WPP Retail Event 4.0 20110531

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TNS presentation at the WPP Digital Retail 4.0 Event, 31st May 2011, London Stock Exchange

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  • Hello and good morning.My name is Raj Halabi from TNS and today I will be sharing with you some of the insights we’ve been uncovering on Digital Retail
  • We will be extracting these insights from Digital Life, which is TNS’ large global syndicated study into what consumers do online... And also from TNS Mobile Life – which provides a global understanding of what consumers across the world do with their mobiles.
  • Both of these studies share attributes that make them really special:Firstly - Truly global coverage. Mobile Life currently covers 43 markets and 34,000 consumers; Digital Life covers 46 markets and 48,800 digital consumers, representing a colossal 88% of the global internet populationSecondly – both surveys deploy methods that go ‘Beyond Behaviour’What do we mean by that? Well, as markets become more sophisticated and competitive it becomes increasingly important not only to understand what people do, but also about their needs, attitudes and motivations. The ‘emotional’ factors that make up he founding principles of connecting with consumers in the Digital Age. TNS has includes some of the best techniques in the industry within these surveys.Finally – both of these surveys address critical business issues... Enabling strategic and tactical planning at both global and local levels. Providing your organisations with robust platforms to drive internal change programmes. The surveys contain detailed detailed information across a multitude of topic areas, including market understanding, usage, brand and convergence. Something to most of the major information needs within a corporate insights function.
  • So today I will be sharing with you three stories around the online retail environment... The first one being around the interplay between online browsing and online shopping.-----------How do we define online browsing: Browsing for things to buy online or offline; e.g. consumer reviews, websites, search engines How do we define online shopping:Purchasing online, whether it be groceries, cinema tickets, clothing, gifts, flights or services
  • The first statistic I want to share with you is a reflection of the sheer scale of online browsing Nearly ¼ of the world’s online population browse online daily for products or services to buy… and these do not all come from developed markets. Amongst the top 10 markets most likely to browse online daily are markets such as Turkey, Thailand, Brazil, Saudi Arabia and the UAE. Countries where the internet is a relatively new experience, compared to some developed marketsPerhaps a more relevant figure is that 60% of the global online population actively browse online for product or services at least once a week or more. Consumer’s claim to spend 2.3 hours per week browsing online for products or services to buy. Only 13% claim never to browse online – and the highest proportions of these appear to come from Tier 2 emerging markets including many African countries where infrastructure and an underdeveloped online ecosystem still pose hurdles to growth.In the wider context, there are many other online activities, such as email or social networking that exhibit more frequent use, so there is still potential headroom for online browsing to grow further.---------------Source: Digital LifeI1: Frequency of online activities / OS3: Research sourcesBase: All respondents n=48804
  • When we investigatewhich locations online consumers are looking at during their pre-purchase browsing - branded channels still dominate over consumer-generated media such as user review sites, user reviews or comments on social networks.More generally, online browsers still also tend to consume a large proportion of information from offline sources as well. ------------Source: Digital LifeI1: Frequency of online activities / OS3: Research sourcesBase: All respondents n=48804
  • There is a considerable amount of variation here by category… Generally research in higher involvement/more complex categories tends to be more geared towards online only, whereas some of the more ‘everyday purchase’ categories tend to be skewed more towards offline.------------Source: Digital LifeOS3: Research sourcesBases: All respondents who purchased in category in L12M - varies by category, ranges from n=8058 to n=17349
  • Globally, 80% of online consumers claim to have purchased products/services online (ever), 36% claim to buy online at least weekly. It is definitely the case that consumers who research online are more likely to also buy online, but the conversion rate is not linear. Online research is of huge importance to driving offline sales as well. Over 60% of consumers who research a product/service online only end up buying offline.This is a clear signal that for consumers the online channel is not a silo. Success will be derived out of greater alignment of online activities with offline point of sale to drive conversion. It is important to create seamless and rich experiences that bridge online and offline.Better understanding how consumers inform themselves for purchases within your sector will help to maximise sales.We also need better metrics to measure the ROI of our online retailing activities as clearly online-only revenue sales will miss a great piece of the puzzle.-----------Chart referenceOnline only 61% 39% Both 66% 34%Offline only 82% 18%-----------Source: Digital LifeOS3: Research sources/ OS1: Source of purchaseBases: All respondents who purchased in category in L12M - varies by category, ranges from n=8058 to n=17349
