Microsoft carat shopper journeys brochure

New Shopper JourneysThe Important New Role of Digital Media

d

This research collaboration between Carat

and Microsoft sought to define the structure

of consumers’ paths to purchase and how

different touchpoints play a role in shaping

decisions as to where and what to purchase.

1

NEW SHOPPER JOURNEYS: How Touchpoints Lead to PurchaseThis research collaboration between Carat and Microsoft sought to define the structure of consumers’ paths to purchase and how different touchpoints play a role in shaping decisions as to where and what to purchase. 19,000 shoppers in 17 countries were queried on their most recent shopping occasions in four key retail categories: apparel, quick service restaurants, groceries and home electronics. A fifth category, Home Improvement Centers, was done in the US.

This study is unique in the comprehensiveness of its data which address these business questions:• What shapes people’s buying decisions?• How are shoppers influenced by both offline,

online and in-store media across key verticals? • What is the relative influence of owned, bought,

and earned media?• What innovative forms of advertising might

shoppers be open to?

The study was done in two phases by UK-based Essential Research. A qualitative study composed of interviews and shopper observations was fielded in five countries in late Fall 2009. Its insights led to a 17-country online survey in March 2010 which queried shoppers about their last purchase occasion in each of the retail sectors covered. This quantitative phase was done just as economic recovery began to be felt in some of countries we surveyed. Thus the study uncovers new behaviors shoppers have adopted in reaction to tighter budgets. Further analyses reveal that many of these new behaviors will continue as shoppers have discovered the ease in which essential information can be accessed through the Internet. Here is a summary of these enduring value-seeking behaviors we found.

HierarcHy of SHopperS’ New BeHaviorS

Seeking Better Value

More Advance Purchase Research

Using Different Channels

Reduced Volume

Word-of-Mouth

Hie

rarc

hy

of t

acti

cs f

or

cop

ing

wit

h t

he

rece

ssio

n

» Discount coupons used more often » Price more important than brand/quality

» More time looking for special promotions » Visiting a number of retailers to find the best deal » Reading online forums/ consumer websites

» Discount stores » More online shopping » More online auctions » Mobile

» Fewer visits to retailers

» Peer reviews - 1:1 and through social media

2

wHat SHapeS people’S BuyiNg deciSioNS

The process that shoppers go through has forever changed, becoming more complex and multifaceted. No longer do shoppers traverse a linear path; rather we see a highly dynamic journey to purchase, one characterized by reiterations in product considerations, i.e., a tumbler effect rather than a funnel.

We identified five general drivers shaping shopper journeys, or Five C’s: the retail category, the culture of the market, the contact points or channels, the context or need states for buying, and the consumer’s attitude within the category.

The study revealed three basic patterns in shoppers’ paths to purchase across all the retail sectors and countries we examined:• Impulse: Purchase was unplanned or the shopper

did not have enough time to research product or shop around before purchasing

• Habitual: The item is one the shopper normally buys

• Research: The shopper did some research prior to buying

The distribution of these types of journeys varies by retail sector. Not surprisingly, the more involved categories like home electronics and apparel tend to have more research journeys while lower involvement sectors like groceries and quick service restaurants (QSR) invite more habitual journeys.

Category

Consumer

Culture

Contacts

Contacts

Context

ContactsCont

acts

driverS of purcHaSe

» Category » Culture » Contacts » Context » Consumer

» Product/Brand » Country/Region » Touchpoints » Need states » Attitudes

3

But eveN witHiN a category, tHe Specific coNtext or Need State caN alSo iNflueNce tHe jourNey type aS tHe followiNg taBle SHowS:

aNd tHe diStriButioN caN alSo differ acroSS couNtrieS aS tHe data oN QSr tripS reveal Below:

Most Common % of all Shopping Journeys

Category Need State (% of all journeys)

Habitual Impulse Research

Groceries Ran out (48%) 76% 14% 10%

Home Electronics Replacement (27%) 13% 16% 70%

Apparel Treat (38%) 37% 44% 19%

QSR JOURNEYS BY CONTEXT

TREAT HUNGER

ITALY Habitual 54% 60%

Impulse 40% 37%

Research 6% 3%

FRANCE Habitual 48% 46%

Impulse 45% 47%

Research 7% 7%

tHe diStriButioN of SHopper jourNey type By retail Sector

Grocery QSR Home Electronics Apparel

Habitual

Impulse

Research

66%52%

14%39%

40%

21%

18%

68%42%

6%

22%

12%

4

If we understand the interplay across these drivers we can determine the shopper journey type which in turn can guide more effective creative and media strategies. Indeed, when we break up a journey into stages, we can get a broad view of how different touchpoints influence shopper decisions.

