Survey Monitor March 2004

Web page errors may force defections

New York-based Jupiter Research has found that one in seven Web site home pages it tested failed a simple link integrity test with one or more errors severe enough to cause visitor defection.

Based on a December 2003 review of 239 well-known consumer-facing Web sites, Jupiter Research’s new report “Managing Web Site Quality: Stanching Customer Defection” found that one in seven Web sites had prominent errors on their home pages. Of the home pages tested, which ranged across a variety of industries, 24 had broken links (“404” errors), 14 provoked server errors, five linked to sites with nonexistent host names, and three pointed to servers that responded with server unavailable errors. In all, Jupiter Research tested over 22,000 links, more than 50 percent of which were routed through manual “redirect” or tracking scripts to measure consumer behavior, a tactic especially prone to generating errors.

According to a recent Jupiter Research Executive Survey, the No. 1 challenge faced by Web site operators is improving site usability (49 percent of respondents), a priority that outweighs the challenge of budget constraints (47 percent of respondents) or measuring ROI (40 percent of respondents).

Despite this priority, Web site quality remains poor. Based on the one in seven failure rate of home page link integrity, Jupiter Research estimates that many Web sites have errors severe enough to undermine visitors’ confidence and cause them to turn elsewhere.

According to David Schatsky, senior vice president of research at Jupiter Research, “Despite the high priority of improving site usability, the basics of Web site operations - having error-free pages, consumer-friendly messaging and navigation that makes sense - require putting yourself in the visitor’s shoes, something only indirectly served by traditional quality assurance.” The report counsels site operators to adopt a raft of visitor-centric site management tactics and technologies to ensure the highest possible site integrity. For more information visit www.jupitermedia.com.

Who’s racking up credit card debt?

Following the 2003 holiday shopping season, MapInfo Corporation, Troy, N.Y., released market analysis using its PSYTE U.S. Advantage Neighbor-hood cluster solution, identifying the U.S. locations in which residents should expect the most credit card bills in the mail. MapInfo demographers uncovered this information integrating PSYTE with data from Mediamark Research Inc. (MRI).

The following profiles cross reference a metro’s propensity for credit card usage with MapInfo’s PSYTE neighborhood clusters, providing a potential index ranking of each market.

• Impulse shopping, Southern-style: Some people would rather buy on credit than wait to save up for items, and that is certainly true for many in Jacksonville, N.C.; Punta Gorda, Fla., and Ocala, Fla. These southern areas topped the list, respectively, with the highest indexes of impulse buyers who would sooner whip out the charge card than pass up a tempting item. Jacksonville - home to U.S. Marine Corps Base Camp Lejeune and Air Station New River - also has the second highest number of people with a personal line of credit, trailing behind Iowa City, Iowa.
• Paying the price for paradise: Honolulu may be one of the most beautiful cities, but according to MapInfo’s research, it is also one of the metros that index highest on average monthly expenditure using credit cards - ranking fourth in the country overall, Honolulu also tops the list with highest likelihood of its residents using gasoline credit cards.
• But baby it’s cold outside: Getting around Anchorage, Alaska, could get difficult without a vehicle, and this might explain why it is one of the top cities with car-related credit profiles. Ranking in the top five for metros with the highest likelihood of residents to have auto retail credit cards, and in the top 10 for people with gas cards, Anchorage’s population makes sure it never gets left out in the cold.
• Big spenders in the Northeast: Stamford-Norwalk, Conn., topped lists as the metro with the greatest likelihood of residents with a general-purpose credit card and the area with the highest average monthly expenditures using credit cards in the entire country. Middlesex-Somerset-Hunterdon, N.J., ranked third with residents carrying any sort of credit card and sixth in overall credit card expenditures. For more information visit www.mapinfo.com.

Americans love to snack - but healthily

With an average consumption of 7.4 healthy snacks per week, Americans eat at least one healthy snack each day, according to research by Chicago research firm Mintel. These findings suggest that snacking has become a way of life. Furthermore, 25 percent of these respondents say that they snack 10 or more times per week, with an average of more than twice per day.

The diversity of healthy snacks chosen by respondents is partly due to what consumers view as important health benefits. Consumers say that low fat is the most important health benefit (24 percent), followed by all natural (21 percent), low cholesterol (14 percent), vitamin and mineral fortified (9 percent), no additives or preservatives (7 percent), low sodium (6 percent), and added fiber (5 percent).

Healthy snack sales were estimated to reach $5.5 billion in 2003, a 41 percent gain since 1998. This growth rate is faster than the overall rate for the entire food and beverage industry, as both yogurt and energy, cereal, and snack bars grew rapidly and none of the other five segments lagged significantly behind the overall market.

