Text 100 Consumer Electronic Index Asia-Pacific

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This report is the fourth in a series of Digital Indexes developed by Text100, a global communications agency. These Digital Indexes are designed to investigate the change in how and where buyers gain influence in sectors where there has been significant disruption caused by changes in technology and communications.

This latest index delves into how consumers are gaining influence as they consider buying consumer electronics. The consumer electronics buying journey has been dramatically disrupted and was one of the first sectors to adopt a heavy ecommerce presence. But, over the last two years additional information and purchase platforms have accelerated the change. Fundamental shifts in technology, business and society have accelerated how we go about fulfilling four very basic human needs: communication, collaboration, creation and consumption. Today, consumers expect a connected and consistent shopping experience across bricks and mortar, desktop, laptop, mobile, apps, social sites, magazines and many other platforms.

Find the original report and press release here:

http://www.text100.com/consumer-electronic-index-asia-pacific/

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Text 100 Consumer Electronic Index Asia-Pacific

  1. 1. TEXT 100 CONSUMER ELECTRONIC INDEX: ASIA-PACIFIC
  2. 2. Introduction This report is the fourth in a series of Digital Indexes developed by Text100, a global communications agency. These Digital Indexes are designed to investigate the change in how and where buyers gain influence in sectors where there has been significant disruption caused by changes in technology and communications. Previous indexes have provided data on influence and how people are buying in the automotive, energy and travel and tourism sectors. This latest index delves into how consumers are gaining influence as they consider buying consumer electronics. The consumer electronics buying journey has been dramatically disrupted and was one of the first sectors to adopt a heavy ecommerce presence. But, over the last two years additional information and purchase platforms have accelerated the change. Fundamental shifts in technology, business and society have accelerated how we go about fulfilling four very basic human needs: communication, collaboration, creation and consumption. Today, consumers expect a connected and consistent shopping experience across bricks and mortar, desktop, laptop, mobile, apps, social sites, magazines and many other platforms. These platforms have given people greater access to information from vendors, media celebrities, peers or anyone, at any time, to influence their decision to buy. How consumers are able to make their purchase has also increased dramatically. This led us to the question: Has the proliferation of information, influence and ways to purchase changed consumer buying patterns? We decided to focus our research on the consumer electronics sector. Along with our research partner Redshift Research Text100 took a deep dive into three subsets of the growing consumer electronics sector: - Smart Devices and Wearable Technology - Gaming, Apps and Software; and - Traditional Electronics and Home Appliances. Our aim was to understand how the buyers’ journey has changed, what kind of information consumers want, where they go to get it and when they need it the most. 2
  3. 3. Our findings showed that 68% of respondents have already decided what they will purchase before they step into a store or visit an e-commerce site. This is based on extensive research conducted offline and online. Even though consumption of smart devices and the use of multiple online platforms has grown significantly in Asia (specifically mobile), offline word-ofmouth and media (broadcast and print) still has equal influence as a vendor’s website and online sharing/testimonials and reviews. Influence varied by sector and country through across the region, celebrity endorsements had more influence in gaming, apps and software and smart device decisions than in traditional electronics and home appliance purchases. Bricks and mortar retail is not dead to the consumers that were surveyed. But, the store needs to be part of an omni-channel strategy where consumers can connect and consume information and make purchasing decisions in a consistent and connected way. . This report looks at ten top observations drawn from our Asia-Pacific wide survey. Our hope is that by understanding the buyers’ journey better and by taking a less platform centric and more connected and consistent content approach brands will be able to engage their audiences at every stage of the shopping journey. Doing so will define the difference between being in the market and leading it. 3
  4. 4. About the study This installment of the Text100 Digital Index focuses on where people in Asia who are purchasing consumer electronics devices and appliances gain influence. The study seeks to understand the most influential information sources and topics as a person moves through each stage of the buying journey: awareness, intent, action, confidence and finally advocacy. THE BUYING JOURNEY It considers how these information sources and topics vary in importance at each of the various stages of the consumer journey across each country and in one of three sub sectors of the consumer electronics sector: namely Smart Devices and Wearable Technology; Gaming, Apps and Software; and Traditional Electronics and Home Appliances.  The findings are based on online interviews conducted in October 2013 with 2,023 respondents across seven locations: Australia, China, Hong Kong, India, Malaysia, Singapore and Taiwan.  There was a balanced sample across age and gender.  The research was conducted by Redshift Research. 4
