How new technologies influence consumer behaviour and why you should care
Posted on Tuesday, October 2nd, 2012
Social. Local. Mobile. These are the new battlegrounds for providing relevancy to today’s consumers. More than ever before, consumers are becoming empowered by the use of new technologies. These technology savvy consumers are changing the rules of commerce and shifting the balance of power in their favor when it comes to the relationships they have with brands.
Adoption of these technologies is expected to accelerate rather than slow down. A 2012 study by Neilson revealed that smartphones now account for almost 50% of mobile phone subscriptions in the U.S., which represented a 38% increase over the prior year. In fact eMarketer estimates that there will be 115.8 million smartphone users in the U.S. by the end of 2012, with that number growing to 176.3 million by 2015.
Not only are consumers becoming more mobile, but we are becoming more social as well. As the undisputed leader in the space, Facebook, recently published its current user base as in excess of 901 million users globally.
Increasingly, consumers are turning to social media as their primary source for information on brands and products. Their next great dining experience, the hot new gadget, the up and coming new store — discussions on Twitter and Facebook are playing an increasingly influential role in the fate of restaurants and retailers. Consumer insights research done in 2012 by Empathica supports this trend with 72% of survey respondents indicating that information on Facebook had influenced their retail and restaurant decisions. Even more importantly, half indicated having tried a brand because of a social media recommendation.
In addition to this, when consumers are out shopping or dining they now have the power of the internet in the palms of their hands with the latest smartphones. At their fingertips and in real-time, they can search for product ratings, reviews and more. Some mobile apps even provide price and discount comparisons. Add that to apps that are designed to generate local incentives or group discounts, and the experience consumers expect from brands has changed forever. For example, 2012 research by ComScore found that 43% of smartphone owners have used their mobile device while in a store for a shopping related reason. Although these consumers have newfound expectations of the experience they receive, some things remain the same. Despite these new expectations, they are still eager to be loyal to their favourite brands. However, how these brands earn and keep that loyalty must change.
The bottom line with social, local and mobile consumers is personalization. Technology has groomed consumers to expect a personalized experience from their interactions with the brands they frequent. Unfortunately, in the eyes of these same consumers many brands are falling short of this expectation with 2 in 5 Empathica Consumer Insights Panel respondents indicating they did not feel as though their shopping experiences are being personalized. Furthermore, according to a CMO Council 2012 report entitled “The Leaders in Loyalty: Feeling the Love from the Loyalty Clubs,” they found that 54% of U.S. and Canadian consumers would consider ending their loyalty relationships if they were not given tailor-made, relevant content and offers.
Where market researchers used to talk about demographics in general terms (e.g. “males 18–35”) today’s consumers see themselves as a demographic of one (i.e. “me”) and expect experiences that reflect that. While this creates a shift in how brands must do business, the technologies available today makes this transition more realistic. Smartphones, social media, near field communications (NFC), the rise of “big data,” all these new technologies can act as the building blocks to highly personalized consumer experiences.
Consumers want their brand interactions to be through the channels they prefer and with the tools they use. This applies to everything from the mechanisms they use to pay for purchases (e.g. NFC devices versus cash and cards) to the activities that earn loyalty points (check-ins versus purchases) to the loyalty rewards they get (highly personalized versus generic discount), and to how they give feedback to the brands they frequent (increasingly via mobile devices).
The above is an excerpt from Empathica’s latest whitepaper, entitled “What is the Opportunity for “SoLoMo” (Social.Local.Mobile.) to Improve the Customer Experience.” To learn the three smart ways to connect with today’s consumer, download to full whitepaper now.
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