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    Google Confidential and Proprietary

    Wireless Shopper 2.0April 20, 2010

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    Google Confidential and Proprietary

    450+phones in

    North America

    with

    10launches a week

    1 Source: Gartner Group (2009)

    2

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    Google Confidential and Proprietary

    Methodology

    The initial study was based on understanding the attitudes of online users who identified

    themselves as wireless purchasers and analyzing behavioral clickstream activity of those observedadding a wireless product to their shopping cart. A follow up study was completed, performing anattitudinal and behavioral study based on a major phone launch in Q2 2009

    Tracked online search and research activity using Competes 2MM US opt-in panelists from Nov2008 to Dec 2009, including carrier, OEM, 3rd party reseller and research sites

    Includes both paid and natural Search

    Sites and Search terms used were provided by Google

    We tracked consumers onlineshopping activity to understandshopping and searchingpatterns.

    We analyzed those who addedthe product to cart, tracing theirbehavior backward from the pointof purchase.

    Surveyed searchers tounderstand their purchasebehavior.

    Source: Google/Compete The Value of Search for Wireless Product Launches Study, March 2010.

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    Google Confidential and Proprietary

    searchsmartphones

    shiftingmarketplace

    4

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    shiftingmarketplace

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    Google Confidential and Proprietary

    Device Focused Consumers

    Online Regardless of Purchase Location

    General Retailers Stepping it Up

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    Shoppers Open to Switching

    Q - When you first considered your most recent cell phone purchase, which statement best describes your mindset about thewireless service provider? (Total Respondents=2961)

    Q - Which statement best describes your mindset about the brand of cell phone? (Total Respondents=2961)Source: Google/Compete Wireless Shopper Study, January 2010.

    Service Provider

    42%did not know exactly whichCarrier they would purchase from

    78%did not know exactly which OEMthey would purchase from

    Device

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    Google Confidential and Proprietary

    Hot Phones and Features Trump Upgrades

    -11% +20% +17%

    I was eligible for afree or discountedupgrade with my

    provider

    I saw a newcell phone that I

    had to have

    I wanted a phonewith morefeatures

    Q. Why did you decide to make this cell phone purchase? (n=2881, among those not purchasing first cell phone)Source: Google/Compete Wireless Shopper Study, January 2010.

    Q. Why did you decide to make this cell phone purchase? Please select all that apply. (n=1217, not first phone)Source: Wireless Shoppers Study, Google & Compete May 2008

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    Google Confidential and Proprietary

    Device Interest Reflected through SearchQueries

    9Source: Google.com, US

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    Google Confidential and Proprietary

    Consumers Increasingly Research Online

    10Q - Which of the following sources did you use to research your recent cell phone purchase? (Total Respondents=2961)+ As recalled by survey respondents in 2009 vs as recalled by 2008 survey respondents

    Source: Google/Compete Wireless Shopper Study, January 2010.

    of people who bought

    phones in stores researchedtheir purchase online

    63%

    increase in the number of online

    resources used in research+

    29%

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    Google Confidential and Proprietary11

    Same Online Research to Buy Online or In-store

    Type of Information Researched Online

    Q - Which of the following activities did you conduct online during your most recent cell phone purchase research process?Please select all that apply. (n=2057; based = shoppers that used online sources)

    Source: Google/Compete Wireless Shopper Study, January 2010.

    **

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    Google Confidential and Proprietary

    Buyers Spending More Time Researching

    12

    56%

    19%

    20%

    5%

    25%

    9%

    45%

    20%

    0% 10% 20% 30% 40% 50% 60%

    2 days or less

    More than two days, but

    less than one week

    1 week but less than 4

    weeks

    4 weeks or more

    Total 2008 (n=1257)

    Total 2009 (N=2961)

    Time Spent Researching Phone Purchase

    Q - How much time did you spend researching your most recent cell phone purchase? (Total Respondents=2916).Source: Google/Compete Wireless Shopper Study, January 2010.