The solid five-year performance of healthy snacks (growth between 5.4 percent and 8.8 percent each year) is particularly notable given the impact of olestra in 1998/1999. A significant portion of sales in 1998 derived from the introduction of products containing olestra. However, adverse side effects in a substantial proportion of consumers caused sales to fall almost as rapidly in 1999. Nevertheless, overall sales of healthy snacks were barely affected.

Consumers seeking healthy snacks have so many choices that the market can absorb product failures and changes in dieting trends. One such trend shift occurred in the late 1990s, more or less simultaneous with the decline of olestra products. The reigning diet fad at that time was low fat, which gave way in a rush to all-protein diets and carbohydrate-counting. Again, the annual rate of sales growth in the healthy snacking market was not much affected, as consumers shifted from low-fat and no-fat healthy snacks to those high in protein and low in carbohydrates.

The healthy snack market operates in a polarized consumer environment. On the one hand, there is a clear trend towards increased obesity, while on the other there is a drive towards increased awareness of health and eating habits. The latter is led in part by aging, and often more educated Baby Boomers, many of which are making efforts to stay fit and active. In addition, there is also a group of younger, sports-oriented youth, to which healthy snacking is part of increased health and diet awareness.

As a result of this polarization there are two clear markets which the healthy snacking industry needs to address. The first application is a supplement to the diets of overweight consumers, and as part of a changing or controlled eating regime, and secondly, as a part of an already healthy diet for those who are making active choices in terms of health and weight control. For more information visit www.mintel.com.

Reward programs popular among young and high-income consumers

A Maritz Poll found that the youngest and the wealthiest consumers are the most consistent participants in rewards programs, and are more likely than other groups to do business with a company that offers a loyalty program. However, the two groups couldn’t be more different in the types of rewards they prefer.

Nearly 89 percent of consumers age 18-24, 86 percent of consumers with income of $75k-100k and 86 percent of consumers with income of $100k and up said their membership in a rewards program makes them more likely to do business with that company. The most popular rewards programs for consumers with household incomes of $100k and up were airline programs (52 percent), while the most popular reward programs among consumers age 18-24 were credit card programs (26 percent) with airline programs following closely behind (23 percent).

When asked why they participate in rewards programs, 63 percent of those in the $100k and up category said for the free travel and 69 percent of those age 18-24 said for the discounts.

“Although participation in a rewards program has great benefits for both consumer and the company offering the program, companies that offer rewards programs need to know that loyalty rewards are not created equal,” says Chris X. Moloney, director of market development and strategy at Maritz Loyalty Marketing. “Companies need to better understand which types of rewards truly drive loyalty.”

Maritz Poll is a national consumer opinion survey conducted periodically by Maritz Research, St. Louis. The online survey, conducted April 7-9, 2003, featured responses from 1,205 randomly selected adult participants in an e-mail panel (602 male, 603 female) from throughout the United States. The survey focused on attitudes and issues related to brand loyalty.

The Maritz Poll also found clear age splits on preference for redeeming rewards online. Consumers under age 35 were far more likely to redeem online (62 percent) than those 65 and older (35 percent). Participants aged 35-64 fell in between, at 57 percent.

The same poll reports that 22 percent of Americans don’t know all the rules and regulations of the rewards program they participate in very well, 58 percent understand the rewards program somewhat well, and 19 percent understand the rewards programs very well. Further, 89 percent of Americans who responded “very well” to knowing all the rules and regulations of the rewards program they participate in are more likely to do business with that company.

“With rewards programs’ popularity growing, the time has never been better for companies to make rewards/loyalty programs stronger and more efficient for consumers in all age and income brackets,” says Moloney. For more information visit www.maritzresearch.com.

Media sharing most popular capability for home networkers

Consumers planning to create a home network are most interested in sharing digital entertainment content through the integration of PCs and related consumer electronics products according to a new survey conducted by The NPD Group, Port Washington, N.Y. The NPD survey and report, Bringing the Network Home: An In-Depth Assessment, shows increasing interest in sharing movies, music and photos using televisions, DVD players and audio systems along with traditional sharing of files, printers and Internet access. In addition, consumers are beginning to embrace home networks for security and for controlling appliances, creating “smart homes.”

Among the newer media-centric applications for home networks, NPD found that sharing personal media was the most popular application among 40 percent of those planning to install home networks during the next 12 months, up from 33 percent among current home-network owners. More home-network planners intend to share personal photos and video (32 percent vs. 27 percent for home-network owners), distribute music across the network (24 percent vs. 18 percent for home-network owners) and distribute movies and TV across the network (16 percent vs. 8 percent for home-network users).

