Data-driven world…

photo credit: Merrill College of Journalism Press Releases

 

By looking around your surrounding now, you’ll realise how easy it is to collect your personal data – especially online. It seems like the more connected you are with the rest of the world, the easier it is to capture your data.

Data on consumer insights can be collected through many forms, some of which you wouldn’t even have thought were a form of data collection. For example, through surveys, filling up forms, credit card transactions, shopping transactions (think Instagram shopping?), social media interactions, conversations on messengers, your online behaviour, etc.

The data collected will be analysed to better understand the environment or gather valuable consumer insights which can help marketers and companies make informed marketing decisions. As consumers’ demographics, traits, beliefs, attitudes, habits, etc. differ greatly from culture to culture or even from one individual to another, something that marketers want to constantly be on track with is targeting their consumers effectively (Patterson et al. 1997), ensuring that the right method is used on the right group/individual to satisfy their needs and wants. Presently, with the rise in free social network connectivity, everything you do online is saved and contributed to the world of big data (Perera et al. 2015).

Referring back to the previous blog post on consumers’ power, it was discussed that the users are actually working for social media companies as they release their personal information and customise their profiles accordingly. Think about it, all these personal information, photos and videos uploaded onto your profile are actually valuable data that is given away freely to the company! (Free labour + free data? It’s really amazing how the social media companies are able to make users do these on our own free will!)

Also, have you ever seen advertisements about products that you have recently looked at appear on a completely irrelevant website you are on, prompting you to purchase it? Together with many other instances online that makes your experience seamless and “coincidentally” convenient, that’s all the works of data too!

Since data is such a valued asset for companies especially in the 21^st century, it is only natural that they go to extents to collect as much as they can from consumers, leading us to an issue that many are concerned about now – privacy issues.

No doubt government bodies across the globe have initiated campaigns to educate the public about protection of their privacy and passed laws to protect consumers (In Singapore’s context, the Personal Data Protection Act), this is still a pressing issue as the amount of data in the world is extremely large hence there is a limit to how much can be controlled. With the development of The Internet of Things (IoT), it poses as an even more problematic issue when discussing privacy as it produces a big amount of data (Pence 2015). The IoT connects people with things at any location, timing and possibly with any other object or device that holds the technology and sensors required (Perera et al. 2015) just to enhance a user’s everyday experience.

Looking at a micro level, the concern for data privacy seem to vary among groups. Redirecting back on my post about digital visitors or residents, it seems like the digital visitors are more likely to be concerned about their privacy issues while the digital residents have accepted the fact that their data is collected once they launch their browser. To put things into perspective, I compared what my parents would say to me about checking-in a location on Facebook as compared to what an 18 year-old will say about it – it is completely different, and almost the complete opposite.

Just awhile back while having a gathering with some of my friends here, a few of us in our early to mid 20s noticed that there is a growing trend among the younger group of us…

They track their friends’ location on mobile!

I don’t know about you, but the fact that they have accepted this as a norm really shocked us (This must be how our parents felt when they first heard about Facebook!). It works similar to a social media platform with a list of friends you add, and you basically track where they are real time. There are even notifications set to inform you that your friend is home!

For marketing, data relating to a person’s location is extremely important and precious for getting insights into understanding a person’s behaviour, routine and activities or places he/she is in, and also allows effective real-life targeting (Zafeiropoulou et al. 2012). Yet at the same time, there is a group of people who are giving away their location and information for free! One may argue that the data collected through the application is kept within it and probably will never be disseminated to third parties. However, will anything that is uploaded online ever be removed from the big data storage? Let alone information that is so crucial for companies?

To end it off, I find the endless possibilities of what an analyst can do with data fascinating, and whatever marketers do to easily retrieve data an innovative work of art. However, as people, it is important to know how to protect our privacy and secured information too.

 

 

References:

Patterson, M., O’Malley, L. & Evans, M., 1997. Database marketing: investigating privacy concerns. Journal of Marketing Communications, 3(3), pp.151–174. Available at: http://www.tandfonline.com/doi/abs/10.1080/135272697345943.

Pence, H.E., 2015. Will Big Data Mean the End of Privacy? Journal of Educational Technology Systems, 44(2), pp.253–267. Available at: http://ets.sagepub.com/lookup/doi/10.1177/0047239515617146.

Perera, C. et al., 2015. Big Data Privacy in the Internet of Things Era. IT Professional, 17(3), pp.32–39.

Zafeiropoulou, A.M. et al., 2012. Location data and privacy: a framework for analysis. R{é}seaux Sociaux: Culture Politique et Ing{é}nierie des R{é}seaux Sociaux, pp.185–200. Available at: http://eprints.soton.ac.uk/273140/.

 

Do consumers hold the power in markets?

It is often mentioned in lectures or in trainings that we have to pay attention to our consumers’ needs and wants and strategise our marketing decisions to satisfy them accordingly, which in turn creates value for them (Sawhney et al., 2006, Tuli et al., 2007 cited in Grönroos & Voima 2013). In other words, this would mean that the consumers have the power to somewhat control what is produced to the market or what sort of service they are provided with because it is in accordance to their requirements.

