Category: consumer behaviour | 消費者行為 | 소비자 행동

Consumer behaviour is central to my role as an account planner and about how I look at the world.

Being from an Irish household growing up in the North West of England, everything was alien. I felt that I was interloping observer who was eternally curious.

The same traits stand today, I just get paid for them. Consumer behaviour and its interactions with the environment and societal structures are fascinating to me.

The hive mind of Wikipedia defines it as

‘the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services.’

It is considered to consist of how the consumer’s emotions, attitudes and preferences affect buying behaviour. Consumer behaviour emerged in the 1940–1950s as a distinct sub-discipline of marketing, but has become an interdisciplinary social science that blends elements from psychology, sociology, social anthropology, anthropology, ethnography, marketing and economics (especially behavioural economics or nudge theory as its often known).

I tend to store a mix of third party insights and links to research papers here. If you were to read one thing on this blog about consumer behaviour, I would recommend this post I wrote on generations. This points out different ways that consumer behaviour can be misattributed, missed or misinterpreted.

Often the devil is in the context, which goes back to the wide ranging nature of this blog hinted at by the ‘renaissance’ in renaissance chambara. Back then I knew that I needed to have wide interests but hadn’t worked on defining the ‘why’ of having spread such a wide net in terms of subject matter.

O2O (online to offline) big in China

My friend Sam Sun used to flag up O2O as the most important trend he saw when we worked together on mainland Chinese campaigns. O2O means online-to-offline. An integration of digital marketing tactics with marketing to drive retail footfall.

O2O in China

In China, there is real consumer demand for this type of marketing. Tencent surveyed WeChat users and found out that 13 per cent of them would prefer to have O2O adverts in their moments (think a stream of friends Tumblr accounts or Facebook’s news feed).

There is a whole eco-system that the Chinese can tap into.

QRcodes have greater customer acceptance in Asia than in Europe, where despite the efforts of Pepsi and other brands to encourage consumer adoption, it has been tepid at best. QRcodes are often confused for barcodes and take-up is a fraction of that in other countries like Japan. By comparison here is the picture of a real estate advert on the table of a Chinese fast food restaurant in Shenzhen.

In-store wi-fi in the UK is often clunky, poorly run by a major carrier like EE or a specialist provider like The Cloud. By comparison, in China, Tencent’s WeChat provides a turnkey solution for retailers, restaurants and bars to provide wi-fi and build their social following in a relatively painless manner for the consumer. (Though the software used by the retailer needs regular updating to keep up with Tencent’s ambitious development of the platform).

On the face of it however China isn’t the most promising market for O2O. It is a vast, diverse country, which makes it hard to build a truly national network of retail outlets. It has a dominant e-commerce platform this is more like eBay than an Amazon in that it doesn’t compete directly with its merchants. Secondly, the cost of labour and the huge funds available to internet companies mean that building a logistics network is more likely to succeed than it would do in a more expensive country like the UK or US.

O2O in the west

Contrast this with the west, where Scott Galloway predicts Amazon’s demise because of the unsustainable cost of its product delivery system. Galloway hypothesises that ad-hoc logistics networks based on the sharing economy a la Uber and clicks and mortar businesses like Tesco offer a better alternative. Apparently doing the warehousing towards the edge is more cost beneficial than the Amazon model.

In the west, we seem to be on the cusp of a range of technologies that could make indoor location, identity and marketing a whole lot easier.

Hong Kong developers Green Tomato, have used ultrasonic signals and low power Bluetooth to allow applications to interact with their surroundings from sports check-ins to shopping mall navigation.

Low power Bluetooth beacons have been experimented with by retailers for encourage mobile augmented shopping and by organisations including Japanese Railways to aid indoor navigation. CSR and other companies have talked about using wi-fi as an indoor navigation aid. Further out quantum technology offers highly accurate GPS type location finding within buildings. All of this technology has the potential to further move O2O further forwards, if the user experience is made sufficiently simple and seamless. In the meantime the humble QRcode soldiers on connecting consumers and retailers in Asia.

