Paul Watts

Starting out: how market research can help bring new concepts and business ideas to market

Market Research has long been recognised as an important tool in facilitating the development of new products.  This will be particularly important if you are trying to attract investors.  But how exactly can it help?  And what kind of research would be of most use for your business?

First things first

The most important point to make here is that there is no one-size-fits-all answer to such questions.  It all depends on your situation.

At the early stages of a new business venture, you may have several unanswered questions about the product you need to create and the market you plan to sell to.  Some things may be quite clear, others a complete mystery.  Perhaps you already have some data on your market or perhaps your past business experience means you already understand certain things very well. 

So, the first thing to do is to create a list of the things you need to know that you do not know already. That should give you a clearer idea of the kind of market research you might need. 

To help in this process, let’s look at some of the key questions many people have when starting out on a new business venture and, in each case, consider how market research can help.

Product Development:  What should the final product look like?

Some people might start with a blank sheet of paper and some very rough ideas.  Others may start with a much more specific vision of their product that just needs some further refining. 

If you are literally starting with a blank sheet of paper and some very rough ideas, then you might want to consider what Steve Jobs once said about product design “You’ve got to start with the customer experience and work back toward the technology, not the other way around.” 

A good place to start is to look at the market as it is today – what do people like / dislike about the products that are already available?  Are there any emerging trends you need to be aware of?  And, if you were to ask a potential customer what they’d like to see in future – what would they say?

Market Research can be of immense value at this early stage, helping you turn rough ideas into a more tangible reality.  At this point any market research you undertake is likely to be highly exploratory.  You might not even have any tangible concepts to test as yet; in which case the very purpose of the research will be to help create some tangible concepts based on what you learn about your market.

However, it might be that you already have a well-defined concept and the challenges you face are more about refining the details.  In this case, you can opt for more direct forms of market research where you test and perhaps compare different concepts that are fairly well developed.

Market research will help you to start any development decision-making process from the viewpoint of the customer experience and refine your ideas from there.  We would use a different approach depending on whether you need develop a detailed design from a blank sheet of paper or choose the best idea from a shortlist of concepts, or just to refine and tweak the final product.  It’s all about horses for courses.

Understanding the market: How big is it?  Who are the competitors?  How do people buy?

Investors and other stakeholders often like to see evidence to support any new idea.  Is the market big enough could be a key question that needs answering – but not always.  If we are talking about a market that is well established and where everyone accepts it is indeed a big market, you are much less likely to need to find the data to convince people. 

But if you are dealing with a new area, or a niche area, the exact size and potential of your market may be an unknown quantity.  Then you may need to think about getting hold of some market research to demonstrate that there is a good business case for what you are planning.

If you are aiming to be a new entrant in an established market then the last thing you want to do is to begin by making some avoidable schoolboy errors.  An established market will have established competitors – each of whom will have their own strengths and weaknesses.  Customers in such a market will be used to buying products in a particular way; they may have strong expectations in terms of the channels they are willing to use, how they buy and what information they expect suppliers to share with them etc.  Understanding the current market dynamics is likely to be a key area to look at, if you find yourself in unfamiliar territory.

Marketing:  Who should I be marketing and selling my product to and how?

You might have a great product but who are you going to sell to?  At some point you will probably need to sit down with a marketing agency and brief them on what you want.  One of the first thing they will want to know is a detailed description of your target audience – what kind of people do you want to reach?

The more you know about your target audience in advance the more targeted (and hence more successful) your marketing can be. 

If you use market research to profile your target market you will get a clear idea of who you need to aim for, why and how. 

Knowing who you need to reach in terms of simple demographics is all well and good.  But often it helps to be a lot more specific than that.  Knowing more about your audience in terms of their interests, their media preferences, product format preferences and other aspects of their lives can all help ensure your marketing is better targeted.

You can also use market research to help understand how you might position your offering with such an audience.  What messages are they likely to respond best to and which are unlikely to resonate?  Understanding their likes, dislikes and interests will all help to determine that.  If you have specific promotional concepts in mind, you can test these directly.  This all helps to refine what you’re doing to ensure it hits the right notes.

Pricing: How much can I (should I) charge customers?

Pricing can sometimes be a key area you need to think about – especially if you are dealing with a price sensitive market.  You might be able to get a good feel for this just by researching what competitors are charging but sometimes it is not necessarily possible (or desirable) to do this.

Market Research can help in such cases by reaching out to potential customers and testing what pricing strategy is likely to deliver the optimum results.  Pricing research can provide your financial people with the information they need to model various pricing options and to understand how different pricing levels might impact on demand.

Market Research can help with any new venture/product concept

By taking time to think about the questions you need answering and why you need them answered, you can obtain a clear view of what kind of market research you might need. 

Hopefully, some of the questions we’ve raised here will help to spark some ideas in that thought process. 

But once you have your list of questions, you can then think about getting some answers.  Some of these you might be able to find answers to yourself but some you might need help with.  At that point you are ready to seek the help of a market research agency.

A market research agency can provide you with advice and guidance as to what form of research might be most appropriate.  Speaking with an agency will help to clarify your thinking and provide you with some tangible options to consider.

If you would like to find out more about the kind of services our agency can offer, or if you have particular questions you’d like help with, please contact us for more information.

The Rise of the Female Gamer

One half of all gamers are women

Gaming is fast becoming as much a female hobby as a male one.

Once upon a time we used to think of gamers, almost exclusively, as young, heterosexual, white, and male.  That is no longer the case.  Gaming is now a popular pastime and today’s “gamers” are a more diverse community than ever before.

These days, around half of all gamers are women – a fact confirmed by more than one 2020 survey reported on UKIE’s ukiepedia site.  Despite this, many women who play games (two-thirds) do not regard “gaming” as one of their hobbies. 

Why don’t women see themselves as gamers?

So why is this?