  • The second story today looks briefly at how online shopping can be leveraged as an information channel to boost consumer engagement
  • The context to this is as follows. Many of us know first hand the consumer irritation that accompanies a spam email or a poorly designed online creative execution. A well designed and properly tested creative can have a great impact on the success of a campaign… but so can the time and place of the targeting Online shopping and pre-purchase browsing are the times when brands are most likely to have permission to engage with the consumer.Targeting the path to purchase can allow brands to seed the right information to build brand awareness and understanding. To provide consumers with an opportunity to engage further.Of course this should not be the only channel, but often can be a critical entry or reinforcement point, with other channels taking on the longer-term engagement roles.----------------Source: Digital LifeI4: Intrusiveness of brand contactBases: displayed below activity
  • Part of the challenge of communicating at the path to purchase is the user-generated review. Though brand-generated sources account for a large share of the research channels used, user generated is still significantBut the solution is not to try to stifle or out-do the user review. The most successful brands have deploy strategies to engage directly with consumers, allowing them the creative freedom to post reviews but supporting and actively listening to (and responding to) suggestions for improvement. [Disney Toy Story 3 example]This can also be a strategy to boost information levels in low engagement sectors…----------Source: Digital LifeOS3: Research sourcesBases: All respondents who purchased in category in L12M - varies by category, ranges from n=8058 to n=17349
  • … or across different geographies.Anyone wishing to break into Emerging Asia would do well to build and encourage user reviews. And we of course know how successful sites like Amazon have been by embracing the user review.-----------Source: Digital LifeOS3: Research sourcesBases: All respondents who purchased in category in L12M - varies by category, ranges from n=8058 to n=17349
  • But that is not the only factor for success.Different online activities satisfy different needs in different geographies. In China for example, pre-purchase browsing is most associated with Fun and Pleasure, whereas in Southern and Eastern Europe it is more associated with being knowledgeable and informed. Aligning to the emotional and cultural tone will help to drive success.--------------Source: Digital LifeNeedScope profiling of activities. See methodology pack for more detailsBase: All respondents, (MENA, Ch, SEEu n =3045, 2023, 9497)
  • And completing the next stage of engaging with consumers is also very feasible using a retail-related tactic. The top two reasons for consumers to join brand communities are to seek or to benefit from special offers or promotions. A relatively simple entry point, but also one that will facilitate the creation of more relevant brand engagement and help build brand advocates.---------Source: Digital LifeN13: Reasons for potential brand friending on social networksBase: All respondents using SN, n=40819
  • My final point for today is about Mobile
  • It is common knowledge that the universe of mobile users far surpasses the universe of fixed PC users.Tapping into the mobile ecosystem could bring huge benefits and further growth to online retailing
  • This is particularly relevant in emerging markets, where many consumers’ do not have fixed PC access, relying more heavily on their mobile’s ---------Source: Digital LifeS4: Internet access point in last 4 weeks for leisure Base: All respondents, n=48804
  • Globally, we are already seeing strong levels of consumers trying online activities on the mobile, including over 60% claiming to do pre-purchase browsing on their phones.---------Source: Digital LifeI1: Frequency of online activitiesBase: All respondents, n=48804
  • Demand for mobile financial services is high, and this may well be one of the key elements to grow mobile online retail especially in emerging markets.--------Source: Mobile Life 2011
  • And of course we have the current boom in tablet computerownership, with high demand and projected growth rates.Much of our research has confirmed the point that tablets provide a very different form of consumer engagement, arguably one that is more conducive to online brand engagement and online pre-purchase browsing-------------Source: Mobile Life 2011
  • Indications are that in many emerging markets the Tablet could take a front-seat compared to the traditional PC.-------------Source: Mobile Life 2011
  • Even in developed markets, we are also only beginning to scratch the surface of what mobile retail can doThere is clearly an education challenge, but also a technology challenge to be tackled. The mobile, as well as the Tablet is a different platform with a different set of rules. It has a role in the purchase process that needs to be better understood.---------Source: TNS UK Chatterbus 19th May 2011
  • But it is uniquely powerful as a tool that is always on, always with the consumer that can augment the online and offline worlds with rich, context sensitive data tailored to both the consumers context and the device contextIf we get it right we could open up new rich experiences for consumers, rich experiences that could help to transform retail and build the bridge between the on and offline worlds.
