Wireless Shoppers
How Consumers Shop for Phones and Wireless Service



October 2008




                                 ...
Objectives

                   Understand the consumer buying process for
                      wireless carriers and mobi...
Methodology

       Survey of Wireless Phone Buyers                 Deep Dive into Search Behavior

   Sample             ...
Summary Findings


  1           Shoppers Can Be Influenced In the Research Process


  2         Search Brings Buyers to ...
What is the decision making
process for wireless shoppers?
Consumer Uncertainty Exists Prior to Purchase

There is an opportunity to influence what brands consumers purchase,
as a b...
Purchase Decision Driven More by Carrier

Nearly half of wireless buyers base their purchase decision primarily on
the ser...
Purchase Decisions are Made Quickly

75% of buyers spend less than one week researching, leaving a short
window to influen...
Cell Phone Buyers Conduct Online Research

78% of all wireless buyers go online to research, with almost half
researching ...
Wireless Buyers Research on Carrier Sites

More people research on the carrier web sites than in the store. Sites
should p...
What is the role of Search
in the research process?
Buyers Searched Throughout the Research Process

24% of wireless buyers used search, finding it valuable at the top of the...
Search Drives Traffic to Your Site

 25% of prospects enter Carrier and OEM sites via a search referral




              ...
Shoppers Search For Branded and General Terms

Wireless shoppers search most heavily for specific OEM terms, while
almost ...
Non-Branded Searchers are Less Decided

Wireless shoppers who search on non-branded terms seek more
information, likely st...
Many Shoppers Click Only Once or Twice

43% of qualified searchers click only once or twice on wireless sites,
while over ...
Are all mobile phone buyers
the same?
- Online and In-Store Buyers
- Searchers and Non-Searchers
Online and In-Store Buyers


Channel Choice Mirrors Customer Need

Wireless buyers purchase online for convenience, while ...
Online and In-Store Buyers


Only 6% of Wireless Sales Are Made Online…


…But 74% of in-store buyers conduct their resear...
Online and In-Store Buyers


In-Store Buyers Search Like Online Buyers
In-Store buyers use search in their wireless resear...
Searchers and Non-Searchers


      Searchers Want More Sophisticated Handsets

      Searchers are high-end customers. Th...
Searchers and Non-Searchers


Searchers Are More Valuable Customers
Wireless buyers who use Search in the research process...
Searchers and Non-Searchers


Searchers Spend More Time Researching

Searchers give more consideration to the wireless pur...
Searchers and Non-Searchers


Searchers Seek More Information from Your Sites

Searchers are more engaged visitors to your...
Summary Findings

   1. Shoppers Can Be Influenced In the Research Process
            •    Shoppers are uncertain at the ...
Q&A
Sara Kleinberg, Google
Head of Marketing, Technology

Karen Parker, Compete, Inc.
Managing Director, Telecom & Media
Appendix
Glossary of Key Terms

Wireless Prospect: an in-market wireless consumer at a Big-4 carrier site who exhibits
shopping and...
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How Consumers Shop for Phones and Wireless Service