    Source: Wireless Shoppers Study, Google & CompeteQ: How much time did you spend researching your recent cell phone purchase? (N=1257, asked of recent wireless buyers, May 2008)

    **

    **

    **

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    Google Confidential and Proprietary

    Retailer Sites Increasing Share of Voice

    Website Traffic Growth Dec 2008 vs Dec 2009

    178% Amazon 107% Target

    160% RadioShack 44%Aggregate ofOEM sites

    26% Walmart 3% Aggregate ofCarrier sites

    Source: Compete.com 13

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    Google Confidential and Proprietary

    24%

    18%

    9%

    40%

    16%

    40%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    35%

    40%

    45%

    Wireless Carrier

    Site

    OEM Site Retailer Site

    Increasingly Influential as a Resource

    14

    2008 2009

    Used During Research Process

    (2008 vs 2009)Influential to Purchase Decision

    (2008 vs 2009)

    Q - Which of the following sources did you use to research your recent cell phone purchase? (Total Respondents=2961) Not all answer choices includedon chartQ - On a scale from 1 to 5, where 1 means no influence at all and 5 means significant influence, how much influence did each of the following have onyour most recent cell phone purchase? Top 2 Box (Total Respondents=2961) Source: Google/Compete Wireless Shopper Study, January 2010.Q: Which of the following sources did you use to research? Asked of Recent Wireless Buyers, (N=1257)

    Q: How much influence did each resource used have on your purchase? (Top 2 Box) Asked of Recent Wireless Buyers Who Used Resource,N=variable, May 2008. Source: Wireless Shoppers Study, Google & Compete 2008.

    45%

    35%

    57%60%

    51%

    55%

    0%

    5%

    10%

    15%

    20%

    25%

    30%

    35%

    40%

    45%

    50%

    55%

    60%

    65%

    Wireless Carrier

    Site

    OEM Site Retailer Site

    **

    **

    ****

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    Google Confidential and Proprietary

    Retailers Have Captured Wireless Customers

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    Purchase Channel for Phone Purchase

    Q Where did you purchase your most recent cell phone? (Total Respondents=2961).Online share of purchases was higher than actual due to online survey fielding. Actual online share is typically ~6% of carrier gross addorders

    Source: Google/Compete Wireless Shopper Study, January 2010.Note: Traqline reports 17% of wireless phone sales through general retail stores in Q4 2009.

    23%

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    Google Confidential and Proprietary

    Device Focused Consumers

    Online Regardless of Purchase Location

    General Retailers Stepping it Up

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    Google Confidential and Proprietary

    smartphones

    17

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    Google Confidential and Proprietary

    Open to Switching Carriers

    Reeled in by Features

    Investing More Money, More Research

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    Google Confidential and Proprietary

    New Segment of Customers

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    Wireless Device Owned Prior to Current Smartphone

    Compete Smartphone Intelligence data. G1: Which of the following best describes the wireless device you primarily used before purchasing

    your current smartphone? (n=1959, smartphone owners)

    65%new smartphoneowners

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    Google Confidential and Proprietary

    Smartphone Purchase Drives Carrier Switching

    20Q: How long have you been with your current wireless service provider.

    Source: Compete Gen Pop Wireless Survey, August 2009.

    Been with currentservice provider 2+

    years

    75%

    67%

    Cellphone

    buyersversus

    Smart-phonebuyers**

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    Google Confidential and Proprietary

    60%

    70%

    80%

    66%

    66%

    71%

    78%

    88%

    29%

    42%

    50%

    60%

    63%

    69%

    77%

    85%

    0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

    Applications available for download

    Operating System

    Specific phone model

    Online account management

    Wireless provider my family and friends use

    Wireless provider customer service

    Wireless provider

    Coverage area

    Sma rtph on e Ow n er ( n=7 04 ) Ce ll Phon e Ow n er ( n=15 42)

    All Attributes Valued by Smartphone Buyers

    21

    Importance of Attributes(Smartphone vs Cell phone)

    Q - On a scale of 1 to 5, how important were each of the following attributes when making your most recent cell phonepurchase? (Top 2 Box)

    (Total Respondents=2961)Source: Google/Compete Wireless Shopper Study, January 2010.

    Carrier

    Device**

    **

    **

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    Google Confidential and Proprietary22

    43%

    21%

    28%

    7%

    25%

    17%

    38%

    20%

    0% 10% 20% 30% 40% 50% 60%

    2 days or less

    More than two days, but

    less than one week

    1 week but less than 4

    weeks

    4 weeks or more

    Cell Phone Owner

    (n=1542)

    Smartphone Owner

    (n=704)

    Smartphone Owners Do More Research

    Time Spent Researching Phone Purchase(Smartphone Owner vs. Cell Phone Owner)

    **

    **

    Q - How much time did you spend researching your most recent cell phone purchase? (Total Respondents=2961)

    Source: Google/Compete Wireless Shopper Study, January 2010.

