zero Moment of likely to become advocates, elevating the circles through peer-to-peer exchange The issue that leads brand owners to Truth brand to ‘hero’ status. By taking the time of brand experiences in the form of lose sleep is the simple truth that, Where the digital arena really excels is as to comment on the experiences they’ve recommendations and reviews. largely thanks to the Internet, they have a platform on which brands can deliver had, and including the emotional impact decreasing levels of control over what a ‘experiential marketing’. Just like the of these in their reviews, customers create 3. the new ways in which the digital space consumer sees or hears about their brand. offline version, this type of marketing is powerful ZMOT experiences that influence allows brands to interact with customers We found that amongst tablet buyers who designed to drive greater engagement with other users. and engage them in two-way dialogues . claimed reviews and recommendations the brand by supporting brand stories in were influential in their decision making, interesting and often unexpected ways. Like any tool in the marketing mix, ZMOT At GfK we decided to look at these issues in as many read online reviews and Where digital differs is in its ability to offer alone isn’t sufficient to drive substantial the context of a real-life purchase journey. recommendations as received them from a truly interactive experience to consumers. growth for any brand, but it is becoming Conducting research with consumers who offline friends and family. Additionally, a It goes beyond the opportunity to merely increasingly influential. In order to maximise purchased a tablet PC, we looked at how similar proportion cited an online review as participate, instead encouraging consumers ZMOT opportunities brands need to create they used the wealth of digital information being most influential in their decision as to play an active role in the creation, not only positive product experiences available to help formulate their product the proportion citing friends and family as development and distribution of these that live up to the brand promise, but also choice. The research combined online having the greatest impact. branded events. engaging brand experiences and a platform surveys with over 300 recent tablet buyers, for the distribution of the advocacy they and tracked the online browsing behaviour This suggests that online can be just The gaming company that provides generate. of a sub-set of these using our LeoTrace* as important as offline when it comes back-stories to characters, the airline software for a four week period prior to to recommendations. The Internet that asks its frequent fliers to upload Sources their purchase. has provided access to a multitude of photos for its advertising campaign, and GfK study conducted with 300 adults via other users, whose humble opinions and the tech company that provides video UK ConsumerScope Panel with LeoTrace, Information underload descriptions of brand experiences often tutorials and a forum for users to share between Dec 2011-Jan 2012. The results revealed that shoppers do make count for far more than the ‘official’ experience are all examples of how digital widespread use of the Internet to gather communications coming from the brand is facilitating improved brand perceptions information, helping them make up their itself. and deeper consumer loyalty through Want more information on ZMOT? minds about their potential purchases. online experiences in a way that cannot be - Wendy Jones Overall, 84 per cent of tablet buyers However, the value of online research achieved through other, more traditional wendy.jones@gfk.com claimed to have actively sought information may be greater amongst those who media. relating to the category in the four weeks require extensive research to validate prior to their purchase: 25 per cent said their purchase decision. For example, they ‘researched extensively’. More than those receiving a strong recommendationCopyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  14. 14. 27 the retail edition the retail edition 28 Digital Psychology: By Colin Strong What smart Data says about you and how brands can use it to build exciting online relationships As I started planning my summer holiday, I Much of what has historically been was struck by the sheer scale of the digital a human-to-human activity is now footprint that I alone was creating. Using increasingly digitised, not only by people, Google to search for potential destinations, such as me, trawling the Internet, but I skimmed through holiday reviews and also through the digitisation of back- local destination websites, tried to see office systems. This means, for example, the facades of various apartments using that I now receive my airline booking Google Earth, shopped around travel sites automatically via email, that the plane to book flights, used comparison sites for capacity is instantly updated and that the my car hire and insurance, let everyone prices are accordingly re-estimated (or know about it on Facebook…and this all should I just say hiked up!), all without the before I had even set foot outside of the involvement of any human being. front door. When I finally do go on holiday, I will of course leave digital traces all the way As life becomes more digital, what we to and from my destination, from attending know about people is progressively going to my messages and updates on social to come from the digital form, thereby networks, to showing up on all manner of creating valuable opportunities for travel systems. On my return I will upload consumer researchers. Indeed, with the photos, share my thoughts online, update numerous traces I have (evidently) left Facebook again...and the list goes on! scattered across the digital landscape fromCopyright GfK | TechTalk Edition One 2012 Copyright GfK | TechTalk Edition One 2012
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×