Originally published in bizologie
A new study by Chadwick Martin Bailey and iModerate Research Technologies shows that smartphone owners use their phones while shopping to compare prices, find other store locations and check for discounts. The study of over 1,400 consumers shows over half of consumers are using their smartphones to enhance their shopping experience.
According to their research both genders equally use smartphones while shopping, but women look more for discounts while men look more for reviews. About 2/3 of smartphone owners under 35 use the phone while shopping, but only 1/3 of owners over 50 do. Surprisingly, not that many people are making purchases with their smartphone yet – only about 25%. And, the most common purchase transaction made via the phone is for entertainment (music, movies, TV) – followed by banking. You can download a free copy of the report by providing some basic contact information.
Journey is complex and multidirectional
A lingering recession, coupled with consumers’ rapid adoption of digital tools, has inexorably altered shopping behavior in categories like groceries, home electronics, apparel and quick-service restaurants. Consumers engage with a variety of digital platforms as they research small and large purchases, when they’re in physical stores and during post-shop activities such as product reviews and referrals. Further, the path to purchase is increasingly nonlinear, according to the findings of a global retail study conducted by Microsoft Advertising and Carat.
The study, conducted in March 2010, examined how the recession has changed shoppers’ purchasing habits and how different media touchpoints affect consumer shopping behavior, including the way people learn about, research and discuss their purchase decisions. This shift has altered the traditional purchase funnel whereby marketers move consumers from awareness to sales to include digital media. For example, consumers may first learn about a product based on a tweet from a friend or a post on a social network, then go online via computer or smartphone to research the product, search for the product and consult product reviews. Beyond that, offline word-of-mouth and media remain influencers, making for a complex multimedia experience along the path to purchase.
Using mobile devices in-store to help make a final decision on an item is a newer and notable influence along the purchase path: The study found 38% of US shoppers said they used their mobile devices to help make a final decision to make a store purchase. And 31% of those polled purchased a new item after using their phone in-store. This finding signifies the rise of yet another media channel in the convoluted path to purchase.
Further demonstrating the need for brands and retailers to evaluate the impact of digital touchpoints, the study found that post-shop, 11% of those blogged about the purchase experience, posted a comment about the purchase on a social networking site and 11% posted a review online, respectively.
In addition, the research found that in the low-involvement grocery segment, 39% of those surveyed engaged in social network conversation about potential purchases but 47% of grocery reconnaissance occurred on the phone with friends and family. It is worth noting that not all social networking is digital.
Another study, “Engaging Consumers: The New Normal,” conducted by Chadwick Martin Bailey, iModerate Research Technologies and SageBerry Consulting, underscores the findings. That report found that since consumers have reduced spending, the shopping process becomes all the more important. The bottom line: Entirely new shopping, research and media consumption habits are emerging—and retailers and brands need to figure out how to address them.
“We found that the way people shop has changed and that during the period where people are making and refining lists, owned media from retailers is a top source of information,” said Beth Uyenco Shatto, global research director with Microsoft's ads unit.
By “owned” Shatto means media that originates from retailers online, in-store and elsewhere. Owned media created by marketers that appears on the retailer’s site (e.g., banners, video and microsites), along with in-store media, are also influential.
As consumer purchasing habits change, so must retailer and marketer communications. They need to collaborate to engage consumers on every channel that has the capacity to influence purchase and result in post-purchase satisfaction.
Having weathered the recession, people are still wary about spending in the future. And while much is still uncertain, marketers who want to be successful in the post-recession era should begin figuring out what the "new normal" is going to be.
According to a study from Chadwick Martin Bailey and iModerate Research Technologies, a third of consumers plan to continue the reduced spending habits they adopted during the recession. However, slightly more -- 43% -- remain undecided about what their future spending patterns may look like, suggesting there is some opportunity for marketers to gain some ground, says John Giegengack, director of CMB's eCommerce and retail practice.
"The companies that understand the ways consumer spending is changing are going to fare the best and pick up market share," Giegengack tells Marketing Daily. "The recommendation that we made based on the study is not to assume that when the economy turns around, the way you've always positioned yourself is going to work.
