10 trends tracked by JWT that will shape consumer mindset and behavior in 2014

December 4, 2013

Posted by: Ann Mack - New York in North America

Today we released our ninth annual forecast of key trends that will drive or significantly impact consumer mindset and behavior in 2014 and beyond.

In this year’s report, we see how consumers are both welcoming and resisting technology’s growing omnipresence in our lives. For many, technology serves as a gateway to opportunity and an enabler of hyper-efficient lifestyles, but those who are most immersed are starting to question its effect on their lives and their privacy. One result is that more people are trying to find a balance and lead more mindful, in-the-moment lives.

Our forecast also puts a spotlight on the growth of immersive experiences; the accelerating shift to a visual vocabulary; the new appeal of imperfection; and the rise of telepathic technology, which will enable brands to better understand minds and moods and react in a very personalized way.

The full report—in which we cover each trend in detail, highlighting what’s driving the shift, how it’s manifesting and what it means for brands—is available here.

JWT: 10 Trends for 2014 – Executive Summary from JWTIntelligence

Read more: http://www.jwtintelligence.com/2013/12/10-trends-shape-consumer-mindset-behavior-2014/#ixzz2nwsQhCcw

Four No-Regret Moves to Convert Your E-Commerce Site Into a Big Seller

 

E-commerce sites convert about 5% of their visitors to buyers. In comparison, many retailers achieve conversion rates in excess of 60% (depending on the format). There are plenty of reasons why offline shopping conversion rates would be higher (e.g. shoppers have already shown commitment by walking into the store) but you don’t have to spend too much time with the data to see there is a massive opportunity for websites to improve their e-commerce sales. Even a 200 or 300 basis point improvement in the current average online conversion rates would be a massive boost. And it’s a reasonable goal.

Recently I was honored to speak to dozens of e-commerce leaders on the McKinsey Chief Marketing & Sales Officer network with a colleague of mine, Stephan Zimmermann, about this topic. We shared a systematic approach to understand and close gaps in conversion performance. Here are a set of 4 no regret moves we shared that you can put in place today:

1. Fix comparison engine entries. Most companies devote attention to getting SEO and SEM right, but one of the most overlooked traffic sources for true "down-funnel" purchasers are comparison shopping engines. I'm amazed at how often the data linkages to comparison engines are either inaccurate or the price is so much higher than competitors that the results are well below the fold or worse on a second page. I encourage my clients to try a simple experiment. Take 15 products that you sell and look them up on one of the popular comparison shopping engines - if your company isn't listed in the top 5, forget about attracting or converting the customers most ready to buy. Fix the entries right away.

2. Understand and address exit points. In retail stores, we often conduct exit interviews in the store parking lot. We stop people with and without shopping bags to understand why their customer journey. For every 100 people that surf a site, on average, 95 leave without buying anything. If you ran a store where you had that type of throughput, you would be out of business.
In our experience, companies need to ask the "five whys" on the highest traffic exit pages.
Systematically attack the root cause of exit pages (e.g. product, price, availability, description) and put in actions to fix them. At one company, they leadership team established a "war room" to fix broken pages and within weeks results started to improve.

3. Boost average order value. Many companies use computer-driven algorithms to drive product recommendations and next-product-to-buy options to increase average order value. These can be very helpful, but as I've written in the past (see: One Big Mistake Retailers Are Making: Not Thinking Like Their Customers), a more nuanced and deeper understanding of customer preferences can be lost in the data shuffle. Many companies will put hours of energy to putting this great technology in place but very little time on maintaining and optimizing it. You need to constantly tune recommendation engines with human intervention from merchants and adjust the technology based on what you learn. If you don't have a periodic human rhythm in place to evaluate and refine the right recommendations for additional products to buy you are missing out on valuable sales.

4. Get smart about loyalty. Not all customers are created equal. A bad customer is worse than no customer at all, especially when you’re spending money trying to keep him or her loyal. It’s critical to do a “recency-frequency” analysis of your customers to spot the opportunities and line up communications to the customer life stage. Identify your new customers, and figure out how to expand their shopping with you so they remain loyal but frequent shopper. Encourage repeat purchases with follow-up emails and next-product-to-buy offers. Keep your frequent and active shoppers loyal; they’re gold to you. Find out who are your customers who were once loyal but no longer are. They might be easy wins to get them back. Most importantly, improve your algorithms to detect customers at risk and take early intervention to keep them.

We've seen this work. I’ve found time and again when you ask follow up questions and the "five why's", the opportunities abound. Follow these four steps and find the opportunities. Because, believe me, there are lots of them. 

Posted by:Josh Leibowitz

Wal-Mart Vs. Amazon: World's Biggest E-Commerce Battle Could Boil Down To Vegetables

Source: Challenges In Agri-Food And Supply Chain
    
Wal-Mart Stores WMT -1.34% and Amazon.com AMZN -0.02% are both such enormous companies that there isn’t even a fitting cliché to clumsily describe their battle for e-commerce supremacy. There isn’t a David in this fight. If Wal-Mart’s Goliath, Amazon is Godzilla.