Perhaps some mostly only play casual games on mobile devices and are less inclined to regard this as “proper” gaming.  Or perhaps some have come to the hobby so recently that they don’t yet see themselves as gamers. Or perhaps the traditional image of the gaming community as a male dominated sphere makes some women reluctant to overtly identify with it.

Anecdotally, women are still a lot less likely to buy from sites such as Steam and, although accurate figures on such sites are hard to come by, there is some evidence to support this.  One 2015 analysis estimated that only between 4% and 18% of visitors to the Steam homepage were actually women.  Now this may well have changed but it does suggest that there are certain gaming environments where you are less likely to find a female gamer. 

Whether or not women as yet represent half of the gaming market in value terms is an open question.  However, they clearly now represent one half of all gamers.  And, no one would argue that, if provided with the right products, women will not spend as much as men.

But if this potential is to be fully realised, we first need to consider what factors, if any, might be holding things back.

What’s putting women off?

One factor that we certainly can’t afford to ignore is that some (possibly many) female gamers have been put off by the toxic misogyny that has been present in certain sections of the gaming community.  This came to an unpleasant head in 2014 with the gamergate controversy.  Attitudes and incidents of this sort will no doubt discourage at least some women from identifying too closely with the gaming community.  It is particularly likely put off others from engaging in some multiplayer games, where they are more likely to encounter such unpleasant behaviour.

Qualitative research has suggested that the online multi-player environment can be particularly problematic for women gamers.  This study suggested that female gamers did, for example, seek to “…mitigate online harassment, including actively hiding their identity and avoiding all forms of verbal communication with other players.”   This may explain, at least partly, why only 33% of women who play games are happy to self-identify as gamers.

When the hobby gets things right

All that said, some studies suggest the hobby is catering more for female gamers than used to be the case.  A 2016 study by Indiana University analysed 571 gaming titles over a 31 year period and claimed that there had been a decline, since 2005, in the level of sexualisation of female characters. 

It is also the case that there will also be certain spaces where you’d be a lot more likely to find female gamers.  Many would argue that female gamers become a lot more significant when it comes to mobile and casual gaming.  For certain games, the female audience can approach 80% but for others it can be as low as 8% and for others closer to 50/50. 

Clearly some games have done a great job of attracting a significant female following, for instance, by offering strong and interesting female character choices.  Games like Horizon Zero Dawn may be an example of this.   As Malindy Hetfield wrote on Polygon: The complex representation of women in different social spheres throughout Horizon Zero Dawn is one of its best features.

Game developers who make the effort to understand and cater for the female audience can potentially unlock a significant future market. All it requires is a good understanding of what that market wants and the ability to develop and market it in an authentic and appealing way.

One potential issue here is the fact that women still represent a minority of people working in the games industry.  UKIE’s 2020 game industry census reported that women make up only 28% of the workforce.  Getting women more involved in the creative process of games development can surely only enrich the end result.

Tapping into the female gamer audience

However, one size is unlikely to fit all and, with so many women now playing games, it would be wrong to think of them as a single homogenous audience.  Some women may prefer casual tile matching games and puzzles but others like enthralling RPGs, or racing games.  The future is likely to see a variety of different female audiences emerge within different gaming genres. 

Tastes are evolving and changing over time and if game developers can find creative ways to tap into the female gaming market, the potential opportunities are clearly significant.  The challenge is to find the right audience and understand how best to reach them with the right products and messages.

We can help in this process by providing audience profiling and segmentation market research services.  If you’d like to find out more about these services, please contact us for more information.

Building brand is key but is the brand funnel still relevant?

Building a strong brand

Every marketeer knows that building a strong and distinctive brand image plays a critical role in business success.  You only need to look at brands like Apple, BMW and Coca Cola to see the power of brand image in action. 

No one doubts that brand building is as important today as it always was.  But what about the brand funnel?

The classic brand funnel

The classic brand funnel has been used to describe how potential customers progress along an emotional journey that has several distinct stages.

First, they become aware of a brand, then familiar, then they desire it enough to consider buying it and then, finally, they buy (if all goes well). 

Not everyone completes this journey.  Some may not even make it before the first one or two steps.  This being the case the role of marketing is to find ways to move as many people as possible through the funnel as quickly as possible.

The old model

Back in the days before digital marketing and the internet, the process of moving potential customers through different stages of the brand funnel was a slow one.  It you are relying on such things as TV advertising, magazine advertising and billboards you have no direct connection between the advert and the sale. 

Sure, a person can see your ad as they walk past a billboard, but they had no way to engage with it or to buy your product.  All they could do was look at the ad and (hopefully) remember it. 

In such a world memory is very important.  The gap between someone seeing an advert and actually visiting a shop where your products are sold could be days, maybe even weeks. 

Times have changed

These days someone can see an ad and instantly go to the online shop to buy your product, all within a matter of a few minutes.  There is a direct connection between advertising and sales that rarely existed in the old pre-digital world. 

Previously there was no direct way to measure how many people had seen a billboard ad or what impact it had had on them.  Now we can see how many people engage with ads and how many of these click through to buy a product.

So, do we even need to worry about the brand funnel anymore? 

Some people have even claimed that the brand funnel has now been ripped apart by the digital environment.  That it is an old, irrelevant model for a non-digital age.  But they would be wrong.

How the funnel works in a digital age

Think about what happens when someone encounters a digital ad for a brand they have never seen before.

The first thing that happens is they see the ad.  That’s the first stage of the brand funnel – awareness.  No one ever bought anything they weren’t aware of.

Next, they absorb the messaging in that ad.  Assuming it hits the mark, they are now more familiar with the offer.  That is the second stage of the funnel. 

Thirdly, let’s say our imaginary customer’s interest is engaged.  If all goes well, they will click through to the online shop – they are now considering a purchase.  Then they make the purchase (we hope).

They have still gone through the exact same process – the only difference is that it has taken minutes, not weeks.

