Econsultancy: How We Shop 2010 USA

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How We Shop in 2010

Habits and motivations of US consumers

How We Shop in 2010 Habits and motivations of US consumers

EconsultancyNew York

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Copyright © Econsultancy.com Ltd 2010

Published May 2010

How We Shop in 2010 Habits and motivations of US consumers

All rights reserved. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopy, recording or any information storage and

retrieval system, without prior permission in writing from the publisher. Copyright © Econsultancy.com Ltd 2010

Contents

1. Executive summary and highlights ................................. 1

1.1. About Econsultancy .................................................................... 4

2. Methodology and sample ................................................. 5

3. Communicating and selling to the social consumer ....... 7

3.1. Preferred channels for communication and marketing ............. 7

3.2. Email Programs .......................................................................... 21

3.3. Importance of emailed coupons ............................................... 30

3.4. E-commerce Websites ............................................................... 32

3.5. E-commerce site features impact on likelihood to purchase ... 33

3.5.1. Product ratings....................................................................... 33

3.5.2. Online chat ............................................................................. 36

3.5.3. Consumer-generated reviews ................................................ 39

3.5.4. Free shipping ......................................................................... 42

3.5.5. Payment options .................................................................... 45

3.5.6. Price guarantees ..................................................................... 48

3.6. E-commerce site issues .............................................................. 51

3.7. Social profile sites ....................................................................... 61

3.8. Twitter ........................................................................................ 71

3.9. Consumers accuracy when providing personal information ... 74

4. Factors in product research ........................................... 75

4.1. Email-driven purchasing .......................................................... 76

4.2. Media used for product research .............................................. 78

4.3. Priorities in the product research process ................................ 80

4.4. Impact of consumer reviews on additional purchases ............. 87

5. Motivations, attitudes and lifestyle factors ................... 89

5.1. Mobile sophistication ................................................................ 89

5.2. User-generated comments and reviews ................................... 94

5.3. Impact of corporate responsibility factors ............................... 96

5.4. Economic outlook .................................................................... 106

How We Shop in 2010 Habits and motivations of US consumers Page 1



1. Executive summary and highlights The Internet has taken on three major roles in consumer culture: research, direct sales, and customer

service. It might be argued that direct selling will ultimately be the least important of the three.

Online product research contributes to a far larger percentage of total retail than the 8% directly

attributed to e-commerce while the digital interaction and service is changing the fundamental

relationship between producers and consumers. Winners in the equation will be those who use digital

communications to best enable and influence offline purchases.

This report, How We Shop in 2010, is based on the findings of a survey of over 1,400 nationally

representative U.S. consumers. The study focuses on how people prefer to interact with e-commerce

brands, how they conduct product research, and contributing factors to their decisions, all through

the lenses of age and demographic type.

Channels

Although a variety of media are competing for consumer attention, email continues to be the desired

channel for many types of commercial communication. For example, only respondents over 55 years

of age prefer postal mail for the delivery of information about sales and specials. Even in that age

range, opinions are changing.

Frequency is in the eye of the beholder. The perception of, and reaction to, email frequency has a

strong relationship with age. But, that generational sensitivity doesn‟t apply to email in general, but

is focused on specific emailers. “Inbox overload” is the least cited reason for dissatisfaction with email

programs, while inability to provide relevance receives the highest score.

The problem for emailers is their email programs, not spam or displacement of email by social

networking. Consumers report a willingness to opt-in, but they have a reasonable expectation of

being treated well. At the very least that means sending a minimum of emails, protecting privacy, and

emphasizing products that people may find interesting. Beyond that, special pricing for house list

members and „first-look‟ offers help increase opt-in rates at the front end, and loyalty in the long

term.

Social networking and its effect on the nature of brand is the hottest topic in digital marketing, and

deservedly so. It‟s still worthwhile for marketers to remember that social network adoption is far from

maturity, and that people over 38 are significantly less likely to use social networks to pursue product

information, seek recommendations, etc., than younger people. That‟s changing, but will take time.

It's our tendency to see things in an either/or light, and that‟s led to renewed questions about the

long-term viability of email in the face of increased social media adoption. Based on the respondents

to this survey, the role of email in this evolving ecosystem is secure. As Econsultancy‟s Chris Lake

referred to it, email is „social media glue‟ – the mechanism for a variety of different types of

communication related to social activities.

The impact of search on the consumer experience continues to grow. People identify search as their

primary source of information for almost all types of purchase. As localized search improves, the line

between online and offline shopping gets increasingly blurred. For marketers, understanding the

nature of personalized and universal search will be essential. The days of being in the top three

results are over for many terms and brands because top results are unique to niche groups and

individuals.




Product Research & E-Commerce Sites

The trend in which consumers have come to rely on, create, and disseminate product reviews may be

as important as the ability to buy online itself. For while e-commerce represents approximately 8% of

retail, user-generated comments are a significant factor in a large percentage of the offline purchases

that make up the other 92%.

55% of all respondents report having a high product rating makes them more likely to buy, and the

inverse is also true. Similarly, 56% report the presence of consumer-generated reviews increases their

likelihood of using a particular online store. This preference is more pronounced among younger and

digitally sophisticated users, suggesting their impact will only increase over time.

