Strategy Centre

The Revolution in Digital Communications

  
04 July 2016 14:59
  

Integrated Digital Marketing Communications

Marketing communications have a very important role to play in sharing companies’ value drivers or value proposition with their target markets. Those value drivers could be, for example, proximity, low prices, distribution, good quality products or excellent aftersales service.

A decade ago, small and medium companies’ communications with customers relied mainly on word of mouth, avoiding the use of mass media advertising because of its high price and, occasionally, its lack of credibility. Their business model was based on an urban commerce of proximity with stores situated in the centre of cities. Nowadays, these companies have adapted their traditional communication model to the digital landscape via ecommerce and social media platforms.

A few years ago, a company’s web page was used only for corporate information. Some companies, following the evolution of technology and changes in customer behaviour, introduced the option of ecommerce.

The digital revolution has changed the meaning of ‘proximity’ in all business models. Websites are available in different languages, demonstrating a commitment to the engagement and retention of a diverse customer base. Some companies have slowly adapted their traditional marketing communication method — based mainly on word of mouth — into the digital arena through ‘word of click’, that is, social media platforms and blogs.

Nowadays, these companies share news, pictures and videos about their products, brands and services. Digital platforms allow them to address new needs from their increasing number of technologically-connected consumers in a timely fashion.

Digital technology has revolutionised communications and has permitted access to a vast amount of information. Customer behaviour is changing because of the impact of technology. Companies can identify potential opportunities and are improving their response to this changing behaviour.

From the marketing communication point of view, this is a double-sided game for companies: it is both a challenge and a potential opportunity. On the one hand, marketers have more tools to engage with customers and have useful information about theirs needs, desires, expectations and satisfactions. On the other hand, customers have more information and options to apply when deciding to make a purchase.

In this digital context, more than ever, information is power.

Example Case Study — Insights into online consumer behaviour in Spain

In the same way that Spanish society and context has evolved, companies have evolved to adapt to a new reality: there are more competitors in the market, new products are developed faster to fulfil the different needs of customers, there are new patterns in customer behaviour and new trends in online engagement.

The Observatorio Cetelem eCommerce 2014 report highlights the consumer trends in ecommerce in Spain. According to this research, laptops and smartphones are the most-used devices throughout the online customer journey. While smartphones are used in the pre-purchase stages, laptops are the preferred devices for the online buying process.

First of all, here is what the report found about the prevalence of communication technology in Spanish households in 2014.

Information and communication technology equipment in Spanish homes 2013-2014

Information and communication technology equipment in Spanish homes 2013-2014

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

In 2014, in almost all Spanish households there was at least one member who owned a mobile phone (96.4%). 74.8% of households had at least one member between 16 and 74 years old who owned a computer (PC/laptop).

According to the survey Observatorio Cetelem eCommerce 2014 Encuesta sobre Equipamiento y Uso de Tecnologías de Información y Comunicación en los hogares. Año 2014, conducted by INE, 74.4% of Spanish households had access to the internet in 2014 — that is, 11.9 million homes were connected to the internet.

As regards the type of connection, 73% of households used broadband. Of particular relevance was the fact that, for the first time, the main method of connection to broadband was via mobile connection through a handheld device (3G and 4G smartphones) in 67.2% of households.

Volume of B2C ecommerce in Spain (in millions of Euro)

Volume of B2C ecommerce in Spain (in millions of Euro)

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

According to an earlier study ('Estudio sobre comercio electrónico B2C 2013. ONTSI'), B2C ecommerce continued to expand in Spain. In 2013, the figures showed a turnover of 14.610 million Euro. That was an increase of 18% from 12.383 million Euro in 2012. This increment was bigger than the previous year which showed a growth rate of a 13.4%.

Responses to questions posed to Spanish consumers

We’ll review here some of the answers given by respondents when asked about their online purchasing behaviour.

How often do you access the internet?

How often do you access the internet?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

When asked how often they accessed the internet, respondents replied as follows:

  • 94% said several times per day
  • 5% said once per day
  • 1% said every two or three days

Which devices do you use to connect to the internet?

Which devices do you use to connect to the internet?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

When asked which devices they used to access the internet, respondents replied as follows:

  • 79% used mobile phones*
  • 73% used laptops*
  • 62% used PCs
  • 36% used tablets†

* 89.1% using mobile phones and laptops were between 25 and 34 years of age.
† 41.7% using tablets were between 35 and 44 years of age.

When was the first time you purchased off the internet?

When was the first time you purchased off the internet?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

64% of survey contestants carried out their first purchase on the internet in or before 2011. This was particularly true of those between 35 and 44 years of age.

Which sources of information do you consult before buying a product or service on the internet?