Understanding longer term impacts matter

But digital advertising does not just have a measurable immediate impact. 

Many people see a digital ad and simply don’t engage with it.  Or perhaps they visit your website and buy nothing.  So digital marketing can have a minimal impact in the initial instance.  This might be regarded as a failure, but is it?

As in the pre-digital age, many people might see a digital ad and pretty much walk on by.  However, over time a combination of marketing initiatives may make them more familiar with what you do until, perhaps months later, they buy.

In such instances the classic brand funnel still applies.  That is because digital advertising can have a longer-term intangible influence on brand perceptions as well as delivering immediate sales results.

The role of advocacy

One thing which we know is a lot more important these days is brand advocacy.  This is especially the case when it comes to customers willing to give positive reviews and ratings for your products online.  It can play a critical role in converting interest into sales and many customers will actively seek out such reviews online to help them make their decision.

This is a new phenomenon of the internet age – and an especially important one.  Promoting advocacy is therefore a key goal for marketeers.

However, as it turns out this isn’t new – it is just more.  In the days before the internet we had a name for this phenomenon – it was called “word of mouth”.  Everyone knew it was important but of course it was incredibly difficult to measure, let alone influence. 

Advocacy has always a key element in the brand funnel.  All the internet has done is made this a lot more visible and measurable. 

What we now need to be able to do is really understand what makes some people become advocates and others not – and how we can influence this process.

The role of brand tracking surveys

As we can measure many of the immediate results of a digital marketing campaign we don’t need a brand tracker to measure this. 

However, if we want to build our brand over time, we still need to consider the cumulative impact of our marketing on brand perceptions (beyond the short term measurable impacts). 

That said, we need to carefully design any brand tracking survey to ensure it can deliver something of value.  And that means looking at how we can use such tools to deliver some of the things that the more immediate and direct measures we can get from the internet might not be able to tell us. That means using trackers more to:

  • Explore why people fail to engage.
  • Investigate why people fail to move all the way through the funnel.
  • Understand what we might try in future that can engage such people.
  • Look at what aspects of our brand image we should focus on in future campaigns.
  • Understand negative and positive aspects of our brand image we need to address.

Where brand trackers can become bogged down and stale is when they are used solely for tracking what has happened and never for testing any forward-thinking ideas.  Ultimately brand tracking surveys can only remain relevant if they are able to elevate what they deliver from simple metrics monitoring to providing insight for actionable change.

If you’d like to learn more about using market research to manage your brand image please feel free to contact us or have a look on our website for more information.

How Covid is shaping the future of language learning

A boom in online language learning

Covid prompted a boom in online language learning in 2020.  The obvious beneficiaries of this have been the providers that specialise in online learning apps – of which Babbel and Duolingo are the most prominent.

During the initial period of lockdowns (March 11 – April 30 2020) Duolingo reported a 67% increase in new learners compared with the same period in 2019.  The take-up of their app fell off again somewhat during May and June but picked up again from July.  Overall, the number of new learners recorded each month remained high into the autumn of 2020; higher than the comparable month in 2019 in each case.

Babbel reported that they passed the milestone of having sold 10 million subscriptions in 2020.  This has been driven by a significant increase in subscriptions (especially during periods of lockdown).  The fastest growth has come in the German (their home market) and US markets where they claim 200%+ sales growth.

However, the lockdowns and social distancing restrictions have also meant that language schools that have historically offered mainly classroom based learning have also been offering more tuition online.  Wall Street English announced in September that they had moved 170,000 students to a proprietary online learning solution.  And the British Council announced in June that they had moved 75,000 English language students from classroom to online learning.

The short-term impact of Lockdowns

Obviously, lockdowns have meant that people are stuck at home, looking for things to occupy their time.  Activities such as home baking, yoga and gaming have all thrived during the pandemic (it’s not all been about just watching box sets).  It is therefore little surprise to find an increased interest in learning a language.

The extra free time that lockdown grants us is an opportunity to do some of those things we have been putting off for a long time / never had time to do before. 

The extent to which this is happening was revealed in a survey commissioned by the British Council back in November.  This found that 10% of people in the UK had started learning a language (or returned to learning one) since the first lockdown. 

All the figures demonstrate that there has been a marked increase in online language learning during 2020.  But 2020 was far from a normal year and one must wonder what impact all this will have on language learning in the longer run?

Longer-term impacts

Whilst the lockdowns have prompted a greater interest in language learning (as they have in other activities like home cooking), we need to ask whether this will represent a sustained longer-term trend or simply a temporary response to a highly abnormal situation.

The British Council reported that much of the increase came from people using their phones to access language learning apps and podcasts.  Such things are easily accessed and do not necessarily require a major commitment (as would be the case when finding and signing up for a more formal/extensive online course).  No doubt many of these people, once they start learning, will continue with it and maybe therefore be in the market for something more substantial in future.  However, it is inevitable that some will fall by the wayside once the world starts opening again and the distractions of work and leisure outside the home begin to encroach once more on our time. 

That said, 2020 has seen more people than ever before make a start on a language learning journey.  The challenge for language learning providers will be to capitalise on this and offer the right mix of learning experiences to encourage them to continue with their journey in the post-Covid world.

After Covid

The other question relates to what balance of online vs classroom learning students might desire in the longer run?  Right now, with lockdowns still very much a feature of life for many countries around the world, the choice is online or nothing for many people.  But once choice returns, what then?

Of course, people do not necessarily want an either/or choice here.  Becoming more open to an online experience does not necessarily preclude the desire for an in-person experience.  Many people may well wish to opt for a blended experience in future.  And whilst the lockdown experience has clearly boosted online language learning it is unlikely to kill demand for in-person learning entirely.

For one thing, once the current pandemic is finally done and lockdowns become a thing of the past, a lot of people are likely to crave more social interaction.  So many people may well find the in-person experience that a classroom can offer has a refreshing appeal.