  5. 5. Top 10 Observations 1. 2 in every 3 consumers end up buying what they research On average, 68 % of consumers across all sectors will purchase the product they have been researching. This varies little by age and demonstrates the importance of the “awareness” stage in the final decision to buy. Consistent and connected, up-to-date information and content needs to be available to consumers across multiple platforms. In the purchase of Gaming, Apps and Software, people discover products on social media sites at the awareness stage and only go to retail outlets once they have the necessary information to make the purchase. Price (37%), customer reviews (36%), compatibility (33%) and accessories (32%) are the top research topics for gaming, software and apps. AWARENESS Offline word of mouth Social media (online word of mouth) Personal experience Traditional media Online specialist and technical sites Online price comparison and consumer sites Manufacturer’s website Visit to a retail outlet 36% 34% 33% 33% 30% 27% 22% 21% INTENT Offline word of mouth Social media (online word of mouth) Personal experience Traditional media Online specialist and technical sites Online price comparison and consumer sites Manufacturer’s website Visit to a retail outlet 37% 33% 37% 33% 35% 28% 26% 26% Word-of-mouth (57%) and media (50%) rate highly as an information resource at the awareness and intent stage for Smart Devices and Wearable Technology purchases. Word-ofmouth declines to 51% and media declines to only 35% during the action and confidence stages. The retail outlet takes on a larger role once the action is taken. Product specifications (61%), purchase price (60%) and customer reviews (55%) topped information topics researched prior to action. 5
  6. 6. In the awareness and intent stages of purchasing Traditional Electronics and Home Appliances, visits to retail outlets (43.5%) and the media (41%) were the most popular information sources. This was the only sector that the media and retail topped the sources. Media becomes less important once the decision is made, but the retail outlet stays key suggesting that this is still the number one destination for information and purchasing of traditional electronics and appliances. 6
  7. 7. 2. Smart Devices and Wearable Technology could be this year’s holiday hot sellers More than 80 per cent of all respondents are currently looking to purchase Smart Devices or Wearable Technology; 55% of respondents are looking to purchase Gaming, Apps or Software; and 47% plan to purchase more Traditional Electronics or Home Appliances. 82% 55% 47% This is particularly the case in China with more than 90% looking and in Australia where 80% are looking to purchase Smart Devices or Wearable Technology in the next 12 months. And for those in the 25-34 year age bracket, their propensity to purchase, and do so in all three categories in the next 12 months, is very high. 90% 60% 65% 7
  8. 8. 3. The Gaming, Apps and Software decision process is the quickest Consumers are 20% more likely to make a purchase decision within one week of becoming aware of the need for Gaming, Apps and Software than for other consumer electronics products. This compares with the average consumer electronics purchase taking within a month of the buyer becoming aware of needing a product. This suggests the time which such brands have to inform and convince people to purchase a product is shorter than any other consumer electronics device. The younger the target audience, the more sources and topics they engage with and search, particularly in the early stages. 18-24 year olds predominantly use social media sites and online web reviews and price/comparison sites to get information on gaming, software, devices and new apps. The younger demographic surprisingly also predominantly used retail outlets as the main source of information for traditional electronic products and appliances. 8
  9. 9. 4. Justifications for purchase vary significantly Why do we buy things? The research found that consumers justify their purchases differently depending on what sort of technology they were buying and where they’re located. In general Malaysian respondents use more reasons to justify their purchases particularly in the Smart Devices and Wearable Technology sectors. a. For Smart Devices and Wearable Technology, the most common reasons for purchase are to take advantage of improved functionality (58%) or replacing older versions (61%). Slightly less important (but still of significant importance) was staying trendy or current (49%). Those aged 18-24 were more likely to purchase replacements for broken devices (56%) than the total survey group, and were also more likely to buy because an item was the newest / latest version (59%). b. The top reasons for purchasing Gaming, Apps and Software are newness (37%), testing if a product suited the buyer’s fancy (33%), and recommendations from friends (35%). 18-24 year olds justified their purchases with more reasons than other age groups; and are more likely to purchase products recommended by a friend than the total group. c. The most common reason people invest in Traditional Electronics and Home Appliances is to replace something that is broken (47%), followed by purchasing in a style that fits with the home (38%). The style conscious 1824 year olds were as likely to buy a new appliance if the old one was broken (41%) or to match the rest of the domestic landscape (41%). 9