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Wireless Shoppers

  1. 1. Wireless Shoppers How Consumers Shop for Phones and Wireless Service October 2008 Google Confidential and Proprietary 1
  2. 2. Objectives Understand the consumer buying process for wireless carriers and mobile phones • What is the decision making process for wireless shoppers? • What is the role of Search in the research process? • Are all mobile phone buyers the same? Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 2
  3. 3. Methodology Survey of Wireless Phone Buyers Deep Dive into Search Behavior Sample Sample • P3M wireless phone buyers • Wireless shoppers who reach the shopping cart of a Big-4 wireless carrier site (Verizon Wireless, AT&T, T-Mobile, Sample source Sprint) after using search • Compete’s 2MM US proprietary panel Sample source Data • Compete’s 2MM US proprietary panel • Self-reported attitudes and behavior • Overlay of the respondent’s observed Data online shopping and searching behavior • Observed searching behavior used to • N = 1,276 arrive at any type of wireless web site • May 2008 including Carrier, OEM, Online Agent and Research or Blog Sites • Q1 2008 Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 3
  4. 4. Summary Findings 1 Shoppers Can Be Influenced In the Research Process 2 Search Brings Buyers to Your Site 3 In-Store Buyers Use Search, Just Like Online Buyers 4 Searchers are More Valuable Customers Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 4
  5. 5. What is the decision making process for wireless shoppers?
  6. 6. Consumer Uncertainty Exists Prior to Purchase There is an opportunity to influence what brands consumers purchase, as a big portion of the market starts out undecided Certainty of What Brand Will Be Purchased Wireless Carrier Handset OEM 21% knew 38% exactly didn’t know exactly 62% knew 79% exactly didn’t know exactly Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 6 Q: When you first considered your recent purchase, which statement best describes your mindset about the wireless service provider and handset OEM you would use? Asked of Recent Wireless Buyers, N=1,257, May 2008
  7. 7. Purchase Decision Driven More by Carrier Nearly half of wireless buyers base their purchase decision primarily on the service carrier Basis of Purchase Decision 48% Based on carrier Based equally on phone and carrier 28% Based on phone 24% Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 7 Q: How much of your recent purchase was based on the specific phone vs. the specific carrier? Asked of Recent Wireless Buyers, N=1,257, May 2008
  8. 8. Purchase Decisions are Made Quickly 75% of buyers spend less than one week researching, leaving a short window to influence uncertain shoppers Time Spent Researching Cell Phone Purchase 40% 35% 75% 30% 21% 20% 19% 15% 10% 5% 5% 0% Less than One to More than two 1 to 2 3 to 4 Longer than one day two days days, but less weeks weeks one month than one week Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 8 Q: How much time did you spend researching your recent cell phone purchase? Asked of Recent Wireless Buyers, N=1,257, May 2008
  9. 9. Cell Phone Buyers Conduct Online Research 78% of all wireless buyers go online to research, with almost half researching exclusively online Type of Research Resources Used 49% 29% 22% Online Research Both Online & Offline Research Only Offline Research Only Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 9 Wireless Resources Used. Asked of Recent Wireless Buyers using either online or offline research, N=1,044, May 2008
  10. 10. Wireless Buyers Research on Carrier Sites More people research on the carrier web sites than in the store. Sites should provide comprehensive phone and plan information. Usage and Influence of Research Sources 50% 100% Online Resources Offline Resources 40% 79% 40% 80% 70% 67% 62% 66% 57% 60% 30% 55% 60% 22% 20% 35% 40% 16% 17% 16% 10% 9% 8% 8% 20% 6% 0% 0% Carrier OEM web site Retail web Consumer Professional Carrier store Friend or Carrier store Big Box web site site reviews reviews salesperson family display display (blogs, etc) (cnet.com, etc) % Using Resource % Resource Influence Source: Wireless Shoppers Study, Google & Compete Q: Which of the following sources did you use to research? Asked of Recent Wireless Buyers, N=1,257 Q: How much influence Google Confidential and Proprietary 10 did each resource used have on your purchase? (Top 2 Box of 5 Points) Asked of Recent Wireless Buyers Who Used Resource, N=variable, May 2008
  11. 11. What is the role of Search in the research process?