The degree to which consumers look to reviews and ratings is in direct proportion to their primary

complaint with e-commerce: they don‟t get enough information to make a decision. People buying

online tend to have very specific concerns related to the inability to interact with products in three

dimensions. Does it have an input jack? Does the cord reach? High enough? For that reason, it pays

to include every piece of manufacturer‟s information at a minimum, and if possible multiple

photographic views as well as unique content.

It‟s also apparent that most e-commerce sites aren‟t able to differentiate themselves. Often,

customers find a product on one site, research it elsewhere, then decide where to buy. If any site in

the chain is able to create a memorable advantage, the customer may return once their research is

complete. Amazon creates that advantage with its “One-Click” checkout. Other sites can use brand

exclusives, price guarantees, free shipping offers, loyalty points and premiums to accomplish the

same thing.

The Youth Market

Although the study examines response across the age ranges, it‟s interesting to focus on the

consumers of tomorrow.

Young people (those between 18 and 24 in our sample) are often assumed to choose social or mobile

media over email, but this appears only to be true in regard to messaging. They demonstrate a strong

preference for email as a personal database for company communications, from receipts and shipping

notices to advertising and coupons.

They are also highly likely to use email as a conduit for coupons, for use both online and off. For all

demographics types, emailed coupons are a high priority and one that translates into real

transactions. Sixty-eight percent of those 18-24 reported using emailed coupons online and 58% used

them offline.

Younger people ask more of site search functions. They‟re more likely to say site search boxes do a

poor job of identifying products. These people have grown up with search and expect it to work

instantly and efficiently.

Demographic Groups

In addition to looking at consumers at the different stages of life, this report focuses on several

important demographic types;

Moms – women who have identified themselves as having children under 18 years of age in the

home.

Influencers – people active on at least one social profile site and have in excess of 500 social

connections.




Digital sophisticates – respondents who fit two or more in a basket of attributes, including having

accessed email on a mobile device, paid to download a television program online, and have surfed the

Internet on a mobile device.

High-income households – respondents reporting annual incomes in excess of $75,000.

Gender – differences in how men and women responded are rare. Significant differences are noted

in the text, but not displayed as separate charts.

Below is a sample of how different groups behave.

Men are more likely to use search engines and expert site reviews during a single round of

research, especially for lower ticket items. Women tend to take part in more discussion, online

and off, at any ticket level.

The purchase process for women tends to involve a greater range of media than men, and to take

longer.

Women tend to be somewhat more loyal to research and purchasing sites than men. Older people

are more loyal than women, and everyone is more loyal than digital sophisticates.

The age range that‟s most reliant on e-commerce is 25 to 38 years old. These people are

comfortable with the Internet, strapped for time, and prize convenience and price. With a greater

likelihood of having small children at home, they are less inclined to go to stores and somewhat

better able to accept deliveries during the workweek.

All age ranges are more likely to trust consumer reviews than formal testimonials posted by a brand.

Trends Worth Watching

Each generation of chipsets moves mobile devices closer to the personal computer. Advanced

behaviors today (accessing the Internet or checking email from a mobile device) will clearly soon be

commonplace, at least for people still in their working years. Nearly two-thirds of people under 24

have checked email on a mobile device (Figure 86).

The Green Movement is an important purchasing factor for a small but significant percentage of

the public. For most the demands of economy and practicality outweigh societal concerns. In general,

young people care more about environmental and political issues. So do people with higher

household incomes. Young people care less about where a product was made and more about how it

was made, by whom, and under what conditions.

Offering alternative payments can be a route to attracting new customers. It‟s a differentiator for

nearly half of all respondents. For high-income households and the digitally sophisticated, it‟s almost

universally viewed as a plus.




1.1. About Econsultancy

Econsultancy is a digital publishing and training group that is used by more than 200,000 internet professionals every month.

The company publishes practical and timesaving research to help marketers make better decisions about the digital environment, build business cases, find the best suppliers, look smart in meetings and accelerate their careers.

Econsultancy has offices in New York and London, and hosts more than 100 events every year in the US and UK. Many of the world's most famous brands use Econsultancy to educate and train their staff.

Some of Econsultancy‟s members include: Google, Yahoo, Dell, BBC, BT, Shell, Vodafone, Virgin Atlantic, Barclays, Deloitte, T-Mobile and Estée Lauder.

Join Econsultancy today to learn what‟s happening in digital marketing – and what works.

Call us to find out more on +44 (0)20 7269 1450 (London) or +1 212 699 3626 (New York). You can also contact us online.

Related Econsultancy reports

E-commerce Platforms Buyer's Guide 2010

http://econsultancy.com/reports/e-commerce-platforms-buyers-guide

E-commerce Statistics

http://econsultancy.com/reports/e-commerce-statistics

Conversion Report http://econsultancy.com/reports/conversion-report

Online Transaction Processing Guide http://econsultancy.com/reports/online-transaction-processing-guide

Checkout Optimization Guide

http://econsultancy.com/reports/checkout-optimization-guide

The Innovation Report

http://econsultancy.com/reports/innovation-report

http://econsultancy.com/

http://econsultancy.com/reports

http://econsultancy.com/events

http://econsultancy.com/training

http://econsultancy.com/membership_plans

http://econsultancy.com/contact

http://econsultancy.com/reports/e-commerce-platforms-buyers-guide

http://econsultancy.com/reports/e-commerce-statistics

http://econsultancy.com/reports/conversion-report

http://econsultancy.com/reports/online-transaction-processing-guide

http://econsultancy.com/reports/checkout-optimization-guide

http://econsultancy.com/reports/innovation-report




2. Methodology and sample This report is the product of a survey fielded to a consumer panel managed by Survey Sampling

International in April of 2010. After the total audience was cleansed for age and location, 1,430

responses were included in the dataset. All respondents reside in the United States and are over 18

years of age. All respondents are Internet users, with email addresses, and have volunteered to

participate in a consumer panel.