  10. 10. 5. Online and offline Word-of-Mouth hold equal sway No matter the stage of the buyers’ journey, word of mouth was the most important information source across all the different stages for the Gaming, Apps, and Software and Smart Devices and Wearable Technology sectors. Offline Word of Mouth Online Word of Mouth Gaming, Apps and Software 35% 32% Smart Devices and Wearable Technology 54% 45% Traditional Electronics and Home Appliances 37% 26% In the awareness stage, online sharing (35%), online specialists (35%) and personal experiences (40%) also all ranked highly in all sectors, with retail rising in importance for Smart Devices and Wearable Technology. That suggests brands need to invest in providing individually-tailored advice and “subject matter expertise” to their audiences: by doing so, they can tap into the word-of-mouth cycles that already make or break the majority of purchases. Of all the countries in the survey, consumers in Malaysia and India use social media and online peer recommendations rather than offline word of mouth recommendations. Hong Kong consumers also use online news, review and price comparison sites extensively. 10
  11. 11. The exception was Traditional Electronics and Home Appliances, where broadcast media (43%) was the most important at the “awareness” stage of the journey. For the other stages, in the purchase of more traditional electronics, retail outlets (45%) comprised the most important point of influence; word-of-mouth (38%) and personal experiences (37%) continued to have substantial influence throughout the remainder of the journey. Retails outlets are much less important to Chinese respondents compared to the rest of Asia. Online news, lifestyle and price comparison websites are the information source most used in China for the purchase of any consumer electronics device. a. Gaming, Apps, and Software o Online sharing was less important in the action and confidence (29%) stages versus the awareness and intent (34%) stages o Information on price and compatibility is important at the beginning, but less so as consumers progress. Consumers do expect accessory information early on, though. b. Smart Devices and Wearable Technology o Word of mouth (57%) is the most significant source of influence in the awareness and intent stages o Personal experience (57%) is important at “intent” stage. o Manufacturers’ websites are particularly important. o Consumers expect all information at “awareness” stage, including guarantees / warranties, compatibility, accessibility, and tech support. c. Traditional Electronics and Home Appliances o One big difference is that consumers use about the same number of sources at the “confidence” stage as during the “awareness” stage. o Retail important throughout the decision-making process. o More than half expect to hear about guarantees and warranties at the “awareness” stage. 11
  12. 12. 6. Purchase price, customer reviews and product specs were the top topics of interest There were only minor differences in the top information types that people looked for across the various sub sectors. 50% of people most wanted to know about purchase price at the awareness stage, 72% at the intent stage, 48% at the action stage and 42% at the confidence stage. Consumers in Hong Kong and Singapore were the most price conscious of all respondents. Peer reviews (43%) were very important to those buying gaming software and apps in the 18-24 year old group. Whereas, only 36% of the total surveyed said customer reviews were a key topic of influence. Product specifications take on greater importance when consumers look to purchase Smart Devices and Wearable Technology (56%). Product specifications for Gaming, Apps and Software (34%) and Traditional Electronics and Home Appliances (43%) were not as significant. The only sector where celebrity endorsements (32%) seemed to make an impact is in the Smart Devices and Wearable Ttechnology sector with the 18-24 year olds. In the Gaming, Apps and Software sector (16%) and in the Traditional Electronics and Home Appliances sector (17%) celebrity endorsements were not rated highly amongst all respondents. Consumers across all sectors are more concerned about the practical details of consumer electronics, seeing and hearing what others’ experiences are rather than hearing about celebrities using the devices. 12
  13. 13. 7. Omni channel crucial to young adults In general, those aged 18-24 use more information sources and search for more topics. In particular, this group sources information from social media sites (26%) and online review and technical sites (27%) when purchasing Gaming, Apps and Software and Smart Devices or Wearable Technology. Overall, they are using more information sources than the other respondents at the intent and confidence stages. The top information sources on customer reviews for the smart devices and new technology sector are: social media sites, word of mouth, specialist online web sites, general web sites, visits to retail outlets, the manufacturers’ web sites, traditional media and personal experience. 13