 

photo credit: Archie Mcphee

 

A prime example of consumers having the power is in the case of the “new coke” during the 80s when Coca-Cola tried to create a new version of its coke with the intentions to prevent Pepsi from gaining more market share. Eventually, taste and emotional attachments that the consumers had with the original coke brought some of the consumers to boycott it, resulting in very poor sales. According to a Coca-Cola spokesperson, he mentioned, “When we look back, this was the pivotal moment when we learned that fiercely loyal consumers – not the Company – own Coca-Cola and all of our brands.” (Rachid Haoues, 2015)

Drawing back to the previous post about shopping on Instagram, the developers of the application came up with the concept as they gathered their consumer insights and found that it was essential and something their users needed so as to streamline their shopping experience. These examples just show how much consumers can impact the market environment.

Additionally, according to Prahalad and Ramaswamy (2000, 2002, 2004a, 2004b cited in Cova et al., 2011), there has been an increasing trend where companies have moved their focus of internal research and development to co-creation of value which happens through the interaction between the company and the consumer. This is especially important now with the influence of social media and its impacts on daily lives. When there is an involvement of the consumers and the company in creation, it is certain that it will increase the value of what the company initially had without the participation of its consumers (Cova & Dalli, 2009).

Therefore, with the importance of the consumers’ role in contributing to the potential profits brought about by the co-creation, shouldn’t they take a share of the profits made?

This brings us to the other side of the argument where consumers are seen as to be exploited during the process of co-creation because they do not receive compensation for any of their labour efforts that contribute to the companies’ profits (i.e. free labour) (Cova et al., 2011). To look deeper into this, it is noted by Franke Piller (2004 cited in Cova & Dalli, 2009) that interestingly, the more actively a consumer dedicates his/her efforts in a co-creation or production, the more they are willing to pay for it. This makes it a “double exploitation of working consumers” (Cova and Dalli, 2007 cited in Cova & Dalli, 2009).

For example, herb garden kits where consumers grow their own herbs but yet pay a premium for the kits as compared to just buying the herbs on its own. In actual fact, do consumers really want to grow their own herbs or is this because of marketing that brought about the concept of “free labour”?

Online in social media, the users are doing free labour for the platforms as they customise their profiles to their own likings, upload information, and in turn providing the companies with data. Additionally, they also co-create value by growing the amount of users through their connections, building communities and participating in social interactions (boyd, 2006, 2008a, 2008b cited in Ritzer & Jurgenson 2010).

With reference to Cova & Dalli (2009), the authors recognise that some of the consumers participate just to fulfil personal needs and wants. In this case, the consumers probably feel a sense of enjoyment and pleasure of being part of the production process and possibly likes being socially recognised for his/her efforts. (Doesn’t this equate to the exploitation of their emotions?)

Ritzer & Jurgenson (2010) also believes that the consumers involved in production (prosumers) can receive a sense of empowerment to control their production process. For example, how they want to grow the herbs or how they want to customise their profiles. Hence, it means that we should not just disregard the benefits that consumers received as they genuinely participate in co-creation or production because they like to and want to and are not just manipulated into such feelings by companies.

 

From the cases and references, it does illuminate the fact that some products and (self) services are created through marketing as it exploits the consumers’ emotions and sense of personal fulfillment, in actual fact consumers do not need them. Despite the lack of control when consumers are being exploited, I believe that consumers ultimately still have the power over the market especially if it is a collective effort as mentioned in the “New Coke” case.

What do you feel about this? Do you think marketers and companies have the power to dictate what’s in the market or does the power lie with consumers?

 

 

References:

Cova, B. & Dalli, D., 2009. Working consumers: the next step in marketing theory? Marketing Theory, 9(3), pp.315–339. Available at: https://mpra.ub.uni-muenchen.de/36717/1/Cova_Dalli_2009_.pdf\nhttp://mtq.sagepub.com/cgi/doi/10.1177/1470593109338144\nhttp://www.scopus.com/inward/record.url?eid=2-s2.0-70349326195&partnerID=tZOtx3y1.

Cova, B., Dalli, D. & Zwick, D., 2011. Critical perspectives on consumers’ role as “producers”: Broadening the debate on value co-creation in marketing processes. Marketing Theory, 11(3), pp.231–241. Available at: http://www.scopus.com/inward/record.url?eid=2-s2.0-80053540070&partnerID=tZOtx3y1.

Grönroos, C. & Voima, P., 2013. Critical service logic: Making sense of value creation and co-creation. Journal of the Academy of Marketing Science, 41(2), pp.133–150.

Rachid Haoues, 2015. Coca-Cola’s PR disaster, 30 years later – CBS News. Available at: http://www.cbsnews.com/news/30-years-ago-today-coca-cola-new-coke-failure/.

Ritzer, G. & Jurgenson, N., 2010. Production, Consumption, Prosumption: The nature of capitalism in the age of the digital “prosumer.” Journal of Consumer Culture, 10(1), pp.13–36.

Insta(nt) Shopping

Having lived in a country blessed with the sun all year round, one of the first things I had to do when I first arrived in UK was to get myself some clothing to prepare for the cold weather here.