Figure 1: Male/Female Breakdown

Response: 1,430




Figure 2: Age Breakdown

Response: 1,430

Figure 3: Income Breakdown

Response: 1,430




3. Communicating and selling to the social

consumer

3.1. Preferred channels for communication and marketing Over the last 15 years, marketers have been beset by a succession of new marketing channels. So have

consumers. Remarkably, they‟ve adapted, learning to take advantage of the unique characteristics of

each new innovation. In these first pages, we see that consumers have strong and specific feelings

about how they‟d like to be communicated with.

At first glance it appears that postal mail and email are tied as the preferred method of delivery for

sales materials, but Figure 5 shows preferences vary significantly by age. Email wins easily among

those respondents under 39 years of age, even though a small but significant part of that same group

(18-38) shows a preference for receiving sales info via their social profile sites.

For those with an older customer base, it should be noted that throughout our research we found

those over 55 to have a marked preference for including some non-digital element of their purchase

process, whether it was a paper catalog, phone consultation or in-store purchase of a product

researched online.

All respondents Figure 4: What is the best way to receive ads for sales and specials?

Response: 1,279




Respondents by age

Figure 5: What is the best way to receive ads for sales and specials? (Age breakdown)

Response: 1,279




Broken out by demographic type we see a more marked preference for email delivery; only the subset

of Moms chooses postal mail. Influencers and digital sophisticates look to electronic delivery, usually

by email, but also including social sites. High-income households may not be ready for delivery via

their social sites, but now express a preference for email that research suggests wasn‟t present as

recently as 2008.

Respondents by type

Figure 6: What is the best way to receive ads for sales and specials? (Type

breakdown)

Response: 1,279




Coupons are the last bastion of postal mail. Only digital sophisticates choose email, and that by a slim

margin. With one significant caveat, the preference for postal delivery of coupons crosses most age

and demographic variations. People are more open to non-food coupons via email and other forms of

electronic delivery. In product categories such as electronics, media and services, the preference for

electronic delivery exceeds that for postal mail.

All Respondents

Figure 7: What is the best way to receive coupons?

Response: 1,279




Respondents by age

Figure 8: What is the best way to receive coupons? (Age breakdown)

Response: 1,279




Respondents by type

Figure 9: What is the best way to receive coupons? (Breakdown)

Response: 1,279




Figures 10 through 12 show email is far and away the preferred mechanism to receive shipping

notices. Even among digital sophisticates and influentials, the interest in social delivery is minimal,

though a small percentage of those groups is interested in phone delivery, likely meaning digital

delivery to the device rather than a phone call.

All Respondents Figure 10: What is the best way to receive shipping notices?

Response: 1,279




Respondents by age

Figure 11: What is the best way to receive shipping notices? (breakdown)

Response: 1,279




Respondents by Type

Figure 12: What is the best way to receive shipping notices? (breakdown)

Response: 1,279




Figure 13 identifies one of the significant failures of consumer-facing businesses in the last 15 years:

the slow movement of customer service to email and other digital delivery mechanisms. All response

groups would prefer to be able to rely on email for customer service, but respondents make it clear

they are frequently disappointed by companies‟ lack of response, quality of response, and response

times.

The preference for email is highest among the 25-38 year-olds, who may be assumed to be highly

active on email, comfortable with the Internet, and also to have more commercial relationships than

the 18-24 year olds. This latter group is the only one with a significant interest (a still modest 8%) in

communicating with brands via social sites.

All Respondents Figure 13: What is the best way to get customer service?

Response: 1,279




Respondents by Age

Figure 14: What is the best way to get customer service? (breakdown)

Response: 1,279




Response by demographic type generally falls in line with the norm, excepting high-income

households, which vary significantly with 61% preferring email.

For marketers considering the question of whether to deploy customer service by email, or how to

improve what they have, consider the top three consumer complaints;

No response at all. Email that simply goes into the ether. Often, there‟s an element of technology

error here, where emails are sent to email addresses that aren‟t monitored.

Slow response. When companies are able to respond within the hour or the business day,

customers notice. Even a quick acknowledgement that the issue is in the queue is appreciated.

Insufficient information. Companies that rely heavily on automated responses or canned answers

can pay the price of infuriating the customer whose question gets an unspecific answer.

Respondents by Type

Figure 15: What is the best way to get customer service? (Breakdown)

Response: 1,279




Respondents by Age

Figure 16: How often do you find that there‟s no way to get a specific question

answered when you‟re shopping online?

Response: 1,279




Respondents by Type

Figure 17: How often do you find that there‟s no way to get a specific question

answered when you‟re shopping online?

Response: 1,279




3.2. Email Programs Figures 18 and 19 chart responses to a question exploring the value of opt-in consumer email

programs. Across ages and types, the most popular answer was that roughly half of the email

programs respondents participate in are of value to them.