  14. 14. 8. Potential growth in second hand economy People are more open to purchase Gaming, Apps, or Software second-hand than other subcategories. 36% of respondents would purchase second hand Gaming, Apps or Software versus 23% for Smart Devices and Wearable Technology and 24% for Traditional Electronics and Home Appliances. The propensity to purchase brand new or second hand does vary by age and location. In Taiwan consumers were as likely to purchase second hand as they were to purchase new. Taiwan respondents were also those most likely to purchase because their old device or appliance had broken. Those in the 25-34 age group are most likely to purchase new (76%). Those most likely to purchase second hand are in the 18-24 group (72%) and in the 55+ age group (67%). Taken together with the finding that online sharing and peer reviews are relatively important in choosing Gaming, Apps or Software, brands may do well to support and engage with userbased trading of products and experiences – rather than making enemies of consumers by clamping down on their behaviours. 14
  15. 15. 9. Early Adopters act faster with more data In all of the markets, there tend to be certain individuals who will test, purchase, and advocate new technologies at a faster and more frequent rate than others. The study found that, cultural nuances notwithstanding, these individuals tend to be males who are around 35 years of age. And while these early adopters have a higher propensity to buy electronic goods in all product areas, they are especially likely to buy Gaming, Apps or Software: 65% plan to do so in the next 12 months, compared to just under-50% in all of APAC. In addition, 86% of 25-44 year olds are likely to purchase Smart Devices and Wearable Technologies versus 75% over the age of 45. Across all markets, males are more likely to be solely responsible for purchasing technical devices (56%). In particular in Australia, the male householder is heavily involved in the consumer electronics decision making process. Early adopters – who often fill the role of trusted advisor for their family and friends’ purchases – are more likely to make fast decisions on purchases than your typical APAC consumer. 68% of those under 45 years of age are often asked to give advice for others making technology related purchases. They are also likely to consult more information sources during this decision window. That means brands need to act faster, and provide more comprehensive information, if they are to engage this critical demographic of influence. 15
  16. 16. 10. Online advocacy – not the whole picture? When it comes to consumers who regularly share their experiences of products, they are more likely to post online about their positive experiences than their negative ones. 40% of respondents said that they share positive feedback with friends and family, 25% on a social media site and 24% said they write positive reviews. Only 33% share negative feedback with friends, 18% on social and 20% write negative reviews. As a result, brands should be wary about judging the impact of their campaigns solely through digital metrics: assessment should equally take into account the word-of-mouth feedback which is, in fact, the most common way through which influential consumers share their expertise. The challenge for brands is how to measure this offline word of mouth; or interpret the online feedback in a manner which better reflects the overall state of play. 16
  17. 17. Conclusion In this Consumer Electronics Digital Index, we set out to find out how the buyers’ journey has changed, where influence is sourced when making purchase decisions, what information is relevant and when brands are best placed to engage with consumers. Our findings showed that 68% of respondents will purchase following research . This decision is based on extensive research both offline and online. Those below the age of 24 are researching more than any other age group and those purchasing Traditional Electronics and Home Appliances are the only decision makers not predominantly influenced by word-of mouth. Instead media plays a key role at awareness and intent and the retail outlet is key at the action and confidence stages. Nuances exist across different markets, but overall word-of-mouth, peer recommendations and customer reviews are the key influences at the awareness and intent stage. The retail outlet becomes increasingly important during the action and confidence stages. Bricks and mortar retail is not dead to the consumers that were surveyed. But, the store needs to be part of a broader strategy where consumers can engage and consume information and make purchasing decisions in a consistent and connected way. Brands need to recognise that despite the similarities in where, when, and why consumers seek out information – particularly in the predominance of word-of-mouth and its digital equivalents, like forums and reviews – it’s the nuances of behaviour which really impact their brand-building strategies. Content should be central to the integrated customer engagement strategy for these brands. This study reinforces the opportunity for content to drive behaviour before making the purchase decision; it also demonstrates why brands need to understand how owned, earned and paid content can (and must) work in harmony. But more critically it illustrates that not all content is created equal: where and when it’s placed always determines how effectively it informs and accelerates a decision or supports a branding initiative. 17
