The Data Digest: Understanding The Drivers For The Uptake Of Mobile Payments

Reineke Reitsma

Mobile payments saw continued innovation and competitive disruption throughout 2012, but consumer adoption lagged behind the industry hype. The Forrester Research Mobile Payments Forecast, 2012 To 2017 (US) shows that US consumers will adopt mobile payments at an accelerating rate over the next five years, reaching $90 billion by the end of 2017. Lower barriers to adoption, increased convenience, and early entrants striving for scale will be important drivers of growth.

Although the mobile wallet marketplace is still in its early stages today, players across the ecosystem are vying for consumer trust. Trust is often based on prior experiences: Forrester’s North American Technographics® Retail Online Benchmark Recontact Survey, Q3 2012 (US) shows that nearly half of current US PayPal users would trust PayPal as their mobile wallet provider. However, for those who don't use PayPal, the most trusted source is a bank or credit card issuer.

The recently published Forrester report “How PayPal Uses Exploratory Research To Drive A Culture Of Customer-Focused Innovation” shows how PayPal conducts exploratory research to understand the tradeoffs and emotions related to consumer payment behaviors to create better products and experiences. The insights gathered from the research helped the product development process.

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The Data Digest: US Leisure Hotel Travelers

Reineke Reitsma

I was in the US this week, visiting our headquarters in Cambridge, and the topic of loyalty cards and loyalty programs came up. I live in the Netherlands, and although there are plenty of loyalty programs to subscribe to, the benefits aren’t any way near what you get from loyalty programs in the US. Because of that, I normally base my travel choices more on convenience and price than on the hotel chain or airline. But our North American Technographics® Travel And Auto Online Benchmark Recontact Survey, Q3 2012 (US) shows that this is different for US travelers.

US hotel travelers clearly see the benefit of subscribing to a loyalty program for the hotels they visit regularly. In fact, our data shows that about 40% of US online leisure hotel travelers belong to at least one hotel loyalty program. And those who belong to a hotel loyalty program are 10 percentage points more likely to recommend a hotel than leisure hotel travelers who are not part of a loyalty program.

However, the majority of leisure travelers who belong to a loyalty program are Gen X; younger travelers account for only a quarter of current loyalty program subscribers. Hoteliers who want to benefit from social sharing and recommendations should tap the potential of their loyal younger customers in particular.

The Data Digest: Technology And New Year's Resolutions

Reineke Reitsma

At this time of the year, many people make resolutions — and many of these are health-related: quit smoking, exercise more, or eat healthier. As anyone who has ever made one of these resolutions knows, it's really hard to make a change. But there’s plenty of technology out there that can help track your progress and give you a bit of support.

Forrester’s Technographics® data shows that about one-third of US online smartphone owners use their phone for healthcare-related activities, ranging from tracking what they eat to text alerts about medication:

However, using technology to track your health hasn’t reached the mainstream yet. In fact, many consumers don’t consider this to be very appealing. Recently, my colleague Lindsey Colella hosted a project in Forrester’s market research online community to better understand the relationship between technology and health. In her report 'Digital Health Management Needs A Makeover To Broaden Its Consumer Appeal', she shows that the average consumer is skeptical about health-tracking technologies. Our respondents believe that using technology to track your health is either for people with a chronic disease or people who are obsessed with their health. Most of them prefer to rely on their doctor for guidance instead.

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The Data Digest: Uptake Of Mobile Messaging In Europe

Reineke Reitsma

This week, there was a lot of blogging and commenting around Facebook possibly acquiring mobile messaging company WhatsApp. And although WhatsApp quickly denied that Facebook acquisition talks were happening, I still really enjoyed all the analysis shared by the different technology blogs on why this would be an interesting deal. Many of these mentioned the differences between adoption of Facebook Messenger and WhatsApp in Europe versus in the US.

In fact, the news got me wondering to what extent consumers use mobile messaging at the moment. Forrester’s European Technographics® Consumer Technology Online Survey, Q4 2012 shows that just over one in 10 online European adults (16+) use mobile messaging (e.g., WhatsApp, Skype, or Viber), and this rises to 21% for European smartphone owners. Further analysis shows that usage is very much driven by age:

 

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The Data Digest: The Information Sources That US Online Holiday Shoppers Use

Reineke Reitsma

In the recently published report “US Online Holiday Retail Forecast, 2012” Forrester estimates that US holiday season online retail sales will grow 15% from 2011 to 2012. While the number of US online holiday shoppers is expected to grow very little compared with last year, the average US online shopper will spend about 12% more than last year. But, as my colleague Sucharita Mulpuru shares in her blog on this topic, consumers are harder to impress this year. Satisfying the expectations of online shoppers during the holiday season is crucial to the Q4 success of retailers.

What kind of information sources are US online shoppers using most when considering products for purchase? Forrester's North American Technographics® Retail Online Benchmark Recontact Survey, Q3 2012 (US) shows that easy access to shipping costs is extremely important, followed by product ratings and reviews from other customers, and product information from retailers.

