The new pathways to purchase in
the world of networked consumers
Henry Assael - lecture at NYU
October 6, 2011
Lee Rainie: Director, Pew Internet Project
Email: Lrainie@pewinternet.org
Twitter: @Lrainie
PewInternet.org
Implication: A New Consumer Decision Journey to Manage
ACTIVE EVALUATION:
The consumer adds 1.7 more brands to
consideration, based on packaging and sampling
INITIAL
CONSIDERATION:
PURCHASE:
At the moment of
purchase, the
consumer has
evaluated only 3.2
brands, and
makes decision
based largely on
information
learned before
shopping
Consumer starts
with 1.5 brands in
mind, influenced
by previous trial
and word of
mouth
POST-PURCHASE EXPERIENCE:
66% of consumers engage with their brand after purchase (e.g., online research), and
this engagement has a meaningful impact on the likelihood of repeat purchase
Source : Pete Blackshaw: CMO, NM Incite, a Nielsen-McKinsey Company
Where Social Media Fits in to the Mix
Most influential touchpoints
Store/agent/dealer
interactions
Prior brand/
product experience
Consumer-driven marketing
 Word of mouth
 Online research
 Offline/print reviews
Company-driven marketing
 Traditional advertising
 Direct marketing
 Sponsorship
 In-store advertising
12
26
43
28
10
5
21
37
31
39
Initial
Consideration
26
22
Active
Evaluation
Moment of
Purchase
Friending the Social Consumer
Source : Pete Blackshaw: CMO, NM Incite, a Nielsen-McKinsey Company
Your experiences -1
• Smaller scale / impulse buys
• Piece of music
• App
• Something off the shelf
Pew Internet findings in 2007 among music buyers:
• 83% find out about music from the radio, TV, or in a
movie;
• 64% find out about music from family, friends, or
co-workers.
PIP Consumer choice survey (2007)
PIP Consumer choice survey (2007)
PIP Consumer choice survey (2007)
Your experiences -2
• Mid-scale products
• Cell phone
• Clothes
Pew Internet findings in 2007 among cell buyers:
• 59% ask an expert of salesperson for advice;
• 46% go to one or more cell phone stores.
PIP Consumer choice survey (2007)
Your experiences -3
• Life-altering “investments”
• Real estate – apartment hunting
• College choice
• Car
Pew Internet findings in 2007 among real estate
shoppers (homes and apartments):
• 49% look at ads in the newspaper;
• 47% ask a real estate agent for advice
PIP Consumer choice survey (2007)
PIP Consumer choice survey (2007)
PIP Consumer choice survey (2007)
Digital Revolution 1
Internet (78%) and Broadband at home (62%)
65%
62%
Networked creators among internet users
•
•
•
•
•
•
•
•
•
•
•
65% are social networking site users
55% share photos
37% contribute rankings and ratings
33% create content tags
30% share personal creations
26% post comments on sites and blogs
15% have personal website
15% are content remixers
14% are bloggers
13% use Twitter
6% location services – 9% allow location
awareness from social media – 23% maps etc.
Impact on shopping
• Shopping is a “full contact” sport throughout
its phases:
– Research phase
• 60% of all Americans do research online about products
– Purchase phase
• 55% of all Americans made e-purchases; 51% travel
reservations
– After-purchase phase
• 37% rankings and ratings; another quarter describe
their shopping experiences
So what for brands?
• The Bermuda Triangle
– Markets are fractured
– Marketplace is roiled
– Metrics haven’t kept pace
– Too much noise
• Brands are co-owned by advocates /acolytes
– Best of times - sanctuaries
– Worst of times - #fail
Digital Revolution 2
Mobile – 84%
Mobile internet connectors – 63% adults
Wireless internet users
70
65
63
60
55
57
54
59
50
45
40
35
37
30
Nov-08
May-09
Nov-09
May-10
Nov-10
May-11
35% own “smartphones”
The networked consumer: cell phones
Interesting tidbit: 17% of American adult cell phones
owners have bumped into another person or an object
because they were distracted by talking or texting on
their phones.
PewInternet.org
56% of adults own laptops –
up from 30% in 2006
52% of adults own DVRs –
up from 3% in 2002
44% of adults own MP3 players –
up from 11% in 2005
42% of adults own game consoles
12% of adults own e-book readers - Kindle
9% of adults own tablet computer - iPad
Dramatically More Cross-Platform / Media-Mixing
59% of Americans use TV
and the Internet
Simultaneously
Source: Nielsen Three-Screen Report
Impact of mobile connectivity on
shopping
• Just in time information
– Where can I get a deal?
– Price comparisons
• “Networked info” packed into the shopping
experience
– QR (quick response) codes
• Announcement and validation of purchase
– Sharing the shopping story
So what for brands?
Attention zones
Continuous
partial attention
Deep dives
Info-snacking
Media zones
Social
Immersive
Streams
Creative /
participatory
Study / work
Digital Revolution 3
Social networking – 50% of all adults
What does this mean?
Social networks are more influential and institutions
less influential - 1
Sentries
What does this mean?
Social networks are more influential and institutions
less influential - 2
Evaluators
What does this mean?
Social networks are more influential and institutions
less influential - 3
Audience = New
media are the
new
neighborhood
Impact of SNS on shopping
• Purchasing can be group activity
• “Consumer cartels” arise (Groupon, Living
Social)
With Dramatically Different Channel Preferences
Discuss
New
products
Complain
Email
96
97
Call a live representative
94
FAQ on company website
Question: Those who would
contact the company to…
Make a
Reco.