It‟s interesting that satisfaction with email has an inverse relationship with age, as shown in Figure

18. This may reflect the importance of email for older demographics, which don‟t have the same range

of channels for contact (social, mobile, etc.) that younger ones do.

It‟s also true that younger users are more likely to take active control of marketing channels, using

filters, folders and the unsubscribe link more easily that the rest of the sample.

Figure 18: Percentage differences between age ranges

>50% satisfaction <50% satisfaction Difference

All 28% 36% -8%

18 - 24 46% 23% 23%

25 - 38 31% 32% -1%

39 - 54 25% 39% -14%

55+ 19% 41% -22%

All Respondents

Figure 19: What percentage of companies sends you emails that are valuable to you?

(All respondents)

Response: 1,278




Respondents by Age


Response: 1,278




Good news for emailers is that most sub-types are happier with their email programs than the

average. Digital sophisticates, who map toward a younger demographic, are the happiest. Older, high-

income households are the least so, though still marginally above average.

Figure 21: Percentage differences between demographics

>50% <50% Difference

All 28% 36% -8%

High-income 31% 38% -7%

Moms 39% 27% 12%

Influencers 39% 27% 12%

Digital sophisticates 47% 23% 24%

Respondents by type


(All respondents)

Response: 1,278




Figure 23 shows the responses of those who indicated they were pleased with more than 50% of their

email programs. Responses haven‟t been broken down by age because there‟s little difference through

that lens.

In a statistical tie are the top two benefits cited: special pricing and interesting content. Simply,

people want utility and the benefits of membership from email.

Figure 23: What makes email programs valuable to you?

Response: 1,089




The demographic types generally fall in line, with the exception of Moms, who are more enthusiastic

about receiving topical newsletters and getting early access to product information. In general, we

believe virtually every product and niche has customer-enthusiasts who are motivated by getting the

latest information first, being asked their opinion, etc. This group – which often spans ages and types

– is highly valuable. They are likely to spread that information in their social circles, both online and

in the real world.

Respondents by type

Figure 24: What makes email programs valuable to you?

Response: 1,089




Frequency is in the eye of the beholder. There‟s no reason to believe that the younger you are, the

more likely you are to subscribe to email programs that send more frequently. But in Figure 25 we see

that perception of, and reaction to, email frequency has a strong relationship with age. Notably, that

generational sensitivity doesn‟t extend to email in general, but is focused on specific emailers. “Inbox

overload” is the least cited reason for dissatisfaction.

Respondents by age

Figure 25: What aren‟t these email programs valuable to you?

Response: 426




Not surprisingly, digital sophisticates are sensitive to email frequency, and are twice as likely to cite

receiving emails too frequently than the average. They, and Moms, are also more likely to feel

inundated by email in general.

Respondents by type

Figure 26: What aren‟t these email programs valuable to you?

Response: 426




Figure 27: Word cloud of responses to the question “What makes these email

programs valuable to you?”




Figure 7: Word cloud of responses to the question “How could these programs be

better?”




3.3. Importance of emailed coupons For all of the discussion of whether email is still relevant to young people, Figure 29 appears to

indicate they are highly likely to be using it as a conduit for coupons, for use both online and off. For

all demographics types, emailed coupons are a high priority (as shown in Figure 30) and one that

translates into real transactions.

Respondents by age Figure 29: Have you used a coupon you received online in the last 12 months?

Response: 1,279




Respondents by type

Figure 30: Have you used a coupon you received online in the last 12 months?

Response: 1,279




3.4. E-commerce Websites Shoppers tend to fall into two camps when it comes to online shopping. In Figure 31 we see top

responses divided between the themes of convenience and security. For most, online shopping

represents an easy, cheaper way to shop, but a significant minority continues to view using credit card

information to shop online as an unacceptable risk.

Figure 31: Word cloud of responses to the question “What comes to mind when you

think about shopping online?”

Common complaints around online shopping are easy to identify, if not to address. Security: The most common and intense negative feeling people, even online shoppers, have toward e-commerce. The inability to touch: Naturally, the computer screen doesn‟t offer the same tactile and three-dimensional views of being in the store. This can be at least in part countered with better, more varied product presentation software. Too much to choose from: Some sites suffer from an abundance of products, although the real issue is likely product presentation and navigation rather than the raw number of SKUs available. Surprises: Many complain about shipping or other fees that aren‟t visible until late in the checkout process.




3.5. E-commerce site features impact on likelihood to

purchase Across all ages and demographics, having reliable and robust product ratings is a valuable addition to

retail sites. Younger shoppers are especially likely to prefer sites offering ratings.

3.5.1. Product ratings

All Respondents Figure 32: Does having product ratings (ex: 3 of 5 stars) affect your likelihood of

using an online store? (Al respondents)

Response: 661




Respondents by Age

Figure 33: Does having product ratings (ex: 3 of 5 stars) affect your likelihood of using an online store?

Response: 661




Respondents by Type

Figure 34: Does having product ratings (ex: 3 of 5 stars) affect your likelihood of

using an online store?

Response: 661




3.5.2. Online chat

Most shoppers consider instant chat to be a „nice to have‟ rather than a free standing differentiator.

The real value of chat is evident when it‟s seen as a mechanism for customer service that‟s preferred

by many.

All Respondents Figure 35: Does having online chat available affect your likelihood of using an online

store? (All respondents)

Response: 661




Respondents by Age

Figure 36: Does having online chat available affect your likelihood of using an online

store?

