A moving target
Editor's note: Based in Beijing, Andy Zhao is managing director of GfK Northeast Asia.
Asia-Pacific is the current center of smartphone growth. Across the Asia-Pacific countries, we are seeing evidence that sales of laptops and tablets are dropping but smartphone purchases rose 22.7 percent in emerging APAC countries in the last year. Consumers across the region are embracing smartphones and the anytime, anywhere, instant-access capability that these offer. And the changing customer behavior behind this trend is having a direct and wide-reaching impact on market research.
It’s not just how we design our market research that has to change in response to this huge consumer trend. Yes, we have incorporated new methods to guarantee effective samples online. And yes, we have redesigned online questionnaires to make the most of the enhanced features offered by smartphone capability. But the core changes – the ones we need to be most alert to – are the impact that smartphone take-up is having on people’s shopping behavior, together with the huge growth in location and retail data. Areas such as geomarketing are thriving from this.
This explosion of data is most apparent in Asia-Pacific’s mobile shopping arena. The high level of smartphone penetration in this region means that consumers are transitioning extremely fast to online shopping and mobile payments. And that means they are generating a huge amount of data – readily available information showing what items they are looking at online, what they are purchasing, when, where and for how much. Take Beijing as an example: here, young people seldom use cash; daily items are paid for via their mobile phones and credit cards are used for larger payments.
The view is that smartphone penetration is so high across developed Asia-Pacific countries (including Japan, Korea, Singapore, Australia and New Zealand) that big data providers no longer have to rely on sampling in these areas – they now have full coverage.
All of this has two major impacts for market research. The first is that mobile phone service providers hold serious amounts of location data – and thus geomarketing data offers huge potential in Asia-Pacific, especially for businesses such as out-of-home advertisers and travel companies. The second is that online retailers are the new data gatherers and they’re becoming bigger and bigger in an area traditionally held by market researchers. They hold masses of information on their consumers compared to physical retailers, such as the products and services that consumers have searched for and viewed online, as well as what was actually bought.
All across Asia-Pacific, we are seeing online retailers providing brands and manufacturers with access to this sales data, with some of it being given free and some data being charged for. This means online retailers are now taking business directly away from traditional market research companies in this particular area.
A change in focus
So far this sounds as if the future might be pretty gloomy for traditional market researchers. But not so. What it does mean for us is a change in focus. Our new strongest card is our ability to turn the mayhem of big data into relevant, usable information. Smart data is what is needed.
The very prevalence of online information is simply overwhelming for anyone not specialized in how to combine multiple, complex data sets and sift out the pertinent meaning from seas of data. The new holders of big data (the online retailers and mobile phone service providers) simply hand over massive sets of data to the brands and manufacturers. And the brands and manufacturers don’t have the data specialists who can analyze this enormous amount of data effectively, nor combine them effectively with their existing data.
The golden opportunity for traditional market research companies therefore lies in our proven expertise in successfully combining multiple, complex, massive data sets and of adding in deep industry knowledge and wider consumer trends. This is how we transform the bewildering big data into smart data for our clients – pulling out the gems of insight that are directly relevant to that individual brand or manufacturer and presenting this in a form that can be built directly into their business strategies and decision making.
Data privacy
There is another strong reason why specialist market research companies will maintain a core role in the world of big data: data privacy. The established market research countries worldwide have data privacy laws that are very tight on exactly how personal data is collected, processed, stored and used. So there are some significant barriers to gathering and using data collected via digital means in these countries.
Currently the situation is more flexible in the emerging market research countries worldwide. In the majority of Asia-Pacific countries (except Japan and Australia) the rules surrounding use of personal data are not as well developed or rigorous as those in the U.S. or Germany, for example. So at present, it’s fairly easy to find ways around the laws that are in place. But that is likely to change. My view is that the data privacy laws for most of Asia-Pacific are unlikely to ever become as tight as those in other developed countries but they will become more organized. And that tips the scale in favor of specialist market research companies being brought by the big data owners to act as consultants or partners, to ensure that consumers’ data is handled and processed in strict accordance with increasing legislation.
Broadcast their opinions
But that’s not all. Fueled by the widespread adoption of the Internet, social media and mobile devices, APAC customers themselves now have access to more information, more choices and more opportunities to broadcast their opinions, widely and loudly, than ever before.
What this means for client-side marketing and market research is the absolute necessity of developing the capability to understand, engage with and react immediately to consumers’ online voices.
Marketers in APAC are currently focused on using mobile as a brand-awareness channel, rather than for sales, e-commerce or driving sales offline. Digital campaigns should go beyond just showcasing pure advertising and instead aim to create an emotional connection between the product and the consumer.
So, for client-side marketing and market research teams, we are seeing the need for increased focus on three core areas:
Innovation. Every brand has its own unique passion and brand values. Marketers have to find new ways to identify which of the myriad digital channels are most relevant for their particular audiences (apps, social media, search engines, video, widgets) and then utilize these in engaging ways, to project their brand values and encourage consumers to engage. To reach and understand their online consumers, client-side marketers and researchers need access to up-to-speed digital methodology and technology.
Industry knowledge. The most significant factor driving growth in demand for research in APAC is businesses realizing the sheer scale of opportunities in developing markets and the appetite with which they are seeking to understand people in these markets. At the same time, the rise of technology-based companies is putting sharp focus on the potential to disrupt not just the tech-focused industries but also financial services, retail and media. Client-side companies need research partners with expertise within their specific industry and country, ones having an informed understanding of developing consumer and market trends and what effect those will have at granular level, in terms of both threats and opportunities. In addition, they need research partners that keep pace with transformation within market research itself – such as how to apply advanced methodology to a particular project, in order to create value, rather than just promote the methodology itself. The best solution is not about simply copying what is being done in overseas markets; it’s about the research agencies having a deep understanding of the client company’s pain points from an industry-expert perspective and understanding how and where to implement digital tools to best effect.
Speed. We’re in a period where up-to-date data is more important than ever to client-side researchers and marketers. E-commerce has significantly changed the pace, rhythm and complexity of the consumer purchase journey, particularly when it comes to the speed at which customer feedback is generated and circulated. Traditionally, marketers in APAC processed their project management data on a monthly basis. Now it is weekly or daily. We’re in a digital world where many decisions need to be made very quickly and consumers expect close interaction with their favorite brands and an immediate response to consumer-generated feedback. With the boost of big data, marketers have access to full-coverage information on consumer behavior in close to real time, providing the means to respond fast and develop precision marketing.
Answer the demands, opportunities and threats
Client-side marketers, product managers and researchers in Asia-Pacific are facing a super-fast change in consumer behavior, driven by the upsurge in smartphones creating an ever more mobile landscape. There is a clear need to take the growing pools of big data and produce smart data from these, while being aware of the likelihood of increasing regional focus on data privacy and possible legislation. Added to all that, client-side marketers and researchers need fast, accurate and relevant data that lets them answer the demands, opportunities and threats presented by a digital environment. Together, these make for a landscape where market research remains absolutely essential, not only in making sense of the masses of big data but also in identifying the new methodologies necessary to achieve accurate results via consumers’ preferred digital channels. In turn, market research can only support all of this by staying on top, through constantly driving for excellence in innovation, industry knowledge and speed.