  12. 12. Buyers Searched Throughout the Research Process 24% of wireless buyers used search, finding it valuable at the top of the funnel and throughout their research When Search is Used During the Research Process Research Process 27% Beginning Only 50% 14% Middle Only Throughout entire process 7% End Only Source: Wireless Shoppers Study, Google & Compete Q: When did you use each resource during your research process? Responses from those who used search. Asked of Recent Google Confidential and Proprietary 12 Wireless Buyers N=1,257, May 2008 Note: 2% Didn’t Know or Could Not Recall
  13. 13. Search Drives Traffic to Your Site 25% of prospects enter Carrier and OEM sites via a search referral 25% from Search Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 13 Search Entry Share of Online Wireless Prospects – Session Based. Quarterly Average Prospect Sessions entering each site via a search referral, Q1 2006- Q1 2008
  14. 14. Shoppers Search For Branded and General Terms Wireless shoppers search most heavily for specific OEM terms, while almost one quarter of shoppers search on general telecom terms Search Queries 23% 28% Non-Branded Carrier 43% OEM Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 14 Term Category Distribution of Search Queries at Google.com – % of Queries at Google.com by Term Category Among Wireless Searchers who reach the Shopping Cart page at a Big-4 Carrier site, Q1 2008 Broad Match
  15. 15. Non-Branded Searchers are Less Decided Wireless shoppers who search on non-branded terms seek more information, likely still undecided on brand. Research Sessions Pageviews Non-Branded 28 430 Searchers Branded 19 276 Searchers Difference 1.5x 1.6x Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 15 Average Volume of Sessions and Pageviews among Searchers by Term Category Among Wireless Searchers who reach a shopping cart at a Big-4 site , Q1 2008. Sessions and Pageviews occurred on Wireless Carrier, Agent, OEM and Research web sites.
  16. 16. Many Shoppers Click Only Once or Twice 43% of qualified searchers click only once or twice on wireless sites, while over one third click 5 or more times. Wireless Shoppers Search Behavior 30% 24% 43% 19% 20% 13% 13% 10% 9% 7% 5% 4% 3% 3% 0% 1 2 3 4 5 6 7 8 9 10+ Number of Search Referrals to Wireless Sites Source: Wireless Shoppers Study, Google & Compete Distribution of Search Referrals – Number of Search Referrals Wireless Shoppers Conduct in the 30 Days prior to reaching Google Confidential and Proprietary 16 Shopping Cart at Big 4 Carrier Site, Q1 2008
  17. 17. Are all mobile phone buyers the same? - Online and In-Store Buyers - Searchers and Non-Searchers
  18. 18. Online and In-Store Buyers Channel Choice Mirrors Customer Need Wireless buyers purchase online for convenience, while immediacy of usage and customer service drive in-store sales. Reasons for Buying Online or In-Store Online In-Store Easier 51% Needed phone now 42% Shipped to me 45% Talk to salesperson 41% Needed to hold phone 36% Special deal online 45% Faster 29% Better price 43% Easier 29% Faster 36% No shipping cost 21% Avoid salesperson 25% Special deal in store 19% Better selection 20% Was in store already 19% 0% 20% 40% 60% 0% 20% 40% 60% Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 18 Q1: Why did you buy offline rather than online? Please select all that apply. Asked of Offline Wireless Buyers N=819 Q2: Why did you buy online rather than offline? Please select all that apply. Asked of Online Wireless Buyers N=438, May 2008
  19. 19. Online and In-Store Buyers Only 6% of Wireless Sales Are Made Online… …But 74% of in-store buyers conduct their research online. Source: Wireless Shoppers Study, Google & Compete Wireless resources used. Asked of recent Wireless Buyers using either online or offline research, N=1,044, Offline Buyers N=633, Online Buyers N=411, May 2008 Google Confidential and Proprietary 19 Source: 6% of Wireless gross add orders are made online. Calculated by dividing Compete’s observed quarterly Big-4 online gross add order total by total reported Big-4 gross add orders
  20. 20. Online and In-Store Buyers In-Store Buyers Search Like Online Buyers In-Store buyers use search in their wireless research process with the same frequency as online buyers Percent Who Search During Their Online Research 26% 22% Online Buyers In-Store Buyers Source: Wireless Shoppers Study, Google & Compete Wireless resources used. Asked of recent Wireless Buyers using either online or offline research, N=1,044, Offline Buyers Google Confidential and Proprietary 20 N=633, Online Buyers N=411, May 2008 Note: Online Buyers 19 sessions In-Store Buyers 20 sessions, Online Buyers 309 pageviews In-Store Buyers 341 pageviews