Response: 661




Chat is important to a significant number of “influentials” and “sophisticates,” as well as roughly one

in five of those in other demographic types.

Respondents by Type

Figure 37: Does having online chat available affect your likelihood of using an online

store?

Response: 661




3.5.3. Consumer-generated reviews

Like chat and ratings, preference for sites with consumer reviews is related to age. The strength of

that preference is higher than that for chat, and on par with ratings. For retailers, one advantage of

reviews is that they can lead to additional purchases of related and complimentary products.

All Respondents

Figure 38: Does having consumer-generated reviews affect your likelihood of using

an online store? (All respondents)

Response: 661




Respondents by Age


an online store?

Response: 661




Respondents by Type


an online store?

Response: 661




3.5.4. Free shipping

Unsurprisingly, free shipping is as strong attraction to all age groups and demographic types.

Retailers can take advantage of this by making it very clear when products or customers qualify for

complimentary shipping.

All Respondents Figure 41: Does having free shipping available affect your likelihood of using an

online store? (All respondents)

Response: 661




Respondents by Age

Figure 42: Does having free shipping available affect your likelihood of using an

online store?

Response: 661




Respondents by Type

Figure 43: Does having free shipping available affect your likelihood of using an


Response: 661




3.5.5. Payment options

Alternatives to credit cards have proliferated in recent years. Figure 44 tracks the relationship

between youth and a strong interest in alternative payment options, such as PayPal, BillMeLater,

SecureEBill and others. Although they make up a relatively small percentage of total purchases

(estimates range from 5% to 25% but the reality is likely at the low end of that range for most sites),

there are reasons for sellers to consider offering alternatives.

Lower fees – alternatives often charge per transaction percentages than the major credit card

companies.

New, wider audience – retailers who offer alternatives often find that the customers taking

advantage are new to their lists.

Differentiator – since alternative payment options are far from universal, and are important to

fans, they are a way of standing out from the crowd and building loyalty.

All Respondents

Figure 44: Does having payment options like PayPal or BillMeLater available affect

your likelihood of using an online store? (All respondents)

Response: 661




Respondents by Age


your likelihood of using an online store?

Response: 661




Respondents by Type


your likelihood of using an online store?

Response: 661




3.5.6. Price guarantees

All Respondents

Figure 47: Does having available price guarantees affect your likelihood of using an


Response: 661




Respondents by Age


online store?

Response: 661




Respondents by Type


online store?

Response: 661




3.6. E-commerce site issues Although younger people are the most likely to notice insufficient numbers of reviews, all segments of

buyer find them helpful. For retailers, the question is how to attract more reviews:

Ask for them – ask for reviews after products are delivered, but not so quickly that customers

won‟t have an opinion. The right timeframe varies by the type of product. For example, clothing

forms an almost immediate impression, while an appliance may take a month or more. Setting up

automated emails with timing based on product category can simplify this process.

Make it easy to create and post – the technical process for submitting a review should be fast, and

take a minimum of clicks, just like everything else on a good site. If coming from an email, the

users should find themselves on the right page, with the product information already provided.

Create an environment that encourages interaction – some sites do this through direct incentives

such as points systems and discounts. Others take the longer view and attempt to build a socially

driven site that rewards reviewers in the more esoteric but satisfying currency of attention for

their contributions.

Respondents by Age

Figure 50: How often do you find too few buyer reviews on websites to be helpful?

Response: 654




Respondents by Type

Figure 51: How often do you find too few buyer reviews on websites to be helpful?

Response: 654




One of the most common and important complaints from online shoppers is there isn‟t enough

information on a specific site to make an informed decision. Because the Internet offers so many

options for information, these shoppers quickly depart via search engines to find the required

information somewhere. Retailers should focus on solving this problem at two levels.

Work to provide all available information. People buying online tend to have very specific

concerns related to the inability to interact with products in three dimensions. Does it have an

input jack? Does the cord reach? High enough? For that reason, including every piece of

manufacturer‟s information, and if possible multiple photographic views, will pay off. Some sites

use consumer-generated content to fill the gap, but for low traffic and SMB focused direct sellers,

there may not be sufficient volume for this solution.

Another consideration is that sometimes customers will find a product on one site, research it

elsewhere, and then make a decision on where to buy. If the first site is able to create a

memorable advantage, the customer may return once their research is complete. Amazon creates

that advantage with its “One-Click” checkout. Other sites can use price guarantees, free shipping

offers, loyalty points and premiums to accomplish the same thing.

Respondents by Age

Figure 52: How often do you find too little information to decide on products/services when you‟re shopping online?

Response: 654




Respondents by Type

Figure 53: How often do you find too little information to decide on products/services when you‟re shopping online?

Response: 654




Respondents by Age

Figure 54: How often do you find pages on retail websites load too slowly?

Response: 654




Respondents by Type

Figure 55: How often do you find pages on retail websites load too slowly?

Response: 654




Respondents by Age

Figure 56: How often that retail websites break or malfunction when you‟re shopping?

Response: 654




Respondents by Type

Figure 57: How often that retail websites break or malfunction when you‟re shopping?

Response: 654




Respondents by Age

Figure 58: How often do you find that the search box doesn‟t work well when you‟re shopping online?

Response: 654




Respondents by Type

Figure 59: How often do you find that the search box doesn‟t work well when you‟re shopping online?

