The Top 500 retailer buys Campus Deals, which offers mobile coupons to college students.
Online consumers rely on the web for product research
They trust friends’ recommendations and often buy in stores, Forrester says.
Editor in Chief
The path a consumer takes from thought to purchase has changed dramatically with the proliferation of product information sources and shopping channels. A new report from Forrester Research Inc. concludes that the Internet plays a big role in product discovery and research, and is gaining on physical stores when it comes to closing the sale.
After the purchase, social media is becoming more important as a growing number of consumers are engaging with brands, says the report, “Fragmented Path-To-Purchase Demands Everywhere Marketing,” by analyst Corinne Munchbach.
Along the path to purchase, consumers have many options, and the ones they choose vary based on the product category and the individual shopper’s motivation, the report says. Munchbach encourages marketers to discard the concept of a purchase funnel, and think more of the “customer life cycle,” with four stages: product discovery, exploration and research, purchase and post-purchase engagement.
How do today’s online consumers discover products? Word of mouth leads the way, cited by 80% of online consumers surveyed by Forrester in the third quarter of 2012. But Internet search engines were a close second, at 79%, followed by TV ads, 71%, seeing a physical display or ad, 51%, ads in the mail, 51%, and other browsing on the web, 41%.
In the research phase, however, the web dominates. When asked how they recently sought more information about a product, 62% said via a search engine, 60% from a manufacturer’s web site, 57% from a retailer’s web site and 42% by visiting a bricks-and-mortar store.
When it comes to making the purchase, 67% say it is likely they will buy in a physical store in the next six months versus 58% who say they’ll probably buy online via a computer. The responses dropped off dramatically after that, with tablet computer following at 14%, a phone order after viewing a catalog, 14%, and buying from a smartphone, 11%.
The report notes that consumers now expect to be able to interact with retailers in many ways—40% say they’re more likely to purchase from a company that offers a variety of purchasing channels. “So while online commerce still makes up less than 10% of overall retail sales in the U.S., the piece of the pie will continue to grow, and the advantages of having an online option will continue to meet consumers’ growing expectations,” Munchbach writes.
Post-purchase service is important, the report says, noting that 69% of consumers say they would recommend a brand that makes it easy to resolve a problem, whereas only 4% would talk up a store, company or manufacturer that makes it hard to get satisfaction.
The report also notes that 78% of online adults can be motivated to interact with brands, and encourages chief marketing officers to woo customers with targeted offers, quality products and good service.
“Digital platforms enable the formation of deeper relationships between people and brands, and savvy CMOs will seize the opportunity to deliver new value and earn engagement in return,” Munchbach writes. She points to Nike Inc.’s use of social media and communities, and says it’s enabled the athletic shoe and apparel maker to capture large amounts of data about how consumers live and work out. “It will be a fine line to walk in the foreseeable future as all parties learn what the appropriate balance is,” the report concludes, “but over the next several years, expect much more intimate exchanges between the brand and the customer.”