Shopping isn't simple any more
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Presentation by Martin Wootton to the MRS in July 2013. Martin explores the rapidly changing developments in consumer buying behaviour in a multi channel digital world
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Shopping isn't simple any more
- 1. Shopping Isn’t Simple Martin Wootton, RS Consulting #MRSlive
- 2. Shopping isn’t simple any more… …and neither is researching shoppers
- 3. Tonight’s agenda The changing consumer Why shopping isn’t simple Shopping in the future What this means for researchers
- 4. The changing consumer Why shopping isn’t simple Shopping in the future What this means for researchers
- 5. An Aging Population Today, 14% of Europe is aged over 65. In 2050, this will be 25% - almost double. 2013 2050 Source: World Health Organisation, European Region forecasts for 2010 – 2050. More customers will be looking for: • Bigger buttons • Touch screen icons • Lighter weights • Larger, clearer labelling Higher disposable incomes among over 65s mean older shoppers will become more sought after… … until pensions crises kick in from 2030 Early adopters = older customers?? • Median age across Europe increased from 35 in 1990 to 41 today. • Continued rise expected, reaching a median of 45 by 2030. • Average lifespan predicted to increase by 10 years between today and 2050
- 6. The Changing Household • Sharp increase in the number of people living alone • Slow growth in number of traditional family units • Decline in the number of children living in the parental home • Total number of households will increase, but average household size will decline. Source: OECD 2011, “Doing Better for Families” • The trend for social networking and mobile communications will increase as more people live alone • Online sharing across different locations is likely to rise – consumers will look for newer, more convenient ways to share photos, videos and messages • Smaller family units will result in lower disposable income per household – manufacturers and retailers will need to adapt pricing and store portfolios to reflect this ‘younger’ emerging market
- 7. • Turkey and Russia have the biggest proportion of young internet users (aged 15-24) in Europe Source: Wall Street Journal (2013): http://blogs.wsj.com/tech-europe/2013/05/29/europe-tops- global-smartphone-penetration/ • Tablet ownership in Western Europe will quadruple by 2017 – from 14% today to 55% in 2017. • Over 23 million people in the EU5 countries had a smartphone as well as a tablet as of December 2012 (7% of the population) Source: Forrester (2013) http://thenextweb.com/eu/2013/04/10/forrester-adults- in-the-uk-spend-more-online-and-own-the-most-devices- out-of-any-eu5-country// Smartphones and Tablets
- 8. Source: TechCrunch / Forrester http://techcrunch.com/2013/02/20/f orrester-tablet-ownership-in-europe- to-rise-4x-in-5-years-55-of-regions- online-adults-will-own-one-by-2017- up-from-14-in-2012/screen-shot- 2013-02-20-at-15-38-58/ Smartphones vs. Tablets
- 9. To what extent do you agree or disagree with the following statements? Average score out of 7, where 7=agree completely, 1=disagree completely Sample size = 4,000+. Differences are statistically significant at 95% confidence interval Attitudes to Technology
- 10. • Mobile devices will become the main platform for internet browsing – so web- enabled devices will become the norm, as will using them to research products at home and in stores • Product advice and recommendations will be driven by virtual correspondents (Facebook ‘friends’, virtual communities, trusted bloggers etc.) • QR codes and photo references will help shoppers keep track of their research and become more savvy • Mobile internet driving social media growth: Facebook and Twitter more likely to be accessed on mobile devices than on PCs or laptops • Search and social becoming more intertwined: conversations will drive SEO, not just search terms • More customers will get access to special deals by interacting with brands on Facebook – and potentially shopping via the site Sources: We are Social,Forbes: http://www.slideshare.net/wearesocialsg/the-future-of-social-media-12-provocations http://www.forbes.com/sites/jondube/2012/05/08/why-smartphones-are-the-future-of-social-networking/ Social Media and Shopping
- 12. The changing consumer Why shopping isn’t simple Shopping in the future What this means for researchers
- 13. Did you initially have a budget in mind? Was the price more or less than initially expected? Budget Base = 11,000 consumers across Europe, 2013
- 14. Days and weeks of research can go out of the window once the customer visits the store… Store experience often trumps research
- 15. • Web, TV, Radio, Printed Media is no substitute for touching and trying out the product Key points • Around 50% of customers buying cameras and printers say they would have liked to spend (more) time touching and trying out the product • Most customers make a decision within the first few seconds of trying out their device
- 16. The changing consumer Why shopping isn’t simple Shopping in the future What this means for researchers
- 17. “The mobile phone – the digital wallet – will replace the physical wallet because it’s safer and more convenient. Our vision for payments is you put everything in your physical wallet in the Cloud - your credit cards, cash, debit cards, loyalty cards…and access it safely and securely from any internet-connected device.” John Donahoe, CEO of eBay Digital Wallets “Wherever the customer is, as soon as they say something about the Burberry brand… if you tweet something positive or negative, our teams around the world can pick up on that and start having dialogue with you in real time.” Angela Ahrends, CEO of Burberry Merging the on-line experience with the in-store experience: “Omni-channel” shopping
