havas worldwide: digital and the new consumer

Summer 2013

A dozen years ago, Havas Worldwide starting tracking an emerging cohort we call Prosumers

Key characteristics

•  Embrace innovation

•  Constantly seek out info + new experiences

•  Enthusiastic adopters of technology

•  “Human media” who transport attitudes + ideas

•  Marketing savvy + demanding of brand partners

•  Highly influential

Image credit: Fernando H. C. Oliveira@flickr.com

We also were studying the rapid changes in the digital world…

Telecommuting!

Smart homes! Interactive TV!

…and most especially the emerging field of e-commerce

(At the time, only 4% of US households had broadband access)

12 years later, we’re still tracking Prosumers…but in a world that has undergone a digital explosion

So we decided to explore how digital is reshaping consumption across the globe

Our Latest Global Study: Digital and the New Consumer

Extensive online survey created by Havas Worldwide and fielded by Market Probe International

31 countries

n=10,219

Around the globe, consumers fall within four categories of

digital integration

As mobile becomes more ubiquitous, people are

creating their own unique consumption mixes

Factors favoring e-commerce far outweigh

those against it

Consumers regard social media as a direct

communications pipeline to brands

What we’ll cover

•  4 degrees of digital integration

•  Mobile in the mix

•  Shopping is social

•  Brands in social media

•  Implications for today

•  Looking ahead to 2025

4 Degrees of Digital Integration

From dissociated…

to integrated

to experimental… to divided…

Digitally Dissociated

Shoppers who stick to traditional face-to-face purchasing, either because they don’t have access to or choose not to use digital tools

Image credit: michael hilton@flickr.com

12% of our global sample made no online purchases in the past year

Digitally Dissociated

Why shop in-store rather than online?

BEING ABLE TO TOUCH/ FEEL/ TRY ON ITEMS

GET PRODUCTS FASTER

SALESPERSON’S HELP

Respondents selected up to three answers

Shopping over the Internet is still perceived to carry greater risk

Digitally Dissociated

% who worry about online security

“I worry about my financial security every time I shop online”

Digitally Dissociated

Those who regard the digital world as a separate sphere they access via a computer at home or work. They are happy to shop online but not via a mobile phone.

Digitally Divided

Image credit: Media-Saturn-Holding GmbH@flickr.com

Occasional purchasers: Around 4 in 10 e-shoppers bought fewer than 10 items online in past year

Digitally Divided

FOR MAJOR PURCHASE DECISIONS, MY FIRST STOP IS USUALLY THE INTERNET

Even among infrequent e-purchasers, the Internet has become vital to the shopping process

Digitally Divided

SHOPPING ONLINE CAN SOMETIMES BE OVERWHELMING

The availability of consumer info online comes at a price

No group is immune from the stress—not even those who thrive on information (Prosumers) or those have grown up with digital (millennials)

What’s in those e-shopping carts?

PERSONAL ELECTRONICS CLOTHING/ SHOES/ACCESSORIES

ACCESSORIES

BOOKS TRAVEL (E.G., BOOKED A HOTEL, AIRLINE, OR TRAIN TICKET, CRUISE) TICKET, CRUISE)

MOVIES/MUSIC/ VIDEO GAMES

MUSIC/ VIDEO GAMES

The most popular categories of online purchases span from electronics to travel—with Prosumers most apt to buy in each category

Product Types Purchased Online Over the Past Year

This group is made up of e-shoppers who find digital intriguing and still a bit of an adventure. They are open to trying out what’s available and exploring what’s possible but have not yet fully integrated digital into their consumer lives.

Digitally Experimental

Image credit: Official BlackBerry Images@flickr.com

Nearly 1 in 5 global respondents made 25+ e-purchases in last year

Digitally Experimental

But brick-and-mortar is still part of the shopping process

I SOMETIMES GO TO A STORE TO SEE/TRY OUT A PRODUCT BEFORE BUYING IT ONLINE

Digitally Experimental

Why buy online rather than in-store?

24/7 ACCESSIBILITY CONVENIENCE BETTER PRICES/DEALS EASY PRICE COMPARISON

Respondents selected up to three answers

Digitally Experimental

Savings is a big driver

Over the course of a year, shopping online… 78%: …saves me money by helping me get better deals/avoid rip-offs

vs.