Wal-Mart's gunning for Amazon's customers away from the cash register, online.

Both chains dominate their historic areas of expertise. Once just a bookseller, Amazon is now the biggest online store on the planet. Wal-Mart is the world’s largest retailer of any kind, its $469 billion 2012 revenues dwarfing Amazon’s $61 billion.On the web, though, Wal-Mart lags. The Bentonville, Ark. chain doesn’t break out its U.S. online sales in its financials, but e-commerce chief Neil Ashe recently said the company aims to do $9 billion of its 2013 revenues on the internet. That’s 2% of its overall sales.

Right now, with Wal-Mart’s brick and mortar business booming, it might not matter much, but it will in five years, say experts at market research firm Nielsen.

According to Nielsen, e-commerce will gain more ground than any other segment of the retail industry by 2017, with a compound annual growth rate of 11% each year. Supercenters of the kind pioneered by Wal-Mart come in second, with their growth rate projected at only about half that of web shopping.

Wal-Mart is doing all it can to catch up with Amazon online, copycatting some of the Seattle retailer’s most successful tactics.

They’re trying out lockers, one of Amazon’s hallmarks, allowing shoppers to order items online and pick them up in stores — crucial for the Wal-Mart demographic, a quarter of whom reportedly do not use debit or credit cards or even have a bank account.

They’re dabbling in same-day delivery and even going a step further than Amazon by attempting to crowdsource package drop-off among customers. They’re investing in web technology to improve both their site’s appearance and ease of navigation.

What else can Wal-Mart possibly do to win the web? Nielsen’s Todd Hale has one answer. “E-commerce is growing at 11% a year, but sales for consumer packaged goods online — food, groceries, everyday items — are more like high double digits, almost 20%,” said Hale, SVP of consumer and shopping insights. “This is the space Wal-Mart has to go after: perishable items. That’s where they need the infrastructure.”

Today’s Wal-Mart isn’t ready to sell fruit and vegetables online. Same-day delivery is still only available in a handful of states. Its grocery hub on the web, Walmart To Go Delivery, remains in beta.

Hale believes Wal-Mart should look to smaller regional businesses like FreshDirect and PeaPod as a blueprint as it rolls out its consumer goods delivery service. And he sees the big box giant’s site as a shoo-in future destination for non-perishables like diapers as long as its infrastructure allows shoppers to set up regularly scheduled deliveries, a service popular on Diapers.com.

Amazon is already a step ahead with its Amazon Fresh same-day delivery, currently available in the Seattle area but soon headed for California. “Amazon is already building an infrastructure for perishables,” said Hale. “Groceries will be the battleground coming to the forefront.”

Kantar Research vice president of retail insights Anne Zybowski agrees to an extent, but warns that Wal-Mart must make sure its web offerings extend outside the grocery aisles.

“It’s not one item at a time, it’s who wins the entire basket or shopping cart of consumables,” she said. “A big piece of the basket is groceries, but there’s also healthy and beauty care, for example.”

Zybowski added that Wal-Mart has made significant strides online in recent months, not just in prettying up its site but making shopping easier for customers who might not want to actually pay via the internet.

“They’ve improved inventory visibility — a customer can make sure an item is in stock by checking Wal-Mart’s site, then they can go to their nearest store to buy it,” she said. “The challenge now is to get people thinking of them as a low-price leader online and off.”

Morningstar MORN -0.65% director of consumer equity research R.J. Hottovy isn’t sure Wal-Mart’s infrastructure is what’s holding up its web growth but its enormous and growing network of brick and mortar outlets — 4,000 in the U.S. and counting.

“Wal-Mart’s done an okay job online, but Amazon’s done a great job,” Hottovy said. “They can undermine the price of a lot of their competition. Without a physical storefront presence and overhead, they can pass that savings directly to consumers.”

Hottovy added that Wal-Mart will have to do more than invest in infrastructure to win the battle of the web behemoths. They’ll have to woo customers who are loyal to Amazon for good reason. “Amazon has tied up price, convenience, sales, and good customer service,” he said. “That’s a powerful combination.”

Social Media Becomes Less Important to Teens; Prefer to Shop In-Store Than Online

by Vahe Habeshian  |   

 

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Today's teens, though digital natives, by a wide margin prefer to shop in stores than online, and even their use of what they consider their favorite social networks is decreasing in importance for them, according to the 23rd semi-annual Taking Stock With Teens survey from Piper Jaffray.

The study also indicates improving discretionary spending across various categories: "Our Spring 2012 survey results provide confirmation that we are in the early stages of a clearly defined discretionary spending cycle," said Jeff Klinefelter, director of research and senior research analyst at Piper Jaffray.

