New Razorfish report studies consumer purchase behavior

Social media influence consumer purchase behavior far more than you might think.

That’s a key finding of new Razorfish thought leadership, FEED: The Razorfish Consumer Experience Report. The report is available in Flash and PDF download here: http://feed.razorfish.com and on the Razorfish Digital Design Blog. FEED, launched on 20 October 20008, helps marketers design better consumer experiences by uncovering insights into consumer behavior in the digital world. The report documents the results of a 2008 survey that Razorfish conducted of more than 1,000 “connected” consumers (a coveted group who spend money online and have access to broadband). Here are a few key findings from FEED that marketers might find noteworthy

1. Social media increasingly influence purchase decisions. Four out of 10 consumers surveyed by Razorfish have made a purchase based on advertising they saw on a social media site, and 76 percent welcome advertising on social networks. Consumers’ purchasing behavior reflects the larger influence of social media on their lives. About 75 percent of consumers surveyed spend at least one hour a week on social media sites like Twitter and Facebook. More than 68 percent of connected consumers are active on two or more social media sites.

2. Consumers are adopting social media and web 2.0 technologies with startling regularity. Nearly 7 out of 10 connected consumers have customized their home pages with content feeds, scheduled updates, and other features. Sixty percent use widgets on websites. The widespread use of widgets is the most surprising finding. We believe the uptake of widgets, mobile devices and social media means that marketers need to design experiences for consumers across a world of fragmented digital media.

3. Video explodes as an advertising format. A whopping 94 percent of consumers surveyed say they watch interactive video with some level of frequency, with nearly a third watching video on a daily basis. We also find that consumers are open to advertising through interactive video, with the majority preferring companion banners to pre-roll as well as new, emerging forms of video advertising such as tickers and interstitials.

4. Personalization and loyalty sway consumers. Razorfish reports that 65 percent of connected consumers say that retail loyalty programs highly influence purchasing decisions. According to Razorfish, loyalty services like Amazon’s Prime or Best Buy’s Reward Zone are essential for retailers to succeed on the eve of the holiday shopping season. Moreover, websites that give personalized recommendations strongly influence connected consumers. Of the total surveyed, 65 percent said that they have made a repeat purchase on a site that issued an automated recommendation based on their previous purchase.

FEED also consists of a series of essays that examine the ways consumers interact with digital media. A few of my favorites are “Putting Jakob Back on the Shelf” and “What’s in a Game?” Both of these firmly assert that simply designing functional websites isn’t going to please a broadband-enabled audience that expects an interactive experience. Instead, designers instead need to ask how to employ concepts like gaming, storytelling, and interactivity to create the next generation of consumer experiences. For instance, “What’s in a Game?” challenges marketers to imagine how consumers could experience one’s product or brand in a playful, game-like fashion. The essay cites Razorfish client work with Lipton tea, where we designed “BrainTrain,” a collection of mental alertness games that engage the consumer while branding Lipton in a subtle way.

Other notable essays include “Twitterific,” “Life after the iPhone, and “Designing Experiences for the Facebook Generation.”

I welcome your feedback.

Web 2.0: A reality check

Have you ever wanted to get grounded in some basic web 2.0 concepts but were afraid to ask? On June 10, my Avenue A | Razorfish colleague Dave Friedman provided some answers in his presentation “Web 2.0: A Reality Check” at the Internet Retailer 2008 Conference. I have posted his presentation for your benefit, and here are some highlights:

It’s not about the technology

Web 2.0 is not a technology. It’s a technology wedded to a culture of collaboration and creativity on the web. Most importantly, it’s about consumers using digital to collaborate with each other. (Dave actually cited the Wikipedia defintion of web 2.0. Although I enjoy Wikipedia, the defintion seemed verbose and vague.) Example: 84 percent of affluent consumers surveyed by the Luxury Institute use ratings and services before making a purchase.

The driving principle behind web 2.0 – collaboration among people – is not new. People have been relying on each other for information about products and services for as long as merchants have existed. But web 2.0 technologies have turbocharged that experience. (Fortunately Dave resisted the urge to say “Web 2.0 is collaboration on steroids” or else I would have heckled him.)

The web 2.0 tool that matters most to retailers

Retailers usually understand the collaboration part of web 2.0. But they are mystified by the proliferation of web 2.0 media and tools, all of which have quickly formed their own argot: blogs, wikis, widgets, and so on.

Rather than attempt an exhaustive overview of most web 2.0 tools, Dave then focused on the most powerful one for retailers to understand: ratings and reviews, which allow customers to rate products and services and share their ratings with others. Ratings and reviews are a central part of the shopping process now. According to Forrester Research, half of people who shop online first do product research on Amazon.com because of the availability of reviews posted by their peers. Implication: having a rating and review section is not optional. Your customers expect it.

Social shopping

Dave also discussed how web 2.0 has fueled the social shopping phenomenon, or people relying on others to help them shop. The web has always been an effective place to do “surgical shopping,” or using price-comparison and search tools to find the right place at the right time to find a particular product you have in mind. But the problem with surgical shopping is that it’s not fun. Although there will always be a place for surgical shopping, digital can make the process more of an engaging experience by giving consumers the ability to explore different brands and involve your peers in the decision-making process. For example, on Kaboodle.com, consumers can find other people with similar interest in a product or category and share their passion for (or disgust with) their experience.

