A recent Forrester report "US Online Holiday Retail Forecast, 2010" forecasts online retail sales during the 2010 US holiday season to grow 16% year over year. Consumers are showing a willingness to spend this season, with affluent consumers driving the most growth. Respondents to our North American Technographics® Retail Online Survey, Q3 2010 (US) plan to complete 37% of their November/December holiday shopping through an online channel, up from 30% last year.
Let’s have a look at the post-mortem of the 2009 US holiday season to understand what is really important to customers: In spite of the economic slowdown last year, nearly three-quarters of US online holiday buyers maintained or increased their spending in the online channel compared with 2008. Online holiday buyers are buying more online for the same reasons that the online channel is a successful and growing component of retail in general: convenience, selection, and price.
Two weeks ago marked the annual IIR Market Research Event. TMRE, as it’s fondly called, has been my favorite MR event for a few years now, and this sentiment was echoed by almost every attendee I spoke with on-site and off. If you haven’t attended this event in the past, you should put it on your radar for next year (which happens to be at Disney World). Not only are there great presentations (like my own on aligning segmentations with newer research methodologies : )) but also tons of great people attend. My favorite part of the conference is sitting down with vendors and client-side MR professionals alike and hearing what’s on their minds at the moment. In fact, a lot of these conversations have served as great fodder for our annual MR predictions doc, which will be released next month; for last year’s, clients can click here. My only regret is not having enough time to connect with everyone! If you missed any of the content or goings-on of the event, TMRE has posted links to all the great blogging that was done over the course of the event.
Overall, I left with a few major impressions:
We are a great group of professionals! Everyone at the conference was so passionate about MR, its current state, and what lies ahead. Every conversation I had was infused with excitement about the possibilities for MR and MR professionals in the near future. Whether it was those of you excited for the additional research you’ll be doing with new DIY tools or those of you embarking in startups for new methodologies, everyone is eagerly awaiting 2011.
His big takeaway is that consumers are still much more likely to provide feedback directly to companies through more traditional channels (like surveys, phone calls, email, and postal mail) than provide feedback through social channels. More specifically, 71% of US consumers who had unsatisfactory service interactions in the past 12 months provided feedback through at least one traditional channel (including email), while only 16% provided feedback through any of the social channels we asked about.
Despite the buzz around social media, this data shows that the majority of customer feedback comes directly to companies via surveys, phone, and email. Organizations should implement sophisticated voice-of-the-customer programs that use text analytics and other technologies to mine this information to better understand customers' needs and the issues they're dealing with, identify best practices, and come up with improvements whenever possible.
In recent years, there has been an increase in the number of US-based companies entering or planning to enter into the Mexican market. For example, Best Buy has rolled out an aggressive plan to invest $400 million to open 20 stores in Mexico over a three-year period. Lowe’s announced earlier this year that it spent roughly $40 million to open two stores in Monterrey, Mexico. And Target is setting its sights on expanding into Mexico, with goals to enter into the market no later than 2013.
Without question, there are many challenges with entering into a new market, such as understanding the country and cultural norms that influence shopping habits, determining how to transfer and modify successful strategies of a winning brand in one country to another, and understanding what the current size of the new market is as well as its growth potential. However, despite these hurdles, my colleague Tamara Barber and I contend that US-based retailers can use the factors that influenced the growth of the US Hispanic eCommerce market as a guide for developing effective growth strategies in Mexico.
In the past five years, the global Internet population has grown from about 1 billion to 1.6 billion, and this growth isn't about to stop any time soon. However, the future growth isn't equally spread across regions. Forrester's ForecastView model shows that the Internet population will increase in every country in the world over the next five years, but emerging markets will grow at a faster pace. In 2014, one-third of Internet users will come from Brazil, Russia, India, or China (the so-called BRIC countries).
The sheer number of online buyers and the increased online spending per capita will position several emerging markets to challenge North America and Europe from an eCommerce perspective. Companies that want to capture this growing number of online users — and their growing funds spent online — will need to look beyond the markets of North America and Europe and approach their online strategies much more globally.
Having analyzed consumers' technology behavior for more than 11 years now here at Forrester, I've seen a certain pattern surface in the uptake of technology: When new technologies become available, it's Generation X (ages 31 to 44) that adopts it first, but it's Generation Y (ages 18-30) that runs with it. Gen Xers have money to spend on technologies when they're still premium-priced, but Gen Yers have the time on their hands to really explore all possibilities. For example, when we look at online activities, young consumers spend more time online and are involved in more activities (especially when we look at social networking). However, for mobile Internet, we see a different pattern emerge.
Forrester's Technographics® data shows that Gen Xers are equally active on their mobile phones, and in some instances, like playing games, they rival the usage of their younger counterparts. In other instances, like checking news, sports, or weather or checking travel status, Gen Xers actually outpace Gen Yers.
Companies that want to target these groups should ensure that their mobile Internet experience is consistent with the regular Internet presence, ensuring a seamless experience for their consumers. The Mandarin Oriental Hotel Group is a perfect example of a company that identified the mobile needs of its clientele and then created a unique experience that allowed users to effortlessly connect both through their mobile device and online.
Last week I was at Forrester's Consumer Forum in Chicago, where I gave a presentation with the title “If The Company Only Knew What The Company Knows: Introduction Of A Knowledge Center Can Empower Market Research Professionals.” For this presentation I did quite a lot of research and talked to many market researchers who have implemented some kind of knowledge management system. Knowledge management systems come in all kinds of flavors and with varying degrees of success, but the market researchers who managed to build a successful, engaging, and widely used system all agreed that it had changed their role.
In fact, the companies we spoke to all saw their knowledge management as a competitive advantage. Although we found a number of market researchers willing to participate in our research, none of them wanted to share all the ins and outs. In keeping with the theme, they said, "We don’t want others to know what we know."
But how can market researchers introduce knowledge management to their organizations? Based on our research, we see three different levels:
Build a research center of excellence within the department.
Implement a system for sharing and distributing (research) information with the organization.
Develop a companywide knowledge management system.