- 18. “The ability to customise everything from price, service, to the product itself will be fundamental … many brands will be concierge brands, catering to the individual based on an in depth knowledge of the exact preferences gathered from personal data. Technological advancements mean that we are entering an age of mass customisation” Marketing Store report 2013 Me-tail: Greater personalisation “Bricks-and-mortar stores will still have a presence, but mainly just to let customers have a sensory experience -- touching and feeling items they can purchase remotely and having them shipped.” Retail magnate Blake Nordstrom reported in USA Today, April 2013 Stores will become showrooms: High Street to Try Street Greater use of mobile apps for shopping “Shoppers are increasingly using their devices and apps to shop online for lower prices and to manage the entire shopping experience on their mobile phones…The only thing you can be really sure of is that your mobile phone, together with apps like RoboShopper or Amazon mobile, will probably play a more and more important role” John Ford, Tech guru and futurologist, Dec 2012
- 19. Further into the future… OCR (Optical Character Recognition) T-Commerce A.I. driving voice recognition on smart phones and tablets 3-D printing iWatches, smart glasses… and contact lenses? Physical interaction, instead of point-and- click, Kinect-style
- 20. The changing consumer Why shopping isn’t simple Shopping in the future What this means for researchers
- 21. • Unexpected moments in the customer journey can’t be accurately measured by surveys alone • Most realistic approach: observational qual with customers in the process of buying a product • Complexity of the customer journey means shoppers won’t reliably recall their activity…or the things that influenced them • Only accurate research will involve monitoring and measuring in real time, or simulating parts of the journey virtually • Fewer shopper surveys and more mining of big data
- 22. • Behavioural Economics will influence research more and more • Research must slow down or sacrifice opportunities for real insight • Embrace smartphones and tablets…carefully • Trade-off methodologies must evolve or die • High-grade video and audio capture is now essential
- 23. Any questions?
Editor's Notes
- Introduce self Introduce the customer journey research we’ve been doing in the last 5 years
- Shopping isn’t simple anymore, particularly when buying relatively expensive items like digital cameras and smartphones. The rapid evolution of the internet, mobile devices and social media means consumers are bombarded with information and spoiled for choice. So how do consumers navigate through this sea of information? How do they make up their mind? Finding this out can be tricky. In tonight’s session, I’ll be drawing on recent shopper research we’ve done for various clients to demonstrate the limitations of “traditional” research.
- In tonight’s session, we’ll be exploring how well research can really get to grips with how people shop for “considered” purchases – products and services that are rarely impulse buys, but instead lead the consumer to take their time to research, shortlist and select the right one. Often – but not always – these are relatively expensive items, typically £50 or more. I am going to argue that ‘traditional’ survey research is becoming increasing limited and outdated when it comes to understanding how consumers buy these kinds of items. RUN THROUGH AGENDA
- I’m going to begin by describing how consumers are changing – and are predicted to change in the coming years. The following slides are based on publicly available data from reputable sources, all describing societal and behavioural changes. All of these have implications for the way we design and implement market research.
- The average age of the European population is set to rise dramatically. Shoppers are getting older, and fast, so marketing strategies and product developments will need to adapt accordingly. Service and accessibility will become increasingly important as age demographics shift upwards.
- As well as ageing populations, falling marriage rates and increased divorce rates will lead to fewer people within a household, and families split over multiple locations
- Ownership of smartphones and tablets is booming…and this is set to continue. Almost ALL shoppers in the UK will have a smartphone or tablet in five years from now.
- Smartphones are clearly now ubiquitous: they are commonly used in nearly all situations…but as this infographic shows, tablets are still currently typically only used in the home. I believe that increased proliferation of ‘hybrid’ smartphone/tablet devices – PHABLETS, as some call them, will change this.
- Findings from an ongoing study we undertake on behalf of a technology manufacturer show that attitudes to technology have changed subtly over the last few years – devices have become over-complicated, but people are getting more fun out of technology.
- Social media will pervade all areas of the internet; social networking will become deeply intertwined with all aspects of a brand’s online presence
- Next, I want to share some findings with you from recent studies we’ve done on how people across Europe shop for technology products, like phones, printers, cameras and tablets. These demonstrate just how complex and convoluted the purchase process can be, even for something that might only be £50 to buy.
- More than half of technology shoppers set out with a budget in mind. However, 1 in 3 customers did not pay the price they expected, and 10% actually were persuaded to pay more than their initial budget.
- VIDEO CLIP I’m going to show you a few video clips of interviews we did recently with people in the process of buying a tablet PC. Note the reactions and language that these customers use, and how fast they make up their mind.
- What we found when we did this research ties in with a lot of behavioural economic theory. Basically, shoppers don’t really behave rationally when bombarded with stimulus and information. Instinct and intuition takes over and cancels out the carefully crafted decisions reached by prior internet research and conversations. Actually touching and trying out the product is incredibly influential, and unfortunately this can be the most difficult for respondents to express. This innate behaviour is typically lost in ‘traditional’ quant and qual research where we ask customers to recall what they did after the event.
