The new pathways to purchase in the world of networked consumers


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Director Lee Rainie lectured at New York University about the impact of digital technologies on the ways that people get advertising and relate to corporations. He discussed how the environment for ad messaging has changed in a world where many technology users expect to be able to monitor brands, chat with corporate representatives, and use social media to describe their shopping experiences and the quality of their purchases.

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  • * Across the consumer’s decision journey, the influence of different touchpoints varies * The traditional elements of company-driven marketing and the consumer’s previous brand experiences dominate entry into the consumer’s initial consideration set (this is the set of brands consumers are first thinking about when triggered to purchase) * However, Consumer-driven marketing, such as wom and online, take over as consumer evaluate their options. This makes it crucial for companies to actively manage a new set of touchpoints * At closure, the importance of in-store interactions can be seen.
  • Not only are we connecting in singular ways we are increasingly multi tasking our consumption. Consider that nearly 60% of Americans use TV and the internet simultaneously Pete: This slide of yours could fit here, if you like.
  • Most importantly, mobile connectivity changes people’s sense of time and their allocation of attention to media. They can exist in three separate zones of attention depending on their circumstances, frame of mind, and needs. Continuous partial attention / multitasking – perpetually interruptable and interrupting Deep dives – the rise of amateur experts who can find out anything about subjects that matter to them. The special case is health research. Info-snacking – this is particularly enabled by mobile because it allows people to get little info-hits when they are in transactional situations or when they have “micro-boredom” to kill Mobile also adds to the number of media zones that people can inhabit, again, reflecting their circumstances, frame of mind, and needs Social zone – what are my friends doing; telling them what I’m doing: highly interactive and involves disclosure of interests of the moment – direct cues about where attention and intentions are focused – people take direction from the people in their social networks about what to examine Immersive zone – 1) gaming and 2) couch potato space – less interruptable and less interested in being interrupted, more attentive to media and more disrupted (unhappily) by interventions Streams – this is the zone people are in when they want to “catch up” with news or developments. Similar to the social zone, but more open to media inputs from organizations …. Checking for “headlines” of all kinds …. Less annoyed at relevant commercial information – indeed “networked information” is a hallmark of this zone Creative / participatory zone – this is the place where people create content to share online…. They comment on / rank /rate the media they’ve experienced; they remix it at times. Commercial messaging is part of the play and participation environment. This is “conversational” space for commercial messaging and there are opportunities and dangers. This is where the most engaged customers are: they can be evangelists OR provocateurs, depending on their mood and the way they encounter brands.
  • WHO: John KEY MESSAGE: "So...if we have an explosion of CGM in the marketplace, and it often has a higher trust factor that paid media, we need to think critical about how to EARN more CGM. After all, it doesn't just occur in a vacuum, and you just can bet the bank on some overnight viral buzz hit. It needs to be earned. Here's a framework for thinking about this. If you look to the right, one thing we're consistently finding in Nielsen online analysis is that certain so-called "talk drivers" such as experience and customer service are influencing earned media output. For examples: - Great service from Best Buy employees in the store aisle of then generates positive reviews or comments online - Terrific customer service by consistenly bleeds into Twitter streams - Apple's terrific website -- complete with video demos and easy instructure -- preciipitates a digital train of commentary. In other cases, earned media can be facilitated though the focused nurturing of key-influencers like "Power Moms" or "Gadget Guys." What's key here is that brands invest the time to really understand which segments trigger conversation with other consumers. It varies by category and type of issue. It's alway worth keeping in mind that "earned media" is often triggered by good old fashioned advertising. Twitter, for example, has significantly ramped up the total volume of comments around TV shows. Just a couple nights ago, for example, the Twitter airwaves were flooded with real time snippets and short-form comments about virtually every aspect of the TV show Mad-Men. So it's not one or the other. The new rules of media mix modeling suggest that we need to understand how the paid and earned compliment or reinforce one another. Let me add one more critical point. Earned media is often negative...and quite damaging. I know many of you have experienced this. What's critical is that we have a solid understanding of the cause/effect. If, for instance, we know that uninformed employees beget online venom, we might actually rethink key investment decisions. One big reason why many CPG companies are taking a fresh look at "Consumer Relations" is that they understand the cause/effect between the brand welcome mat and "earned media."
