Let’s go shopping.
Those three words used to mean climbing into the car and heading to the local mall. But for today’s connected consumer it more likely means going online, hitting the blogs, following a Facebook trail, or sending out a tweet–all without ever visiting a single retail location.
Two recent surveys show that at least 30% and as much as 70% of consumers who bought retail reported pre-shopping for information about a product before shopping a physical store (ARG, “Pre-shopping and the ever changing role of retail” January 2009). And these numbers are up almost 20% since the same survey less than two years ago.
Retailers know that pre-shopping isn’t a new phenomenon. For higher consideration products (purchases over $50) consumers have always sought advice and information from multiple sources before they started to shop. Asking friends and family for suggestions, checking out manufacturer brochures, sending in “additional information†cards in the back of magazines, etc. are all pre-shopping behaviors that pre-date ubiquitous Internet usage.
As marketers know well, since the turn of the century, the Internet has increasingly transformed consumption – it has enabled and empowered consumers to seek out and devour information before they set out on any task. Today’s shopper can access product specifications, store recommendations, and industry data in ways that would have been almost impossible a generation ago.
But to understand the most fundamental change in consumer shopping trends today, we have to go back to pre-Internet shopping. Because despite new ways to shop –from home, from your phone, from digital kiosks and more, consumers are still relying on an old habit to drive their decision making process: Word of mouth. Why did you shop today? What caused you to choose this store over its competitor? And why did you choose this brand over another? For retailers, the answer to these questions hasn’t really changed all that much over the last twenty years. Convenience is usually the number one answer. Price, right selection and a friend’s recommendation usually compete for second place. Meanwhile, the drop-off in other shopping factors like loyalty card influence, social responsibility, credit programs, etc. is usually significant.
Word of mouth is even more powerful a factor in shopping choice, because when you ask the question a different way – what could cause you to switch from one retailer to another – we find that the influence of friend and family recommendations becomes the number one way to drive store preference changes.
For retailers, the pursuit of positive word of mouth has always been an elusive game. Word of mouth was hard to identify, even harder to measure. Most customer service research tools include a “likelihood to recommend†metric, but even positive scores don’t necessarily translate into actual referrals. In general, people are much more likely to tell their friends and families about bad customer service than good.
But with new media tracking tools and evolving research methodologies, marketers can now eavesdrop on word of mouth conversations; the dialogue that used to be relegated to friends and family is now global. We can’t sneak onto a soccer field to listen in on mom-to-mom conversations about our brands (without getting arrested) but we can lurk in chatrooms, blog sites, and forums and observe how moms talk to each other; how golf enthusiasts debate the benefits of new club technology; how energy-conscious consumers share tips on cutting their utility bills.
The ability to observe and report on word of mouth is incredibly powerful. It gives insight into what topics drive the most emotional exchanges. It also reveals the kinds of information that consumers are seeking from each other – usually a warning that the brands and retailers aren’t doing a good job delivering that information in an easy, credible way themselves.
What is amazing about these conversations is that they are frequently focused on shopping. For example, according to eMarketer, over 70% of mom-to-mom blogs entail reviews and advice about products. Golfer dialogue on the Web is far more heavily weighted to product discussions than dialogue about technique; even light bulbs have a strong and loyal discussion pattern as consumers determine the benefits of lower energy consumption versus the environmental effects of non-recyclable bulbs. In most cases these discussions and reviews involve dialogues between dozens, sometimes hundreds of different consumers all discussing which products work better and why they prefer them.
As powerful as these new listening opportunities are, the real power comes when we participate in conversations, and even influence them. Not just observing word of mouth, but actually redirecting word of mouth as it happens in real time. Globally. Now that is marketing power.
Retailers can, for the first time, observe and influence the conversations that take part about their brands, often much earlier in the shopping consideration process than at any time previously possible. But how do they do this? Offers? Coupons? Online ROP ads?
The answer is far simpler: information. Consumers are going to each other for information and not to the manufacturer or retailer because the vendors and stores do a pretty miserable job of giving consumers the information they need to make smart choices. A majority of consumers say that the store was marginally-to -not-very helpful in making their final choice. And even more consumers say that brands’ online and packaging information are more likely to confuse them with technical jargon than inform them on how to make the best choice.
So the good news is: consumers are increasingly pre-shopping before visiting retail stores, even when they have no intention of buying online; one of the most powerful influencers in shopping is word of mouth, a metric which is now is identifiable and “influenceable” in real time; and the currency is not expensive advertising or discounting, but information.
If this is the new norm, how we do we help retailers tap into the expanding opportunities? First, we have to deploy new toolsets to eavesdrop on shopping and brand conversations; second, we help them understand the pre-shopping and physical shopping process by plotting consumer behaviors using tools like IPG Lab’s Neural Shopping Matrix.
Combined this gives retailers – and the brands that sell into retail – the most profound insight into how to give consumers the information they want, at the stage they want it.
And giving consumers what they want is the best way to get them to give us their money.
John Ross is President of the IPG Emerging Media Lab and Executive Vice President of Mediabrands’ Retail 3.0 Practice. Leave a comment for John, or email him here.
