••• shopper insights
Millennials are big couponers
Only generation with YOY growth
A study from Livonia, Mich., media delivery company Valassis shows that 94 percent of Millennials surveyed are using coupons, versus 88 percent in 2016 – the only generation showing growth year over year. They’re not alone: The study found that coupon use is holding steady, with 90 percent of consumers obtaining them from a variety of online and offline sources, a finding consistent across audiences, including various generations and demographic segments, such as multicultural consumers and parents.
Derived from an online survey of 1,000 consumers and focusing on shopping behavior for traditional consumer packaged goods categories, the findings from the 2K17 Coupon Intelligence Report (Influencing Consumers Along the Path to Purchase) explore how print, mobile and digital coupons and discounts impact shoppers before, during and after the point of purchase. Results indicate that today’s consumers are “always connected” and becoming increasingly adept at incorporating both print and digital coupons as they plan their shopping activities.
Among coupon users, approximately 30 percent have increased their use of paper coupons (either from the mail or newspaper coupon book) and 36 percent have increased their use of paperless discounts (discounts received on a smartphone/mobile device and/or downloaded onto a store ID/loyalty card), further supporting coupon use from a multitude of sources.
When asked about their habits along the path to purchase, most consumers said they create a list prior to shopping and 84 percent use coupons during this process. Since more than 45 percent of consumers make CPG purchase decisions at home before their shopping trip, it is important for brands to reach them early in the planning stage. However, there is still significant opportunity to impact buyer behavior in store, with 86 percent of shoppers making a purchase based on a discount in the store. The study also reveals that the buying process does not end at the purchase stage, as 53 percent of consumers scan receipts with a mobile device to receive cash back and/or points, providing a ripe opportunity to increase brand loyalty post-purchase.
“The shopper journey is not defined at one specific point – the consumer can be influenced before, during and after the point of purchase,” says Curtis Tingle, chief marketing officer, Valassis. “Our research indicates that there is an opportunity for brands to influence how shoppers plan, where they shop and the products they buy – which can be achieved by dynamically targeting the right audiences with a strategic combination of print and digital incentives.”
Additional findings from the Valassis report include:
Preferred sources of coupons and discounts: Mail ranks as the most preferred way to obtain coupons, with 44 percent of consumers preferring this channel. Smartphones/mobile devices recorded the greatest increase, with 32 percent of consumers preferring this method versus 24 percent in 2016.
Brand-loyal shoppers can be persuaded: If the right deal presents itself, 79 percent of brand loyal consumers (self-defined) are influenced to buy a brand they wouldn’t typically have purchased due to coupon influence.
Brands and marketers can influence consumers during multiple stages of their path to purchase. At home: 82 percent of consumers switch stores to take advantage of weekly specials and 67 percent decide which store to shop based on where they can use paperless discounts received via mobile devices. In-store: 81 percent of shoppers search for deals via in-store circulars while shopping and 51 percent make a purchase based on a mobile notification received in store. After purchase: There is a tremendous social currency post-purchase; among mobile coupon users, 79 percent share brand reviews, along with information about product savings, with family and friends following a purchase.
The study was fielded in the third quarter of 2016 in conjunction with a third-party marketing research firm with proficiency in Internet surveys. The sample was derived from an online consumer opinion panel and all participants were at least 18 years of age and living in the contiguous United States. Consumers were e-mailed an invitation to participate in the survey and were given three days to complete it. The survey was closed once 1,000 completed responses had been reached. The responses were weighted by factors obtained from national census data to provide appropriate representations of demographic groups at summary levels.
••• brand research
Trading on your reputation
The company behind the product matters
Based on findings from its annual U.S. RepTrak 100 rankings, Boston-based stakeholder measurement firm Reputation Institute (RI) has identified characteristics of companies that have formed effective bonds with consumers.
The top 10 firms in this year’s rankings, in order, were: Rolex, Amazon.com, Sony, LEGO Group, Hallmark, Netflix, Kimberly-Clark, Hershey, Fruit of the Loom and Barnes & Noble. RI sees six key factors that define the top 10: their strength of familiarity; they identify with Millennials; their focus on CSR; active social media activity; a strong corporate brand purpose; and an inspiring, multichannel brand persona.
RI’s RepTrak System measures the public’s perception of companies on seven rational dimensions of reputation: products and services, innovation, workplace, governance, citizenship, leadership and performance. An “excellent” reputation is represented by an overall RepTrak Pulse score of 80 or higher. This year, 28 companies have a Pulse rating that falls into the “excellent” range. A RepTrak Pulse score of 70-79 is considered “strong,” while 60-69 is “average.” Outside of the top 28, the remaining 72 companies in the 2017 US RepTrak Top 100 all have a “strong” rating.