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    Google Confidential and Proprietary

    Not All Wireless Shoppers On Board Yet

    23Q - Why did you decide to make this cell phone purchase? (Total Respondents=2961) Source: Google/Compete WirelessShopper Study, January 2010.SC4: Why haven't you purchased a smartphone? Source: Smartphone Intelligence Study, Q32009. (n=1959)

    I wanted a phone

    with more features45%

    22% I saw a new phoneI had to have

    Smartphone plans are

    too expensive53%

    28%I dont need the features

    on a smartphone

    Why I Bought a Smartphone Why I Didnt Buy a Smartphone

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    Google Confidential and Proprietary

    Open to Switching Carriers

    Reeled in by Features

    Investing More Money, More Research

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    Google Confidential and Proprietary

    search

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    Google Confidential and ProprietarySource: Google/Compete The Value of Search for Wireless Product Launches Study, March 2010.

    White-labeled case study based on the launch of a mobile in Q2 2009. Survey Data.

    of consumers who searched for a newly

    launched mobile device purchasedone.

    62%26

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    Google Confidential and Proprietary

    Search is a Compass

    Increase Acquisition & Loyalty

    Bridge the Gap from Queries to Sales

    27

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    Google Confidential and Proprietary28

    Wireless buyers conduct an average of

    searches during their shopping process

    Source: Google/Compete Wireless Shopper Study, January 2010. Clickstream Data.28

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    Google Confidential and Proprietary

    Announcement

    Pre-Launch

    Launch

    Capture,

    Learn,

    andOptimize

    AverageMobilePhoneLaunch

    Source: Google internal data.

    Time

    SearchQuer

    ies

    Search Encompasses Mobile Device Launch

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    Google Confidential and Proprietary

    Search Directs Traffic to New Phone Sites

    Search Share of Total Site Visits to New Device Product Pages(Share of search referrals among total referrals to Carrier and OEM sites)

    Source: Google/Compete The Value of Search for Wireless Product Launches Study, March

    2010.White-labeled case study based on the launch of a mobile in Q2 2009. Clickstream Data.

    30

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    Google Confidential and Proprietary

    Search Introduces New Customers

    Announcement &Pre-Launch

    Launch Post-Launch

    62%Prospects

    38%Current

    Customers

    46%

    54%

    47%

    Prospects

    53%Current

    Customers

    56%Prospects

    44%Current

    Customers

    39%

    61%

    Searchers

    Percent of Searchers and Buyers(Device term searchers and search referred buyers who were current customers or prospects of the launch carrier)

    Source: Google/Compete The Value of Search for Wireless Product Launches Study, March 2010.

    White-labeled case study based on the launch of a mobile in Q2 2009. Clickstream Data.

    Searchers SearchersBuyers Buyers

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    Google Confidential and Proprietary

    Visits Initiated by New Device Searches

    Percent of Search Referrals from Specific Device Keywords(Search referrals to OEM and Carrier pages, Compared to generic keywords)

    Source: Google/Compete The Value of Search for Wireless Product Launches Study, March 2010.

    White-labeled case study based on the launch of a mobile in Q2 2009. Clickstream Data.

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    Google Confidential and Proprietary

    49% of Buyers Searched on Non-Brand Terms

    33

    Top 10

    Non-BrandedTermsthat drove to shopping cart

    cell phones

    prepaid cell phones

    cell phone plans

    cell phone

    cell phone companies

    prepaid phones

    cell phone deals

    prepaid cell phone plans

    prepaid phone

    cell phones providers

    Google Confidential andProprietary

    33

    hot cell phones

    Source: Google/Compete Wireless Shopper Study, January 2010. Clickstream Data.

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    Google Confidential and Proprietary

    Non-Brand Terms Convert to Sales

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    30%of search-driven conversionsto Tier 1 carriers

    Non-Brandedterms drove

    67%of search-driven visits tostore locator pages

    Source: Compete Custom Dashboards. Q3 2009.

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    Google Confidential and Proprietary

    Search Drives Sales, Overall

    Purchases made in-storebysearchers of new phone launches.67%

    Source: Google/Compete The Value of Search for Wireless Product Launches Study, March 2010.

    White-labeled case study based on the launch of a mobile in Q2 2009. Survey Data.

    35

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    Google Confidential and Proprietary

    Search is a Compass

    Increase Acquisition & Loyalty

    Bridge the Gap from Queries to Sales

    36

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    Google Confidential and Proprietary

    Thank you

    37


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