"There's a lot of bad [economic] news, but there's also some silver linings," he says. "One of those is that in this upheaval, consumers are forming new kinds of habits and attitudes. There are a lot of entrenched behaviors that are being broken and there's a lot of spending that's looking for a best place to land."
Through the study, the market research companies identified four product groups that generally hold with consumer purchases. The first, "Investments in My Quality of Life," includes things such as vacations, home improvement and other items for which there are no easy substitute. "Things I Don't Think About" includes activities for children and subscription services (cable TV/Internet/ Magazines). "Things that Entertain Me" includes video games, books and electronics, while "Guilty Pleasures" refers to things such as jewelry, designer clothing and shoes.
Of the four categories, the Guilty Pleasures will have the hardest time rebounding. On the other hand, the "Things I Don't Think About" category will fare the best, largely because discontinuing these products and services requires consumers to opt out of them. Marketers -- even those whose typical business model doesn't run in a subscription fashion -- may want to look at new ways to package and promote their products along these lines, Giegengack says.
"There's evidence that companies that don't package services like that probably could and have some success with that," Giegengack says. He cited JetBlue's "All You Can Fly" pass and promotion as one example of rethinking how to package traditional items. "It was a really big hit with consumers, and it was a moneymaker for Jet Blue," he says. "That's an example of understanding how people are making these decisions and adapting to match."
In light of the current economic climate, it’s no surprise that more than 179 million adults have bought, sold or shopped for items on a classifieds web site. Since classifieds are increasingly becoming a buying and selling platform of choice for many consumers, safety is a priority for users and classifieds sites alike. A national survey commissioned by Kijiji.com, eBay’s free, safe, family-friendly, local classifieds site, has uncovered key factors that users consider before visiting an online classifieds site.
“If something seems too good to be true, it probably is.”
Three in four U.S. adults (75%) said they prefer to buy or sell items from a Web site that does not host erotic ads or adult services, and more than half (53%) of consumers said they would prefer that a family member use a site without such listings.
Top attributes Americans are looking for in an online classifieds site include free listings, a safe experience and good deals, according to a survey conducted by Chadwick Martin Bailey1. The positive qualities in demand are not surprising considering the variety of reasons consumers opt not to visit online classifieds sites such as apprehension that ads may be misleading or fraudulent (36%), email address might be spammed (28%), getting a computer virus (26%) and classifieds ads may have adult content (24%), according to the Kijiji survey.
However, nearly three-quarters (74%) of Americans are more likely to use a classifieds site if it has a customer service team that focuses on monitoring and removing fraudulent and offensive ads. Kijiji addresses these concerns and is dedicated to providing an easy-to-use, family-friendly and safe experience through the following safeguards:
- Community-based measures: Kijiji’s Community Watch program encourages users to patrol the site and remove unsuitable content.
- Technology-based measures: Sophisticated filters and processes are used to weed out unsafe and inappropriate listings. The posting of ads is delayed in certain categories more susceptible to fraud or spam.
- Site-based measures: Certain categories that appear on other online classifieds sites are completely banned from the site, such as personal ads, erotic services and casual encounters.
- Customer Service team: Kijiji has a large team on staff that investigates reported ads and promptly handles complaints around the clock.
While erotic ads and adult services may turn consumers away from some online classifieds sites, half of those surveyed (56%) also felt that people who buy and sell things through online classified sites are responsible for looking out for themselves. To help consumers stay safe when using an online marketplace, Kijiji provides the following tips:
- Think Local: Making local connections helps reduce fraud. When buying or selling, always meet in person to see the product and exchange funds. Never send or wire money to sellers or buyers.
- Ask Questions: To ensure you know exactly what you are considering purchasing, ask about the condition of the item and when it was purchased. Kijiji allows sellers to upload up to eight photos on every listing, but don’t be afraid to request more pictures or ask additional questions if you would like additional details.
