I am delighted to announce that our annual report on The State Of Consumers And Technology: Benchmark 2012, US is now available. This report is a graphical analysis of a range of topics about consumers and technology and serves as a benchmark for understanding how consumers have changed over the years. For those of you who aren't familiar with our benchmark report, it's based on Forrester's annual Technographics® online benchmark survey that we've been fielding since 1998 and for which we interview close to 60,000 US online adults. The report covers a wide range of topics, such as online activities, device ownership — including penetration data and forecasts for smartphones and tablets — media consumption, retail, social media, and a deep dive on mobile.
We analyze our findings through a generational lens, including Gen Z, Gen Y, Gen X, Younger Boomers, Older Boomers, and the Golden Generation. Age is a key factor behind consumers’ usage of and attitudes toward technology. However, one finding spans the generations: Consumers of all ages embrace the opportunity to find information and connect with people and brands wherever they are. And while online penetration in the US remains the same as a year ago — at 79% of all adults — the depth of Internet usage has grown; more consumers go online on a daily basis and they connect on more devices. The graphic below illustrates our point: US smartphone owners use their device almost everywhere. They aren’t just connecting at home but wherever they go; in fact, they’re more likely to access the Internet on their phone in a store than in their own kitchen.
Recently, Forrester released a report entitled “What Drives Retention and Sales In US Banking?” that tackles this question from the consumer point of view. Using regression analysis, we uncover how these drivers vary for acquisition, retention, and cross-selling in US retail banking.
What did we find? For one thing, consumers value trustworthiness from a bank above all else for both sales and retention. This comes as no surprise to us; with so many financial institutions to choose from, consumers want to do business with a bank that they trust. This finding also supports the key theme that Harley Manning and Kerry Bodine focus on in their recent book, Outside In: Treating your customers well and providing them with a positive customer experience pays off.
The graphic below shows the drivers of retention for the US retail banking customers: The perception of trustworthiness is off the charts as a driver of retention, and offering good customer service is the second-most influential driver. What our analysis shows to not impact retention — and even shows a negative relationship with retention — is having low APR and many locations.
Consumer behavior is changing even more rapidly than you might think. In the past couple of weeks, my colleague Samantha Jaddou and I have been analyzing the data for the US version of our annual global series, “Understanding The Changing Needs Of Consumers.” We are seeing not only a decline in the number of US consumers with a computing device (a PC, laptop, or netbook) but also a drop in the amount of time that consumers spend on traditional media like watching TV (on a TV) or reading newspapers or magazines.
One of the biggest revelations in this year’s data was the change in attitude of consumers — particularly younger ones — toward the Internet. Since we started tracking this information in 1997, we have only seen the amount of time spent online increasing. But Forrester’s 2012 data shows that US online adults are now reporting a decline in the amount of time they spend using the Internet compared with 2011 and 2010.
What’s going on? Our analysis revealed that “being online” is becoming a fluid concept. Consumers no longer consider some of the online activities they perform to be activities related to “using the Internet.” In fact, given the various types of connected devices that US consumers own, many people are connected and logged on (automatically) at all times. The Internet has become such a normal part of their lives that consumers don’t register that they are using the Internet when they’re on Facebook, for example. It’s only when they are actively doing a specific task, like search, that they consider this to be time that they’re spending online.
For consumers today, online and mobile channels have become an integral part of the shopping experience — for both researching and purchasing products and services.
In their transition to agile commerce, companies must understand how consumers are interacting and using multiple touchpoints to research, transact, and get service. Our recent report Segmenting Buyers: Introducing Super Buyers, Connected Traditionalists, And Traditionalists examines how three distinct retail segments of US online consumers — Super Buyers, Connected Traditionalists, and Traditionalists — leverage various channels for their shopping needs and explains how companies can best engage with each segment.
Some highlights from the report, which is based on a survey of more than 4,500 US online consumers:
· Super Buyers are the most connected shoppers and buy from many channels: online, offline, and mobile. Super Buyers like to mix and match their shopping by either researching online and buying offline or vice versa.
· Connected Traditionalists do most of their shopping online on a computer or in an offline store.
· Traditionalists are the largest segment; they do most of their shopping in-store — although they are also shopping online on a computer. This group has the lowest uptake of tablets and smartphones.
Recently, there has been concern over privacy regarding data on Facebook. Since the recent Facebook IPO, many people have been wondering if the company is facing pressure to find a new source of revenue. The question in many people’s minds is whether it will come from advertising and/or other sources — or whether Facebook will monetize the massive amount of data that the company has on consumers. After all, most people are on Facebook: Forrester’s North American Technographics® Online Benchmark Survey (Part 2), Q3 2012 (US, Canada) shows that almost seven out of 10 US online adults have a Facebook account. What’s more, that survey shows that the typical US online adult with a Facebook account has more than 180 friends on Facebook and spends an average of 7 hours each week on the site.