What is noteworthy is the significance of the post-purchase stage which can influence future shopping especially in highly-researched categories like home electronics. It is also at this stage where digital media are

key enablers. So the new schematic in shopper journeys is one where post-purchase activity, typically word-of-mouth, loops back to influence succeeding purchases.

tHe New Structure of SHoppiNg jourNeyS

Need State Research Purchase Post Purchase

WOM Feedback Loop

‘Pre-tailing’ Retailing ‘Post-tailing’

In-store Research

5

From this analysis, we found that Cutting Edge shoppers were receptive to a wider array of channels while Early Adopters were more likely to be influenced by word of mouth particularly from experts as the

following table reports. The large differences in media consumption by segment have clear implications for media strategists.

For new shopper journeys, one of the most useful approaches to determining the proper media mix is through segmentation analyses which layer attitudinal variables over behavior. To understand how attitudes may further impact touchpoints’ influence, we

segmented shoppers according to their relationship with technology: 1) Cutting Edge, 2) Early Adopter, 3) Judicious Timer and 4) After-Jones. We then looked at these segments’ shopping journeys by type:

WiSdOm fROm PSYCHOgRaPHiCS

Q: Thinking about the last time you bought home electronics, which statements best describe your actions?

Home electroNicS SHopper jourNeyS By tecH pSycHograpHic

Cutting Edge Early Adopter Judicious Timer After-Jones

All Category Shoppers 19% 23% 32% 25%

Impulse 28% 16% 18% 22%

Research 49% 64% 69% 63%

100=All US Home Electronic Shoppers

Cutting Edge Early Adopter Judicious Timer After-Jones

Advertising 145 119 83 68

Word of Mouth 100 132 100 71

Something seen while shopping 151 99 90 75

Newsletter/Email 162 108 97 49

TV ads 182 111 65 72

Internet ads 150 131 70 70

Newspaper ads 144 130 96 43

Expert reviews online 108 149 114 30

Seeing someone w/item 157 156 60 55

Past experience 129 122 78 85

Promotion seen while shopping 165 94 96 61

Something read/seen online 125 105 113 60

Q: What influenced you to start thinking about your purchase?

toucHpoiNtS raNked By iNflueNce at trigger Stage u.S. Home electroNicS SHopperS

6

When we combine behavioral and attitudinal variables in segmentation analyses we get a more comprehensive and granular view of the entire purchase path. The following model depicts in greater detail how the

drivers (the Five C’s) lead to the final purchase decision. It better accounts for all influencing factors within the new shopper paths than do classic models like AIDA (Attention >Interest >Desire >Action >Satisfaction).

THE ROLES Of OffLiNE aNd ONLiNE TOUCHPOiNTSNow that we have a framework that helps us understand how purchase decisions are made, we can begin to map the appropriate touchpoints along the shopper’s journey. The type of journey will indicate which ones hold sway at specific points along the path. We found that offline and online media serve truly

differentiated roles. This underscores the need for both in order to drive purchase.

Here is an illustration of how channels serve different points along the three types of journeys in the purchase of computers/laptops:

tHe New dyNamic framework for uNderStaNdiNg tHe purcHaSe patH

Consumer Behavioral Differentiation

Thinking about the last time you bought . . . which statement best describes your actions?

Three types of journeys:• Habit• Impulse• Research

Attitudinal Fine-Tuning by Vertical

Multivariate segmentation based upon category-specific psychographics

Example: Home Electronics:• Expert• Novice• Trend-Chaser

Example: Apparel:• Fashionista• Clueless• Quick & Easy

Context Need States

Category Retail Sectors

Culture Regions/Markets

Contacts Extensive, granular touchpoints including online, social media, WOM, situational settings, traditional media & advertising

Consideration Touchpoints Initial Media Impetus for Purchase Process

Research Source Mobilization For Information & Inspiration

Factors on Final Decision Price, Location, Availability, etc.