However, things have clearly changed.  A great many people have had the opportunity to explore online language learning over the past year.  It therefore stands to reason that this will have grown demand for this form of learning in the future.  Perhaps this change was coming anyway, and perhaps all Covid really did was accelerate it. 

The future for language learning, like so many things, will see online experiences assume a much greater importance than was the case in the pre-Covid world of 2019. 

Discovering the Future of Cloud Gaming

People keep talking about it, but will 2021 finally be the year that cloud gaming comes of age?  Will we be seeing an end to discs and downloads as gamers discover a new age of streaming?

The emergence of new services

At the end of 2020 new Cloud gaming services like Stadia, Microsoft’s Ultimate Game Pass and now Amazon’s Luna began to emerge as serious, more rounded, offers.  However, let’s not get too ahead of ourselves, many of these services remain at an early stage of development.  Clearly, the ability to offer a wide range of good quality game content, that works well on many different platforms, represents two essential preconditions that need to be met before these services can make a real impact.  Progress is being made but there is still a long way to go.

The elephant in the room – internet connectivity

The elephant in the room, of course, is the quality of the player’s internet connection.  Looking ahead, you can see how developments like 5G will open up the potential for streaming to mobile, and broadband services in general can be expected to help expand this market. 

That said, the situation today is that many people lack an internet connection that can adequately stream these services as they stand.

This means that the sweet spot for these services at present will be those people with a good broadband connection, who aren’t wedded to the idea of having the latest and greatest console/PC set-up.  The big question is – how small/large is this sweet spot? 

The sweet spot

Those in the sweet spot will include those new to gaming, who are not particularly devoted to a specific hardware set-up.  The PS and Xbox lovers seem keen to continue to invest in consoles.  So too, I would argue, the hardcore PC gamer.  I am sure that some of these people will be happy to experiment with game streaming.  As they are likely to be open to experimentation with any new developments in gaming.

However, there may be newer audiences emerging in terms of people who have taken to gaming a lot more during lockdown.  Another group might be the older generations of gamers – people more likely to have old/outdated gaming platform set-ups.  A third group to look out for would be female gamers – less wedded to consoles and PCs and far more at home gaming on a mobile device.

Cloud gaming might provide these people with a relatively quick and easy way to play new games without needing to get the latest consoles.  Obviously, these services will need to effectively connect with these people and get their messaging right.  After all, many of these people are a different audience from the hardcore gamers currently queuing up to buy the very latest consoles. 

The need to promote real benefits

There is also a potential problem here – and that is that I wonder if they are even promoting the right benefits?

To use these services effectively at the moment you must have a great internet connection.  I suspect that those gamers with great connections are also likely to be the same people with the latest Xbox / PS console or with high powered PCs.  They will be the very same people who have easiest access to the latest games because their tech can handle them.  They are also likely to be the people who will suffer the least from problems when downloading games. 

As a result, some of the benefits that cloud gaming often talks about are least likely to be issues for people with the best internet connections.  So, what is the point of pushing the message that you do not need the latest hardware, if the people with the fastest, most reliable speeds have the latest hardware anyway? And what is the point of telling them that they do not need to worry about slow downloads or troublesome upgrades when it is not a problem, because most of them have top-end fibre connectivity? 

So, the big question is, what other benefits are these services offering? 

Content is King

The obvious key requirement for these services to have any future at all will be for them to offer a strong library of relevant content.  Because for any streaming service, content is king after all.  Offering a few dozen titles (not all of which work on all platforms) is not that great to say the least.  100 titles – so what?  Steam offer thousands of titles!  Once people can be sure, for example, that all Xbox games are available for streaming on Ultimate Game Pass – then we would be cooking on gas.

At present content libraries are a bit scant, although they are growing.  The appeal of a streaming service will be limited by the range and quality of the content it can offer and its ability to deliver that content on any platform with consummate ease.

Just compare these services with successful, mass-market, film or music streaming services.  Netflix UK offers 6,500 films and box sets, including much unique content, available over pretty much any platform you could want.  Currently, cloud gaming services come nowhere near offering that kind of choice.  And if those services can take one lesson from film and TV streaming, it will be that the provision of attractive original content is likely to be the most important determinant of longer-term success (or failure).

The Right Business Model

Finally, these services are going to need to find the right business model for delivering cloud gaming.  Currently, things are at an early stage and, I suspect, many providers are still feeling their way.

The benchmark standards have already been set by the music and film streaming services.  These are the standards by which cloud gaming will ultimately be judged. 

Netflix UK deliver their service for an all-in cost of £84-£168 a year.  Now, buying a film on a DVD is generally cheaper than buying a game on disc so, granted, it is not 100% comparable.  That said, film and music streaming services have, in many ways, set expectations in consumers’ minds as to how successful streaming services should work. Which is that an all-in price provides access to a large amount of content.

On the other hand, Amazon’s film and TV streaming works a little differently in so far as you get access to a lot of free stuff and then pay extra for the premium content.  That works because there is a lot of essentially free content. 

So, when all is said and done, cloud gaming is likely going to need to develop an approach like the models that have been shown to work well for film and TV.  And that, of course, brings us back to the need for content.

A year of evolution rather than revolution

On balance, 2021 is more likely to prove to be a year of evolution and experimentation rather than one of revolution.  It is likely that these services will need this time to build their functionality and gaming libraries.  In addition to that, they will probably go through a period of experimentation whilst they get their business models right.  

That said, it is quite possible that by the end of the year we may see some of these services develop the necessary content libraries, business model and technology to start making a more serious in-road into the traditional gaming market.  The potential is there – at the end of the day, if it can work for film and TV then it can work for gaming.  But there is still a fair journey to go before realising that potential.