- Over the coming years, though, we’re going to see some significant changes in the way people shop. What researchers are doing today will need to change to adapt to these new ways of shopping. I’m going to describe a few of the most interesting changes to you.
- Burberry video 2:18 - 3.00
- Several futurologists believe we’re on the brink of a boom in more personalised shopping experiences. With our smartphone enabled to communicate with the store infrastructure GREATER PERSONALISATION PROVIDES: Contextually relevant information and tools to in-store shoppers. It lest you q uickly locate items on your mobile shopping list with in-store aisle-location You can s can barcodes for price and store information, discounts and local ads Partly as a result of this, retail stores will become showrooms, which you visit to review and interact with the items you want, try out virtual technologies and visual displays and projections and have a more “fun” shopping experience. Rather than queue at a checkout, you simply order what you want in the showroom and it gets delivered later that day or the next day to your chosen location
- 3-D printing either in stores, or in the more distant future, at home. Shoppers will be able to order a product on line and download the blueprint to their 3-D printer and manufacture it themselves in the comfort of their own armchair! Social engagement will move beyond point and click – customers will interact more physically . Think of the Microsoft Kinect, where your body becomes the controller. Websites and even in-store kiosks could soon enable Kinect-style physical interaction to make the shopping process more fun. Artificial Intelligence driving voice recognition on smartphones to accurately answer queries and suggest new products the shopper might like, using voice personality analysis or data mining of recent behaviour OCR could soon allow shoppers to scan documents, flyers, ads, pictures and even handwritten scribbles, present a page of products that might fit the bill, and the shopper can select, buy or even personalise it there and then. You may find yourself wearing glasses again, even with 20/20 vision. Display and visual information capture will be enabled through things like Google glasses, or eventually smart contact lenses, embedded with head’s up display technology, video, tag and other scanning features to capture what you see and show you the information you want versus what advertisers want you to know. T-commerce is simply using your smart TV sets to buy products. See something in an ad – or even on your favourite TV show – that you want to buy or find out more about, you’ll be able to do this directly from your remote control.
- Unexpected moments in the customer journey can’t be got from surveys alone. Most realistic approach: observational qual with customers in the process of buying a product. Most practical approach: mixing observational qual with other qual and quant methods. The art is to balance the ideal approach with a realistic budget! Complexity of the customer journey means shoppers won’t reliably recall their activity…or the things that influenced them. Only accurate research will involve monitoring and measuring in real time, or simulating parts of the journey virtually. Researchers will need to embrace technology to do this. Fewer shopper surveys and more mining of big data. Traditional surveys are increasingly irrelevant to how people actually shop. They are becoming less and less accurate in measuring what really drives people when purchasing a product or service. In my view, customer surveys in this context will become obsolete – researchers will instead analyse behavioural data from smartphones, tablets, GPS tags and so on, to map actual behaviour. Of course, this will require the buy-in of at least a proportion of a brand’s customers, but we’re hearing more and more that younger customers are less concerned about keeping their GPS data, search history data etc private.
- Behavioural economics, which sets out to explain how emotional and irrational factors influence choice, will become increasingly important. Behavioural economic theories on social norms and how people react in different environments – and particularly in situations where people might feel pressured – will influence research design, as research evolves to more accurately explain and measure the customer journey. We’re accustomed to writing questionnaires and guides, collecting data and analysing it with ever increasing rapidness. This is idiotic. Real insight requires researchers to take their time, make space to think, and be prepared to revise and refine your research design based on pilot phases. For the complex process of shopping, real insight can only come from a more measured, adaptive, iterative approach to research. The value for marketers is increasingly in in-depth analysis of how customers behave at each point they interact with a brand or a retailer. And this takes time. There’s no getting away from smartphones and tablets empowering the shopper, and we’d be fools to ignore the influence of these devices on the purchase process. Whatever research we do, be it observational or survey-based, must capture how shoppers use their smart devices. This means not asking respondents to turn their mobiles off during the interview, and perhaps not using the mobile as the data capture tool. Trade-off methodologies, like conjoint, where we give respondents series of hypothetical product choices to make, will become more detached from real world purchase decision-making. This means they are becoming less likely to mirror actual behaviour, and therefore they risk becoming obsolete and meaningless. Somehow, trade-off questions will need to evolve to match the way in which people shop, maybe having time limits to simulate time pressure, or have the exercises laid out more in the style of retailer web sites. Whatever the solutions, ‘traditional’ conjoint no longer fits. DO use professional-grade recording equipment for filming and audio capture. Grainy footage and crackly audio not only looks and sounds rubbish, but it makes it really hard to capture the shopper’s environment, things like the product, the shelf and point of sale material accurately, so you lose the contextual data that might really help to understand a decision or interesting behaviour.