More information

WeChat Adds Wi-Fi Solution to Public Accounts | Technode
China consumers voice their preferences for WeChat Moments ads | Resonance China
Proposes new indoor requirements and revisions to existing E911 rules | FCC
New indoor positioning system lets you do Batman-like echolocation on your phone | ExtremeTech
CSR claims it will be able to fix your indoor location accurately | VentureBeat
UK military creates quantum compass that could be the successor to GPS | ExtremeTech
JR Rolls Beacon Navi for Tokyo Station | Wireless Watch Japan – interesting internal navigation application of beacon (low power Bluetooth technology)
WiFi Chip Tracks Indoor Location | EE Times
Five examples of how marketers are using iBeacons | Econsultancy
Mapping Our Interiors – NYTimes.com – interesting business model by IndoorAtlas
Grindr – Lisa Page – HyperIsland – really interesting insights on LBS design
Green Tomato Limited

February 3, 2015
Li Ka shing + more news

From ‘superman’ to ‘big tiger’, Li Ka shing loses favour with Beijing | South China Morning Post – interesting analysis of the changing sentiment of the Chinese government to Li Ka shing. Li Ka-shing has managed to walk his own path, even compared to other Hong Kong oligarchs. He was also able to play well with westerners. Li Ka shing was just just a man with a plastic flower factory and a headful of ambition until he persuaded HSBC to help him acquire property during the 1967 riots. HSBC bought into Hutchison Whampoa in 1979, got rid of the current taipan Douglas Clague. They then lent Li Ka shing the money to buy the business, including HSBC’s own 22% stake at a knockdown price of 639 million Hong Kong dollars. A large amount of money, but still less than the value of the assets being bought. Li has become even richer thanks to skilful use of the conglomerate discount phenomenon

Consumer behaviour

The Psychology of Intelligence Analysis: Drivers of Prediction Accuracy in World Politics – Journal of Experimental Psychology – interesting traits and teams rather than individuals tend to do better. It would be interesting to see how this affects the wisdom of crowds given they are a mass of individuals rather than a team per se (PDF)

FMCG

Most Energy Drink Companies Market to Minors, Report Finds | Time – this could be a ticking time bomb from a regulatory point of view

Media

Case Study: How Huawei turned its smartphone business around | Marketing Interactive – superlative headline but interesting overview of programmatic buying in China via iClick

Millward Brown Digital partners with Snapchat | Research Live – interesting they can tell an ad

Vinyl’s difficult comeback | The Guardian – interesting opportunity for manufacturing record press machines

Online

LIVEhouse.in – Online Broadcasting Service – really cool Asian content

Security

UK’s Cameron won’t “allow” strong encryption of communications — GigaOM – this is the most disturbing stuff I have seen and read in a long term, the Home Secretary is a political role by its very nature. It is not even an independent judiciary signing off. Secondly, given the poor understanding of technology by the body politic in the UK it doesn’t inspire confidence – if there is a back door for HMG, there is a back door for an abusive third party. Finally this is crush or encourage innovative start ups who focus on privacy to move offshore – Shoreditch to Berlin for instance. More related content here.

Wireless

BlackBerry Responds to Media Report – Press Releases – not talking to Samsung, it didn’t sound like it made sense to me

Smartphones At Tipping Point In China | Young’s China Business – domestic Chinese smartphone market likely to contract 10 per cent over the next year – shipments of all types of cellphones actually plummeted 22 percent in China last year to 452 million units, led by a 64 percent plunge in 2G models and 46 percent drop in 3G ones. (Chinese article) China’s mobile users now number 1.28 billion, giving the nation a penetration rate of 95 percent.

Smartphone shipments didn’t fare nearly as badly as the older 2G and 3G models, but were still down 8.2 percent last year to 389 million units. That means that a hefty 86 percent of all cellphones shipped in China last year were smartphones, which were rapidly flooding the market as new players jumped joined the space and older ones ramped up production.

It’s worth noting that the 389 million figure is unit shipments and not actual sales. I suspect a big portion of those smartphones — perhaps as much as 20-30 percent — are still sitting in distributor warehouses and on store shelves as unsold inventory due to the market saturation – expect channel clearing sales or developing market dumping

January 21, 2015
Changing definition of what social means
What social means

This inspiration for this post about what social means came from working with business-to-business marketing clients and prospects. Its based on thinking I’ve done over the past six months or so. Based on the experience I had talking to clients and the work that I have been doing I came up with a what I’ll describe as a working hypothesis.

The past Cluetrain Manifesto

For a number of years, business and consumer social marketers have taken The Cluetrain Manifesto as their talisman. What social means was defined by a series of statements or beliefs outlined in the book. The outcome was that social media marketing was seen in terms of re-defining the relationship between stakeholders and a business. This was around a number of values including:
- Transparency
- Speedy response
- Humane
- Resp0nsiveness
What social means now

What social means has changed, at least in Europe. I would put part of the change down to technological capabilities influencing the philosophy around social and the fact that business-to-business are measured exclusively on sales when they are not corporate HQ. And if they are corporate HQ for a non-US domiciled company the focus is much more quarterly results-orientated, so even the corporate social accounts are expected to carry their weight in terms of delivering regular prospective customers.