Response: 654




3.7. Social profile sites The social phenomenon has already changed e-commerce. User-generated reviews were one of the

first intersections between commerce and the online conversation. Moving forward, the permutations

and implications of social networking and marketing will continue to change the ways in which we

research, choose, negotiate for, and purchase products, both online and off-. There are trends just

taking shape today that may become the new reality of e-commerce in years to come.

Location is a more powerful factor in buying equation than many of the other variables that we

use to target products. The industry is only beginning to understand the implications of our

mobile devices‟ self-awareness. But we are not far from a time when consumers are able to take a

photo of a product, access review sites to confirm its quality, and have nearby and online stores

compete for our interest, all from our mobiles, which will also serve as payment devices.

In an open-ended question about social media, one survey respondent said, “it seems like

Facebook is the Internet.” For many people, that‟s true, and for over 400 million worldwide,

Facebook plays a significant role in their lives online. So far, the ways in which Facebook and

commerce have overlapped have been limited to marketing and the sale of virtual products (a

multi-billion dollar industry in its own right). However, Facebook has exploring ways in which to

bring commerce to the site in more direct ways. Whether through the implementation of their

own payment-credit system or the integration of existing platforms, Facebook may become a sales

channel for all sizes of business.

Collaborative buying takes advantage of easy communication among like-minded people to

create groups with the purpose of driving down the price of a particular product or service. This

model exists in many forms in the offline world and some online examples exist, like Groupon. So

far, most collective buying online has been limited to digital and service products that don‟t

require physical fulfillment. The growth in popularity of these affinity-buying groups seems to be

inevitable as social networks become a ubiquitous part of the average person‟s daily life.




Respondents by Age

Figure 60: Do you use Facebook, MySpace or another social profile site? If so, how

often do you access it?

Response: 1,430




One challenge to those using social outreach to generate attention is that they‟re competing with an

individual‟s entire social network, which is constantly growing. In Figure 61 we see that for many

people theflow of posts can be overwhelming and that just over 60% of all respondents report reading

less than a page of updates on Facebook (respondents were not asked to make a distinction between

the „Top News” and “Most Recent” pages). Influencers are much more likely to invest the time to read

beyond the first page, but by definition, their feeds will be far more crowded than average.

All the above suggests that over time, the nature of commercial relationships that people maintain via

social networks will evolve as they did as the early stages of email marketing, which has matured into

today's channel. Currently in social media, as it was for email 10 years ago, it‟s relatively easy to gain

followers and friends, at least for some brands. But new people and organizations are competing for

attention. Fortunately, in the case of social media, we may avoid the saturation and low quality that

plagues email marketing. Marketers tend to treat their social customers with the respect email

recipients deserve but d0nt‟ always get, and it‟s the nature of social messaging to be less intrusive

than email.

Respondents by Type

Figure 61: Do you use Facebook, MySpace or another social profile site? If so, how

often do you access it?

Response: 1,430




All respondents

Figure 62: When you check [their social profile site] how many of your friends‟ posts do you read?

Response: 720




Over one third of all respondents reported having forged some type of social connection with a

commercial entity in the last 30 days, as did close to half of those in the key 18-24 year old

demographic. Respondents between 25 and 38 are a close second at 42%

Respondents by Age

Figure 63: In the last month, have you become a “fan” or “friend” of any companies, products or brands?

Respondents: 720




In what appears to be good news for marketers, several key demographic types are significantly more

likely than the average to connect to companies. Figure 64 shows only high-income households hover

around the average.

Respondents by Type


Respondents: 720




The explosive growth of social media has introduced the question of a „bubble.‟ Will there be a decline

in some aspect of social media that mirrors its rise? Figure 65 shows one measure that indicates

otherwise.

Respondents by length of membership


Respondents: 720




The two primary reasons for connecting with a brand online are to advertise that affiliation and to

learn of offers. Figure 66 shows there's some variation based on age, with younger people being more

inclined to connect with brands as an expression of style or support of a brand concept. They also

value have a higher expectation of entertainment from a brand‟s communications.

Respondents by age

Figure 66: What leads you to become a “friend” or “fan” of a company or product on your social site?

Respondents: 720

15%

30%

32%

35%

45%

49%

15%

24%

24%

44%

55%

48%

21%

22%

16%

33%

49%

51%

9%

16%

13%

41%

43%

37%

0% 20% 40% 60%

Learn about the company's culture and responsibility to the environment, its

workers, etc.

I'm making a statement

For entertainment - their updates need to be funny or insightful

Learn about new products/features/services

Learn about specials, sales, etc.

Show that I like the the company or product

55+

39-54

25-38

18-24




Figure 67 shows few distinctions among the demographic types, with the exception of influencers and

sophisticates. These two groups are more likely to see the connections as „making a statement‟.

Respondents by type

Figure 67: What leads you to become a “friend” or “fan” of a company or product on

your social site?

Respondents: 720

15%

33%

23%

42%

47%

53%

19%

31%

30%

40%

55%

56%

24%

31%

31%

42%

50%

46%

19%

29%

23%

37%

52%

49%

16%

24%

25%

38%

47%

48%

0% 20% 40% 60%

Learn about the company's culture and responsibility to the

environment, its workers, etc.