"Double-digit increases in spending on a sequential and year-over-year basis for both upper- and average-income teens, and similar strength in spending intentions, signal improved confidence in the overall environment and a willingness to spend more broadly on key categories of interest."

Below, selected findings from the most recent Taking Stock With Teens survey from Piper Jaffray.

Social Networks and Websites

Facebook is still cited by a plurality (33%) of teens as the most important social network, but that's down 9 percentage points from the fall 2012 level of 42%.

Instead, teens give more importance to Twitter and Instagram now than they did six months ago:


When considering social media websites (as opposed to networks), teens ascribe equal importance to YouTube (not cited as a network) and Facebook, followed by Twitter and Instagram.

Still, relative to six months and 12 months earlier, the importance to teens of both Facebook and YouTube has declined, whereas that of Twitter and Instagram seems to be improving.

Asked whether social media has an impact on their purchasing behavior, more than have said it does: 53% of female teens and 52% of male teens.

Shopping
By a large majority, teens prefer to shop in stores rather than online: 78% vs. 17% in the case of female teens, and 75% vs. 19% in the case of males.

Nevertheless, teens do shop online—in similarly large proportions:

Teens' top 4 favorite shopping websites, led by a wide margin by Amazon, remained unchanged from six months earlier:

The following are additional study findings from the portable devices, fashion, beauty and personal care, restaurant, and videogame categories.

Mobile Devices
Teen spending on portable devices continues to accelerate: 86% of teens report that they are likely to purchase a smartphone for their next device, up from 83% last fall and 81% one year ago.

• Apple's iOS gained market share as the most desired operating system, with 51% of teens reporting they are likely to buy an iOS device (compared with  22% for Android).
• Approximately 34% of teen respondents owned an iPhone, up from 17% last spring, driven by the availability of a $49 iPhone 3GS at the launch of the iPhone 4S.
• Also, 40% of teens expect to purchase an iPhone in the next six months, up from 37% last year.

In tablet market, 34% of teens owned a tablet computer, up from 22% last spring. Of those teen tablet owners, 70% owned an iPad, 19% owned an Android-based tablet, and 11% owned a Kindle Fire.

Furthermore, 19% of teens expected to purchase a tablet in the next six months, with 80% of those teens intending to purchase an iPad. 

Fashion
Teens cited improvements in both current fashion spending and intention to spend, across income levels and genders:

• The fashion category accounted for 39% of teen budgets, up from 38% in the fall of 2011 and 37% a year ago.
• Upper-income teens indicated that spending on fashion increased 17% on a sequential basis and 21% year-over-year.
• Average-income teens indicated their spending on fashion increased 18% on a sequential basis, and 15% year-over-year.

Those double-digit increases in fashion spending are the first recorded since the 2003/2004 surveys, when teens across income levels indicated a similar meaningful propensity to spend on the fashion category, Piper Jaffray said.

Strength in spending was broad-based across categories, but spending by male teens in fashion was the highest—historically indicative of a multi-year, dual-gender fashion spending recovery, according to the firm

Food and Restaurants
Teen spending on food and restaurants is at or near the highest level since early 2000:

• Upper-income and average-income survey respondents increased their weekly restaurant spending approximately 10% and 3%, respectively, compared with the fall of last year.
• Taste remained the strongest influence on food and restaurant dining decisions.
• Value also continued to be an important influence on dining decisions and has gained in importance over time, ranking number two in the current survey compared with number five in the spring of 2007.

Videogames

• Teens constitute 33% of videogame players, with videogames accounting for 7% of teen spending.
• Teens are increasingly receptive to downloading games, accessing social networks, and playing games on smartphones and tablets.
• Social networks, tablets, and smartphones are taking increasing eyeball share away from console-based video games.

Beauty and Personal Care

• Beauty spending by upper-income teens increased 8% sequentially and 6% year-over-year. For average-income teens, beauty spending increased 21% sequentially and 18% year-over-year.
• Skin care and cosmetics accounted for a larger share of overall beauty spending, and the beauty spending gap between upper- and average-income teens continues to narrow.
• MAC remained the No. 1 cosmetics brand for upper-income teens, while Cover Girl was once again the No. 1 brand for average-income teens.
• Victoria's Secret remains the preferred fragrance for teens across both income segments, consistent with the past eight surveys.

About the data: The Taking Stock With Teens survey from Piper Jaffray gathered input from approximately 5,600 teens, whose average age was 16.3 years during the latest survey. Teen spending patterns, fashion trends, and brand and media preferences were assessed via visits to geographically diverse high schools in 11 states, and via an online survey of a wider group of teens from 34 states. The survey is conducted in partnership with DECA (an international association of high school students).

Vahe Habeshian is the director of publications at MarketingProfs and a long-time editor. Reach him at vahe@marketingprofs.com
Twitter: @habesh