The focus has changed:
- Brand communities and corporate reputation have given way to performance marketing
- Influencer programmes have given way to prospect-baiting content marketing
- Engagement has given way to CTA (call to action) and customer path to purchase
- Building customer loyalty has given way to purchase satisfaction
The emphasis has moved from the brand to performance marketing, even for what would be seen to be corporate communications. The fig leaf of reputation used to protect corporate PR has been torn away in social media. A secondary aspect of this is a less tangible decline in the stock of social media or community professionals at least within the business-to-business context.

Whilst the organisations I have been dealing with are in the early stages of thinking about marketing automation, with only a few going through the costly integration process for the likes of Eloquia or Pardot – the philosophy behind them has become the defacto view.

I spent far too long writing this post, in between starting drafting this post and pressing publish, two of the authors (David Weinberger and Doc Searls) responsible for the Cluetrain Manifesto have updated it to reflect marketing realities online which broadly touch on areas of my hypothesis and I have included a link at the bottom.

In the words of Bill Hicks business-to-business marketers run the risk of knowing the price of everything and the value of nothing.

More information
The Cluetrain Manifesto
New Clues
#NewClues and #VRM – Watching The Watchers
January 10, 2015
What does technology adoption really mean?
I ended up giving a lot of thought about the concept of technology adoption and what it really means. I have been spending a bit of time with the family over the Christmas period as the Carroll family CTO. Reading some of the statistics out there about technology adoption got me thinking whilst I was doing my role as CTO.

In my role as family CTO I had my work cut out for me. My first task on Christmas morning was to recover their Apple ID so that the iPad could be used effectively.

Their mobile communications needs pose a far thornier problem for me and I have been given some thought to my parents and their battered feature phones.

The problem that I have is that its getting increasingly difficult to get them the kind of phone that they want:
- Focused on voice
- Really simple-to-use SMS
- Good haptic feedback (just like what real buttons do)
- Something that can be easily locked
- Something that can be obtained SIM-free
- Something that is physically robust
- Something that I can troubleshoot easily
It is a tough call. I have been down this route before. I gave them my old Palm Treo 650 a number of years ago and it got them thinking about digital photography, but it failed as a phone. It’s failures were:
- Being too complicated
- Providing too many choices
- Having too confusing a keyboard
The software was also buggy as hell, but I could trouble shoot any problems they had from my memory of using it a few years before they got their hands on it. The Treo 650 eventually gave up the ghost as the family digital camera, to be replaced by the iPad. My friends who have managed to get their parents using Weixin/WeChat on a mobile phone are not particularly good case studies for what I need to do. There is an absolute unwillingness to have phones with a data package: it is hard for them to understand the vagaries of the mobile phone company tariffs; email is something that they can pick up at home. They never hit the wall on their data allowance from the ISP so it never occurs as a consideration to them.

There is also something about the iPad which means it is accepted as something different to a complex smartphone device and more accepted despite the similar pictures-under-glass interface.

Instead a market stall provided a Samsung feature phone with a late Series 40-esque interface which pushes the envelope in terms of my Dad’s comfort level using it. Meanwhile my Mum soldiers on with an old Nokia. My immediate gut reaction is to go to eBay and pick up something like the Nokia 225 or a Samsung Solid Immerse GT-B2710 for the both of them.

I know other people who have faced similar conundrums and have gone with a Windows Phone (it fails my spec because I wouldn’t be able to troubleshoot it for them), but the tiles front page presents what could be a senior-friendly experience in their eyes. The shy and retiring Tomi Ahonen got hold of some Nokia data looking at phone activations and was both astonished and angry. Roughly a third of Nokia Lumia phones which went out form the factories were never activated. His theory was that a combination of high handset failure rate, unsold inventory from the messy switch over to Windows Phone 8 and possible channel stuffing might be involved.

I don’t know what might justify a 26 million handset short fall, but I could imagine an appreciable amount of them might be due to people using a smartphone as a feature phone. Not having a data plan, being perfectly happy for a phone to be a phone. Is a smartphone still a smartphone if its used as a feature phone?

Extending this analogy further, a large amount of ‘smart TVs’ are now being sold and being touted as the new, new thing in terms of internet eyeballs. Web TV isn’t particularly new as an idea, Combining the web in a TV format has been going since at least the mid-1990s when Steve Perlman founded what would later become MSN TV.