How retailers can embrace web 2.0

Finally, Dave discussed four ways retailers can embrace web 2.0:

1. Support multi-dimensional product comparisons. Give your customers access to product reviews and ratings even if you sell them through another channel. But make it possible to compare product, features, and styles.

2. Build places to make it easy for customers to play. Make it possible for customers to connect with other people. For instance, the Behr online paint store addresses the typically collaborative process of home design. At behr.com, you can upload photos and create possible designs based on lifestyle and color palette. After you create the ideas, you can share them with friends and family.

3. Engage in the conversation. Customers do want to hear from you – but they want to have a conversation. For example, Overstock.com includes a user forum and product rating function. You can even tell Overstock.com when you find lower prices elsewhere – which gives Overstock.com valuable input from the marketplace in addition to providing a voice for consumers.

4. Give people the ability to take your content and use it in other places. Your customer does not wake up every morning with a burning desire to visit online retailing websites. So make it possible for them to share information about you with their friends via“share with a friend” features. Clothing retailer Karma Loop turns customers into representatives for its brand by making it possible for you to download and design your own widget and post on your Facebook page.

Dave’s concluding point: if you’re still not sure what to do next, use your own network of trusted colleagues to get ideas – in other words, apply a little web 2.0-style collaboration to learn. That’s how Dave wrote the presentation you see on this blog post.

Meantime, check out these reactions in the blogosphere:

Tim Parry, Multichannel Merchant

Phil Windley’s Technometria

I welcome your feedback, too.

Web 2.0: A reality check

Have you ever wanted to get grounded in some basic web 2.0 concepts but were afraid to ask? On June 10, my Avenue A | Razorfish colleague Dave Friedman provided some answers in his presentation “Web 2.0: A Reality Check” at the Internet Retailer 2008 Conference. I have posted his presentation for your benefit, and here are some highlights:

It’s not about the technology

Web 2.0 is not a technology. It’s a technology wedded to a culture of collaboration and creativity on the web. Most importantly, it’s about consumers using digital to collaborate with each other. (Dave actually cited the Wikipedia defintion of web 2.0. Although I enjoy Wikipedia, the defintion seemed verbose and vague.) Example: 84 percent of affluent consumers surveyed by the Luxury Institute use ratings and services before making a purchase.

The driving principle behind web 2.0 – collaboration among people – is not new. People have been relying on each other for information about products and services for as long as merchants have existed. But web 2.0 technologies have turbocharged that experience. (Fortunately Dave resisted the urge to say “Web 2.0 is collaboration on steroids” or else I would have heckled him.)

The web 2.0 tool that matters most to retailers

Retailers usually understand the collaboration part of web 2.0. But they are mystified by the proliferation of web 2.0 media and tools, all of which have quickly formed their own argot: blogs, wikis, widgets, and so on.

Rather than attempt an exhaustive overview of most web 2.0 tools, Dave then focused on the most powerful one for retailers to understand: ratings and reviews, which allow customers to rate products and services and share their ratings with others. Ratings and reviews are a central part of the shopping process now. According to Forrester Research, half of people who shop online first do product research on Amazon.com because of the availability of reviews posted by their peers. Implication: having a rating and review section is not optional. Your customers expect it.

Social shopping

Dave also discussed how web 2.0 has fueled the social shopping phenomenon, or people relying on others to help them shop. The web has always been an effective place to do “surgical shopping,” or using price-comparison and search tools to find the right place at the right time to find a particular product you have in mind. But the problem with surgical shopping is that it’s not fun. Although there will always be a place for surgical shopping, digital can make the process more of an engaging experience by giving consumers the ability to explore different brands and involve your peers in the decision-making process. For example, on Kaboodle.com, consumers can find other people with similar interest in a product or category and share their passion for (or disgust with) their experience.

How retailers can embrace web 2.0

Finally, Dave discussed four ways retailers can embrace web 2.0:

1. Support multi-dimensional product comparisons. Give your customers access to product reviews and ratings even if you sell them through another channel. But make it possible to compare product, features, and styles.

2. Build places to make it easy for customers to play. Make it possible for customers to connect with other people. For instance, the Behr online paint store addresses the typically collaborative process of home design. At behr.com, you can upload photos and create possible designs based on lifestyle and color palette. After you create the ideas, you can share them with friends and family.

3. Engage in the conversation. Customers do want to hear from you – but they want to have a conversation. For example, Overstock.com includes a user forum and product rating function. You can even tell Overstock.com when you find lower prices elsewhere – which gives Overstock.com valuable input from the marketplace in addition to providing a voice for consumers.

4. Give people the ability to take your content and use it in other places. Your customer does not wake up every morning with a burning desire to visit online retailing websites. So make it possible for them to share information about you with their friends via“share with a friend” features. Clothing retailer Karma Loop turns customers into representatives for its brand by making it possible for you to download and design your own widget and post on your Facebook page.

Dave’s concluding point: if you’re still not sure what to do next, use your own network of trusted colleagues to get ideas – in other words, apply a little web 2.0-style collaboration to learn. That’s how Dave wrote the presentation you see on this blog post.

Meantime, check out these reactions in the blogosphere:

Tim Parry, Multichannel Merchant

Phil Windley’s Technometria

I welcome your feedback, too.