Title of Presentation Subhead

PewInternet.org

The new pathways to purchase in the world of networked consumers

Henry Assael - lecture at NYUOctober 6, 2011Lee Rainie: Director, Pew Internet ProjectEmail: [email protected]: @Lrainie

mailto:[email protected]

Implication: A New Consumer Decision Journey to Manage

INITIAL CONSIDERATION: PURCHASE:

POST-PURCHASE EXPERIENCE:

ACTIVE EVALUATION:

Consumer starts with 1.5 brands in mind, influenced by previous trial and word of mouth

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

Where Social Media Fits in to the Mix

Friending the Social Consumer

Most influential touchpoints

2137

31

2810

Company-driven marketing Traditional advertising Direct marketing Sponsorship In-store advertising

Consumer-driven marketing Word of mouth Online research Offline/print reviews

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

Your experiences -1

• Smaller scale / impulse buys• Piece of music • App • Something off the shelf

Pew Internet findings in 2007 among music buyers:

• 83% find out about music from the radio, TV, or in a movie;• 64% find out about music from family, friends, or co-workers.

PIP Consumer choice survey (2007)



Your experiences -2

• Mid-scale products• Cell phone• Clothes

Pew Internet findings in 2007 among cell buyers:

• 59% ask an expert of salesperson for advice;• 46% go to one or more cell phone stores.


Your experiences -3

• Life-altering “investments”• Real estate – apartment hunting• College choice• Car

Pew Internet findings in 2007 among real estate shoppers (homes and apartments):

• 49% look at ads in the newspaper;• 47% ask a real estate agent for advice




Digital Revolution 1Internet (78%) and Broadband at home (62%)

65% 62%

Networked creators among internet users• 65% are social networking site users• 55% share photos• 37% contribute rankings and ratings• 33% create content tags • 30% share personal creations • 26% post comments on sites and blogs• 15% have personal website• 15% are content remixers • 14% are bloggers• 13% use Twitter• 6% location services – 9% allow location

awareness from social media – 23% maps etc.

Impact on shopping

• Shopping is a “full contact” sport throughout its phases:– Research phase

• 60% of all Americans do research online about products– Purchase phase

• 55% of all Americans made e-purchases; 51% travel reservations

– After-purchase phase• 37% rankings and ratings; another quarter describe

their shopping experiences

So what for brands?

• The Bermuda Triangle– Markets are fractured– Marketplace is roiled– Metrics haven’t kept pace– Too much noise

• Brands are co-owned by advocates /acolytes– Best of times - sanctuaries– Worst of times - #fail

Digital Revolution 2Mobile – 84%

Mobile internet connectors – 63% adults

35% own “smartphones”

PewInternet.org

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.

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

59% of Americans use TV 59% of Americans use TV and the Internet and the Internet SimultaneouslySimultaneously

Dramatically More Cross-Platform / Media-Mixing

Source: Nielsen Three-Screen Report

Impact of mobile connectivity on shopping

• Just in time information – Where can I get a deal?– Price comparisons

• “Networked info” packed into the shopping experience– QR (quick response) codes

• Announcement and validation of purchase– Sharing the shopping story

So what for brands?

Attention zonesContinuous

partial attentionDeep divesInfo-snacking

Media zonesSocialImmersiveStreamsCreative /

participatoryStudy / work

Digital Revolution 3Social networking – 50% of all adults

What does this mean?Social networks are more influential and institutions

less influential - 1

Sentries

What does this mean?

Evaluators

Social networks are more influential and institutions less influential - 2

What does this mean?

Audience = New media are the

new neighborhood

Social networks are more influential and institutions less influential - 3

Impact of SNS on shopping

• Purchasing can be group activity• “Consumer cartels” arise (Groupon, Living

Social)

With Dramatically Different Channel Preferences

Question: Those who would contact the company to…

Discuss New

productsComplain Get

AdviceMake 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

Source: Nielsen Consumer Channel Preference Study ‘09

Six Drivers of Brand Credibility

Trust Authenticity Transparency

ConfidenceConsistency

IntegrityAuthority

As AdvertisedReal & Sincere

Real PeopleInformal

Let the Sun Shine InEasy to Learn

Easy to DiscoverNo Secrets

Affirmation Listening Responsiveness

PlaybackReinforcementSearch ResultsAccountability

EmpathyWelcome Mat

Humility (we can learn)Absorbing Feedback

Follow-UpInvitational MarketingSolidifying the SolutionDignifying Feedback

24

Brand Credibility More Important Than Ever


Implication: Bold New Questions for CompaniesIssue 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?


Social Commerce Ecosystems Implication: Death (or erosion) of Web Sites

Consumer Relations

BrandedMedia

Channels

Forum / Communities

ConsumerOutreach

Influencer Outreach

Brand Backyard Consumer BackyardCommon

Brand SiteContact CenterE-mail PhoneWeb Site

EngagementBlogChat, SMSPhoneRate & Review

CommunitiesUser-Contributions Ratings & Reviews Co-Creation

PlatformsTwitterFacebookYouTubeFlickr, LinkedIn

3rd PartyConsumeristEdmundsWebMDTechCrunch

43

Implication: New and More Holistic Rules of Engagement

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

Relevance to BPPrice Finders

Product Info

Travel Services

Environmental Info


Implication: Rise of Consumer Cartels


Implication: Massive Levels of Retailer Innovation

Source: Company websites; Progressive Grocer & Pittsburgh Post-Gazette

Can BP empower its franchises and/or products around innovation?


http://www.shopbloom.com/Savings/Specials/

Implication: The Rise of Real-Time

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


Source: Nielsen

Looking Ahead

Trend What It Is, What It MeansMass Socialization Social “earned” media & paid media become more

intertwinedPlatform Proliferation New devices and multi-tasking aboundMobile Comes of Age Extends mass socialization & extends media to point of saleApps Everywhere Disruptive growth in apps, fueled by games and service

utilitiesDominance 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 scrutinyInfrastructure 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, choices41

What’s Ahead / Next?Near Term Trends for 2012

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

42

What’s Ahead / Next?Longer Term Trends & Disrupters

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

Things to watch• Content metering online – new media business

models• Enhanced tech – 3-D• New attention research – Nielsen and

Coalition for Innovative Media Measurement

• Privacy debates• Net neutrality debates • Spectrum allocation debates • Rise of the “internet of things”

Thank you!

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