Q3 is always a very exciting quarter for the market research team at Forrester. Not only do we analyze, write and publish our annual State Of Consumers And Technology Benchmark report (which my colleague Jackie Anderson is very busy with at the moment), but we also start analyzing our annual reports looking specifically at consumers' online behavior. In Q3 we will first publish the US version of the document, followed by European, Asia Pacific, and LATAM versions later in the year. These reports are internally referenced as “the Deep Dive” reports, not only for the level of detail these reports contain but also because of the depth of analysis included. What really makes these reports unique is that they're similar in setup, making it possible to compare online consumer behavior across regions and within regions.
For example, our 2009 APAC Deep Dive report shows that Asia Pacific consumers are active Internet users compared with North American and European consumers but that their interests and activities varied greatly. And within Asia Pacific it's definitely not one-size-fits-all: The following graphic shows for example how the different countries vary in their uptake of media and entertainment activities:
The sheer number and types of devices on which people can listen to music have expanded enormously in the past few years. How has that affected people's music consumption? Our Technographics survey data shows that the car stereo is the most popular device on which to listen to music, followed by the home stereo and the PC. About one-third of US adults regularly listen to music on a MP3 player, and 8% listen on their cell phones.
Even though music functionality on phones has been around for about six years, only iPhone owners have adopted it in a significant way. What keeps consumers from adopting new music offerings? A recent Forrester report called "Which Device Offers The Best Music Experience?" uses Forrester's Convenience Quotient (CQ) methodology to assess a sample of devices to evaluate consumer experiences. This analysis shows that every device currently available leaves consumers with a wish list of features and improvements: challenges with installation and setup, an inability to share music, a broken link between music and video, or a lack of logic in the navigation. The tradeoff for consumers is simple: They only adopt something new when the benefits are bigger than the barriers.
Most companies are now building a social media strategy, with a presence on Facebook, Twitter and/or YouTube. At the same time there's much debate over the value of a "Facebook fan." In this whole discussion I was wondering which consumers are most likely to become fans of a brand. Our Technographics survey data shows that about 13% of European online adults have become “fans” of a brand, company, or product they liked recently. About 10% were interested in interacting with companies through social media but haven’t done so yet. The first group we called “brand fans,” the other “aspiring brand fans.” How do the two compare?
Aspiring brand fans have a more mainstream online profile: Half of them are male, and they are older in general. Brand fans, on the other hand, are more likely to be female, and two-thirds are younger than 35 years old. And 20% of these Europeans who are fans of a brand say they are more likely to recommend the brand that they are “friends” with to their network of friends over any other brand. And this is exactly where the value of the Facebook fan lies. As my colleague Augie Ray said in his blog post: "Facebook fans have little actual value until they are activated by the brand."
Many consumers find ratings and reviews helpful when doing product research online. Our Technographics survey shows that about half of US online men and 42% of female Internet users are using ratings and reviews at least monthly. Less than half of them are posting ratings and reviews regularly.
But how do consumers value these ratings and reviews, and what do they do about not knowing who's behind the ratings? To get a better understanding of this, we recently asked the community members in Forrester’s Digital Consumers Community the following question:
'Do you read customer reviews before you buy a product? If so, how important are others’ reviews when making your decision to buy a product? Does your reliance on customer reviews vary for different products?'
While most are checking consumer reviews, the comments reveal that they are not heavily influenced by peer reviews. People tend to seek out reviews when they are about to purchase a big ticket item and they are reading the reviews to make themselves feel more comfortable with spending that money – like they have done their homework – but in the end, it’s their own judgment they rely on.
Some key quotes:
“I always see what others have to say regarding the products, some are helpful and some are not”
On two occasions in the past few months, I’ve given a speech to members of Forrester’s Market Research Forrester Leadership Board about vendor management best practices, a topic I’m writing a report on.[i] With market research budgets increasingly shrinking and research expectations growing, we see that market researchers need to select, manage, and measure their vendors more efficiently.
The key to success here is to develop partnerships with your key vendors. Why? Because conversations with Market Research professionals at a variety of organizations show that partnering with research vendors leads to better projects, deeper insights, and lower costs. As one of my interviewees said: “It’s about intellectual ROI: You need to invest less time for each project. You build a lot of equity. You also get more of a team thing going — to me, this is very important. You work with these people on a daily basis, so finding the right vendor and contact is critical, as we see them as colleagues.”
To understand how Market Research professionals currently collaborate with their research vendors, we surveyed our Market Research Panel earlier this year. The majority of our panelists feel that they already have established partnerships with most vendors, and two-thirds state that price is less important than quality.