Assessing the Impact of COVID on Retail and Online Shopping

A far from reasonable year

COVID has had a huge impact on most businesses over the past year.  One of the sectors which has seen some of the most significant change is retail.  Lockdown restrictions have hit some parts of retail harder than others and prompted an unprecedented acceleration of the general trend towards more online shopping.  In this article we will examine some of the key changes revealed by UK national statistics, taking stock of what happened and its longer-term significance.

Back at the end of 2019 (remember then?) UK retail was reflecting on another year of modest growth. It was another year in which our shopping habits continued to move increasingly online at a steady albeit not spectacular pace. Overall retail sales were up a modest 3% and the proportion of business done online had edged up from 18% to 19%.

In the absence of any global pandemic a reasonable person would have predicted that 2020 would have seen a similar modest 3-4% rise in retail sales overall and a steady increase in the amount of online shopping from 19% to 20% or maybe 21%. 

But 2020, as it turned out, had no intention of being a reasonable year.

Now here we sit at the start of 2021, reflecting on a year in which retail growth has overall remained flat and the proportion of business done online has rocketed up to a staggering 28%.  That has led to a massive 10% decline in offline sales, hitting the high street hard.

And now we are looking at the prospect of old high street names like Debenhams and Topshop being snapped up by the new e-kids on the block in the shape of ASOS and Boohoo.  Who would have predicted that at the end of 2019?

Can the High Street bounce back?

Of course, much of the growth in online retail has been driven by the fact that COVID restrictions have meant that people have been forced to buy online.  At various times in 2020, pretty much nothing was open on the High Street except for supermarkets, chemists and convenience stores.  But the big question that many people are wondering is whether, once this pandemic is finally behind us, how many people will return to the high street and how many will continue to shop extensively online?

There is some evidence that we can expect to see at least some bounce back.  We can see that from a closer look at the 2020 data.  Q2 of 2020, when the first lockdown came into effect, saw the biggest drop in offline sales.  31% of retail business in this period was done online; up from 21% in Q1.  However, once the High Street started re-opening in Q3 sales did start to pick up.  And, whilst the level of online retail business continued to rise, it fell back from 31% of the total to 27%.  This suggests that, when COVID is behind us, we can expect to see some migration of shoppers back to the high street.

But how much of a recovery might we expect?  Can we expect the High Street to return to something like a healthy (if diminished) condition? 

Without question we would expect to see a short-term uplift.  People have been locked in for a while now, so being able to shop on the High Street without worrying about social distancing and COVID will have a strong novelty appeal.  High Street retailers will then have a short window of opportunity to persuade people to stay on the High Street rather than returning online.

That said, some might argue that COVID has simply accelerated a process that was happening anyway.  The historic trend has been for online to take an increasing share of retail sales.  This has been evident for years now; the last decade having seen the proportion of online sales climb steadily from 7% in 2010 to 19% by 2019.  Now, whilst the jump to 28% in 2020 clearly results from exceptional circumstances, the fact remains that many people have now grown used to shopping online.  Many customers are more comfortable with shopping online now, which was not the case back in 2019.  So, we can be sure that the proportion of online shopping is not going to drop back to around 20% again. 

But not all sectors of retail have been equally affected

Looking at the details beyond the headline figures reveals a more interesting story.  For not all sectors of retail have been equally affected by COVID and, as a result, a migration to online sales has occurred far more rapidly in some sectors than others.

Food retailing has held up well but has still seen a gradual move online

If we look just at food retailers (defined as businesses whose retail stores primarily sell food, like butchers, bakers, supermarkets and convenience stores), we have clearly seen some movement to increased online shopping.  However, this has been more gradual than that seen elsewhere. It remains the case that over 90% of sales continue to be made instore. 

This sector has doubtless benefited from the fact that its stores have been able to remain open throughout the pandemic.  Indeed, during the periods of the strictest lockdown restrictions, food retailers could remain open while most other retailers were shut.

However, food retail does have certain characteristics that would encourage consumers to continue to shop in store.  When it comes to buying fresh food, many consumers want to pick the product in person rather than leave it to chance.  Freshness is not something you can easily judge online.  So then the question is, how much would you trust the order picker to pick the freshest product?  (Of course, if all you buy is packaged and processed food then this is clearly much less of a barrier to shopping online.)

Another limitation on online shopping here is the whole question of supply.  Early on during lockdown, home delivery services were put under great strain.  At times it was difficult to book a delivery slot from a supermarket, which naturally limited how much business it was possible to do online.

We can expect to see more online shopping, but even given the pressures created by a global pandemic, instore sales of food products continue to remain very resilient.  The future here will be one of a steady migration to an increased level of online business, but physical stores will continue to remain the key channel to market.

Non-Food Retail stores have been hardest hit by the pandemic

Other retailers have been a lot less fortunate and have had to endure long periods of enforced closure during lockdowns.  This has clearly had a dramatic impact on sales and has forced a much higher proportion of business online.  In-store sales have dropped from £150 billion to a little under £113 billion in a single year.  Over the same period, online shopping has seen a dramatic increase from £27 billion to just over £41 billion.  And these numbers don’t even include any of the pure-play online retailers, like ASOS and Boohoo.

Unfortunately, the growth of online sales here was not enough to offset the decline seen in store.  These figures underline the harsh trading realities that have seen the demise of such well-known high street brand names as Debenhams, Top Shop and Dorothy Perkins.

Here the migration online has been gathering pace for a while, but the past year has seen a particularly dramatic acceleration in that trend.  This form of retail increasingly needs to rely on a strong online presence to survive.  In a way, many of the principles of the High Street still apply online – you need an attractive storefront, your store needs to be easy for the customers to navigate and the products need to be well presented (and of course you still need the right mix of products).  A strong brand image remains just as important online as in the High Street.  The media through which sales are conducted may be changing fast, but many of the underlying criteria for success remain the same.

The rise and rise of the pure-play online retailers

Retail businesses that have no stores are, as you would expect, primarily the pure-play online businesses.  These businesses have had a great 2020 with sales increasing by around one third. 