  • WPP Retail Event 4.0 20110531

    1. 1. Retail Insights from TNS Digital Life31st May 2011
    2. 2. Discover how the world lives Discover how consumers across online the world use their mobiles
    3. 3. What you need to know about Mobile Life and Digital LifeTruly global That go ‘Beyond To address critical coverage Behaviour’ business issues 3
    4. 4. Online Pre-purchase Versus Online Browsing Shopping 4
    5. 5. Online consumers are vociferous pre-purchase researchers 24% Most likely to Most likely to of consumers browse browse online NEVER browse online DAILY for products or DAILY online services to buy Vietnam Tanzania Turkey Uganda South Korea Nigeria 60% Hong Kong Indonesia of consumers browse online Thailand Egypt at least WEEKLY for products Brazil Philippines or services to buy Saudi Arabia South Africa Italy Kenya UAE India UK Morocco Only 13% of consumers NEVER browse online for products or services to buy 5
    6. 6. ...but they still research more in branded channels than consumer-generated mediaAverage % using touchpoint across categoriesManufacturer / service provider sites 18 Retailer sites 18 Search engines 16 Online touchpoints Review sites 12 Price comparison websites 11 User reviews 11 Comments on social networks 6 Word of mouth 17 Retail stores Offline 12 touchpoints Offline media 11 6
    7. 7. Research in higher involvement / more complex categories is predominantly done online Research channels used - % Online only Both Offline only TRAVEL 60 15 12 AUDIO VISUAL 53 19 17 FINANCIAL SERVICES 48 15 21 AUTOMOTIVE 49 21 16 MOBILE PHONE 48 28 23 HOME BUYING 47 22 19 HOME APPLIANCES 47 18 23 BABY CARE PRODUCTS 43 15 21 CLOTHES 33 19 29 COSMETICS 34 13 27 TOBACCO 29 7 27 CLEANING PRODUCTS 26 8 29 FOOD/DRINK 25 8 33 7
    8. 8. Despite heavy online researching, the majority of purchasing still occurs offlineAverage research pattern across categories Researched Researched Researched online only online and offline offline only 43% 14% 22% Offline purchase Online purchase 8
    9. 9. Maximising the ROI of Brand communications online pre-purchase during the purchase cycle 9
    10. 10. eCommerce is the least intrusive context to interact with consumers; target the path to purchase Attitudes to brand interaction within activities 22516 39730 17545 5500 11940 3731 4763 13869 12882 7640 5199 % activelylooking for brands 46 49 35 39 37 29 29 33 29 26 22 17 15 12 16 22 19 18 22 28 23 26% who find brands intrusive 10
    11. 11. User-generated content important despite brand generated content taking larger share Online research channels used - % User generated Brand generated AUDIO VISUAL 33 52 AUTOMOTIVE 31 43 MOBILE PHONE 29 48BABY CARE PRODUCTS 27 33 HOLIDAY / TRAVEL 26 50 HOME APPLIANCES 26 47 FINANCIAL SERVICES 25 40 COSMETICS 19 30 TOBACCO 16 20CLEANING PRODUCTS 14 22 CLOTHES 12 30 FOOD/DRINK 12 20 11
    12. 12. User-generated is strong in Emerging Asia, creating a strong need for an integrated strategy for path to purchaseOnline research channels used Brand generated User generated 12
    13. 13. Align with sites that best meet the needs of the activity indifferent geographies; in China, focus on pre-purchase sites that have a fun twist Unique Needs – Pre-purchase & browsing Knowledgeable, informed In touch, in the loop Confident, assured Energised, excited Reassured, peace of mind Fun, pleasure Amused, entertained A sense of sharing, giving Energised, excited Knowledgeable, informed Intelligent, thinking Under control, on top of things Effective, efficient 13
    14. 14. Shopping related offers can be used as a tactic to generate brand connectionsReasons to join brand community To get more information about a brand 40 To support a brand I enjoy 35 To connect with a brand I like 25 To follow my friends who are already fans 19 To seek for promotions or special offers 41 To use specific apps promoted by the brand 19 To benefit from a promotion of specific offer 43 14
    15. 15. Targeting the next Using Mobile togeneration of Retail access broad growth audiences 15
    16. 16. 4 of 5 consumers will access the mobile ecosystem, 1 out of 5 the PC ecosystem PC MOBILE USERS USERS 16
    17. 17. Mobile access is critical in rapid growth markets% online users accessing internet from mobile in last four weeks 39 40 32 26 24 25 22 18 12 14 10 17
    18. 18. In mobile, the proportion of consumers that have at least tried activities is already high. Investment in services and apps will drive it further % doing activity on the Mobile 83 Daily Ever 83 78 75 73 71 70 61 55 51 44 43 39 35 29 23 21 18 16 12 8 14 18
    19. 19. New features, such as mobile financial services will facilitate the growth of mobile online retail and the continuing blurring of the online and offline worlds Reading your account details on the phone 8 13 Buying air time or phone credit 7 9 Give instructions to your bank using SMS 5 9 Getting money out of your bank account into your phone 4 14 Paying bills like for water, power, rates 3 21 Paying post-paid phone bills or fixed line phone bills 3 10 Paying for items in a shop or restaurant or bar 3 14 Receiving your wages / salary 2 10Transferring money from your phone into your bank account 2 10 Receiving payments for your goods or services 2 7 Currently doing Receiving money from another country 1 6 Receiving share or cooperative dividends 1 4 Repaying loans 1 6 Would like to do Paying rent or mortgage on house 1 5 Paying insurance premiums 1 4 19
    20. 20. Tablets already starting to gain traction, and showing take-up potential Dev Asia 6 31 Current ownership Europe 6 28 Intended ownershipN America 5 20 Lat Am 4 23 China 2 6 MENA 1 14 India 11 SSA 8Emerg Asia 4 20
    21. 21. More likely to replace PCs than handsets, particularly in the emerging world To replace a mobile To replace a PC India 10 43 China 8 37 MENA 4 31 Dev Asia 5 30 LatAm 7 21Emerg Asia 7 20 Europe 5 19 SSA 12 18N America 3 8 21
    22. 22. Describe your mobile retail experience... If I’m shopping and I find something I like I will Google the product to see if it is In bed at 2am or in cheaper anywhere else HMV Oxford Street I’ve won auctions on ebay while on the move. Mobile is just for usually quick search - check price etc and pcThere is a barcode for purchasing . scanner onsmartphones. Ive used it to find cheaper toys for More compromised the kids but handy 22 UK Mobile shoppers
    23. 23. Exemplifying the mobile utility proposition 23

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