MIT’s Technology Reviewrecently published an article on the topic, “What Facebook Knows.” The article highlights how massive Facebook’s consumer database is and compares Facebook with a country — with 900 million members, it would be the third-largest globally. People share all kinds of information with Facebook: their demographic details, personal information, interests, and even their contact information.
Does your brand include Seniors (those ages 65+) in its digital marketing strategy? It should. Here’s why. Forrester recently published a demographic overview of Digital Seniors, and the findings are suggestive: 60% of US Seniors are online — that’s more than 20 million online Seniors in the US.
How are US Seniors using the Internet and technology? While they trail behind younger generations when it comes to device ownership and online usage, they integrate technology into their lives in ways that are relevant for them. For example, they use it as a way to connect with family and friends — 46% of US online Seniors send and receive photos by email, and just under half have a Facebook account.
Seniors aren’t as active on the Web and are less likely to own a smartphone or tablet as younger generations, so many campaign managers don't see them as an obvious target for digital campaigns. But they do have a number of advantages compared with younger consumers, including 1) their size — there are about 21 million online Seniors in the US; 2) their income — they have far more money to spend than 18- to 24-year-olds; and 3) their brand attitudes — they are more brand-loyal, with 63% of online Seniors agreeing that when they find a brand they like, they stick to it, compared with 53% of all US online adults.
Recently, I attended the MSI Workshop on behavioral economics at the Harvard Innovation Lab. The presenters included an innovative crew: a number of academics from Harvard Business School and Dan Ariely , author of Predictably Irrational. They gave many examples of how consumers aren’t always rational and don’t always know why they do what they do. This is troubling for market researchers, since it’s our job to understand what drives consumers so that companies can effectively optimize what works and what doesn’t. Let’s look at a couple of examples of how principles of behavioral economics can wreak havoc on market researchers:
The path of least resistance (AKA the default). Ever wonder why you are enrolled in your company’s 401(k)? Why you take generic over brand-name prescriptions? Why you’re an organ donor? Is it because of your financial sense or your values — or could it be because it was simply the default (and hence the simplest) option? In fact, multiple experiments in behavioral economics suggest just that: People tend to go with the default option but don’t realize they do.
I just returned from the IIR Market Research Technology Event (TMRTE). These were three action-packed days of industry leaders delivering great insights on what’s important for the market research industry, as well as the challenges and opportunities that technology presents. It was a pleasure to meet and connect with so many thought leaders in market research. Here are three main themes I gathered from the event and what I think market researchers need to pay attention to:
Big data is here. Many of the presenters highlighted how intimidating the flood of digital data can be for market researchers. Christopher Frank from American Express and Paul Magnone from Openet say it’s like “Drinking from the Fire Hose.” But Stan Sthanunathan from Coca-Cola reminded us that big data is a reality — so we’d better embrace it or get left behind. As a result, market researchers will need to move from viewing technology as an enabler to viewing technology as a driver.
We listened to marketers of the world’s biggest brands when they asked, “What’s the impact of Facebook on my brand?” and we decided to take a look for ourselves. We proudly present our latest research, “The Facebook Factor.” In the report, we answer the pressing question, “How much more likely are Facebook fans to purchase, consider, and recommend brands, compared with non-fans?” We used logistic regression modeling to find out. The impact? We call it the “Facebook factor,” and I urge you to read the report to find out how you can leverage our methodology to assess the Facebook factor for your brand.
In the report, we use four major brands as case studies to assess the Facebook factor for Coca-Cola, Walmart, Best Buy, and BlackBerry(Research In Motion [RIM]). Guess what? Facebook fans are much more likely to purchase, consider, and recommend the brands that they engage with on Facebook than non-fans. As the graphic below shows, Facebook fans of Best Buy are about twice as likely to purchase from and recommend Best Buy as non-fans.
Last week, I ran into an infographic on Ad Age about The People of Walmart. It compares the demographics of Walmart, Kmart, Kohl’s, and Target shoppers: for example, age, sex, income, and region of the customers. It shows that more women than men shop at Walmart, and that their audience is quite equally spread across age as well as income. Recently, Forrester conducted a survey where we gained insights on customers of retailers like Walmart. We found that while it’s great to examine the demographics of shoppers, it’s much more powerful (and actionable) to look at other insights about these retailers’ customer base, like marketing preferences, spend levels, and brand consideration.
Below you'll find some of the results from this Forrester study. You'll see that the average US online adult who shops at Walmart spent about $848 on average in the past year, but that only about half are likely to recommend the retail giant to a friend or family member. When these results are compared to other retailers, and by demographic, you create real insights.
I’d love to hear from you: How do you target your customers? Are there any behavioral and attitudinal variables that have been very helpful in defining your target segments?