Purchase Venue Various Retail Outlets Online & Offline

Post-Purchase Behavior Feedback & WOM through Social Media & Interpersonal Channels

7

Home electroNicS – HaBitual jourNey iN tHe uSPrint media are most influential in pre-purchase while mobile phones do well at the point of purchase. Habitual purchases are fueled by loyalty. So it makes sense that such journeys spur more active recommendation and online postings post-purchase.

Need State purcHaSe

advertising: Online: 17% TV: 17% Newspaper: 24% Magazine: 17% Newsletter: 19%

in-store: Flyers: 13% News story on TV: 11%

wom: Expert reviews online: 7% From friends: 15%

recommended: Brand: 48% Retailer: 30%

wom online: Blogged online: 11% Posted on Social Network: 11% Posted on a review: 11%

Used mobile phone: 54% Compared prices: 30% Searched for info: 20%

poSt-purcHaSe

Home electroNicS – impulSe jourNey iN tHe uSAdvertising is least likely to trigger intentions to shop; rather it is coupons or a store’s sales personnel that can move shoppers to purchase.

Need State purcHaSe

advertising: Online: 6% TV: 12% Newspaper: 12%

Coupons: 18% Talked to Sales Assistant: 18%

wom: From friends: 20%


wom online: Blogged online: 8% Posted on Social Network: 0% Posted on a review: 8%

Used mobile phone: 41% Compared prices: 18% Searched for info: 14%

poSt-purcHaSe

Home electroNicS – reSearcH jourNey iN tHe uSThe Internet and word of mouth dominate across all phases of the journey. Moreover nearly 2/3 of research journeys depend on the Internet for information. Interestingly, having done a lot of research prior to visiting a store, this journey type is least likely to be influenced by in-store channels.

Need State purcHaSe


Coupons: 11%

wom: Expert reviews online: 12% From friends: 28%


wom online: Posted on Social Network: 8%

Used mobile phone: 26% Compared prices: 18%

poSt-purcHaSereSearcH

Used Internet 64%


In-store promo: 15%

wom: To friends: 35%

8

TOUCHPOiNTS fOR LOW vERSUS HigH iNTEREST CaTEgORiES

u.S. womeN grocery SHopperS

Pre-purchase Shopping Patterns by Shopper Types

Purchase After-Purchase

Factors decided before research or shopping

Which items to buy 63% How much to spend 39% Location of the store 28% Payment methods 23% Number of items to buy 22%

Need state touchpoints focused on new product trial

Factors that influenced you to purchase items that are new or different arom what you normally buy

Speaking to friends/family 46% Coupons 45% Television Ads 44% Promotion seen while shopping 36% Samples/Product Demo 34% Sign/display etc. seen while shopping 31% In-store coupons 27%

Habitual buyers (72% of total):

What inspired you to try different products or brands?

Coupons 47% Speaking to friends/family 41% Promotion seen while shopping 40% TV ads 37% In-store coupons 35% Samples/product demo 28%

Impulse buyers (17% of total):

What made you to make a purchase?

TV ads 40% Promotion seen while shopping 35% Speaking to friends/family 33% Coupons 31% In-store coupons 20% Sign/display seen while shopping 18% In-store flyers 16%

Researchers (11% of total):

Sources mobilized for research

Newsletter/leaflets/ coupons 60% Ads/sponsorship 49% Discount coupon 46% Internet 31% WOM 31% Newspaper Ads 5%

Factors that influenced choice of store

Proximity 66% Price 63% Quality of Products 44% Familiarity with the retailer 40% Past positive experience 34% Deals & Promotions 35% Variety of Products Available 32%

After-purchase Behaviors

What did you do after purchase?

Discussed the purchase with friends/family 19%

Recommended the brand/product to friends/family 17%

Recommended the retailer to friends/family 8%

As this analysis shows we can account for the relative influence of various media channels, offline, online and in-store. With similar information for multiple countries, we can define how touchpoints’ influence vary thus

enabling global strategies to be more easily localized. The following chart shows how the same type of journey can yield different media influences by region and retail category.