  • Retailers stepped up the use of technology in their stores to create convenient consumer solutions as well as to target promotions as consumers enter or shop a store. Food Lion’s bloom format allows shoppers to use hand-held scanning devices to scan their own purchases & avoid lengthy waits at check-out. Ahold’s Stop & Shop uses on-cart scanners to allow shoppers to scan their purchases & keep a running total of each trip. It also makes a “cha-ching” noise when a product is purchased that includes a store deal. The devices also allow manufacturers to buy programs to promote products on the display screen imbedded in the device. Other retailers are deploying in-store kiosks which allow shoppers to scan their loyalty cards & receive targeted coupons based on their prior purchase behavior in the chain. And shoppers can also stop at a kiosk at the front of the store & order their deli selections & pick them up on their way by that department. And, the state of Pennsylvania is testing a self-serve wine kiosk. “The vending machines to be used hold up to 500 bottles of 50 different wines, with assortments to be determined by location. In addition, the machines will be designed to prevent sales to underage purchasers or individuals with a blood-alcohol level at or above .05 percent.” Other retailers have deployed vending machines at airports and in and outside of retail stores to allow shoppers to buy fairly expensive electronics (e.g., Best Buy) or to rent movies (e.g., Redbox). Look for more of these devices as manufacturers and retailers look to engage shoppers in new locations.
  • Director
  • The new pathways to purchase in the world of networked consumers

    1. 1. 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
    2. 2. Implication: A New Consumer Decision Journey to Manage INITIAL CONSIDERATION: PURCHASE: POST-PURCHASE EXPERIENCE: ACTIVE EVALUATION: <ul><ul><li>Consumer starts with 1.5 brands in mind, influenced by previous trial and word of mouth </li></ul></ul>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
    3. 3. Where Social Media Fits in to the Mix 3 22 Friending the Social Consumer Most influential touchpoints <ul><li>Company-driven marketing </li></ul><ul><ul><li>Traditional advertising </li></ul></ul><ul><ul><li>Direct marketing </li></ul></ul><ul><ul><li>Sponsorship </li></ul></ul><ul><ul><li>In-store advertising </li></ul></ul><ul><li>Consumer-driven marketing </li></ul><ul><ul><li>Word of mouth </li></ul></ul><ul><ul><li>Online research </li></ul></ul><ul><ul><li>Offline/print reviews </li></ul></ul>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
    4. 4. Your experiences -1 <ul><li>Smaller scale / impulse buys </li></ul><ul><ul><ul><li>Piece of music </li></ul></ul></ul><ul><ul><ul><li>App </li></ul></ul></ul><ul><ul><ul><li>Something off the shelf </li></ul></ul></ul><ul><li>Pew Internet findings in 2007 among music buyers: </li></ul><ul><li>83% find out about music from the radio, TV, or in a movie; </li></ul><ul><li>64% find out about music from family, friends, or co-workers. </li></ul>
    5. 5. PIP Consumer choice survey (2007)
    6. 6. PIP Consumer choice survey (2007)
    7. 7. PIP Consumer choice survey (2007)
    8. 8. Your experiences -2 <ul><li>Mid-scale products </li></ul><ul><ul><li>Cell phone </li></ul></ul><ul><ul><li>Clothes </li></ul></ul><ul><li>Pew Internet findings in 2007 among cell buyers: </li></ul><ul><li>59% ask an expert of salesperson for advice; </li></ul><ul><li>46% go to one or more cell phone stores. </li></ul>
    9. 9. PIP Consumer choice survey (2007)
    10. 10. Your experiences -3 <ul><li>Life-altering “investments” </li></ul><ul><ul><li>Real estate – apartment hunting </li></ul></ul><ul><ul><li>College choice </li></ul></ul><ul><ul><li>Car </li></ul></ul><ul><li>Pew Internet findings in 2007 among real estate shoppers (homes and apartments): </li></ul><ul><li>49% look at ads in the newspaper; </li></ul><ul><li>47% ask a real estate agent for advice </li></ul>
    11. 11. PIP Consumer choice survey (2007)
    12. 12. PIP Consumer choice survey (2007)
    13. 13. PIP Consumer choice survey (2007)
    14. 14. Digital Revolution 1 Internet (78%) and Broadband at home (62%) 65% 62%