However, a small amount of business here is not done online.  This would include such businesses as mail order catalogues, telephone selling and automated vending machines.  This type of retail saw a modest rise in 2020, no doubt driven in no small part by the ability of these models to continue to operate during lockdown (and potentially even benefit from it).

Nevertheless, the big story here remains the rise of the online retailers.  No doubt we can expect this sector to continue to see significant growth into 2021.

Get in touch for more information and to find out more about how we can help you: email us at [email protected] or go to our Contact page

The Art of Understanding Customer Satisfaction

Today we live in a world where customer expectations are higher than ever.  Next day deliveries or even same day deliveries are becoming the norm rather than the exception.  Stories of bad experiences can go viral on social media in a matter of minutes.  Multiple social media channels, email, chat rooms and call centres provide customers with many ways to communication with a brand and the immediate nature of communications in the modern world creates the expectation that queries can be swiftly dealt with.

For many years now customer experience professionals have made use of customer satisfaction and experience surveys to help them understand their customers.  When tracked over time, they can provide useful insight into what is going well and what could be done better.  But with things changing so fast, how can we ensure these surveys remain relevant and continue to provide useful feedback?

Here are some of my observations and tips for managing customer satisfaction surveys:

Be aware of customer feedback from all sources

Customer needs can change fast.  New technology can create new expectations that rapidly alter customer perceptions of how well or badly a brand is doing.

It is important to ensure that your customer satisfaction survey measures what is important to customers today – not what was important yesterday.  If the market changes, that might mean we ought to be measuring something new or measuring something in a different way.

We can pick up early signs that change might be necessary from a variety of different sources both internal and external to the brand.  Internally, anecdotal feedback from salespeople, accounts people or service engineers are all potentially important.  So too are customer comments on social media – even in the unfortunate event when they present a significant PR problem in the short run, they also provide an opportunity for the business to learn something useful. 

Finally, many customer surveys include open comments questions, and it is always useful to keep an eye on these for anything important that the business might not be aware of. 

The challenge is to gather all this disparate, unstructured, and sometimes entirely anecdotal information together and pick out what’s important.  It is a good idea to set aside some time for a more comprehensive review, where all these different inputs can be collated together and considered, at regular pre-planned times.

Understanding what customer feedback is really telling us

Imagine if a service engineer was late for an appointment and the customer articulates their frustration on Facebook by saying “The engineer was three hours late!”  Or perhaps in another case we hear that “the engineer missed the appointment.”

On the surface of it the problem seems obvious.  The engineer was late, or the appointment was missed.  You review your customer experience questionnaire and sure enough there are questions that appear to cover such things as late or missed appointments.  So, the survey can monitor any issues in these areas as things stand.  That seems clear enough – but is it the full story?

Would these comments have been different if the engineer had called in advance to say they were running late?  And did anyone contact the other customer in advance to let them know the appointment was cancelled?  Keeping people well informed about delays and cancellations might also be an issue here in so far as it may help alleviate the feeling of dissatisfaction.  Is this adequately covered in our survey?

Sometimes it helps not only to focus on the specific problems mentioned in a customer satisfaction survey but also to think about what other factor might be at play that may have made that negative experience worse or better.  Taking time to think about such issues can help to ensure that we are measuring everything we need, providing us with useful ideas as to how we might improve our survey.

Consistency vs. Evolution

When managing any tracking survey over time we are faced with two opposing practical considerations:

  • The need for consistency:  often the most powerful insights from a tracking survey come from the ability to compare like-for-like measures month on month.
  • The need for evolution: but markets and customer needs are ever changing.  The flip side of maintaining consistency for consistency’s sake is potentially that we end up missing emerging key issues.

This is a difficult balancing act but taking the time to step back and formally review the program at pre-planned intervals is the best way to ensure that nothing important is missed. 

However, just as we may need to add to our survey, it is also important to ensure that unused questions are not being retained unnecessarily.  Long surveys lead to poor response rates and, after all, you do not want to annoy your customers by taking up too much of their time!

When pop-up surveys fail

How many times have you been onto a website and immediately been confronted with a pop-up survey asking you for your opinion of the website? 

What a waste of time and effort some of these surveys are – and what a wasted opportunity!

How can anyone meaningfully answer questions about a website that they have only just clicked through to for the first time and have not yet had the chance to look at?

The answer is that they cannot.  Either they will just close the pop-up, or they will fill it out with meaningless information.

Unless people have the option to complete the pop-up survey after they have finished navigating their way around the site, it is a pointless exercise.  This might generate a lower response but at least the response will be meaningful.

Is NPS always useful?

NPS (Net Promoter Score) is a widely used tool in customer satisfaction and loyalty research.  There is a good reason for that.  It has been widely used by many different people for a long time, which means there are some good benchmarks around that you can compare your brand to.  It has also often been shown to translate directly to trends in revenue for many businesses.

But what holds true for a great number of brands is not always true for a particular industry or a particular brand.  If you are using NPS, track it over time and compare it with internal data on sales revenues and repeat business levels, etc.  Is there a relationship?  If so, then NPS can be said to be a key metric for the business to use.  But if not, you may need to look at more appropriate alternatives or perhaps find a modified way to look at it that is more relevant for the situation in hand.

The elephant in the room

GDPR, CAN-SPAM, data privacy. 

Marketeers and market researchers generally do not like spend too much time focusing on such things.  But corporate data compliance officers do.  Corporate compliance and marketing might be cat and dog, but these days we cannot afford to leave the compliance side of customer satisfaction research to the last minute when designing a survey.

How will the customers be contacted, who will contact them and what information will need to be used by whom?  The earlier compliance is involved in these questions the better.  After all, we don’t want to end up designing something only for a compliance officer to turn around at the eleventh hour and say, “Oh no, you can’t do that.”