This holiday season, consumers are more likely than ever to visit a website before buying gifts; in fact, it will be the channel of choice for many. Retailers already go big on promotions, but if they don't have their basics in order — such as search, navigation, and checkout — customers will quickly move on to a competitor to find that great deal.

The Data Digest: Profiling Chinese Luxury Shoppers

Reineke Reitsma

One of my responsibilities at Forrester is editing our Technographics® research deliverables globally. In recent years, we have regularly published reports on consumer behaviors in emerging markets, including the BRIC countries. One aspect of this global data really intrigues me: the success of luxury brands and the profile of luxury goods buyers in these markets.

China has emerged as one of the world's largest luxury goods markets: According to the World Luxury Association, shoppers from Japan represent 29% of the world market share of luxury goods sales; China, 27%; Europe, 18%; and the US, just 14%.

How are Chinese luxury goods buyers different from their non-luxury goods buyer counterparts? Forrester's Technographics® data shows that Chinese luxury goods buyers are similar in terms of age and gender to non-luxury buyers, but they tend to have higher incomes. However, they differ significantly with regards to lifestyle and social attitudes.

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The Data Digest: Magazine Readership On Digital Devices

Reineke Reitsma

This week the news broke that Newsweek, one of the most recognized magazine brands in the world, will cease publishing its print edition after nearly 80 years and go all digital in 2013. The news got quite a bit of attention globally — it even made it into the printed edition of a Dutch newspaper. Of course, this didn’t come as a complete surprise, and Forrester has published enough about digital disruption and the media meltdown to know that newspapers and magazines have to change their strategy.

But the news got me wondering to what extent consumers use their digital devices for media consumption at this moment. Forrester’s North American Technographics® Media And Advertising Online Benchmark Survey, Q3 2012 (US) shows that about one-fifth of US online adults consume magazine content digitally, meaning they visit magazine websites or read digital publications.

This is lower than for newspapers, where about one-third of the US online population reads newspapers digitally — and 14% digital only (compared with 5% for magazines). Those who read digital magazines only are far more likely to be male, the average age skews younger than 35 years old, and only one-quarter of them regularly spend money on magazines.

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The Data Digest: Profiling Creators

Reineke Reitsma

Creators sit at the top of Forrester’s Social Technographics® ladder: They are the consumers who write blogs and articles, upload self-created video and music, post photos, and maintain their own web pages. More than any other group, Creators are shaping the face of consumer content online. We recently published a report called “Exploring The Social Technographics® Ladder: Creators.” It shows that Creators are great advocates for the brands they like, and that they have, on average, many more friends and followers to share their opinions with than any other group.

However, what was really intriguing is how much they value feedback from companies and brands. Even more importantly, more Creators expect companies to respond to positive posts about products/services than to negative ones.

This is contrary to popular belief. In fact, there’s plenty of advice out there on what you should do in a crisis or how to respond to someone who’s posted a complaint. There’s not much advice on how to handle positive feedback, but in fact, it’s one of the best ways to trigger (and motivate) your brand advocates.

The Data Digest: Multitasking While Watching TV

Reineke Reitsma

The proliferation of mobile and portable Internet-connected devices has made TV multitasking the norm. Forrester’s Consumer Technographics® data shows that about four out of five US online adults who own a laptop, smartphone, or tablet go online regularly while watching TV, but the intensity of interaction differs by device.

 

My colleague Tracy Stokes wrote about this in a report called “The New Layers Of TV Audience Insight.” Her take: Just because your TV audience is active on social and digital platforms doesn’t mean that they will blindly engage with your brand. To drive cross-media engagement, you have to have a clear call to action that easily conveys why consumers should be active across multiple media channels.

But when you do it right, there’s a lot to gain. Research from Discovery Communications shows that exposure to more digital touchpoints while watching TV can strengthen consumers' connection to content and brands, not detract from it. Discovery's study found that users who multitask with devices while they watch TV are more attentive and responsive to TV programming and advertising than the average viewer.

The Data Digest: Alternative Payment Methods In Europe

Reineke Reitsma

Consumer usage of alternative payment methods like contactless cards or mobile payments is still very limited in Europe, and the majority of European consumers aren’t interested in using these services (yet). But attitudes vary across Europe. In the UK, where consumers are more familiar with the concept thanks to public transport schemes like London’s Oyster card, about 4% of the population use contactless payment cards, and a further 22% are interested in using one. In Spain and Italy, a third of consumers show interest in such a payment system.

But security concerns and a lack of need are holding consumers back. While early adopters will more likely overcome them, these concerns represent a serious barrier to mainstream adoption.

While mobile digital wallets have received much of the recent buzz in the marketplace, digital wallets cover a much broader spectrum, as my colleague Denée Carrington explains in her post 'The Digital Wallets Wars Are The Next Phase Of The Payments Industry Transformation'. But moving the needle on the adoption of digital wallets will require adding significant value before, during, and after payment.

Consumers have little motivation to adopt a new payment solution if it is purely a one-for-one replacement. Digital wallets must instead increase the value of the transaction for both consumers and merchants. Winning solutions will bring this to life through greater convenience, contextual relevance, and a compelling purchase experience.