How smartphones, the web and social media influence consumers' CPG purchase decisions
If you’ve ever seen a grocery store patron accidentally clip an end cap while walking and texting, the following statement may not come as a surprise: Canadians are confirmed techno-fiends.
According to a survey by Nielsen, the Internet and mobile technology, both inside and outside the store, heavily influence consumer purchase decisions. The Global Survey of New Product Purchase Sentiment offers insights into this phenomenon.
For example, 44 per cent of consumers say technology has a particularly strong effect on their decision to buy new food and beverage products, personal health and over-the-counter medicine (41 per cent of consumers), personal hygiene (38 per cent) and oral-care products (37 per cent).
What else does the study reveal? Put your cellphone on silent and read on.
Click, scroll, buy. Free samples and word of mouth from friends and family remain the two most influential factors determining whether or not a shopper buys a new product.
But the Internet is no bit player. Almost six in 10 Canadians told us they are more likely to purchase something new after learning about it through Internet research.
The brand or manufacturer’s website also has an impact, affecting about 44 per cent of respondents’ purchase behaviour.
Trailing closely behind are articles that appear on frequently visited websites. So if, for instance, The Globe and Mail publishes a laudatory review of a new CPG product on its website, you can bet consumers will pay attention.
Predictably, Internet forums and social media websites are also influential, but not as much as you might expect. They came in at 30 and 29 per cent, respectfully.
Marketing in the digital age. Pop quiz! Which resonates most with consumers: ads on TV or online marketing? Our research shows that, in fact, consumers find traditional and new-age advertising equally compelling.
But there’s one major benefit to using social media marketing: websites like Facebook and Twitter are effective sounding boards. In other words, they’re an easy way to learn about potential issues with products, and they can help identify future opportunities without expensive focus groups.
It’s a good idea to use social media in combination with traditional methods of marketing, like magazine ads and TV spots. It enhances recall and spurs one-on-one engagement, research shows.
The smartphone effect. Canadians appear to have warmed to the idea of virtual shopping. In 2011, about a quarter of Canadians said they would be willing to buy consumables online. Now, almost 40 per cent say they’re game.
Retailers and manufacturers must become more technologically advanced in order to stay competitive and to attract increasingly tech-savvy consumers.
Grocers should consider building apps that allow customers to easily access weekly sales. Manufacturers, meanwhile, should work with retailers to highlight their brands in these apps.
For those retailers already offering shopping apps, consider using them to supplement promoted non-food items, such as toys, paper products, cleaning products, and health and beauty products. Why? Research shows consumers are most open to purchasing those categories virtually.
A new App-roach to loyalty cards. Just about every retailer offers a version of a loyalty or rewards program. But all those cards add up to one heavy wallet.
In fact, Nielsen spoke with consumers who had so many cards they had to carry two wallets–one for their driver’s licence, health card and credit cards, and another for their loyalty cards. It’s understandably frustrating.
Retailers should make it as easy as possible for consumers to be loyal by offering an app. According to our research, 35 per cent of Canadians are willing to replace their plastic loyalty cards with the virtual kind.
Payment: phoning it in. There’s no denying that mobile payment is the next big thing to hit retail.
Our research shows that almost a quarter of Canadians are willing to use their smartphones as mobile wallets; another 26 per cent are sitting on the fence. Other studies have put the number of willing shoppers even higher. Offering customers this option could influence their choice of where to shop.
Carman Allison is director of industry insights at Nielsen in Toronto <ca.nielsen.com>