These days devising a solid strategy for handling customer data in a way that safeguards privacy and complies with regulations should always form a critical part of the briefing and proposal process for any customer satisfaction survey.

The Road Ahead to Greener Motoring

In November 2020, the UK government announced that there will be a ban on the sale of vehicles with combustion engines by 2030.  The sale of some hybrid cars and vans will continue until 2035 after which they too will be banned.  The idea being that we are heading down the road to greener motoring.  Aside from the environmental benefit, it is hoped that the associated investment in electric vehicles and the infrastructure needed to support them will help stimulate our economy in a post-COVID-19 world.

It all sounds like a great target to aim for – but where are we today?  And more importantly, how can we reach our green destination?

Well, firstly it is important to acknowledge that like many other industries, the pandemic has hit the automotive sector hard.  2020 has been a tough year with SMMT figures showing a drop in new car registrations in the UK of more than 29% – the worst year since 1992.

Looking beyond the headline figure, 1.63 million cars have nevertheless been registered in 2020.  That is still a lot but, under more normal circumstances, new registrations have been regularly exceeding 2m in every year since 2013. The good news is that some 465,331 (29%) of these vehicles were electric or hybrid.  And, unlike the rest of the market, low emission vehicles of this sort have experienced strong growth (nearly 90% annual growth in a market that has declined by 29% overall can’t be bad).  

But if we are aiming to replace all cars on the road with electric or electric hybrids, we still have a long way to go.  According to UK government statistics there were just under 32 million cars on UK roads at the end of 2019.  Of these only about 2.5% were electric, hybrid or used some form of lower emission fuel such as gas.   Indeed, if you exclude all the hybrids, there were only just over 244,000 electric cars on the road at the end of 2019 (that’s less than 1%).  To replace 31.5 million vehicles with electric ones in a market where, even when things are going well, is only buying say 2 to 2.5 million new vehicles of any kind each year is clearly going to take a while.

So how do we get to 100%?  Well, one thing that clearly needs to happen is to develop the infrastructure needed to fully support electric vehicles.  As of 13th January 2021, charging points were available at 13,383 locations according to zap-map and 2,615 of these locations offered rapid chargers.  On the surface of it that’s great news.  Electric charging is now available at more locations than petrol / diesel filling stations.

However, these facilities are still in the process of being rolled out and many of our UK filling stations do not yet have them.  Many of the current charging points are in places like car parks in town centres or shopping centres or in the corner of a motorway services car park.  It is also the case that you may need to subscribe to several different providers if you travel around a lot and need to make use of charging points in different parts of the country.  The roll out of more charging points will help but ideally, we will still need an easy way for motorists to be able to access any and all charging points in a universally accepted manner. 

At present, the current set-up best suits people who are making mainly local journeys and who prefer to rely on charging at home.  If you charge at home and only make relatively short journeys you don’t need to worry too much about the need for re-charging mid-journey. 

This raises another issue that needs to be given some thought – how easy is it for motorists to re-charge at home?  If you keep your car in a garage next to your house or on your driveway then it is very convenient.  However, not everyone has off street parking and some people may sometimes find it difficult to find a parking space on their street near their home at all.  This creates a real barrier to adoption that will likely make it necessary to introduce some form of viable mass access to electric charging for anyone parking on a residential street.  This is a challenge but one for which there are possible solutions.  One possibility here might be to adapt ordinary street lighting to be able to offer EV charging facilities – as has been demonstrated in a trial run by Siemens in Westminster.

The other issue, related to charging, is range.  The range of electric vehicles is now much improved from what was once the case and we are now seeing vehicles coming to market with ranges in the order of 250-300+ miles on a single charge.  Coupled with access to rapid charging points it is now just possible to boost your range by 100 miles or so with a 30-minute re-charge en route at a rapid charging point.  So you can just about make a 400-mile trip with the current technology in practical terms.  It may not yet be ideally suited for long distance driving yet but every year sees new advances.

In a way the pandemic may have brought about changes in our society which will make electric cars fit in better with our lifestyle.  The long periods of enforced lockdown have caused many employers to re-think traditional practices of office working.  Home working and remote working will be far more the norm in the post pandemic world.  Not only that, but we have now got used to doing a lot of business via video calls rather than face to face.  As a result, people will be spending more time locally and less time commuting or travelling for business over long distances.  And more local motoring plays directly to the strength of electric vehicles.

A final significant barrier that needs to be overcome is the perception that electric vehicles are expensive.  In terms of the initial price tag, there can be no denying that the price differential can be significant – sometimes 40%-50% more expensive for an electric vehicle vs a petrol equivalent according to figures quoted by thisismoney.  That’s scary.  When paid for with financing, the monthly costs can be made to look more palatable but there is no getting away from the fact that the up-front purchase cost for a new electric car looks daunting in the eyes of many consumers.

However, if you investigate the issue of cost in greater detail, a more nuanced picture emerges.  One area where electric cars now offer a big price advantage is when you compare the re-charging costs to the cost of petrol.  Here the savings are potentially significant (thisismoney worked out a saving for £640 a year for a car owner doing a typical mileage of 10,000 a year when comparing a particular electric car with its petrol equivalent).  Electric vehicle owners may also expect to benefit financially in terms of tax, insurance, and maintenance costs.  Overall, this serves to balance the equation somewhat, such that the total cost of ownership over several years ends up being broadly comparable.  On this measure electric cars are not so expensive.

Comparing cars in terms of overall cost of ownership is, however, a task many ordinary consumers may struggle with.  It can be hard to see beyond the upfront price tag.  As a result, this may be an area the government will need to look at when crystalising their plans for getting petrol and diesel cars off our roads.  The car industry itself will also need to look at how it can find better ways to clearly articulate the value of these vehicles.  That means finding the right messaging to convince consumers that these vehicles are not actually as expensive as they first appear. 