In a highly engaging category like home electronics where research accounts for 68% of the journeys, the usefulness of online media is readily apparent. It is harder to understand online’s role in low involvement categories like groceries unless we have the data to

explain it. Using our purchase path framework we can identify specific channels’ roles at each point of the path. Here is an example from the US for a typical FMCG brand:

9

Another interesting finding was online channels’ ability to influence the purchase of new brands. Indeed, one of the most fascinating discoveries is the influence of mobile touchpoints at the moment of truth particularly in Asia.

reacH of major toucHpoiNtS By Sector aNd regioN BaSe: reSearcH jourNeyS

Reach within last Purchase Occasion

Home electronics

apparel

fast food

groceries

USA The Internet 65%

The Internet 50%

The Internet 43%

Discount coupons 51%

AMERICAS The Internet 58%

Advice from friends 37%


TV ads 38%

ASIA The Internet 61%

The Internet 49%

TV ads 52%

TV ads 57%

EUROPE The Internet 64%

Internet 43%


Internet 37%

Home electronics Online Researchers. Unduplicated reach of the top channel.

iNflueNce of oNliNe cHaNNelS iN New grocery product iNtroductioNS

Bought new items

Didn’t buy any new items

A Used cell phone in-store

B Used the Internet during research

C Exposed to online advertising during research

Q: Thinking about the last time you bought groceries and personal care products, did you buy anything that was new or different from the items you normally buy?

a B c

uSa

a B c

americaS

a B c

aSia

a B c

europe

31%

7%

45%

30%

14%

6%

30%

14%

30%

24%21%

13%

54%

26%

52%

34%

40%

24% 26%

10%

38%35%

11%

2%

10

iNfLUENCE Of OWNEd, bOUgHT, aNd EaRNEd mEdia COmPaREdA frequent conundrum for marketers is determining the right mix of channel types. To simplify the analysis we grouped all the channels by type to see how and where they play within a journey as the following table illustrates.

Among research journeys in the Home Electronics category, we found that Bought media actually have a slightly heavier influence than Owned or Earned media when it comes to choosing brands or stores. Contrary to conventional wisdom, this study documents the value of Bought media advertising beyond the usual considerations of audience reach.

The following table compares these three types of touchpoints in their ability to shift shopper choices across the four regions. It shows that Bought media channels were best at influencing choices on brands and retailers. The one exception is in the US where it was the retailer-owned media which can shift store choice.

claSSificatioN of variouS oNliNe media cHaNNelS

Owned Bought Earned

Retailer Websites Search engines Reading customer reviews on website

Brand websites Magazine websites Experts reviews or comments

E-mail newsletter from a retailer or brand

Online shopping websites (for example Amazon)

Reviews from trusted blogger

Coupons I received online Auctions websites (for example eBay)

Posting messages on online blogs or forum websites

Video demonstration of how to use the product

Price comparison website Reading messages on online blogs or forum websites

Online circulars (these tell you the items on promotion this week)

Portal websites such as MSN, Yahoo, AOL

Seeking opinions of someone I don’t know using a social networking site

Sponsor links on a website

11

SOCiaL mEdia CHaNNELS COmPaREdSocial networks attract considerable attention among marketers because of the large audiences they draw and their perceived lower cost. Our study found that when it comes to influence it is actually personal 1:1 conversations via phones, email and instant messaging which are more heavily relied upon in purchase journeys than comments or reviews in social networks.

Below lists the top three social media forms for each retail category by region. Only in the US do social networks rank among top 3 and only for groceries and QSR categories.

