Information transparency, michael paulson, sic, 2011 11 03
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Information Transparency Empowering the Consumer Coup
Michael Paulson
VP Product & Marketing, Decide
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TRANSPARENCY
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TRANSPARENCY
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TRANSPARENCY: SHOPPING
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Some things don’t change
Shoppers want quality products at a great price, great customer service, convenient locations
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Some things do change
• An overwhelming number of shopping decisions + less free time to make those decisions.
• New consumer pain points.
• The way people shop.
• The balance of power between manufacturers, retailers and shoppers.
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MORE DECISIONS, LESS TIME
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More decisions
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…and that’s just offline. Online?
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You’re gonna need a longer day
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CHANGES: NEW PAIN POINTS
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Pain point: Price volatility Sony 3D LED HDTV KDL-55NX810
Source: Decide Data Vault
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Pain point: Price Volatility
$23,698,655.93
Guess the price of this book
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Pain point: Product obsolescence
15
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Pain point: Information Overload
“…the volume of data obscures more than it reveals; financial reporting has become so transparent as to be invisible.” - Daniel Roth, Wired Magazine
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CHANGES: HOW WE SHOP
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How people shop
The days of uninformed shopping are over
• 70% of Americans now say they look at
product reviews before making a purchase
• 79% of smartphone owners now say they
use their smartphone to help with shopping
• 83% of moms say they do online research
after seeing TV commercials for products that interest them
Source: ZMOT: Winning the Zero Moment Of Truth, by Jim Lecinski, Google
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How people shop
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How people shop
The average shopper used 10.4 sources of information to make
a decision in 2011, up from 5.3 sources in 2010.
Source: ZMOT: Winning the Zero Moment Of Truth, by Jim Lecinski, Google
Traditional 3-Step mental model
New mental model
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CHANGES: BALANCE OF POWER
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Balance Of Power
Technology is empowering shoppers by making information more transparent.
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Balance Of Power: Retailers’ POV
• 55% of retailers say it’s getting too easy for
consumers to find competitive prices
• 55% of retailers say shoppers are better
connected to information than store associates
• 87% of retailers believe that shoppers can
easily find a better deal using their mobile devices
Sources: 1) Retail Systems Research, “Optimizing Price In A Transparent World” Benchmark Report, Nikki Baird and Paula Rosenblum, April 2011. 2) Motorola Solutions Annual Holiday Study, January 2011
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Information Transparency (my definition)
The information consumers need
simply delivered
when and where they need it
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SHOPPING TRANSPARENCY: PRODUCT REVIEWS
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Product review pioneers
1979
1936
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Product Information, then
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Product Information, now
“this toaster is junk and dangerous … our daughter burned her fingers on it. It's going in the garbage where it belongs.”
“We've had 3 fires in ours … stay away from this product unless you don't mind burning down your house/apartment.
“One of the scariest things I have ever experienced.”
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and speaking of burned fingers…
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Product Information, now
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Product Information, now
• “My 6 year old was hurt within 5 min.”
• “My 8 year old cousin broke his neck walking (not even bouncing) on these shoes ... the little boy's life has been pretty dramatically changed.”
• “My 7 1/2 year old daughter tried these on at a friend's house yesterday. She had them on for about 2 minutes before she fell and got hurt. After a trip to the ER and the Orthopedic Surgeon, she has a fracture in her growth plate.“
• Don't be as stupid as me, and DO NOT buy this item. I'M SERIOUS!!!!”
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BUT WAIT … THAT’S NOT ALL
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Here’s the good news
• Most reviews are good (Avg = 4.3 / 5.0)
• Bad reviews aren’t all bad
• Socially engaged customers spend 30% more
• Besides …the conversation is already going on
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Most Reviews Are Good
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SHOPPING TRANSPARENCY: PRICE
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Price Comparison, then
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Price comparison pioneers
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Price Comparison, now
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Unfortunately…
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Concealment
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Concealment
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A cautionary tale
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Concealment
“Our results indicate … retailers pursue strategies to lower the quality of the data and thus the utility of product search … it is more than questionable whether ShopBots will ever create market transparency”
Source: “SHOPBOTS AND INFORMATION QUALITY – RETAILERS’ STRATEGIES FOR PRICE CONCEALMENT” , Oliver Hinz and Tanja Frischmann, 2008,
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For the first time, the advantage has tipped in consumers’ favor
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Consumers and a wave of startups are innovating to push the boundaries of
information transparency
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SHOPPING TRANSPARENCY: THE FRONTIER
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Consumers
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Room 77
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Travel: Oyster
http://www.oyster.com/hotels/photo-fakeouts/
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Yelp Monocle
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TRUEcar
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PointInside
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Decide
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Decide
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SO WHAT?
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Conceivable
All shopping will soon be online
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So What? Retailers
• Your best customer is the one currently in your store – will you keep them?
• Empower your sales associates (don’t tie their hands).
– Provide access to product info and pricing via mobile devices
– Have a policy around price comparison
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What’s Your Policy?
Source: RSR Research, Optimizing Price in a Transparent World
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So What? Retailers
• Your best customer is the one currently in your store – will you keep them?
• Empower your sales associates (don’t tie their hands). – Provide access to product info and pricing via
mobile devices
– Have a policy around price comparison
– Create a feedback loop
• Standardize pricing online and in-store
• Never refuse to tell your customers a price
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So What? Manufacturers
• What resources have you deployed toward ZMOT? Are you one of the 10.4 research sources?
• Think of customer product reviewers as your extended marketing team.
• Don’t force your retailers to conceal prices.
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So What? All Brands
• What resources have you allocated toward driving transparency vs. concealment?
• Consider partnerships to help drive transparency in ways that will benefit your brand
• Monitor your brand online, incl. mobile
• Don’t fight your customers or the trend of transparency
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Thank You
The data scientists at
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?s