  21. 21. Searchers and Non-Searchers Searchers Want More Sophisticated Handsets Searchers are high-end customers. They seek more functionality, are specific about the handset and spend more money on their phones. Bought a New Phone to Get Purchase Decision Was More Functionality Based on Phone Over Service Carrier **33% 22% **28% 23% Searchers Non-Searchers Spent over $100 on Phone **27% 20% Source: Wireless Shoppers Study, Google & Compete Q1: How much of your recent purchase was based on the specific phone vs. the specific carrier? Asked of Recent Wireless Buyers N=1,257 Q2: Why did you set out to make a cell phone purchase? Select all that apply. Asked of Recent Wireless Buyers not purchasing their first phone Google Confidential and Proprietary 21 N=1,217, Q3: How much did you pay (after any rebates) for your current cell phone (not including the cost of your monthly plan)? Asked of Recent Wireless Buyers N=1,257 May 2008 Note: ** indicates Statistical Significance at the 95% level
  22. 22. Searchers and Non-Searchers Searchers Are More Valuable Customers Wireless buyers who use Search in the research process use more value-added services on their phone Activities Performed on Cell Phone Searchers Non-Searchers Use the internet *38% 31% Send email *38% 29% Download and purchase digital media *24% 16% Download and purchase applications **23% 13% Watch Mobile TV *16% 9% Source: Wireless Shoppers Study, Google & Compete Q: On average, how often do you do each of the following on your cell phone? Google Confidential and Proprietary 22 Asked of Recent Wireless Buyers N=1,257, Searchers N=297, Non Searchers N=960, May 2008 Note: * indicates statistical significance at the 90% level, ** indicates statistical significance at the 95% level
  23. 23. Searchers and Non-Searchers Searchers Spend More Time Researching Searchers give more consideration to the wireless purchase, making them more open to influence. Amount of Time Spent Researching Purchase 59% 43% 29% 28% 25% 16% 28% One or two days More than two days, but More than a week less than a week Searcher Non-Searchers Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary 23 Q: How much time did you spend researching your recent cell phone purchase? Asked of Wireless Buyers N=1,257, Searchers N=297, Non Searchers N=960, May 2008
  24. 24. Searchers and Non-Searchers Searchers Seek More Information from Your Sites Searchers are more engaged visitors to your site, consuming more wireless content than non-searchers. Research Sessions Pageviews Searchers 23 405 Non-Searchers 16 237 Difference 1.4x 1.7x Source: Wireless Shoppers Study, Google & Compete Google Confidential and Proprietary Average Volume of Sessions among Searchers by category, Q1 2008. Average Volume of Pageviews among Searchers by category, Q1 2008. Sessions and Pageviews occurred on Wireless Carrier, Agent, OEM and Research sites.
  25. 25. Summary Findings 1. Shoppers Can Be Influenced In the Research Process • Shoppers are uncertain at the onset and are open to influence • Be omnipresent in the marketplace, as purchase decisions are made quickly 2. Search Drives Prospects to Your Site • Ensure enough Share of Voice to capture those that only click 1 or 2 times • Develop a strategy to reach undecided buyers who search on non-brand terms 3. In-Store Buyers Use Search, Just Like Online Buyers • Use Search to target online buyers and in-store buyers • Consider how in-store sales factor into the ROI of your Search investment 4. Searchers are More Valuable Customers • Use Search to attract high spenders and heavy data users • Tailor key words and messaging to meet interest in high-end phones Google Confidential and Proprietary 25 Source: Wireless Shoppers Study, Google & Compete
  26. 26. Q&A Sara Kleinberg, Google Head of Marketing, Technology Karen Parker, Compete, Inc. Managing Director, Telecom & Media
  27. 27. Appendix
  28. 28. Glossary of Key Terms Wireless Prospect: an in-market wireless consumer at a Big-4 carrier site who exhibits shopping and researching behavior, but does not log in or do any customer-centric activities. Wireless Gross Adds: a metric reported by Big-4 wireless service carriers as well as smaller wireless service carriers that denotes the number of new lines of service added each time period. Gross add volumes do not include upgrade or replacement purchases made by existing customers. Search Referral: Occurs when a wireless shopper enters a query at a major search engine and subsequently reaches a wireless web site as a direct result of that query. Wireless web sites include: • Wireless Service Carrier web site • OEM web site • Agent web site • Research web site (i.e., blog, forum, etc.) Search Query: Occurs when a wireless shopper enters a query at a major search engine but does not necessarily click on it to reach a wireless-specific site Search Term Buckets: Compete and Google separated search terms into two buckets, branded (Verizon cell phone, Motorola enV, etc.) and non-branded (wireless phone, 3G Google Confidential and Proprietary 28 handset, etc.)

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