Before making an acquisition on the internet:

Which sources of information do you consult before buying a product or service on the internet?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

  • 62% of respondents consulted friends and relatives
  • 60% respondents consulted web brands
  • 54% respondents consulted blogs/discussion forums

When segmented by age, consumers older than 45 years of age mainly consulted web brands before buying (67%), whereas consumers between 18 and 24 years of age preferred reviewing blogs and discussion forums (60.7%).

From where do you normally connect to the internet to make purchases?

From where do you normally connect to the internet to make purchases?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Although users can connect to the internet from anywhere, Spanish consumers preferred to make the final decision about purchasing from their houses (98%).

Which devices do you normally use to buy on the internet?

Which devices do you normally use to buy on the internet?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

As regards the devices that respondents used to purchase on the internet:

  • 76% of respondents used a PC or laptop, especially consumers older than 45 years of age.
  • 13% used a combination of a computer and a smartphone, especially those aged between 18 and 24 years of age.

In the last 12 months, which products/services have you used or bought on the internet?

In the last 12 months, which products/services have you used or bought on the internet?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

According to this survey, the top five used or purchased products/services on the internet were:

  • 57% travel
  • 54% tickets
  • 48% telecommunications
  • 44% books/CDs
  • 43% household appliances/technology

What was your average online spend in the last 12 months?

What was your average online spend in the last 12 months?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

The national average spend on the internet was 1.330 Euro per year. Consumers between 35 and 44 years of age averaged 1.798 Euro.

Which payment methods do you prefer when buying on the internet?

Which payment methods do you prefer when buying on the internet?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

The preferred payment methods were PayPal (71%) and debit card (51%).

Have you ever cancelled an online purchase because of an issue with the payment step?

Have you ever cancelled an online purchase because of an issue with the payment step?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Most of the survey respondents did not encounter any issue at the point of payment that forced them to cancel their purchase. Among those consumers who did experience an issue, 26% encountered a problem with the payment webpage not working. This figure is important in terms of brand image and credibility as well as purchases not being finalised, bad referrals and the potential loss of future purchases by consumers.

On the other hand, 22% of customers said they were afraid of entering their personal details on the internet. This was less of an issue among regular purchasers but it was a barrier for newbies online because of a lack of confidence and a sense of insecurity.

Although the buying process is similar across most ecommerce sites, 9% of survey respondents abandoned a purchase because there were too many steps required to finalise the purchase.

When you have paid using your credit/debit card online, have you saved your card details on the web page?

When you have paid using your credit/debit card online, have you saved your card details on the web page?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Among customers who normally used their credit/debit card to buy online, 35% of them had saved their details on the websites on which they regularly bought products or services. This option was particularly used by consumers between 35 and 44 years of age (39.7%). In addition 38? of men had usually saved their card details.

How many times have you bought products or services online in the last 12 months?

How many times have you bought products or services online in the last 12 months?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Respondents purchased the following number of times in the previous year:

  • 32% purchased between 3 and 5 times in a year
  • 27% purchased more than 10 times per year
  • 25% purchased between 6 and 10 times in a year
  • 17% purchased once or twice

These numbers support the exponential growth in turnover in Spanish ecommerce. When segmented by age, customers aged between 35 and 44 years of age were the most active buyers on the internet (36.3%).

How frequently do you buy on the internet?

How frequently do you buy on the internet?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Respondents purchased with the following frequencies:

  • 53% less than once per month
  • 25% once per month
  • 12% once every 2 weeks
  • 8% once per week
  • 2% several times per week

Highlight the three most positive aspects of buying on the internet.

Highlight the three most positive aspects of buying on the internet.

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

The three most positive aspects of online purchasing were given as follows:

  • 22% cited the ability to shop from home
  • 15% cited 24/7 availability
  • 11% cited the fast and easy buying process

Highlight the three most negative aspects of buying on the internet.

Highlight the three most negative aspects of buying on the internet.

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Respondents noted the following barriers to buying online:

  • 23% highlighted the delivery costs associated with the buying process
  • 21% preferred seeing and touching products before buying them
  • 15% experienced difficulties when returning some products

When you buy online, do you take into consideration that the website has trust marks or confidence stamps?

When you buy online, do you take into consideration that the website has trust marks or confidence stamps?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

75% of survey respondents took trust marks and confidence stamps into consideration when buying on the internet. This was especially the case for those older than 45 years of age (77.8% of that group).

What percentage of your overall purchasing has been carried out online in the last 12 months?

What percentage of your overall purchasing has been carried out online in the last 12 months?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Consumers bought 75% of their total purchases in bricks-and-mortar stores in the previous year. 10 years previously, this percentage would have been higher. But trends indicate that the distribution between online and offline shopping will be close to 50%-50% in the future.