    15. 15. Networked creators among internet users <ul><li>65% are social networking site users </li></ul><ul><li>55% share photos </li></ul><ul><li>37% contribute rankings and ratings </li></ul><ul><li>33% create content tags </li></ul><ul><li>30% share personal creations </li></ul><ul><li>26% post comments on sites and blogs </li></ul><ul><li>15% have personal website </li></ul><ul><li>15% are content remixers </li></ul><ul><li>14% are bloggers </li></ul><ul><li>13% use Twitter </li></ul><ul><li>6% location services – 9% allow location awareness from social media – 23% maps etc. </li></ul>
    16. 16. Impact on shopping <ul><li>Shopping is a “full contact” sport throughout its phases: </li></ul><ul><ul><li>Research phase </li></ul></ul><ul><ul><ul><li>60% of all Americans do research online about products </li></ul></ul></ul><ul><ul><li>Purchase phase </li></ul></ul><ul><ul><ul><li>55% of all Americans made e-purchases; 51% travel reservations </li></ul></ul></ul><ul><ul><li>After-purchase phase </li></ul></ul><ul><ul><ul><li>37% rankings and ratings; another quarter describe their shopping experiences </li></ul></ul></ul>
    17. 17. So what for brands? <ul><li>The Bermuda Triangle </li></ul><ul><ul><li>Markets are fractured </li></ul></ul><ul><ul><li>Marketplace is roiled </li></ul></ul><ul><ul><li>Metrics haven’t kept pace </li></ul></ul><ul><ul><li>Too much noise </li></ul></ul><ul><li>Brands are co-owned by advocates /acolytes </li></ul><ul><ul><li>Best of times - sanctuaries </li></ul></ul><ul><ul><li>Worst of times - #fail </li></ul></ul>
    18. 18. Digital Revolution 2 Mobile – 84%
    19. 19. Mobile internet connectors – 63% adults
    20. 20. 35% own “smartphones”
    21. 21. 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.
    22. 22. 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
    23. 23. 59% of Americans use TV and the Internet Simultaneously Dramatically More Cross-Platform / Media-Mixing Source: Nielsen Three-Screen Report
    24. 24. Impact of mobile connectivity on shopping <ul><li>Just in time information </li></ul><ul><ul><li>Where can I get a deal? </li></ul></ul><ul><ul><li>Price comparisons </li></ul></ul><ul><li>“ Networked info” packed into the shopping experience </li></ul><ul><ul><li>QR (quick response) codes </li></ul></ul><ul><li>Announcement and validation of purchase </li></ul><ul><ul><li>Sharing the shopping story </li></ul></ul>
    25. 25. So what for brands? <ul><li>Attention zones </li></ul><ul><ul><li>Continuous partial attention </li></ul></ul><ul><ul><li>Deep dives </li></ul></ul><ul><ul><li>Info-snacking </li></ul></ul><ul><li>Media zones </li></ul><ul><ul><li>Social </li></ul></ul><ul><ul><li>Immersive </li></ul></ul><ul><ul><li>Streams </li></ul></ul><ul><ul><li>Creative / participatory </li></ul></ul><ul><ul><li>Study / work </li></ul></ul>
    26. 26. Digital Revolution 3 Social networking – 50% of all adults
    27. 27. What does this mean? <ul><li>Social networks are more influential and institutions less influential - 1 </li></ul>Sentries
    28. 28. What does this mean? Evaluators Social networks are more influential and institutions less influential - 2
    29. 29. What does this mean? <ul><li>Social networks are more influential and institutions less influential - 3 </li></ul>Audience = New media are the new neighborhood
    30. 30. Impact of SNS on shopping <ul><li>Purchasing can be group activity </li></ul><ul><li>“ Consumer cartels” arise (Groupon, Living Social) </li></ul>
    31. 31. 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
    32. 32. 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
    33. 33. 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?
    34. 34. Social Commerce Ecosystems Implication: Death (or erosion) of Web Sites
    35. 35. 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
    36. 36. 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
    37. 37. Implication: Rise of Consumer Cartels Source: Nielsen Consumer Channel Preference Study ‘09
    38. 38. 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
    39. 39. 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
    40. 40. Looking Ahead Source: Nielsen
    41. 41. 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
    42. 42. 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
    43. 43. Things to watch <ul><li>Content metering online – new media business models </li></ul><ul><li>Enhanced tech – 3-D </li></ul><ul><li>New attention research – Nielsen and Coalition for Innovative Media Measurement </li></ul><ul><li>Privacy debates </li></ul><ul><li>Net neutrality debates </li></ul><ul><li>Spectrum allocation debates </li></ul><ul><li>Rise of the “internet of things” </li></ul>
    44. 44. <ul><li>Thank you! </li></ul>