22%: …causes me to spend more money than I normally would because it’s so much faster and easier to buy things

Image credit: epSos.de@flickr.com

Another plus: Anonymity

1/3 of the global sample—and 4 in 10 millennials—purchase certain items online to avoid the embarrassment of buying them in person

Digitally Experimental

THERE ARE SOME ITEMS I PREFER TO BUY ONLINE BECAUSE I WOULD BE EMBARRASSED TO BUY THEM IN A LOCAL STORE

Those who blend online and offline without making a conscious distinction between the two; digital anytime/ anywhere is simply part of where and how they live.

Digitally Integrated

Image Credit: Sergio Uceda@flickr.com

Looking for a seamless blend of online and offline retail choices and interactions

Digitally Integrated

IT FRUSTRATES ME WHEN A RETAIL COMPANY DOESN'T HAVE AN ONLINE STORE

Mobile in the Mix

As long as going online required being tethered to a computer indoors, it had limited utility for shopping

That’s changing as widespread wireless connectivity and powerful mobile devices change who goes online—and when and where

Mobile changes everything

Strategy Analytics estimates there were more than 1 billion smartphones worldwide as of Q3 2012

Morgan Stanley forecasts that by late 2013, Internet will be accessed more by mobile devices than by desktop PCs

HOME COMPUTER WORK COMPUTER MOBILE DEVICE

For now, mobile is more about researching/ communicating than purchasing

Main Devices for Shopping Online

% OF RESPONDENTS WHO HAVE USED A SMARTPHONE TO SHOP ONLINE

But shopping via smartphones is catching on

And mobile devices have been embraced as a shopping tool

WHEN SHOPPING FOR A PRODUCT IN A STORE I HAVE USED A SMARTPHONE TO CHECK FOR A BETTER PRICE OR FOR CUSTOMER REVIEWS ONLINE

All signs point to more m-commerce in near future

I AM COMFORTABLE PURCHASING PRODUCTS AND SERVICES THROUGH MY SMARTPHONE

Digital Shopping Is Inherently Social

I DO LOTS OF CUSTOMER RESEARCH ONLINE

Websites, blogs, and social media are influencing purchase decisions

And the most relied upon influencers aren’t experts but peer consumers

I TRUST CUSTOMER REVIEWS MORE THAN “EXPERT” REVIEWS

On the “buy” side, nearly 1/2 of consumers have read about a product online and gone directly to another website to buy it I HAVE READ ABOUT A PRODUCT ONLINE AND GONE DIRECTLY TO ANOTHER WEBSITE TO BUY IT

On the “don’t buy” side, nearly 4 in 10 say a single negative comment can dissuade them from making a purchase…

EVEN A SINGLE NEGATIVE COMMENT ONLINE CAN STOP ME FROM PURCHASING A PRODUCT

OVER THE LAST YEAR, NONBRANDED BLOGS OR SOCIAL MEDIA MADE ME CHANGE MY MIND ABOUT A PRODUCT OR SERVICE I HAD INTENDED TO BUY

…and around 1/3 say social media has changed their mind about a purchase

Most people talk about brand/product experiences on social media

I SHARE INFORMATION ONLINE ABOUT BRANDS/PRODUCTS I USE

Contrary to conventional wisdom, people are more likely to share good experiences than bad

MORE LIKELY TO SHARE GOOD

EXPERIENCES

MORE LIKELY TO SHARE

BAD EXPERIENCES

I SHARE BOTH ABOUT THE SAME

Brands in Social Media: Yes, No, and OK

Around 1/2 of consumers interact with brands via social media

I INTERACT WITH BRANDS VIA SOCIAL MEDIA (E.G., "LIKE" THEM ON FACEBOOK, FOLLOW THEM ON TWITTER)

Social media can build brand connections…

I FEEL MORE CONNECTED TO CERTAIN BRANDS TODAY BECAUSE I CAN LEARN MORE ABOUT THEM AND INTERACT WITH THEM ONLINE

…and is an increasingly important engagement channel—especially for Prosumers

I FEEL ENGAGED WITH AT LEAST ONE COMPANY OR BRAND ON A SOCIAL MEDIA SITE

A social media presence can boost sales

I AM MORE LIKELY TO PURCHASE FROM A COMPANY/BRAND THAT IS ACTIVE ON SOCIAL MEDIA SITES

Pinterest hits the sweet spot

PINTEREST INFLUENCES MY SHOPPING BY GIVING ME IDEAS AND LINKING ME TO PRODUCTS I LIKE

And, as in the offline world, brands have an important role to play as guarantors of quality and trustworthiness online