Are you going to buy products or services through the internet in the next 12 months?

Are you going to buy products or services through the internet in the next 12 months?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Almost all the survey respondents (98%) said that they intended to buy on the internet over the next year.

Which factors will influence you most to make more online purchases in the future?

Which factors will influence you most to make more online purchases in the future?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

The most important factors that would cause respondents to buy more online in the futures were as follows:

  • 72% said more competitive prices
  • 37% said greater ease of buying process
  • 36% said safer transactions
  • 20% said internet disposition
  • 18% of online consumers demanded more payment methods

Which online channel would you prefer to use for your future purchases?

Which online channel would you prefer to use for your future purchases?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

When asked which channel and device they would prefer to use for purchases in the future:

  • 85% would use PC or laptop
  • 12% would prefer to buy via smartphone or tablet
  • 4% would like to buy through social networks

Trends in m-Commerce

In the previous 12 months, 23% of those who bought via the internet used a mobile device (smartphone or tablet) to buy some products or services. Although this figure varied for different sectors, according to the report “m-commerce will be the most common way for online buying in the future”.

Do you use an App or a website to carry out the online buying process?

Do you use an App or a website to carry out the online buying process?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Respondents replied as follows:

  • 48% used websites to buy online
  • 40% used a combination of websites and apps
  • 12% used an app only in the buying process

Which payment methods do you use in m-commerce?

Which payment methods do you use in m-commerce?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Respondents who used mobile devices to buy online preferred to use the following payment methods:

  • 71% preferred PayPal
  • 50% preferred to use a debit card
  • 22% preferred to use cash on delivery
  • 17% preferred to use a credit card*
  • 16% preferred bank transfer*

*It was also found that payments by credit card and bank transfer using mobiles had a lower percentage of use when compared with the same options through PC and laptop (24% in both cases).

What are your main reasons for purchasing using mobiles?

What are your main reasons for purchasing using mobiles?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

Respondents said that their primary reasons for choosing to shop online using a mobile device were as follows:

  • 33% said speed of action
  • 29% said 24/7 availability
  • 21% said simplicity

In the future, do you think that m-commerce will be the most common way of online shopping?

In the future, do you think that m-commerce will be the most common way of online shopping?

Source: translated/adapted from 'Observatorio Cetelem eCommerce 2014' (Cetelem, 2014)

79% of online buyers thought that m-commerce would be the most extended channel of online shopping.

Summary Infographic

Summary Infographic

Conclusion: The Digital Disruption

New technologies are transforming the world. Devices and software based on the internet have been created, improved and optimised. They have changed communications among people as well as businesses. The digital world is a reality and it is present in our day-to-day life, both in our personal and working lives.

Marketing is not alien to this context. Marketers now have more tools and data available to engage with customers. In this digital landscape, where there are plenty of opportunities and challenges, digital marketing is a must-have activity within the communications mix of any organisation.

“It could be fair to say that any business that does not adapt to the new era of marketing and communications is in danger of losing out.” (totallydigitalmarketing.com)

Technology developments are completely transforming customer behaviour. Technology influences when, why, how and where people do, or do not, buy a product or a service. Digital Marketing tools can be implemented at every stage of the customer journey to engage with customers and prospects. However, this is also a challenge because of the atomisation of communications channels and the empowerment of customers. The main goal is to personalise the experience for each customer.

“Digital Disruption is changing the way all businesses interact with their customers and each other.” (James McQuivey, YouTube presentation)

And it is consumers who are leading the digital media revolution:

“The new global consumer generation […] have taken control and disrupted the balance of power between consumer and business. New trends and consumer behaviour patterns are shifting the control from large corporations and bringing it directly into the hands of consumers. How consumers think, shop, connect and live life is now being influenced and impacted by endless competitive product offerings and opportunities to personalise their experiences. Understanding the newly emerging consumer habits and trends and winning their more than ever hard-to-get satisfaction, is the key to success for any organisation. Designing a winning product proposition requires a new approach. It means tapping into a revolutionised consumer decision journey with never seen before touch points that will challenge the existing relationship you have with your consumers. […] Leveraging all the new ways you can understand you consumers will be essential in developing successful and meaningful products.” (Aleksandro Gabulov, YouTube presentation)

Comments

You must be logged in to comment on this article.


Copyright © 2017 IRP Commerce. Use of this website constitutes acceptance of the IRP World Terms of Use, IRP Privacy Policy and IRP Cookie Policy
IRP Commerce is a Trading Name of Export Technologies Limited, a Deloitte Fast 50 Company five times: 2010, 2011, 2012, 2013 & 2014   Deloitte.