By Steve Markenson, WB&A Market Research
Perhaps you’re reading this blog post and getting hungry. There’s a new pizza place down the street which seems to be drawing quite a few customers. But how good is that pizza? You may be able to answer that question by going online and searching for reviews written by fellow consumers. Fortunately, you locate several reviews on the popular site, Yelp. You find a few more on Trip Advisor. So, did these reviews impact your purchase decision?
As a market researcher, I’ve been following consumer attitudes and behaviors relating to the adoption of technology for over twenty-five years. Recently, I’ve been curious how consumers are reacting to online reviews from other consumers, the degree to which they are purchasing online “daily deals”, and the extent to which they are engaging with companies, brands—or merchants, through social media.
My company asked a series of new technology-related questions to consumers in both the Washington, DC, and Baltimore markets. In addition to exploring the impact of consumer-generated reviews, social media engagement with companies and brands and purchasing behavior at online daily deal websites, we looked at smartphone usage, the new QR codes, and even a question on how consumers view the potential impact of an Internet Sales Tax. You can check out our website, WBandA.com for the full report.
Let’s return to the pizza example. Did that Yelp or Trip Advisor review matter? Our study showed that 57% of consumers in the Baltimore market compared to 59% in the DC market said that online reviews impacted their purchasing decisions over the past six months. In both markets, 27% said that they do not read reviews and 16% for Baltimore and 14% for DC said that reviews that they read had “no impact” on their purchasing decision.
Having digested the reviews, you are convinced that the new pizza place is worth the trip. It turns out that you made the right choice. Are you going to return the favor and post a review? Our study showed that 42% of Baltimore-area consumers have posted online reviews—either positive or negative in the past six months. Interestingly, this participation level exceeds that of the Washington, DC market (33%). Of those who posted reviews in Baltimore, 38% were positive and 17% were negative (31% positive and 15% negative in DC).
When you visited the pizza restaurant, you were greeted with signage inviting you to “Like us on Facebook”. That invitation also appeared prominently on the menu. So, will you follow this merchant on Facebook or Twitter? About a third of residents in both markets “friend” or “like” companies or brands on Facebook (Baltimore 34%, Washington, DC 32%), while almost one in ten “follow” or “tag” companies on Twitter (Baltimore 7%, Washington, DC 9%).
How about those daily deal coupons from companies like Groupon or Living Social? To encourage trial, the pizza merchant may offer a daily deal—50% off a pizza or a $20 coupon for $10. Since the coupon is not limited to new customers, the merchant may be struggling to assess whether the Groupon or Living Social marketing programs are simply encouraging existing customers to take advantage of a steep discount. So, the first question we asked is whether residents in both markets are purchasing online coupons. The next question is whether these coupons are for a new merchant relationship or an existing relationship.
According to our study, about a quarter of respondents said they purchased online coupons through a daily deal website in the past two months (Baltimore 24%, Washington, DC 30%). Slightly more DC-area residents bought a daily deal coupon for a merchant they had not tried before (25%), than for merchants they had made a previous purchase from (21%), whereas a similar proportion of Baltimore-area residents purchased these daily deal coupons both for merchants they are trying for the first time and for merchants they had experience with in the past (17% vs. 16%).
Beyond the Groupon or Living Social daily deal marketing programs, the pizza merchant may invite you to scan a QR code with your smartphone to obtain product or promotional information. While thumbing through the community newspaper, you see a small print ad for the pizza merchant along with a familiar black and white, box-shaped code. You capture the image with your iPhone or Android smartphone’s camera and the appropriate app and you quickly link to a landing page where you’re reminded that Tuesday is “Two-for-one Pizza Night”. Are Baltimore-area consumers scanning QR codes?
To scan a QR code, one first needs a smartphone. According to our study, 42% of Baltimore-area consumers own a smartphone, vs. 58% for the DC area. When we asked the smartphone ownership question in January, Baltimore was at 34% and DC at 51%, so you have a sense of the speed of adoption. Of those in the Baltimore area who own a smartphone, 17% have scanned a QR code, compared to 23% in the DC market. I’m sure you will agree that these are impressive numbers for the adoption of new technologies.
Finally, as a market researcher, I would be remiss if I did not share a few details on the study methodology. First, our survey was done in partnership with the Capitol Communicator and with the support of our sponsor, ZilYen. The research was fielded in the Baltimore market in July and the DC market in August. This study piggy-backed WB&A’s established MarkeTrak® study of 400 adults in each market, with a geographic sample representative of each market. A total of 300 telephone interviews were supplemented with 100 online interviews per market. Once again, I invite you to check out the full study on our site, WBandA.com.
As you come to the end of this blog post, I hope that I have given you more than a craving for pizza. Perhaps, you’ve gained some insight into area consumers. We’re currently fielding our next consumer study. This time we’ll look at consumer behavior toward the environment—“green behavior”. It should be interesting--stay tuned!
Steve Markenson has been president of WB&A Market Research since 1997