Crisis
94
96
76
95
92
90
95
94
NA
92
NA
74
Post an opinion or question on company website
87
80
77
82
48
IM through the company's website
81
78
78
76
71
Posting on a company message board
77
69
71
74
47
Posting on a blog sponsored by that company
68
61
64
68
41
Telephone - automated response/recording
57
57
62
59
52
Reading company's Facebook page
55
NA
53
NA
36
Sending photo or video to company
53
48
48
51
41
Posting on the company's Facebook page
50
42
47
47
31
Texting the company via mobile device
36
34
40
37
41
Source: Nielsen Consumer Channel Preference Study ‘09
Get
Advice
Brand Credibility More Important Than Ever
Six Drivers of Brand Credibility
Trust
Authenticity
Transparency
Confidence
Consistency
Integrity
Authority
As Advertised
Real & Sincere
Real People
Informal
Let the Sun Shine In
Easy to Learn
Easy to Discover
No Secrets
Affirmation
Listening
Responsiveness
Playback
Reinforcement
Search Results
Accountability
Follow-Up
Empathy
Welcome Mat
Invitational Marketing
Humility (we can learn) Solidifying the Solution
Absorbing Feedback
Dignifying Feedback
24
Source: Nielsen Consumer Channel Preference Study ‘09
Implication: Bold New Questions for Companies
Issue
The Big Question
Credibility
How to manage and protect credibility and trust in a highly
transparent, 24/7 feedback environment?
Influencer
Management
How to extend the notion of key influencer management to
everyday consumers and even employees?
Cultivating
How to generate earned media from customer service, and
Earned Media how service in general can be leveraged more strongly for
brand and business-building via social media?
Organization
How to best manage day-to-day digital/social media
operations, recognizing that social media breaks down
geographic and organizational barriers.
Listening &
What are the right listening & measurement protocols to drive
Measurement accountability, feed engagement strategy & investment?
Source: Nielsen Consumer Channel Preference Study ‘09
Implication:
(or erosion)
of Web Sites
SocialDeath
Commerce
Ecosystems
Facebook
LinkedIn
Website
MySpace
Twitter
Implication: New and More Holistic Rules of Engagement
Brand Backyard
Consumer
Relations
Brand Site
Contact Center
E-mail
Phone
Web Site
43
Branded
Media
Channels
Engagement
Blog
Chat, SMS
Phone
Rate & Review
Common
Consumer Backyard
Forum /
Communities
Consumer
Outreach
Communities
User-Contributions
Ratings & Reviews
Co-Creation
Platforms
Twitter
Facebook
YouTube
Flickr, LinkedIn
Influencer
Outreach
3rd Party
Consumerist
Edmunds
WebMD
TechCrunch
Implication: From Selling to Service
Pizza Hut
Convenient pizza
ordering experience
Ben & Jerry’s
Experience B& J through
peace, love and ice cream
Kraft
Discover recipes for any
occasion.
Hershey’s
Simulate your favorite choc. milk
experience at anytime
Dunkin Donuts
Communicate with coworkers for coffee runs
Relevance to BP
Price Finders
Product Info
Travel Services
Environmental Info
Source: Nielsen Consumer Channel Preference Study ‘09
Implication: Rise of Consumer Cartels
Source: Nielsen Consumer Channel Preference Study ‘09
Implication: Massive Levels of Retailer Innovation
Can BP empower its franchises and/or products around innovation?
Source: Company websites; Progressive Grocer &
Pittsburgh Post-Gazette
Source: Nielsen Consumer Channel Preference Study ‘09
Implication: The Rise of Real-Time
24/7 Real-Time War Room
24/7 Engagement
All aspects of integrated, brand- Deliberate effort to shape and
monitored social media
manage messaging
Source: Nielsen Consumer Channel Preference Study ‘09
Listening Beyond Borders
Listening tools cover multiple
languages & regions
Looking Ahead
Source: Nielsen
Near
TermAhead
Trends /for
2012
What’s
Next?
Trend
What It Is, What It Means
Mass Socialization
Social “earned” media & paid media become more
intertwined
Platform Proliferation
New devices and multi-tasking abound
Mobile Comes of Age
Extends mass socialization & extends media to point of sale
Apps Everywhere
Disruptive growth in apps, fueled by games and service
utilities
Dominance of
Facebook
A juggernaut, rewriting rules + shifting attention from
websites
Rise of Social
Commerce
Redefining consumer retailer interactions, powered by GPS,
etc
Relevance & Privacy
Cautious advance to addressability; heightened scrutiny
Infrastructure Growth
Increased access and speed expand digital opportunities
“Heads Down”
Generation
Dramatic consumer habit change; all eyes to wireless
devices
Digital Downsizing
More filtering/control of apps, friends, followers, choices
41
Longer
Term
Trends/ &Next?
Disrupters
What’s
Ahead
Market Trends
Description
Digital & Social
From separate roles to unified and integrated (now one
& the same)
Mobile Disruption
Re-setting the entire landscape
Activism & Social
Media
Smarter, Creative, More Empowered/Linked & More
Sophisticated
Payments and Fees
Friction-free and seamless (already in play with iTunes)
Organizational
Trends
Globalization of
Description
Creating huge opportunities….and huge operational
Social
Media Blending
challenges sophisticated: Paid, Owned, Earned
Increasingly
Brand Managers
Moving to “Community Manager” Roles & Responsibilities
Enterprise SM
Dramatic expansion beyond marketing innovations
Marketing + Service
New synergy between marketing & operations
Agency Integration
Social prompting greater integration from agencies &
suppliers
Speedbacking
Practice of immediately responding to key issues, crises
42
Things to watch
• Content metering online – new media business
models
• Enhanced tech – 3-D
• New attention research – Nielsen and
Coalition for Innovative Media Measurement
•
•
•
•
Privacy debates
Net neutrality debates
Spectrum allocation debates
Rise of the “internet of things”
Thank you!