For 2017, Rolex emerges to displace Amazon as #1, while Lego and Hershey bounce back into the top 10, and Kimberly-Clark appears in the top 10 for the first time. In addition, seven of the top 10 are U.S.-based, while six can be viewed as “nostalgic, classic brands.”
Based on more than 42,000 respondents who completed the survey in the first quarter of 2017, the survey quantifies the emotional bond consumers have with 800 companies and how these connections drive supportive behavior like the willingness to purchase a company’s products, recommend the brand, invest or even work for the company.
“The bar for reputation is getting higher than ever before. The key to earning an excellent reputation for any company requires a strong focus on delivering high-quality products and services, and assurances of good governance coupled with a commitment to good corporate citizenship,” says Stephen Hahn-Griffiths, RI vice president and managing director for the U.S. and Canada.
Kimberly-Clark appears in the top 10 for the first time (#7), increasing this year by 6.9 points to a score of 82.1. Gains across all dimensions of reputation, notably citizenship and products, helped to drive this move. The company’s strong focus on CSR with key initiatives around sourcing sustainability and product donations, plus product innovation, also helped to drive Kimberly-Clark’s “excellent” rating.
In the tech sector, Google was a big mover (to #17), increasing 4.6 points to a score of 80.6. The company saw a notable increase in the CSR dimensions (governance, citizenship and workplace) as Google focused on sustainability and donations to charity in lieu of employee bonus driving positive perceptions. Meanwhile the company continues to show strong gains in performance (+6.3) and leadership (+7.1) under CEO Sundar Pichai.
As part of an overall upward trend among “nostalgic, classic brands,” Levi Strauss & Co. moved to #25 with an increase of 2.9 points to a score of 80.2. Several quality-of-work initiatives, including increased paid parental leave and the CEO’s accessibility, contributed to an impressive double-digit (+10.0) increase in the workplace dimension score.
On the downside, Samsung dropped from #3 to #63, after the company was challenged by its Galaxy Note 7 recall. Yet, the company’s overall Pulse score remained in the “strong” range (77.8), highlighting that brand strength can provide a buffer during a crisis.
Other companies taking a step back in reputation this year include American Express, which saw its score drop by 4.4 points to 72.7, and Yahoo!, which saw one of the largest drops of 10.6 points to 60.8, as delays in the closing of Verizon’s acquisition plus a series of data breaches served to undermine confidence in the brand.
“The most successful firms have a proactive, 360-degree focus on reputation, engaging its leadership to drive and actively communicate both product and corporate reputation initiatives,” says Brad Hecht, RI vice president and chief research officer. “Whether it is successfully building reputation capital, as shown by Kimberly-Clark’s positive reputational gains in 2017, or creating a reputation buffer, which served Samsung well during its 2017 crisis, having a strong reputation is critical to both ensure customer loyalty and maintain stakeholder trust.”
When looking at reputations by sector, consumer companies remain the most highly regarded (due to relatability), while the energy sector is the weakest. The top ranked industries in RI’s 2017 U.S. RepTrak 100 are: consumer; food and beverage; transport; automotive; airlines; industrial; retail; technology; information; pharmaceuticals; hospitality; services; financial; health care; telecommunication; and energy.
Across industries, the products, services and governance dimensions remain key drivers of overall reputation, while in technology, leadership is uniquely important vs. other sectors. Also retail, financial and hospitality are impacted by lower scores on innovation and citizenship, while hospitality gets average scores on workplace.
In terms of supportive behavior, the general public is more likely to support consumer companies, while the financial industry’s lower scores for citizenship and governance detract from the support they receive.
Overall, industries that are viewed as open and transparent generate more support. Higher levels of transparency increase likelihood of “saying something positive,” but transparency does not as readily yield higher reputation in the financial industry.
••• health care research
Health care data breaches try the patient’s patience
Organizations need a response plan
One in four U.S. consumers (26 percent) have had their personal medical information stolen from technology systems, according to results of a survey from Accenture. The findings show that half (50 percent) of those who experienced a breach were victims of medical identity theft and had to pay approximately $2,500 in out-of-pocket costs per incident, on average.
In addition, the survey of 2,000 U.S. consumers found that the breaches were most likely to occur in hospitals – the location cited by more than one-third (36 percent) of respondents who experienced a breach – followed by urgent-care clinics (22 percent), pharmacies (22 percent), physician’s offices (21 percent) and health insurers (21 percent). Half (50 percent) of consumers who experienced a breach found out about it themselves, through noting an error on their credit card statement or benefits explanation, whereas only one-third (33 percent) were alerted to the breach by the organization where it occurred and only about one in seven (15 percent) were alerted by a government agency.