Smartphones have changed consumer' shopping behavior significantly. Our Technographics data shows that almost one-third of consumers are using their phones to locate a store nearby to find a specific product, and once they’re in the store, they’re using their phones to look up product information (21%) and to compare prices (14%). The retail industry should cater to this need and develop a mobile presence that guides consumers in their decision-making process and makes the information consumers seek easily accessible to seamlessly move them to the cashier.
Retailers can only benefit at this point because the “hard” part is already done: The consumer already wants the product. But without delivering on this last step toward the purchase decision, retailers aren't capitalizing on their previous marketing efforts that got the consumer interested in their product or their store in the first place-- it’s like running a race and stopping 5 feet before the finish line.
Rather than relying on a third-party app that could easily get the consumer walking next door for the lower price he just found, retailers should develop a mobile Website (and if relevant for their target audience, a mobile app) that will support and enhance consumers’ in-store experience when they’re looking up information and also build up loyalty and improve the cross-channel shopping experience.
Americans of all ages — not just the young — spend a lot of time playing games. Our Technographics data shows that all generations spend about 7 hours a week playing PC games, but younger consumers also play games on consoles, handhelds, and mobile phones. Generation Y spends close to 20 hours a week playing games!
The reason why console gamers play on game consoles is that they can play against others (49%), while computer gamers choose their platform because it's convenient (55%). Forrester wrote a report about the role of PCs and portable devices in gaming called “The Re-Emergence Of The PC As A Proper Gaming Platform.” The accessibility of gaming today is one important reason that video gaming is very popular. Mobile devices, like the iPad, give consumers the ability to play games nearly anywhere at any time, and, in many cases, they can play for free.
Forrester's Social Technographics® looks at how consumers approach social technologies — not just the adoption of individual technologies. We group consumers into seven different categories of participation — and participation at one level may or may not overlap with participation at other levels. We use the metaphor of a ladder to show this, with the rungs at the higher end of the ladder indicating a higher level of participation. You can find more background on Social Technographics and the concept behind it at our Groundswell blog.
Overall, engagement with social activities has increased significantly in the past few years. By the end of 2009, almost three-quarters of US online adults were participating in one way or another with social media. But how do users of Facebook and MySpace compare to each other when looking at how active they are? The following graphic shows that MySpace users are far more likely to be “Creators” — the group that actually creates its own fresh content.
We've also asked consumers in which categories they like to express themselves online. The behaviors of Facebook and MySpace consumers are quite comparable for most categories, but MySpace users score much higher on expressing themselves on music, video, or gaming online - true to their 'Creator' profile.
The recent recession has changed consumers' mindsets. They are more careful and prudent about how they spend their money on everything, including travel. But can price drive loyalty? What makes consumers feel valued? Forrester's Technographics® research shows that price and transparency of costs are indeed very important elements for travel companies to make their clients feel special, but these are followed by support statements like “Make me confident that any arising issues will be fixed.”
To increase loyalty and make consumers feel valued, travel companies should see beyond deals and extend their focus to include support. In a recent report on this topic 'Why Travel eBusiness Misses The Mark By Only Emphasizing Price' my colleague Henry Harteveldt gives an example of how a travel seller can use the recent Icelandic volcanic eruption to show affected customers they care, by offering them a special deal when they log into their account.
As Henry says, travel sellers must remember that they don't own the traveler; they earn the opportunity to serve the traveler from one purchase to the next. Fail and the traveler will consider your competitor — and price will likely provide the motivation to switch.
I am excited to announce that my first report that draws from our Latin American Technographics® data — entitled Understanding Latin American Online Consumers— is now available. (For Forrester clients who do not subscribe to our Latin American Technographics data, there is a shorter version of the report that you can access here.) I hope that our readers find a lot of valuable takeaways in this report. One aspect I want to highlight here is that understanding the Latin American market requires a long-term commitment.
Although the Internet has been around for almost two decades, Latin American’s active presence in the online world is relatively new. Our data shows that 58% of metropolitan Brazilians and 53% of metropolitan Mexicans are online at least monthly or more. While these may sound like exciting numbers for developing markets, two caveats stand out to me: 1) non-metropolitan populations will have much lower penetration, and 2) consumers in these metropolitan markets are just starting to familiarize themselves with the Internet — as evidenced by their generally lower Internet activity compared with other regions we cover. However, certain trends, such as the use of social media, suggest ways in which companies can connect with certain Latin American consumers online.