But tread carefully…a sizeable minority believe social networking sites should be off-limits to brands

BRANDS ON SOCIAL MEDIA SITES ARE INTRUSIVE

I DON'T THINK COMPANIES/BRANDS BELONG ON FACEBOOK OR OTHER SOCIAL NETWORKING SITES; THESE SHOULD JUST BE FOR INDIVIDUALS

I DON'T THINK COMPANIES/BRANDS BELONG ON FACEBOOK OR OTHER SOCIAL NETWORKING SITES; THESE SHOULD JUST BE FOR INDIVIDUALS

STRONGLY AGREE SOMEWHAT AGREE NEITHER AGREE NOR DISAGREE

SOMEWHAT DISAGREE STRONGLY DISAGREE

The split on these statements suggests lots of wiggle room

BRANDS ON SOCIAL MEDIA SITES ARE INTRUSIVE

STRONGLY AGREE SOMEWHAT AGREE NEITHER AGREE NOR DISAGREE

SOMEWHAT DISAGREE STRONGLY DISAGREE

The split on these statements suggests lots of wiggle room

Acceptance is predicated on how you behave…

Brands on social media are expected to be especially responsive

COMPANIES ARE MORE RESPONSIVE TO CUSTOMERS WHEN THEY COMPLAIN VIA SOCIAL MEDIA

Consumers expect brands to listen and respond quickly and appropriately on social sites…

…and social media users are annoyed when brands fall short

IT ANNOYS ME IF I DON’T GET A FAST RESPONSE FROM A COMPANY OR BRAND I CONTACT VIA FACEBOOK, TWITTER, OR ANOTHER SOCIAL MEDIA CHANNEL

For some, it’s all about the quid pro quo

I ONLY ENGAGE WITH BRANDS ON SOCIAL MEDIA IF THEY OFFER DISCOUNTS OR PRIZES

Bottom line: Do be useful and responsive

Do share interesting information

Do offer engaging experiences

Do convey a sense of the real human beings behind the brand

Do offer tangible rewards

Do let them play a role in the company and brand

Don’t be on social media just for the sake of being there

Source: buzzfeed.com

Don’t be tone deaf

Source: Facebook via mUmbrella

Implications for Today

Smarter in-store tactics to battle online shopping and “showrooming”

Staples is experimenting with a retail format that incorporates a business lounge with meeting space and mobile workstations

Fashion eyewear retailer Warby Parker is opening brick-and-mortar showrooms but requires that all prescription purchases be made online

Rethinking the role of in-store employees

Source: Google Shopper Marketing Council

Combining commerce and community

Woot.com promotes shopper banter in real time

Personalized shopping: Delivering individualized value

xxx

Retailers and others are introducing improved Prosumer apps for smart shopping

Mobile as first screen

More focus on responsive design as retailers strive to accommodate every point of access

Image source: Martin Dube@flickr.com

Smarter mobile marketing

Meat Pack Hijack : Guatemala retailer uses app that detects when shopper is entering competitor’s store and flashes alert offering 99% discount—which decreases by 1% each second

Apps to improve brick-and-mortar retail experience

Instant discounts

Further blurring of online and offline

amish.patel@flickr.com

The race for speed—for retailers online and off

Finding new ways to target online influencers

jjprojects@flickr.com

Finding new ways to target online influencers

What Can We Expect in 2025?

The end of cash?

In 2012, cash comprised just 2% of point-of-sale payments for US households earning more than $60K a year [McKinsey]

The world as our computer—interactive surfaces anywhere and everywhere

Image credit: Houzz.com

Intelligent household devices—to automate chores and household purchases

Already, we’re seeing the start of functional window shopping

No store—just a window display; pay via PayPal and items are delivered by courier within the hour

Wearable technology—to make life easier and consumption more seamless

In the market for a new car? Your personalized curator will narrow down options based on a wide range of collected data, including typical number of passengers, driving style, entertainment and style preferences, area weather patterns, and more.

Personalized curation

As buying decisions become more complex, we’ll maintain individualized databases of preferences and needs to make smarter—and simplified—choices

Competing on apps

Currently, around 80 % of m-commerce purchases take place via apps. Took for more apps to get “smarter” through use, giving consumers reason to remain loyal.

For more insights from Havas Worldwide research—and to download the “Digital and the New Consumer” white paper—visit http://www.prosumer-report.com/blog/

And follow us on Twitter (@prosumer_report)