- Use the Buddy System: Whether you’re selling or buying, bring a friend along with you to check out the item you are considering purchasing or selling. In addition to being a safety precaution, you’ll also have someone there to provide a second opinion on your potential purchase.
- Be Prepared to Negotiate: Most sellers price their items high, knowing that potential buyers may try to bargain. When purchasing an item, it doesn’t hurt to ask the seller if they’re willing to be flexible on the price -- you may be surprised at the deal they give you!
- Listen to Your Mother: You may not have wanted to take her advice when you were young, but your mother really did mean it when she said, “If something seems too good to be true, it probably is.” Like anything else, use your common sense when purchasing an item. If something about an online listing or user raises a red flag for you, trust your gut.
- Be Descriptive: Be as descriptive as possible when developing your listing. Include the size, measurements, color, model, style and any other unique features about the item in the description. Also, be sure to take clear images of the item from a variety of different angles. The more information you provide in the listing the more likely you will sell your item.
About the Survey
The Kijiji Online Security survey was conducted by Wakefield among 1,000 nationally representative Americans ages 18 and older between August 7 and August 11, 2009 via telephone using Random Digit Dialing. Quotas were set to ensure reliable and accurate representation of the total U.S. population over the age of 18. Results of any sample are subject to variation. The magnitude of the variation is measurable and is affected by the number of interviews and the level of the percentages expressing the results. In this particular study, the chances are 95 in 100 that a survey result does not vary, plus or minus, by more than 3.1 percentage points from the result that would be obtained if interviews had been conducted with all persons in the universe represented by the sample.
Kijiji (www.kijiji.com), which means “village” in Swahili, is eBay’s free, safe, family friendly, local classifieds website that makes it easy to buy or sell everything from clothes to cars, find a job, adopt a pet, rent an apartment, and do so much more, right in your own neighborhood. Kijiji is currently available in more than 1,000 cities and countries around the world, and the site launched in 220 cities in the U.S. on June 29, 2007. In addition to the U.S., Kijiji has online communities in Canada, Austria, France, Germany, Italy, Switzerland, Japan and Taiwan. Kijiji is part of a broader eBay Classifieds family including Gumtree, Marktplaats, Mobile.de and Loquo, which extends the reach of eBay Classifieds to more than 20 countries.
In Philadelphia, where the dining scene is a fraction of the size of New York's, Stephen Starr dominates. He has 12 restaurants there, soon to be 13. His pull is like that of the New York restaurateurs Danny Meyer, Drew Nieporent and Stephen Hanson combined. His openings are guaranteed to attract attention.
Skip to next paragraph But he will be the new guy in town on Tuesday, the scheduled opening of Morimoto, at 10th Avenue and 16th Street. Morimoto is a $10 million, 160-seat Japanese restaurant with Masaharu Morimoto, the Iron Chef, in charge of the kitchen. About two weeks later Mr. Starr expects to open Buddakan, a 260-seat Pan-Asian extravaganza, around the block on Ninth Avenue.
Filling 420 seats was not a problem when Mr. Starr was promoting rock concerts 20 years ago. But can he do that nightly, at two big, new restaurants in a restaurant-saturated city?
Every opening is agonizing, he said, "but these are the most agonizing of all because they're the most expensive and they're in New York."
And they are in an area where some marquee names have already staked claims: Mario Batali at Del Posto, Jean-Georges Vongerichten at Spice Market, Mr. Hanson at Vento and soon Tom Colicchio at Craftsteak. Mr. Starr is trying to set himself apart by appealing to the fashion world as much as to the food world, and he hopes to generate the kind of buzz here that he routinely receives at home in Philadelphia.
He had planned for the two Manhattan restaurants to open in time to be host to designers' parties for Fashion Week in September. But construction delays, including some unusual glitches, like dealing with a section of the High Line rail viaduct in the ceiling of Morimoto, pushed back the openings a full season.
A fashion presentation by Adam + Eve is scheduled for Feb. 6 at Buddakan. A Calvin Klein dinner will be held at Morimoto on Feb. 9.