All

High income

Digital sophisticates

Influencers

Moms




New arrivals to social networks appear to have less distinct feelings on friending/following companies

than more experienced users. It‟s an encouraging sign to marketers that over time the behavior and

its value appear to become more apparent.

Respondents by length of membership

Figure 68: What leads you to become a “friend” or “fan” of a company or product on

your social site?

Respondents: 720

13%

27%

26%

42%

56%

55%

22%

29%

24%

37%

29%

26%

16%

24%

25%

38%

47%

48%

0% 20% 40% 60%

Learn about the company's culture and responsibility to the

environment, its workers, etc.






All

Under 6 months

Over 2 years




3.8. Twitter Twitter is still an emerging phenomenon, even among the population of online survey takers who are

naturally more participatory in online activities than the general population. Figure 69 shows only

15% of respondents ever use Twitter, with one third of those doing so only occasionally. However,

Twitter enthusiasts tend to be influencers who may have disproportionate value to brands. They can

spread a worthy offer or viral campaign fast and far. By the same token, Twitter can be used to punish

brands for customer service mistakes and other misdeeds.

For companies that are adept at tracking and responding to brand-related tweets, there are real

dividends.

Happy customers who appreciate a rapid, personal response to their tweets.

Positive social messaging from those customers, who are highly likely to publicly acknowledge the

response and the actions taken. A few moments of time spent replying to a tweet can lead to a

positive message being spread to hundreds or even thousands of people, with the added power of

an explicit or implied personal endorsement.

Depending on internal factors, lower customer service costs.

All Respondents

Figure 69: Do you use Twitter or another micro-blogging service? If so, how often do you access it?

Response: 1,430




Twitter Users

In Figure 70 we see that even among users, only 60 percent have used the search function on Twitter,

but that doesn‟t reflect its total impact. The ability to search social posts has created an important

new source of information with the powerful combination of timeliness, relevance and individual

attitude. The major search engines have responded to this by integrating social responses into their

pages.

Figure 70: Do you use the search function in Twitter or another micro-blogging service?

Response: 163




Twitter Users

Figure 71: What qualities lead you to 'follow' a company on Twitter?

Response: 163




3.9. Consumers accuracy when providing personal

information Many marketing campaigns are designed primarily to being a relationship with potential customers,

rather than make an immediate sale, especially campaigns mounted on social networks. The lead

generation process inevitably leads to a form asking for personal information. Astute marketers know

that asking for too much, too soon leads to abandoned forms, or, as we see in Figure 72, information

that is inaccurate.

In general, older people are more likely to provide accurate information than the average, as are

Moms. Men are less likely to provide personal opinions, phone numbers and HH income than

women. Interestingly, the group that‟s most comfortable sharing HH income is made up of high-

income households.

All respondents Figure 72: How often do you provide accurate information online?

Response: 1,250




4. Factors in product research Consumers hear of products in so many different ways that it‟s impossible to give them a list to

choose from. Instead, referring to a recent purchase they had already identified survey respondents

were simply asked whether they could remember where they had first heard of the product. They may

or may not be remembering accurately, but it does tell us something about how memorable ad types

and shopping experiences can be.

Throughout this section, we‟ll see how important a role the Internet is playing in product research,

regardless of whether that product is bought online or off. But, offline experiences dominate product

awareness, as the list below demonstrates. It‟s interesting that “Google” was among the top answers,

even though it‟s unlikely that search engines were actually the point of first contact with products.

Just as marketers can give search engines too much credit in their attribution schemes, so it appears

do consumers.

Respondents who reported having made a major purchase in the previous six

months

How did you first hear of this product? (Google and other search engines removed)

1. Television (open response including commercials and informational programming)

2. TV commercials

3. Stores

4. Emails – stores & brands

5. Internet – informational sites

6. Catalogs & Magazines

7. Internet – store sites




4.1. Email-driven purchasing Although younger people tend to use media that compete with email, they are more likely than any

other age group to make purchases based on information they receive from it.

The high response from younger demographics is already encouraging for retailers. Moving forward,

as coupons and bar codes are increasingly available via mobile device, the role of email as connective

tissue may well increase rather than recede.

Respondents by age Figure 8: Has email sparked a purchase in the last 12 months?

Response: 1,279




Respondents by type

Figure 74: Has email sparked a purchase in the last 12 months?

Response: 1,279




4.2. Media used for product research The next sections show answers related to a specific purchase identified by respondents, who were

split into groups based on whether the purchase was in process or had already taken place.

Respondents by Age

Figure 75: In your current product search, what sources for information are you using to decide on the product or service?

Response: 539

Based on open text responses, and examining how different demographic groups respond at various

points in the product research process (awareness, research, narrowing, decision) a number of

patterns emerge.

Men are more likely to use search engines and expert site reviews during a single round of

research, especially for lower ticket items. Women tend to take part in more discussion, online

and off-, at any ticket level.

The purchase process for women tends to involve a greater range of media than men, and to take

longer.




Women tend to be somewhat more loyal to research and purchasing sites than men. Older people

are more loyal than women, and everyone is more loyal than digital sophisticates.

The age range that‟s most reliant on e-commerce is 25 to 38 year olds. These people are

comfortable with the Internet, strapped for time, and prize convenience and price. With a greater

likelihood of having small children at home, they are less inclined to visit stores, and somewhat

better able to take deliveries during the workweek.

People over 38 are significantly less likely to use social networks to pursue product information,

seek recommendations, etc.