  18. 18. A Note on Design The “heroes” which illustrate this report were designed to reflect the 8-bit graphic design style used predominantly in 1980s and 1990s video games. 8-bit’s resurgence in popular culture has reflected a growing interest in “retro” electronics products and, like our study, suggests the truth to the adage that “everything old is new again”. 18
  19. 19. APPENDIX: COUNTRY SUMMARIES China o More than 90 per cent of Chinese people are looking to purchase Smart Devices or Wearable Technology within the next 12 months. o Retail outlets are much less important (30—40%)to Chinese respondents compared to the rest of APAC (up to 50%): “online general” (e.g. news, lifestyle and price comparison websites) is the information source the Chinese use most when researching these product types. o The “intent” stage, in the majority of cases, is as or more important than the “awareness” stage whereas for APAC in general, this is the opposite. India o In contrast to the regional findings, Indians place less importance on word-of-mouth when researching Traditional Electronics and Home Appliances (33%). However they do rely heavily on what may be termed the ‘modern word-of-mouth’ – online sharing – particularly when researching Smart Devices and Wearable Technology (49%-56%). o In keeping with the overall APAC findings, broadcast media becomes less important the further along the decision journey, especially when purchasing Traditional Electronics and Home Appliances (decrease from 51% to 32%) and Smart Devices and Wearable Technology (decrease from 59% to 43%). o When it comes to Smart Devices and Wearable Technology, ‘online sharing’ is the most important source post the awareness phase at more than 50%. Technical support information (60%) is sought after at the awareness stage for this sub sector, along with guarantees and warranties and purchase price. Australia o 1 in 5 Australians are not looking to purchase any of these product types within the next 12 months, which contrasts heavily to other parts of the region. 19
  20. 20. o Australians rate visits to retail outlets highly (in the top three sources) throughout the audience journey and perhaps more so than many other nations in the survey, especially when considering Gaming, Apps and Software products. o Within Australian households it is common for the husband/male partner to be heavily involved in the decision-making process for consumer electronics purchases. Malaysia o In general Malaysians use more reasons to justify purchases, particularly in the Smart Devices/Wearable Technology sub sector. o Malaysians tend to use online sharing more (up to 70%) for Smart Devices and Wearable Technology and Gaming, Apps and Software and rely less on the traditional ‘word of mouth’ than other APAC countries, particularly for Traditional Electronics and Home Appliances (27-42%). o Malaysians rank visits to retail outlets as the most important source for particular topics of information (up to 45%), such as accessories, delivery options, guarantees and warranties, trials, price, running costs and tech support; and are most likely to view retail outlets as the key source in the action and confidence stages for all three sub sectors. Singapore o Singaporeans are less likely (only 38%) to be looking to purchase Gaming, Apps and Software in the next 12 months; but of those that are more than one third will make their decision to purchase within a week of researching. o For Smart Devices and Wearable Technology manufacturers’ websites rank as important as (accessories – 28%; guarantees and warranties – 29%; running costs – 22%) or even more important than (compatibility – 26%; product specifications – 30%) visits to retail outlets for particular topics in this sub sector. o For Traditional Electronics and Home Appliances, visits to retail outlets are by far the most important information source (52% at awareness and 53% at action). 20
  21. 21. Hong Kong o Over two thirds of respondents are the sole decision maker of tech purchases within the household. o The two most frequently used information sources for Hong Kong residents when researching information topics are “online general” sites, and retail outlets (predominantly for guarantees and warranties, product trials). The amount people from Hong Kong use these sources varies with the sub sector. For example these two sources are used almost equally for Smart Devices and Wearable Technology, whereas Hong Kong people are more likely to use online general sites when progressing through the Gaming, Apps and Software journey. For Traditional Electronics and Home Appliances, visiting retail outlets is the more frequently used source for information. o At all points of the decision-making journey and for all product types, purchase price is the most important topic (and more so in comparison to the total survey sample) Taiwan o For 2 in 3 purchases in Smart Devices or Wearable Technology, “Replacing something that has broken” is the key reason why Taiwanese respondents purchase. For APAC in general this is far less important. o Taiwanese respondents use a wide range of information sources when searching for certain information topics – however, most of these sources are online. o Almost three quarters of respondents are the sole decision makers when purchasing technological devices for the household; Taiwan residents are just as likely to purchase goods second-hand as they are brand new. 21

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