The publicity firm Mr. Starr hired, Full Picture, specializes in fashion and celebrities. It helped Ian Schrager open hotels in New York and California but does very little restaurant promotion. It arranged for Mr. Morimoto to prepare the lunch for Debra Messing's birthday in August in Los Angeles that is featured in the February issue of In Style magazine.
On Monday night Gourmet magazine held its 65th anniversary party at Morimoto, which was barely completed in time. Ruth Reichl, the editor, said that when the opening of the new Le Cirque was delayed, she decided to have the party for 300 people at Morimoto because she has long loved the chef's food. Mr. Morimoto will be on "Today" on NBC next Monday.
Interest in Morimoto is guaranteed because Mr. Morimoto is a star of the "Iron Chef" television show. After he left Nobu, where he was the head sushi chef, he opened Morimoto in Philadelphia with Mr. Starr, who promised him a New York restaurant in the future. (The original Buddakan is also in Philadelphia.)
"Morimoto is an easy sell," Mr. Starr said. "He's the Iron Chef that people see on television every single day. The press comes to him."
Promotion has been at the center of Mr. Starr's life since college. After graduating from Temple University in 1977, Mr. Starr, 49, ran a comedy club, then tired of that; became a concert promoter, then tired of that; ran a night club, and then tired of that. Then he bought an empty diner.
"I thought I could create a little buzz," he said.
The diner became the Continental, a restaurant with a retro cocktail lounge feel, which he opened in 1995. It was the first in a portfolio of restaurants that will expand to include one in Atlantic City next. Bon Appétit magazine made him its restaurateur of the year for 2005.
"The restaurants gave me a lot of energy," he said, "and I kept at it."
That restless energy is always apparent.
Mr. Starr, a native of Philadelphia, commutes regularly from his hometown, although he has an apartment at 24th Street and Seventh Avenue and an office in the Chelsea Market building, where the two restaurants are situated. When he visited the restaurants with a reporter while they were under construction, he strode through them without taking off his coat. Solidly built and of medium height, Mr. Starr invariably dresses in black, no tie. He said little. Mark Andelbradt, the chef de cuisine at Morimoto in Philadelphia, who has transferred to New York, said Mr. Starr would listen to others' ideas, but if he was not interested he would close off the conversation.
Even in Philadelphia Mr. Starr's restaurants have often been boldly fashioned by major designers like David Rockwell, Philippe Starck and Karim Rashid.
For Morimoto, the Japanese architect Tadao Ando agreed to take on his first restaurant project. Morimoto is on two levels and has walls of nearly 20,000 of the new clear, shimmering Ty Nant water bottles. Rippled fabric on the ceilings and walls was inspired by patterns raked in sand at Japanese temples. Hanging under the curving sweep of iron on the facade is what Mr. Starr called the world's largest noren, the traditional Japanese split-door curtain. The noren at the entrance was Mr. Morimoto's idea.
Skip to next paragraphAt a design meeting with Mr. Ando there was considerable discussion among the architects and engineers about whether the Ty Nant water bottles should be full or empty. Mr. Starr's only comment was that Ty Nant "should give us the water free for all the publicity they're getting." They did. But the water has to be served in the restaurant.
The designer of Buddakan, Christian Liagre, whose other New York work includes the Mercer Hotel, is creating a blend of East and West for the two-level restaurant, with colorful Asian fretwork alongside $800,000 worth of elegant French 18th-century-style carved woodwork.
For good luck, a feng shui master put dozens of Buddha statues into the ceiling of Morimoto to ward off any problems that the High Line track might cause.
Mr. Starr said he wanted to attract a combination of the hip, the cool and food enthusiasts. "But," he added, "regular people are the ones that will ultimately pay the bills, like the lawyers from Long Island."
As other restaurateurs and chefs have long known, that sort of support will have to be sustained by something more than buzz.
For example, Zak Pelaccio developed a cult following for his inventive sandwiches and small dishes at Chickenbone Cafe in Williamsburg, Brooklyn, and took it with him when he became the chef at 5 Ninth in the meatpacking district and an owner of Fatty Crab just beyond it.
