Robert Heeg
Consumer spending in the USA and Canada seems to be recovering. Can market research benefit now that the tide is (perhaps) turning? We asked North American clients and suppliers about the latest trends and developments in consumer research.
A change is gonna come. This year’s ESOMAR Congress was held for the first time ever in the USA, and Susan Casserly Griffin, executive vice president of marketing and business development at BrainJuicer US, considers it no coincidence. She also observes that, for the first time ever, US practitioners form the largest block of ESOMAR members. Griffin, an ESOMAR representative in the US, sees it as part of a movement in research with “professionals increasingly educating themselves and promoting evolutions in methodologies and technologies that might be supplanting older research approaches.”
Changes are also seen on the client side. Acoording to Communispace, a provider of online consumer insights communities, senior vice president of innovation Julie Wittes Schlack has seen a change in the purchasing process, “with tighter budgets, more formal requests for proposals and a greater involvement from the procurement function within client organisations.”
Austerity
The Canadian market research industry typically follows or lags economic indicators, explains Cam Davis, managing director of Social Data Research. He notes that real GDP growth is forecast to slow down to 1.9% in 2012 and 1.8% in 2013. “Therefore, one should expect slower market research growth. MRIA, the Canadian market research association, has already recorded slower industry signals,” says Davis. Year-over-year market research growth declined 3.23% in Canada for the first 6 months of 2012. And it gets worse. Davis, the ESOMAR representative for Canada, knows that federal public sector market research spending is being dramatically cut back, a function of the Prime Minister’s austerity budget. Furthermore, Canada relies on major exports to the USA, and that country’s economy is not seen to be picking up during this election year.
Jean-Marc Léger, founder and president of Leger Marketing, adds that, although consumer spending has risen, this is mostly because of energy prices. In the US, consumer spending rose by 0.9% in August, but 0.8% of that increase was due to energy prices. “Consumer spending, excluding energy prices, is still very anaemic.” However, he adds that the amount spent on consumer studies increased by a robust 5.1%.
Solely mobile
Despite – or perhaps because of – the lean years, the North American research industry has gone through a tech-driven transformation. Cam Davis feels that Canada continues to lead the online transformation, with 36% of all research spend collected online (second only to Japan with 40%). He predicts, “One should expect the 50% tipping point in the near future, as the need for reduced time and lower costs are imposed in more austere times.”
In the US too, Schlack has witnessed the growing adoption of a number of innovations like social media, reliance on mobile survey and ethnography apps, webcam-based chats and focus groups, and a keen interest in understanding emotions. “What all of these developments represent is a growing view that a deep, more holistic understanding of consumers is essential to developing products, services and messages that are not only innovative and relevant, but emotionally resonant.”
Griffin detects a general acknowledgement that emotion is the most compelling driver in human activity. “So whether it is neuroscience, facial recognition or clever survey techniques to identify emotional drivers, we are seeing more methodologies to measure emotion so that we can understand how and why consumers do what they do.” Secondly, she sees evidence of the early stages of mobile research evolving to be a truly powerful way to intersect consumers in the moment of truth. “Roughly 30% of US households are solely mobile, which has huge implications for phone research.”
Virtually instantaneous
Several trends dominate the US consumer research industry. Schlack sees that mobile panels are on the rise, as is the use of non-panel-based approaches. She also continues to see strong growth in the market for private market research online communities. “Quantitative research hasn’t gone away, of course, but as the need for speed grows ever more urgent, companies seem more willing to trade off some statistical rigour in exchange for the ability to simply keep up with their customers.”
At organic foods brand Stonyfield Farm, brand program and insights manager Amy Elkes is seeing more emphasis being placed on research that mixes both quantitative and qualitative elements. “I think this is the result of market research catching up with the marketing ideal of providing consumers with a higher order benefit.” As a research buyer, Elkes explains the growing popularity of social media platforms for both directed and spontaneous consumer research. “The wealth of information that can be gleaned is tremendous, and it’s low cost and virtually instantaneous.” Another trend she sees is the rise of eye tracking in customers’ homes, made possible by the pre-installed cameras in today’s computers. Coupled with social media-based focus groups, Elkes thinks this is “part of a trend to get feedback from consumers in environments and through media that are already part of their lives, rather than forcing them into contrived research environments.”
