Well-informed consumers looking for a new handset typically turn to online research first, using search capabilities and often searching for a specific handset, according to a new study of online shopping behavior.
The online shopper is a high-value subscriber who typically spends more time deciding on their purchase -and then spends more on a handset and services, according to the findings by Compete Inc. and Google.
Three-quarters of in-store purchases begin with online research and therein lie several opportunities for carriers and handset vendors – whose Web sites are the most-visited, though not the most influential – to influence a purchase.
Nearly one-quarter of handset shoppers who use the Web, however, used non-branded terms to search, indicating they may be up for grabs by those with effective, search-based promotions.
The insights into consumers’ online shopping behavior, however, did not lead to any predictions on the result.
“The story is unwritten on what people will buy this season,” said Sara Kleinberg, head of marketing for technology at Google. “Across retail, however, online sales are projected to be higher than in-store sales.”
Under the current economic slowdown – now being felt by consumers – shoppers will be more cautious and keen to derive value from their purchases, said Karen Parker, managing director for telecoms and media at Compete.
Consumers sharply cut spending in the third quarter, according to the federal Commerce Department last week. That marked the end of a 17-year spree by consumers, according to The New York Times; the last such drop came in 1991. And personal consumption saw its biggest drop in the third quarter since 1980, the paper reported.
Thus the findings by Compete and Google may help carriers and handset vendors shape their most effective approach to catching consumers’ attention and persuading them that high-margin smartphones and lucrative data plans will ease a frenetic work/life balance, entertain and inform them.
60% start with carrier
As the online shopper begins researching handsets, 60% head straight to a specific carrier, thus they probably are upgrading a handset from their existing carrier, the study found. But 38% did not begin with a carrier, reflecting that more than one-third of handset shoppers can be influenced by loyalty programs or are vulnerable to churn. Fully 80% had not settled on a handset brand, another opportunity for carriers and vendors to influence purchasing patterns.
As much as 75% of shoppers make a decision in less than a week and as many as one-third decide in less than a day, the study found.
That means most shoppers begin with a high degree of uncertainty over their eventual purchase, but they make decisions swiftly.
“There’s a narrow window in which to get your message across,” said Kleinberg. “Focus on your best promotions and link to good information on your handset offerings.”
But the online sites where shoppers most often do their research do not exert the most influence, the Compete/Google study found. While 40% of shoppers spend time on carrier Web sites – the most of any source – those sites exerted only a 57% influence on their purchase. Sixteen percent of shoppers spent time on handset vendor Web sites, but those sites wielded only 60% influence on a purchase.
In contrast, though only 6% of shoppers visited sites offering professional product reviews, those wielded the most influence (79%). Only 8% visited sites with consumer reviews, but that was the next most influential source of information (62%).
Those who do all their research offline rely on family and friends to advise them (a 70% influence).