"You can hype a place all you want, but there has to be something there to sustain it, not just a bunch of celebrities," Mr. Pelaccio said. "P.R. does a lot to spread the word, but then you have to sustain it with word of mouth, and that depends on the food."
Last fall Chadwick Martin Bailey, a market research company in Boston, released the results of a national survey about the value of word-of-mouth recommendations, which it calls advocacy. The study showed that 27 percent of Americans went to a restaurant because of such a recommendation and that the more expensive the restaurant, the more important advocacy recommendations were.
"An advocate is an evangelist not content to merely pass along or comment on 'the latest thing,' " said Judy Melanson, a vice president of Chadwick Martin Bailey. "Advocacy is different than buzz."
Mr. Starr said his restaurant would stand apart from the growing number of Asian and especially Japanese behemoths that have opened in New York in the past several years. "Morimoto is going to be far more interesting than any restaurant New York has seen," he said. "We're going to get fish flown in from the Tokyo market three times a week."
Discussing his new restaurants this month with The New York Post, he said that there had not been any "really incredible openings" in New York in almost 10 years.
"Maybe I came across as brash and arrogant," he said of that interview. "I may be eating my words, but I still don't think that Morimoto will have any problem handling the competition."
He also said that Mr. Morimoto has "a passion to show up Nobu." But Mr. Morimoto put it this way: "I will try to be the best. I don't care what others are doing. I'll do it my way."
Mr. Starr, who has an outside food publicist in Philadelphia, said he is under the impression that in New York it may not be "cool" to rely on publicists who specialize in food and restaurants. But, he said: "If I don't see a strong response right from the beginning, I'll need help. I may even wind up hiring food p.r. in New York."
Here’s something to pass along: Word-of-mouth marketing is worth billions of dollars in travel sales each year, according to a study by Chadwick Martin Bailey, which surveyed 1,000 respondents on the power of advocacy in the travel and hospitality industries.
For example, at least 11% of the U.S. population has taken a cruise. Four percent of the population selected their cruise based on the recommendations of advocates. Multiply that by the $3,000 average cost of a cruise, and the impact of such advocacy amounts to more than $9.5 billion in annual revenue.
Judy Melanson, Chadwick Martin Bailey’s travel and hospitality practice leader, stressed that advocacy is different from a simple passing recommendation.
“An advocate is an evangelist,” Melanson said. “Not content to merely pass along or comment on the latest thing, the advocate is driven by a heartfelt belief that you should buy this product and is ready, willing and able to explain why.”
It’s different from developing buzz, she said. “We see buzz as more of a subset of advocacy -- more of a shortterm, viral campaign during which a willing accomplice spreads information or excitement,” Melanson said.
The study found that more than a quarter of the U.S. population ate in a restaurant in the past year based solely upon recommendations from satisfied customers. People who selected restaurants based on the advice of advocates spent about $50 per visit, according to the study. That translates to more than $3.3 billion worth of annual advocacy-driven purchases at restaurants.
The study also found that:
- Over the last two years, 70% of consumers recommended a hotel, airline, restaurant, cruise or theme park. On average, these advocates were making recommendations to at least four people.
- Consumers born in 1979 or later were the most prolific brand advocates in the travel and hospitality segment among all other generations.
- Baby boomers accounted for 59% of direct advocacy-related purchases, worth an estimated $18 billion last year.
- Frequent travelers are not only most influenced by advocates but are also most likely to act upon a recommendation, especially for cruise lines, upscale hotels, vacation resorts, casinos and amusement parks.
Melanson said the study’s results underscore the importance of having not only a good product but a solid chorus of advocates who will strongly sing its praises. “By implementing measurable advocacy strategies, companies can perform ‘market judo,’ leveraging these new marketplace realities to their advantage,” she said.
“Those who lack an understanding of the nature of advocacy in relation to their business and fail to develop strategies to increase advocacy levels will find themselves struggling upstream against a very powerful current.”
Read more in this Brandweek Article about how CMB research helps Holiday Inn Select target Gen-Xers.