This would have been a simple process in the past – go to the mall and purchase the clothes. However, I actually found myself browsing online just to see if there are better deals or options available.

Current Situation

This observation seems to be prevalent among consumers where they now firstly go through an online research via online/social media platforms before purchasing their products (Nielsen 2014), in other words, they now have a lot more options available to them than in the past. This could also explain why brands are now actively investing in their online efforts so as to avoid missing a touchpoint in the consumers’ purchase journey.

For example, brands have built their brand presence online by starting up an e-store, created mobile applications for consumers to shop on, and invested in online advertising through social media platforms. In Singapore, some young entrepreneurs have started up their own blogshops where they have their entire retail business on blogging platforms and they then advertise their products on Instagram or Facebook.

In fact, mobile shopping (m-commerce) has actually grown tremendously over the years (expected to grow 300% faster than ecommerce) and will be a great way to push online shopping since it also reaps substantial profits (Coupofy 2015). Instagram has also noticed that their users have been shopping informally on the platform. Some users have taken screenshots of the products they are interested in or even sending a direct message of the picture to themselves to “bookmark” it (Sarah Frier 2016)!

Now think about it, doesn’t it seem like there is always an intentional step on the consumers’ end before they purchase a product? Instead, Instagram is now experimenting with a new concept that aims to bridge the gap between the discovery of products and the actual purchase (Refinery29 2016).

Linking closely with the buyer decision process, Instagram is trying to merge the three crucial steps, ‘information search’, ‘alternative evaluation’ and ‘purchase’ all into one platform. This could possibly save time and cost on both brands and the consumers’ ends.

 

Shopping on Instagram

 

 Kate Spade from Instagram for Business on Vimeo.

Instagram is now testing the possibilities of brands tagging their photos with the price. Not only that, a simple click on the tag would instantly lead users straight to the product page allowing them to purchase the product straightaway with just a click on the “Shop Now” button (Refinery29 2016). So assuming you follow your favourite brands on Instagram, these posts will automatically come up when you are browsing through your feed. Now you don’t have to do the additional step of clicking on the purchase link in the “bio” of a profile then searching for your product!

It was also reported that if this works out, Instagram will explore the function of saving products to “Favourites” and purchasing it later (Refinery29 2016) – this would solve the issue of consumers screenshotting or sending themselves DMs to “bookmark” an item.

What this means

With such a change in the platform, it is evident that Instagram has been studying the users and their behaviours. Thus, using technology to cater to their needs and making it an enhanced, seamless shopping experience for both the retailers and consumers.

I find this really exciting as I do follow some brands on Instagram. Having this convenience and interesting shopping experience will definitely change the way I use Instagram or shop online. However, besides looking at the good side of this, I see some potential issues which may occur:

• Brands’ usage of social media

Whenever a new form of social media comes about, one common issue that arises from that is where brands (both small and large) choose to dive in to the platform without carefully evaluating if it is needed (redevolution.com 2015) – just because it is usually free! They do so to build presence in any social media platform possible so as to attract a greater pool of (potential) consumers.

I believe that the same thing will be expected from the latest shopping function on Instagram. With only having to spend on paid posts (if they choose to), brands may jump onto the bandwagon. There is definitely no harm in doing so, but would it then alter the image of a brand (such as luxury brands) by selling their products through Instagram?

• Instagram losing its original purpose?

Given such an effective and efficient functionality, it is possible that consumers and brands will be motivated to use Instagram for shopping. But will this community of users eventually focus only on the shopping part of the platform and transform it into just a marketplace or interactive catalogue shared among friends instead of its original intentions? This may just defeat the purpose of capturing and sharing moments that is in line with Instagram’s original focus (Instagram n.d.).

In the end, will this technological change be beneficial to everyone or will it cause a loss of focus on the users, brands and Instagram’s end? Do share your thoughts!

 

 

References:

Coupofy, 2015. Mobile Commerce Growing 300% Faster than eCommerce – Study by Coupofy. Available at: http://www.prnewswire.com/news-releases/mobile-commerce-growing-300-faster-than-ecommerce—study-by-coupofy-300133569.html.

Instagram, About Us • Instagram. Available at: https://www.instagram.com/about/us/.

Instagram, 2016. Shopping Coming to Instagram – Instagram for Business. Available at: http://blog.business.instagram.com/post/152598788716/shopping-coming-to-instagram.

Nielsen, 2014. E-commerce: Evolution or revolution in the fast-moving consumer goods world? , (August), pp.1–21.

redevolution.com, 2015. Don’t Jump On The Bandwagon, Developing An Effective Social Media Strategy. Available at: http://blog.redevolution.com/don-t-jump-on-the-bandwagon-developing-an-effective-social-media-strategy.

Refinery29, 2016. New Instagram Shopping Posts – How To Shop On Instagram. Available at: http://www.refinery29.uk/2016/11/128330/new-instagram-shopping-posts#slide-7.

Sarah Frier, 2016. Instagram Wants to Ease Its Users into Shopping – Bloomberg. Available at: https://www.bloomberg.com/news/articles/2016-11-01/instagram-wants-to-ease-its-users-into-shopping.