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13 October 2006
Hong Kong
It may not be a surprise to learn that online consumers rely heavily on the Internet – and a strong brand and reputation - to help make their purchase decisions, but with Internet penetration rates in many markets increasingly reflecting the offline population, we’re set to see the transformation of retailing in the high street, along with traditional advertising and marketing approaches, according to ACNielsen, the world’s leading marketing information and research company.
In a recent online survey conducted in 41 countries around the world, ACNielsen asked consumers what helped their final decision when it came to purchasing a variety of products. ‘Searching the Internet’ was the most popular decision-influence, particularly for purchasing Holidays (54%), MP3 players (42%), Mobile Phones (39%) and Loans (29%) with European consumers most in line with this global preference (Chart 1). ‘Brand/Reputation’ was the most popular for almost half of global internet population when buying Cars (46%) and Window Shopping most preferred when it came to Fashion (47%), and Jewelry/Watches (42%). ‘Prior Experience with the Same Brand’ was most likely to swing it for four in 10 in choosing a Bank.
“The reality is that, today, an Internet presence isn’t a ‘nice to have’, it’s a commercial necessity. It’s where the majority is going to make up their minds about a purchase, particularly in developed markets in Europe, where the Internet is highly penetrated, and for certain categories where services may becoming more commoditized, such as holidays, banking, loans and mobile phones,” said Alastair Gordon, Managing Director of Customised Research Services, ACNielsen Asia Pacific.
‘Brand/Reputation’ was the second most likely purchase influencer overall and is a dominating decision-influence for consumers in Asia Pacific when it came to ‘investing’ in big ticket items like cars (51%), jewelry (42%), and personal financing like the use of banks (44%) and loans (32%) (Chart 2). Asia Pacific consumers’ preferences were in interesting contrast to their counterparts in Europe and the US, where consumers in both regions believe Prior Experience to be the first and foremost consideration when buying a car, and ‘seeing’ the jewelry item in person was a pre-requisite before deciding to buy.
“It certainly poses a challenge for tomorrow’s retailers and mall operators. The retailing experience of the future will need to be a much different proposition than it is today, if people are less motivated to visit a store to buy anything other than fashion and accessories, which are less likely to be researched online and more likely to be spontaneous in-store purchases.”
In Asia Pacific, Brand/Reputation outranked Searching the Internet as a major influencer. Yet the Internet is the first point of information gathering for holiday-makers when planning their vacation/travel. This is in fact a universal trend, with 59 percent of Europeans and 51 percent of Americans indicating the same. After the Internet, the world’s consumers rely on Word of Mouth and Previous Experience, except in Asia Pacific, where TV/Print Advertising was considered more important.
“While growing rapidly, Internet penetration rates are still relatively low in some markets in Asia, and as home to a number of developing economies with burgeoning middle classes, the power of Brand and the status it conveys, is very strong,” commented Gordon.
A less-so-obvious phenomenon in Asia Pacific is that while both are electronic gadgets, mobile phones purchase decisions are most likely to be influenced by Brand/Reputation (45%), while any plan to buy a MP3 player will prompt consumers to Search on Internet (47%) before anything else.
“This is an interesting revelation of consumer behavior and together with the differences in purchase influences in other parts of the world, it once again reminds marketers the importance of market segmentation and that one strategy doesn’t fit all.”
In the US, Previous Experience was the strongest influencer overall and particularly when it came to buying Cars (49%), Banks (46%), Mobile Phones (39%) and Loans (35%) (Chart 3) .Word of Mouth is a priority when buying weight loss products and mobile phones. “This again differentiates American consumers most distinctly from those in Asia Pacific where Prior Experience is not as important a consideration for most purchase decisions,” said Gordon. “The purchase influencers reflect the development of the markets, and the history a consumer may have with a particular brand or service provider. In less developed markets for example, there may be little or no previous experience, so they become more reliant on the brand positioning and word of mouth.”
Window Shopping was the most important decision influencer when it came to Fashion, in particular for Europeans, with 56 percent preferring some good old-fashioned retail therapy, compared to a global average of 47 percent. 44 percent of Americans and 42 percent of people in Asia Pacific also consider window shopping key in their clothes-shopping. “People rely much more strongly on visual presentation when selecting Fashion and jewelry / watches. This would suggest these purchases are less likely than average to be researched and more likely to be spontaneous. Advertising and Brand were the second and third ranked influencers globally.”
As an important part of marketing mix for any products and brands, Conventional TV/Print Advertising is of greatest importance among Asia Pacific consumers especially when it came to purchasing Holidays, Cars, Jewelry/Watches and Weight Loss products.
“Traditional media was not skewed to any particular type of product, suggesting it’s a ‘generic’ that people take as a given. While consumers may not think conventional advertising influences their purchase, advertising builds the brand awareness and positioning over time and it will continue to play a major role in marketing strategies,” said Gordon. “There is no doubt consumers will need to be ‘addressed on all fronts’, with the Internet a core part of any multimedia strategy.”
The ACNielsen Online Consumer Confidence and Opinion Survey is the largest half-yearly survey of its kind aiming at gauging current confidence levels, spending habits/intentions and current major concerns of consumers across the globe. The ACNielsen Consumer Confidence Index is developed based on consumer’s confidence in the job market, status of their personal finance and their readiness to spend. The latest survey, conducted in late May/early June, polled about 22,780 internet users in 41 markets from Europe, Asia Pacific, North America to the Baltics.
Markets Covered
Australia (Aus), Austria (AT), Belgium (Bel), Canada (Can), China (Cn), Denmark (Den), Finland (Fin), France (Fra), Germany (Ger), Greece (Gre), Hong Kong (HK), India (Ind), Indonesia (Indo), Ireland (Ire), Italy (Ita), Japan (Jpn), Korea (Kor), Malaysia (Mal), Netherlands (NL), New Zealand (NZ), Norway (Nor), Philippines (PH), Poland (Pol), Portugal (Por), Russia (Rus), Singapore (SG), South Africa (SA), Spain (Spa), Sweden (Swe), Switzerland (Swi), Taiwan (TW), Thailand (TH), Turkey (TR), United Kingdom (UK), United States (US), Czech Republic (Cze), Hungary (Hun), Vietnam (Vnm) and the Baltics (Bal) which covers Estonia, Latvia and Lithuania.
About ACNielsen
ACNielsen, a VNU business, is the world’s leading marketing information provider. Offering services in more than 100 markets, the unit provides measurement and analysis of marketplace dynamics and consumer attitudes and behavior. Clients rely on ACNielsen’s market research, proprietary products, analytical tools and professional service to understand competitive performance, to uncover new opportunities and to raise the profitability of their marketing and sales campaigns. To learn more, visit www.acnielsen.com.
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