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New Study Finds Fresh Insights About Consumer Online Behavior
January 28, 2015
By Kow Kuanhua
General Manager, Greater China
Originally published by BrandZ’s Top 100 Most Valuable Chinese Brands report
Identifies effective marketing initiatives
We know that the consumer transition to online is well along and accelerating in China. But how do those consumers really behave? And what marketing activities most effectively reach and persuade them? Our new study revealed many important insights about how consumers engage with social media; combine their online and offline activities; and respond to influences at the moment of truth, the point of sale.
Almost two-thirds of respondents, 62.7 percent, reported following a brand on social media. Brands need to understand who these people are and why and how interaction takes place on social media. This knowledge can drive informed decisions about the right placement for the brand.
Our study revealed that for most consumers, 63.8 percent, promotions are the most prevailing reason to become brand followers on social media. Promotional features often involve the “like” concept to be eligible for a discount, the “in-it-to win-it” mentality. Brands have an opportunity to measure the duration of these interactions and their impact on purchase intention and recommendation.
For almost half of respondents, 47.4 percent, learning the latest trends was the secondary motivation for being on social media sites, closely followed by product launch news, 44.8 percent. These findings make sense, as the ability to connect with a brand for the inside story is a key factor for building brand loyalty and gaining traction well before new products reach the shop floor.
The fourth highest rationale for social media engagement was sharing with friends, 37.9 percent. This connects with the role brands play in helping consumers define and communicate a personal identity.
To reach consumers and keep them engaged on social media, each brand needs to understand what works best. Brands can test the relative response rates of general posts compared with promotions and events, for example. For digital marketers, social media presents the opportunity to become a brand that someone would recommend to their friends. Instead of targeting individuals alone, social media advertising offers the ability to capitalize on the power of recommendation.
Price drives online sales
But the overarching question is what does this mean to incremental sales? Ecommerce made a big impact in the last decade, dominating in many markets and making brands re-think their approach to the shopper journey. But have these tables turned again? The topic of Online-to-Offline (OTO) is popular, and large ecommerce companies, such as GroupOn and Alibaba, are connecting the offline and online worlds.
Our survey results suggest consumers are actively purchasing online, with 94.2 percent having done so in the past three months. Males showed marginally more online purchase activity, at 1.4 percent higher than females. When using only one electronic device, males favored mobile, while women are more likely to purchase on a PC. However, using multiple devices was the overriding trend for both genders.
Unsurprisingly, almost half of respondents, 49.4 percent say that price drives purchase online, followed by convenience, 28.4 percent. More brand choice and ease of comparing prices are also motivators, more influential online than offline. Certain categories dominate online purchasing, including: clothing, food and beverage, shoes, personal care and electrical items. Consumers are less likely to purchase furniture, health supplements and sports equipment online.
Search begins the journey to the point of purchase
But how do consumers reach the point of purchase? The vast majority of people, 93.3 percent, both male and female, search online before purchasing. Over half of respondents, 58.5 percent, said recommendation by a friend was important. What struck us, however, was that only 39.1 percent reported online ads as their source of product information before purchase. Similarly, only about a third of respondents, 32.7 percent, said that TV advertising was a component of their online purchase decision.
People currently buy online items that they’re familiar and comfortable with, like beverages or shoes. They want to see and experience “newer” or more “risky” purchases, such as health supplements or furniture, before purchasing. Here are more of our conclusions:
- Many believe that having more choice and being able to do price comparison quickly are the reasons why people buy online. That’s not the case based on our data. Low price and convenience are still the core reasons, as found from this study.
- We recommend that brand owners consider launching products that are “exclusive” (for familiar categories) to online shoppers, to drive traffic as well as to create a “snowball” effect for shoppers to buy other more regular items via the same channel. For “newer” categories, use offline concept stores to drive online purchase.
- For online retailers to expand the size and scope of their offers and customer base, using a combination of online and offline channels has to be the way forward, and that is how consumers would like to interact with brands nowadays.
This study only begins to skim the surface of how the marketing landscape is being transformed by online and technological advances. What it suggests is the need for better understanding of whether more traditional approaches are still important. Maybe it is the platform and the willingness to connect that has changed, rather than the inherent human needs behind brand loyalty. The big challenge for the year ahead is to embrace the opportunity to use a brand’s own customer data, along with digging deeper into questions specific to the brand’s own needs, before jumping on-board, online.
About Lightspeed GMI
Lightspeed GMI is an award-winning global digital data collection enterprise. Founded in 1996, its innovative technology and proven sampling methodologies deliver operational excellence throughout the online research process. With more than 5.5 million online research respondents in 45 countries, Lightspeed GMI’s proprietary panels deliver unparalleled quality, capacity and targeting.
Headquartered in Warren, New Jersey, Lightspeed GMI is part of Kantar, the data investment management arm of WPP, the world leader in marketing communication services. For more information, visit www.lightspeedresearch.com.
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