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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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