All age ranges are more likely to trust consumer reviews than formal testimonials posted by a

brand.

Respondents by Type Figure 76: In your current product search, what sources for information are you using to decide on the product or service?

Response: 539




4.3. Priorities in the product research process Figures 77 through 82 compare respondents stated priorities regarding purchases that are in process,

versus those that have already been made. Although price tends to be the top rated factor prior in the

research phase, its importance drops in virtually every case when viewed post-purchase. This may

reflect a psychological shift once people are removed from the process, or indicate that other factors

increase in importance as they get close to purchase.

Respondents 18 – 24 years old

Figure 77: In your current search, what are your priorities for the product or service you‟re considering?

Respondents: 539






Respondents: 539






Respondents: 539




Respondents over 55 years old


Respondents: 539




Respondents – Moms Figure 81: In your current search, what are your priorities for the product or service you‟re considering?

Respondents: 539




Respondents – High-income households


Respondents – Influencers





Respondents – Digital Sophisticates


Respondents: 539




4.4. Impact of consumer reviews on additional purchases One of many arguments for incorporating consumer reviews into e-commerce sites is that they are

one of the few ways in which online purchases can expand beyond the item originally shopped for.

Respondents by Age

Figure 85: In the past 12 months, have you purchased something online that you weren‟t planning on buying because of a consumer comment or review?

Respondents: 539




Respondents by Type

Figure 86: In the past 12 months, have you purchased something online that you

weren‟t planning on buying because of a consumer comment or review?

Respondents: 539




5. Motivations, attitudes and lifestyle factors

5.1. Mobile sophistication Each generation of chipsets moves mobile phones closer to the personal computer. Advanced

behaviors today (accessing the Internet or checking email from a mobile device) will clearly be

commonplace soon, at least for people still in their working years. Nearly two-thirds of people under

24 have checked email on a mobile device (Figure 87).

In time, it's likely that our current thinking, which is wrapped around the platform – computer vs.

mobile vs. tablet, etc., will become obsolete in favor of simply understanding what people want and

need to do in various settings. Today‟s mobile devices may be poor conduits for e-commerce, but

that‟s already changing.

Respondents by age

Figure 87: Have you checked email on a mobile device (smartphone or PDA) in the last 12 months?

Response: 1,430




Respondents by type

Figure 88: Have you checked email on a mobile device (smartphone or PDA) in the last 12 months?

Respondents: 1,430




Respondents by age

Figure 89: Have you accessed the Internet on a mobile device (smartphone or PDA) in the last 12 months?

Respondents: 1,430




Respondents by type

Figure 90: Have you accessed the Internet on a mobile device (smartphone or PDA) in the last 12 months?

Respondents: 1,430




The touchscreen smartphone is expected to become wholly or partly integrated into most mobile

designs over the next several generations. Figure 91 shows the degree to which their usability allows

and encourages behaviors. For touchscreen users, checking email rates slightly higher than voice

calling itself.

All respondents

Figure 91: Choose the four most common activities when you use your mobile device?

Respondents: 1,038




5.2. User-generated comments and reviews The trend in which consumers have come to rely on, create, and disseminate product reviews is

perhaps as important as the ability to buy online itself. For while e-commerce represents

approximately 5% of retail, user-generated comments are a significant factor in a large percentage of

the offline purchases that make up the other 95%. Figure 92 shows that while for consumers over 39,

generating reviews is relatively rare, for younger people it has already become an entrenched way of

life. Even for those who don‟t create reviews, they are part of the research process.

Respondents by age

Figure 92: Have you posted an online comment or review about a product or company in the last 12 months?

Respondents: 1,430




Respondents by type

Figure 93: Have you posted an online comment or review about a product or company in the last 12 months?

Respondents: 1,430




5.3. Impact of corporate responsibility factors In the commoditized world of retail, there are few factors that transcend price. The following section

examines how corporate responsibility factors affect consumer perception, or don‟t. For some

companies, the move toward greener pastures may be literal.

However, for many people, the demands of economy and practicality far outweigh societal concerns.

In general, young people – varying called Millenials or Generation Y, care more about environmental

and political issues. So do people with higher household incomes.


Figure 94: When you were evaluating this product/service, did any of the following influence your decision?

Response: 270




Respondents 25-38 years old


Response: 301




Respondents 39-54 years old Figure 96: When you were evaluating this product/service, did any of the following influence your decision?

Response: 368




Respondents 55 years old and over


Response: 391




Respondents – Moms


Response: 251




Respondents – Influencers


Response: 284




Respondents – High-income households


Response: 270




Respondents – Digital sophisticates


Response: 285




Respondents by Type Figure 102: How important is it to you that a product is “green” or environmentally friendly?

Response: 1,430




Respondents by Age

Figure 103: How important is it to you that a product is natural or “organic” (if applicable)?

Response: 390




5.4. Economic outlook Feelings toward the North American economy vary significantly by age. Younger respondents have a

distinctly more positive outlook on how they will personally fare in 2010 and 2011. A high correlation

existed between those people who had recently made a major purchase or were considering one,

suggesting that economic outlook transcends the merely political and truly reflects behavior.

All respondents

Figure 104: In general, how would you describe your feelings about the economic outlook for you and your family in the coming year?

Response: 1,430

Documents

Econsultancy: How We Shop 2010 USA