Michael paulson-sic-2011

Information Transparency Empowering the Consumer Coup

Michael Paulson

VP Product & Marketing, Decide

TRANSPARENCY

TRANSPARENCY

TRANSPARENCY: SHOPPING

Some things don’t change

Shoppers want quality products at a great price, great customer service, convenient locations

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.

MORE DECISIONS, LESS TIME

More decisions

…and that’s just offline. Online?

You’re gonna need a longer day

CHANGES: NEW PAIN POINTS

Pain point: Price volatility Sony 3D LED HDTV KDL-55NX810

Source: Decide Data Vault

Pain point: Price Volatility

$23,698,655.93

Guess the price of this book

Pain point: Product obsolescence

15

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

CHANGES: HOW WE SHOP

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

How people shop

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

CHANGES: BALANCE OF POWER

Balance Of Power

Technology is empowering shoppers by making information more transparent.

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

Information Transparency (my definition)

The information consumers need

simply delivered

when and where they need it

SHOPPING TRANSPARENCY: PRODUCT REVIEWS

Product review pioneers

1979

1936

Product Information, then

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.”

and speaking of burned fingers…

Product Information, now

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!!!!”

BUT WAIT … THAT’S NOT ALL

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

Most Reviews Are Good

SHOPPING TRANSPARENCY: PRICE

Price Comparison, then

Price comparison pioneers

Price Comparison, now

Unfortunately…

Concealment

Concealment

A cautionary tale

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,

For the first time, the advantage has tipped in consumers’ favor

Consumers and a wave of startups are innovating to push the boundaries of

information transparency

SHOPPING TRANSPARENCY: THE FRONTIER

Consumers

Room 77

Travel: Oyster

http://www.oyster.com/hotels/photo-fakeouts/

Yelp Monocle

TRUEcar

PointInside

Decide

Decide

SO WHAT?

Conceivable

All shopping will soon be online

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

What’s Your Policy?

Source: RSR Research, Optimizing Price in a Transparent World

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

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.

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

Thank You

The data scientists at

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