raNkiNg of Social media typeS By uSage witHiN reSearcH jourNeyS

GROCERIES Europe Asia Americas USA

1 Mobile (59%) Mobile (76%) Home Phone (43%) Home Phone (47%)

2 Home Phone (59%) IM (56%) Email (41%) Social Net (39%)

3 Email (54%) Email (52%) Mobile (39%) Mobile (31%)

QSR Europe Asia Americas USA

1 Mobile (44%) Mobile (74%) Mobile (47%) Mobile (67%)

2 Email (42%) IM (55%) Home Phone (44%) Emails (58%)

3 IM (36%) Email (49%) Email (41%) Social Net (43%)

Apparel Europe Asia Americas USA

1 Mobile (54%) Mobile (71%) Home Phone (41%) Mobile (42%)

2 Home Phone (48%) IM (53%) Email (40%) Home Phone (38%)

3 Email (46%) Home Phone (47%) IM (35%) Email (32%)

Home Electronics Europe Asia Americas USA

1 Mobile (40%) Mobile (71%) Home Phone (42%) Email (42%)

2 Home Phone (40%) IM (53%) Email (41%) Mobile (39%)

3 Email (39%) Home Phone (47%) IM (31%) Home Phone (31%)

Home electroNicS: reSearcH jourNeyS

USA Americas Asia Europe

% of those who changed their mind about the brand after research

owNed 56% 54% 48% 54%

BougHt 62% 58% 61% 66%

earNed 47% 36% 51% 52%

% of those who changed their mind about the retailer after research

owNed 64% 52% 51% 54%

BougHt 60% 55% 61% 59%

earNed 47% 33% 51% 41%

12

Social networks get the greatest usage in Asia where at the start of the journey, content read in a social network site may trigger intent to purchase a product or service. The incidence of this is quite low (4% or less) in other regions.

RECEPTiviTY TO EmERgiNg fORmS Of CHaNNEL ENgagEmENTWe asked what newer forms of brand/store engagements shoppers would be most open to. We posed different possibilities to respondents and we found a greater acceptance of e-commerce followed by payments via mobile phones. This was consistent across all regions.

Shoppers are most interested in online purchasing. The next ranked applications in desirability involve mobile communications suggesting new opportunities to impact shopper decisions closer to the point of purchase.

Make purchases online

Send pictures/videos of a potential purchase to friends or family

Use a mobile phone to research information whilst at a store

Use a mobile phone to interact with a billboards/displays

Ask for views from people you don’t personally know online

Make purchases from a mobile phone

I would be interested in making payments using mobile phone

% of all jourNeyS iNflueNced By aN oNliNe Blog poSt, forum commeNt or SometHiNg read oN a Social Network

20%

16%

12%

8%

4%

0%

aSia uSa americaS europe

% wHo would Be moSt williNg to do iN tHe future (top Box meNtioNS)

80%

60%

40%

20%

0%uSa americaS aSia europe

Grocery

Fast Food

Home Electronics

Clothing, Shoes, Accesories

13

For more information about this study, please contact: Beth Uyenco, Global Research Director, Microsoft Advertising [email protected] Mike Hess, EVP for Insights & Analytics, Carat US [email protected] Caroline Vogt, Head of Insight, Aegis Global, [email protected]

• Qualitative Study: Fifteen in-depth shopper interviews and shopping observations were conducted in the US, United Kingdom, Mexico, France, Japan and China covering the five retail sectors. In addition, respondents completed shopping diaries.

• Quantitative Study: Online surveys among those aged 16 or older were completed in 17 countries. Sample sizes are as follows:

The original intent was to include a South American composite of markets: Argentina, Chile and Colombia. Chile was dropped following a devastating earthquake that paralyzed communications making contact with prospective respondents extremely difficult.

* Combined as one market

fiNaL WORdThe old Purchase Path based on an AIDA “funnel” is gone. Study results have clearly established the existence of a new, more dynamic Purchase Path that is driven by the power of differentiated touchpoints along a shopper’s journey. Further, the type of journey depends on the segment that a consumer is in, so media must be planned accordingly.

Only by fully taking into account the dynamics of the new Path, can today’s marketers attain the best ROI for their offline and digital investments.

New Shopper Journeys contains an exhaustive database of media behavior and the purchasing that results from it. While there are many patterns and similarities across the globe in our findings, cultural differences also appear. As such, researchers at Microsoft Advertising, Carat, and their clients can mine these data to determine effective channel mixes for offline, online, and in-store media on both global and local levels.

detailS oN metHodology

USA 2,680

Canada 1,089

Brazil 1,023

Mexico 1,006

Argentina* 581

Colombia* 493

Taiwan 1,073

China 1,546

Japan 1,015

India 1,065

Hong Kong 1,032

Singapore 1,034

Italy 1,118

Germany 1,012

Spain 1,031

United Kingdom 1,141

France 1,063

Microsoft carat shopper journeys brochure

Entertainment & Humor

Transcript of Microsoft carat shopper journeys brochure