We know that a large amount of homes are buying TVs that are smart, but how do they use them? Are they just using them for the delivery of Apple TV like services; a cable box over IP or are they doing ‘lean forward’ activity one would expect of a smart TV like email, Facebook updates and the like?

I suspect most smart TVs are video delivery mechanisms and that’s pretty much it, are they then really smart? All of this may sound like semantics, but they could feed into the decisions of advertisers, in terms of platforms and creative execution. They are also likely to feed back into product management in the the consumer electronics sector, where TV makers enjoy (if thats the right word) razor-thin margins.

From an information security point-of-view, how would you explain to smart TV owners with ‘dumb TV’ usage patterns that their set may be at risk of being hacked and how they should spend money to protect themselves. A worst case scenario maybe a Sony Bravia (or other manufacturers for that matter) bot army of TVs may never be shut down because consumer apathy to the perceived security risk.

More related posts here.

More information
Bizarre Stat of the Day: Microsoft (and Nokia) have only achieved 50M Lumia activations? Seriously? Out of 76M shipments? What happened to the other 26M? Seriously! Tossed into garbage by retail? | Communities Dominate Brands
December 31, 2014
Patent cliff + more things

Pharma to lose $69 billion in five years as patents expire | Pharma File – patent cliff kicks in. Pharma has been buoyed historically by a run of blockbuster drugs. These drugs are coming off patent and there is a lack of obvious replacements. Secondly, investment in research is getting more and more expensive for pharma companies to stave off this patent cliff. Expect the pharma industry to try and go for intellectual property right extensions to try and stave off the patent cliff

Laurence Fink Says Activist Investing Can ‘Destroy Jobs’ | New York Times – not terribly surprising but interesting that Black Rock has come out and said it

Britain’s autumn statement: Two lost decades? | The Economist – at least since there is no compelling reason for things to improve (like with North Sea oil in the 1980s)

Intelligence: Nike’s CIO Had to Get the Hell Out of Portland | Racked – surprised that Nike hadn’t managed to build a more urbane environment in Portland. I could see this as being a great case study for Who Is Your City author Richard Florida

Intelligence: Gucci Cleans House: CEO, Creative Director Are OUT | Racked – not surprising given poor sales performance

WhatsApp might be working on a web client | VentureBeat – me too feature to catch up with WeChat, expect QRCode hand-off

Yahoo shuts offices in Malaysia, Vietnam, Indonesia | Campaign Asia – Malaysia I understand: closeness to Singapore, less of an economic power machine and a marketing sector that needs to work hard to keep up with legislation and local sensibilities. Indonesia and Vietnam are surprises given the high growth and populous markets that they represent

Sony Lawyers Warn Press to Destroy Documents from Hack | Variety – this is tough one legally Sony as journalists are largely protected by the the US constitution

Top 10 websites in the US according to Quantcast: A few observations | Chris Dixon – some interesting data points, you can still see the power of the IE installed user base and email looking at this data

The Cheapest Generation – Atlantic Mobile – it assumes that will have the same amount to invest

Silk Road subsidies undermine rail link | South China Morning Post – really interesting article about the nitty gritty of rail freight including lack of international common legal standards and requirements for paper work, insurance etc

The Customer Journey to Online Purchase – Think with Google – really handy for media planning

Sony hack: Studio Tries to Disrupt Downloads of its Stolen Files | Re/code – ethically dubious at best

Xiaomi’s Indian expansion could be derailed by a patent tussle with Ericsson | Quartz – this is interesting as IP could put a speed bump on the new smartphone players for the time being, though this may decline in 5G as Huawei and ZTE get a bigger proportion of the IP in comparison to Alcatel-Lucent, Qualcomm, Samsung, Broadcom, Nokia, and Ericsson

Russia tries again, in vain, to steady its collapsing currency | Quartz – it’s a buffet that the west hasn’t been invited and will end with a stronger China – having got hold of military and strategic industry IP, industrial assets and natural resources to drive further Chinese growth and strength

Wal-Mart is the latest company to badly overestimate China | Quartz – there is a whole blog post in this story about growth, the nature of growth, management by Excel spreadsheets and a bit about China. Maybe I will have the time to write it one day

EDMTCC 2014 – The EDM Guide: Technology, Culture, Curation – white paper trying to defend the bastard child of the dance music scene now that the Americans discovered it including Swedish House Mafia alumni (PDF)

December 16, 2014