It’s the time of year again, in which we tend to look back at what has been, and look forward to what will happen. Looking at this from a professional angle, 2010 was a very interesting year for the industry: research vendors bounced back from the recession, there was an increased focus on added value, and we saw a lot of innovation happening. In our report Predictions 2011: What Will Happen In Market Research, my team and I have identified a number of trends that we expect to shape market research in 2011.
Organization, technology, and social are defining the research agenda in 2011. In fact, in 2011 market researchers need to embrace social media as an information source, recognize technology as a driver of change while understanding how to implement it effectively, and continue to identify and integrate innovative methodologies to prepare for the future ahead. This will drive, for example, the following trends:
Forrester’s Technographics® shows that online European consumers have lost their trust in traditional media as an information source. A low 30% of online Europeans state that they trust the TV as an information source. The traditional media that Europeans see as most trustworthy are radio and newspapers. About one-third agree that they trust newspapers as an information source. Funnily enough, this number varies significantly across European countries: 45% of French Internet users trust newspapers as an information source — a number that is almost three times as high as the 16% quoted by their UK counterparts!
In fact, consumers trust consumer reviews and price comparison Web sites more than manufacturers' Web sites. But what does this trust mean? How influential are consumer reviews in the purchasing process? About one in 10 online consumers takes consumer reviews specifically into consideration when making a major purchase. Information sources that influence them most in the purchasing process are going to the shop (34%), talking with family and friends (24%), and the retailer’s Web site (13%). And although we see some differences in the percentages reported by country, these top three are the same everywhere.
Location-based social networks (LBSNs), apps that are downloaded on a mobile phone, offer organizations a possibility of right-time, right-place marketing by connecting people and nearby points of sale with geotargeted media. Forrester's Technographics® data shows that only 4% of US online adults have ever used location-based social networks, such as FourSquare and Brightkite, on their mobile phones, with only 1% using them more than once a week. Although the uptake is limited to a small group, this doesn't mean that LBSNs are not useful.
Looking at the profile of location-based app users, we see that they are:
Influential.Geolocation users are 38% more likely than the average US online adult to say that friends and family ask their opinions before making a purchase decision.
An interesting target group.They are typically young adult males with college degrees.
Heavy mobile researchers.They are also far more likely to search for information about businesses and products, as well as read customer ratings/reviews of products and services
Many people consume content from multiple media channels simultaneously (see for example this recent post on European youth), but does the content they’re looking at actually overlap? We looked into our Technographics® data to see what consumers are doing on their computers while watching a TV show and we found that the top four activities have nothing to do with what they are watching.
Because consumers are using their PC for activities that require more attention than watching TV – which is mostly a passive activity — it’s questionable how much of the TV content they are even registering. Almost one-third of consumers are playing games on their computers while watching television, and one-quarter are doing schoolwork. Has the TV just become background noise?
We also see that 44% of consumers are communicating with friends via social networks, chat, and email on topics that are not related to the show. So consumers are interested in content online, but not necessarily in parallel with the broadcasting of a show. Market researchers need to develop a research plan that helps companies understand how and when consumers watch TV, and when they are checking out online content related to the company's products or brand, in order to build a marketing strategy that reinforces the message across channels.
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.
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.