“Spurred by the current wave of digital convergence, home networking will be one of the first technologies to which consumers will be exposed,” says Stephen Baker, The NPD Group’s director of industry analysis. “As the survey indicates, more and more consumers see the clear benefits of home networking. They’ll share pictures and music across multiple digital devices, and will integrate new-to-market products into their networks.”

Survey results found no single demographic trait was especially strong among the 28 percent of respondents who identified themselves as home network owners, although some demographic groups were more inclined to own networks than others. More men (30 percent) than women (26 percent) had home networks installed and home networkers were more likely to be under 35 and make more than $100,000 per year.

NPD also found increasing interest in forging links with relatively low-tech products. Some 11 percent of home-network planners intend to use their networks for home security – including baby monitoring and security cameras – compared with the 4 percent of network users who now do so. Seven percent of home-network planners (versus 3 percent of current home-network users) have expressed intent in creating a “smart home” which would control home appliances through the network.

Wi-Fi is gaining on Ethernet, the current standard for home networking. Wi-Fi is the indicated choice of future home networkers – 40 percent versus the current 22 percent. Twenty-one percent of future planned home networks will use Ethernet, down from the current 58 percent rate, NPD found.

“Practical concerns have driven the adoption of home networks, but they’ve also been the leading barriers to adoption,” Baker says. “Nearly 80 percent of those not planning to install a home network cited lack of need while half noted that they didn’t have enough suitable products to create such a network.” There was, however, considerable promise that many respondents would be drawn to network their homes at some point. About 31 percent reported they might network in the future.

Bringing Home the Network: An In-Depth Assessment was an online survey conducted among members of NPD’s online consumer panel. The nationally balanced sample of adults completed the survey between October 29 and November 6, 2003. The survey was structured to yield three basic consumer segments that comprise the home-network market: current home-network owners, those planning to install home networks during the next 12 months and those with no immediate plans to install a network. For more information visit www.npd.com.

Discount stores a fashionable choice for Generation X and upscale women

Vertis, a Baltimore marketing services firm, announced the results of its Customer Focus 2004: Discount Store study, which reveals that discount stores are reaching an increasing number of key consumer groups for fashion purchases compared to those made in 2002. The results of the study show that more Generation X women (ages 28-39) are shopping at discount stores, reflecting a 25 percent increase in the audience’s tendency to make their fashion purchases through this channel.

“In most categories, discount stores have grabbed Generation X purchases more than any other type of store,” says Therese Mulvey, vice president marketing research at Vertis. “The trend with fashion purchases has also continued to grow among Generation Y men (ages 18-27), from 15 percent in 2002 to 25 percent in 2004. Since the last study was conducted in 2002 we have seen an 11 percent increase in discount store fashion purchases made by upscale women.”

The Vertis Customer Focus 2004: Discount Store study shows the following additional findings, which provide insight into the differences in consumers’ fashion purchase behavior through the discount store channels.

• Fashion-forward women shopping at discounters: 34 percent of Generation X women reported that they shop at discount stores for their fashion purchases.
• Price is a leading motivator in the Generation X purchase decision.
• When compared to the average female fashion shopper, convenience and selection are not deciding factors for Generation X women when they are looking at making fashion purchases.
• Upscale women are buying more at discount stores: 15 percent of women with household incomes of $100,000 or more shop discount stores for their fashion items. This figure represents an 11 percent increase over fashion purchases by upscale women in 2002.
• Upscale women are shopping less at upscale department stores and through catalogs, turning more toward discount stores to make their fashion purchases.
• Discount stores are grabbing the attention of Generation Y men: 25 percent of Generation Y men make their fashion-related purchases at discount stores. The figure represents a 10 percent increase over the number of purchases made by this group in 2002.
• Department store and value retailer market share dropped significantly in this category from 43 percent in 2002 to 34 percent in 2004.
• Compared to other male discount store shoppers, the Generation Y men who shop at discount stores for fashion say they shop there because of the quality.
• Advertising inserts strongly influence consumer fashion purchases: while men and higher-income adults pay more attention to discount stores for fashion, a correlation exists with their use of advertising to make a fashion purchase decision.
• The number of adults with annual household incomes of $50,000 or more using ad inserts to make their purchase decisions has increased six percent since 2002.
• The average income of the advertising-insert user for fashion purchases exceeds that of the average American consumer, illustrating a trend of affluent, high-income-earning adults utilizing this medium to make their fashion purchase decisions.

Customer Focus is Vertis’ proprietary annual study tracking consumer behavior across a wide variety of industry segments - home improvement, furniture, grocery, sporting goods, home electronics, optical, insurance, office supplies, and discount stores - and media, including advertising inserts, direct marketing, and the Internet. The survey was first conducted in 1998 and, in subsequent years, has been expanded and modified to identify emerging consumer behavior patterns and track shifts in consumer practices and motivations. For more information visit www.vertisinc.com.