Among those who experienced a breach, half (50 percent) were victims of medical identity theft. Most often, the stolen identity was used to purchase items (cited by 37 percent of data-breached respondents) or used for fraudulent activities, such as billing for care (37 percent) or filling prescriptions (26 percent). Nearly one-third of consumers had their Social Security number (31 percent), contact information (31 percent) or medical data (31 percent) compromised. Unlike credit-card identity theft, where the card provider generally has a legal responsibility for account holders’ losses above $50, victims of medical identity theft often have no automatic right to recover their losses.
“Health systems need to recognize that many patients will suffer personal financial loss from cyberattacks of their medical information,” says Reza Chapman, managing director of cybersecurity in Accenture’s health practice. “Not only do health organizations need to stay vigilant in safeguarding personal information, they need to build a foundation of digital trust with patients to help weather the storm of a breach.”
Despite the myriad breaches occurring, significantly more consumers still trust their health care provider (88 percent) and payer (82 percent) to keep their health care data secure than trust health technology companies (57 percent) or the government (56 percent) to do so. And while more than four in five consumers (82 percent) said they want to have at least some involvement in keeping their health care data secured, fewer than two-thirds (64 percent) said that they have such involvement today.
In response to the breach, nearly all (91 percent) of the consumers who were data-breach victims took some type of action. Some changed health care providers (cited by 25 percent), insurance plans (21 percent) or sought legal counsel (19 percent). Others took personal steps, such as changing login credentials (29 percent), subscribing to identity-protection services (24 percent) or adding security software to their computer (20 percent). Only 12 percent of data-breach victims reported the breach to the organization holding their data.
“Now is the time to strengthen cybersecurity capabilities, improve defenses, build resilience and better manage breaches so that consumers have confidence that their data is in trusted hands,” Chapman says. “When a breach occurs, health care organizations should be able to ask ‘How is our plan working’ instead of ‘What’s our plan?’”
The findings reported here relate only to the U.S. portion of the survey. The full research, Accenture’s 2017 Healthcare Cybersecurity and Digital Trust Research, represents a seven-country survey of 7,580 consumers ages 18+ to assess their attitudes toward health care data, digital trust, roles and responsibilities, data sharing and breaches. The online survey included consumers across seven countries: Australia (1,000), Brazil (1,000), England (1,000), Norway (800), Saudi Arabia (850), Singapore (930) and the United States (2,000). The survey was conducted by Nielsen on behalf of Accenture between November 2016 and January 2017. The analysis provided comparisons by country, sector, age and use.
••• shopper insights
Set it and forget it
Who’s buying products and services via subscription?
Research from Cincinnati-based payments processer Vantiv shows the growing disparity in subscription-spending habits from generation to generation. While Gen Xers and Baby Boomers aren’t signing up at a rapid rate, Millennials, more than 70 percent of whom have a product subscription and 89 percent a service subscription, see subscriptions as purchasing made easier at a time when they’re bombarded with an abundance of choice.
As subscription spending continues to grow for services like groceries, household items and beauty products, Vantiv’s research, conducted by San Francisco research firm Socratic Technologies, shows less than half of Gen X consumers and less than 20 percent of Baby Boomers and retirees use subscription-based products. (Socratic Technologies surveyed 500 people around the United States in partnership with Vantiv’s market insights organization, Vantage Point.) For service subscriptions, it is much higher, coming in at 67 percent for Boomers and 78 percent for Gen Xers. Millennials, on the other hand, seem to like the convenience of subscription services, having things shipped to them on the spot, without having to reorder every week or every month, and the ease of a service subscription. They also have an overall greater interest in subscribing to products or services in the future to which they do not already subscribe.
“E-commerce merchants must seriously consider subscription strategies to build loyalty,” says Bill Cohn, senior product leader, e-commerce at Vantiv. “The business model provides many advantages for merchants. First, customer lifetime value to a merchant typically goes up. A consumer can click ‘buy’ once and get razors or beauty products or coffee pods shipped every month with no further thought or action. Second, services that would be costly if billed in one lump sum become more affordable. This is particularly important for Millennials, who have the strongest appetite for online services but the tightest cash flow compared with previous generations. Third, a growing recurring revenue stream is a good way to increase the value of your company. So for smaller businesses or startups, a subscription model provides a great opportunity to compete with larger incumbents – think for example of groceries and the growing online/subscription meals delivery services.”
While many e-commerce merchants may take this generation gap in spending as a sign they need to appeal to older generations, those segments of the population aren’t likely to budge. Vantiv’s research shows that 77 percent of consumers who don’t currently subscribe to any products are unlikely to do so in the future. For online merchants, this data means it’s time to double down on the Millennials.