But, right now, we are at the early stages of this journey.  A dramatic transition to greener motoring is on the cards over the coming decade.  Challenges exist for sure, but so do opportunities.  One thing is for certain – this is a market that will see some dramatic changes and significant growth over the next few years.

Discovering the Future of Mobile Gaming

Mobile gaming has achieved massive popularity in recent years.  The pandemic of 2020 has seen it boom, with Facebook figures reported in the Drum, showing mobile gaming hours spent on its platform doubling when comparing Q4 2019 with Q4 2020.  So, what might we expect to see in the coming year?  Here’s our take on four key things to look out for in the development of mobile gaming in 2021.

Firstly, 2021 will see the roll out of 5G. The consequence of this is that it will become increasing easy to stream games over mobile and this will open the door to new possibilities in terms of gaming development. 

The most popular mobile games up to now have tended to be puzzle games, arcade games and other what might be termed “casual” games.  Part of the reason for their popularity relates to the fact that they are well suited to playing quick games on-the-go on your phone (for example, whilst you are commuting or taking your lunch break).  No doubt that will remain very influential in how the market develops.  That said, other types of games may currently be less popular on mobile only because of the limitations of the technology.  So, if 5G is combined with a great use of edge computing this will allow mobile gamers to play games that offer better graphics combined with a more interactive, immersive experience than has previously been the case.  As a result, we may well find that other gaming genres can finally become more popular on mobile.

Secondly, we should look out for further developments in terms of the links between gaming and social media on mobile over the coming year.  The original Farmville demonstrated the potential of social media gaming on Facebook over a decade ago.  Recently Farmville was retired from Facebook (its flash technology finally consigning it to the history books) but it has provided the blueprint for casual gaming success.  Zynga’s founder, Marc Pincus, noted in his recent Twitter feed that “The real innovation of FarmVille was in making games accessible to busy adults, giving them a place to invest and express themselves and be seen by people in their lives as creative.” Farmville on Facebook may be gone but Farmville 3 will aim to emulate its success on mobile.  But Zygna are by no means done with social media.  In 2020, Snap Games’ players exceeded 100 million, prompting Zynga to enter into a partnership with them to create multiplayer games for their platform.  Facebook too has moved on with its own gaming app and has seen gaming activity double in 2020.  It will be interesting to see how social media platforms and gaming companies seek to find new ways to exploit the opportunities offered by such an obvious symbiotic relationship during 2021.

Thirdly, is the huge potential mobile gaming offers as the advertising media of the future.  There is clear potential here to reach an engaged, fast growing, mass market audience.  Finding ways in which to make this work & exploring how best to use this new media will be an area where we’d expect to see some significant developments in 2021.  And the way forward may not simply be in-game ads but also sponsorships and in-game product placement (less intrusive and potentially as impactful as any influencer endorsement).   Reaching global audiences in the tens of millions means that mobile gaming is not a medium that advertisers can afford to ignore.

Fourthly (and finally), mobile gaming may well prove to be an area to watch in terms of cloud streaming services such as Google Stadia, Microsoft’s Ultimate Game Pass and Amazon Luna. 

These services will need to do some work to get the technology right and (more important in many ways) the content.  5G will have a role to play in terms of the former but, assuming they can get their ducks in a row, mobile could well be the platform to watch.  Why?  Because the mobile gaming audience will include a great many new as well as casual gamers who are not wedded to traditional console and PC gaming.  They will also include many people who are comfortable with streaming film or music to their mobiles already, so Cloud Gaming will not seem like a strange concept to them. 

However, there are barriers here that will need to be overcome – the availability of faster reliable connections (which 5G can play a role in providing) and the limitations of data caps will likely mean that cloud gaming on mobile will start off niche.  More important will be the availability of a strong library of mobile games (and here it is still very early days).  Of course, these services also need to get their business model right – can they evolve a model that is closer to a Netflix or a Spotify to really enable them to connect with a mass market?  All that said, mobile has the potential to offer some significant longer-term opportunities for Cloud services and it is worth watching out for how this develops over 2021.

Understanding Change and the post-COVID Normal

There is little doubt that 2020 has brought considerable changes to our world.  Who could have predicted how dramatically COVID would have turned our world upside down at the start of 2020?

Hopefully, as 2021 begins, we can see some light at the end of the tunnel.  The new vaccines are starting to roll out (not a moment too soon) and perhaps we might dare hope for a return to normality during the spring.

But what will that normality look like?  Quite apart from the radical disruption to our social and working lives that COVID has wrought, it has quite likely accelerated and even inspired some long-term changes that will remain with us for years to come.

Remote working was forced on a large section of the working population for much of 2020.  By and large it worked.  Will office culture ever be the same again?  Or will the future of office work point towards an inexorable march toward the remote/virtual office.  The practical savings for office-based business are potentially huge – just think how much many businesses spend every year on prime location office space and business travel.  Imagine if you could slash that by cost by half or, perhaps, by even more than half.  Well, it turns out you probably can.  Tools and technologies that support the virtual office will become increasingly critical.  Who knows, in five or ten years from now we could all be holding international business meetings in VR simulated boardrooms.  In fact, I predict we will.

Many businesses have had to adapt to a world where trading online has, at times really been the only option.  Buying and selling at fixed locations and in-person has been hard hit.  Post COVID it will surely bounce back to some extent but the long-term trend to online retail has surely been greatly accelerated.  ONS figures showed that the % of UK retail business done online rose from around 16% in 2017 to 19% in 2019.  Without COVID we might have expected it to climb to around 21% for 2020 maybe.  However, the pandemic has meant the final 2020 figure is likely to end up closer to 26% or perhaps even a little higher.  

I’m sure people will want to return to the bricks and mortar shops to some degree once the pandemic is over – but online commerce has undeniably come of age and will, without question, form an increasingly critical part of any future marketing.  In future the look, feel and effectiveness of online sales and marketing will be just as important (and probably more so) than any in-person selling.

Scroll to Top