Clarion call
Progress can be a double-edged sword, though. Griffin sees a growing awareness that big data is simultaneously a threat and an opportunity for market researchers. She warns: “There are suppliers in the information-based decision-making business who lean more towards the delivery of data with none of the experience and competencies of our industry, who are gaining a place at the table with our clients. But there is a clarion call for interpretation of data and a hunger for researchers to be more consultative in order to help clients understand what the data means.”
In Canada, the client currently determines the main trends in consumer research, observes Léger. He describes an industry in which “clients want more and more with less and less money, demand more extensive analysis in a shorter period of time, want to convince a larger mass of customers by offering more and more personalised products, are looking for branded solutions but want to customise them, want to know you offer the latest technologies but will never buy them, and want a one-page in-depth report.”
Time starved
Reminding us that challenges represent the flip side of opportunities, Schlack points out that clients are not only time starved, but simply overwhelmed by data. And so the challenge for providers is to better synthesise data from multiple sources, and discern and extract really actionable insight from it: “Our job is ultimately to bring consumers to life within client organisations.”
In Canada, Davis wonders if new business analytical companies – the big data collectors – will embrace ESOMAR standards and guidelines that protect the privacy of respondents. “The use of permission-based data and cookie tracking have yet to become polemical issues with Canadians that might adversely affect the collection of data.” Subsequently, Léger feels that the main challenge for the research business is its fragmentation. “Big data, social media research, analytics and data collection would normally be considered the preserve of the market research industry. Currently, there are many players on the market who are not researchers handling many of these aspects of marketing research.”
Privacy is the first issue that springs to mind when we ask Griffin about the major challenges in her industry. But she adds that there is a growing desire on the part of research buyers to get decision support more quickly and efficiently, and have it delivered in more innovative ways. “Boardrooms are demanding faster decisions, and so research buyers are looking for faster more efficient, more innovative, more insightful ways to get to answers from their suppliers and research partners.”
Wild west
As the role of social media research in consumer studies increases dramatically, so do the controversies. Griffin says that traditionalists tend to question everything – from representativeness to whether data can be the source of true insights. “But, undeniably, social media is a way to source answers to questions that we don’t even ask. Done right, social media research can move beyond sentiment context to rich portraits of consumer segments.”
Schlack sees that brands are experimenting, with many of them trying to use their Facebook fan pages as a venue for traditional research, soliciting feedback through status updates, polls and a growing number of Facebook apps. “The fact is that most people still go to corporate-sponsored social media sites to get offers and promotions or to participate in contests, not to provide personal, thoughtful feedback. That’s part of why participation rates are still generally abysmal.” Elkes describes social media research as “something of a wild-west frontier, where people are still figuring out best practices, potential biases and so on. I wouldn’t call it controversial, but I would say it’s still very much in its infancy, and we have a lot to learn about how best to use it.”
All change
Despite Canada’s rapid digital development, Léger agrees that social media research is in its earliest stages. “While social media is used more and more for marketing purposes, in research it is not a big force. But this can change fairly quickly.” As in other developed research markets, there is a debate about methodology, reliability, etc.; but digital developments will continue nevertheless, he predicts. “The research world is changing, our client is changing, we must also change.” Davis adds: “Many companies are getting their feet wet and trying to understand the benefits, costing and limitations.” However, he notes that two social media companies in Canada were recently acquired by international firms, “suggesting that social media is becoming mainstream and a lucrative revenue stream.”
Ending on a positive note, Davis says there are twenty-five posted current market research jobs across Canada, primarily in middle management. “Indicating: business as usual.” Léger, too, sees healthy signs. “Our studies show that consumers have slowed their spending in the past four years but are now anxious to purchase a new home, a new car and new furniture. The future is brighter in North America.”
Box
Organic growth
Amy Elkes is brand program and insights manager at Stonyfield Farm, a producer of organic foods. She relates how her company has actually been doing more research since the recession began. “The economic downturn has made it even more important for us to understand our consumers and what motivations, beyond price, impact their purchasing behaviour.” Stonyfield’s research spending now is very similar to what is has been over the past several years. It helps that organic food sales (dairy in particular) have shown very robust growth. In 2011, organic food sales in the US grew by over 9%, while conventional food sales grew by only 3%.
Susan Griffin is Executive Vice President of Marketing and Business Development at Brain Juicer in the USA. Julie Wittes Schlack is Senoir Vice President of Innovation at Communispace. Cam Davies is Managing Director of Social Data Research in Canada. Jean Marc Léger is founder and president of Lèger Marketing in the USA. Amy Elkes is Brand Program and Insights Manager at Stoneyfield Farm in the USA.
