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  • Why are big advertisers still getting this wrong?
    • 07/23/18
    • Global
    • English

    Why are big advertisers still getting this wrong?

    We ran a test recently on some ads that were airing in the UK during the World Cup, all from the same product category (consumer electronics). Some of the advertisers were official World Cup sponsors; others had an alternative football sponsorship association – and we evaluated them using a new pre-test methodology that was co-created with major advertisers.

    All the ads employed a football theme and the results from our unforced exposure method proved this to be a strong hook that attracted – and held – viewer notice equally well across all the ads. Strong and consistent brand name presence in each ad also led to the viewers correctly recalling which brand each ad was promoting.

    What was missing?

    However, one key thing was not quite right in the majority of these executions. While the product was always clearly shown, it was not always the hero of the ad. The football theme was the dominant attraction, which meant that viewers too often lost sight of the product’s actual features and benefits. Ultimately, the connection between the product and the sport was not always clear to the viewers.

    Even more crucially, most of the ads were not driving a direct or indirect call to action – be that an interest to learn more about the product or brand, or a desire to go out and buy one.

    The key learning

    In this test we only focused on a small proportion of each brands’ advertising activity around the World Cup – however, it’s always worth remembering that, while a brand may be relevant to the event it sponsors, that relevance needs to be clearly communicated to the viewers, in order for the brand to benefit.

    Our Ad FIT method identified that the strongest performer for an ad that fascinates (grabs and holds viewers’ attention), imprints (leaves a positive, branded lasting impression) and triggers (generates a direct or indirect response from viewers) was not in this case the most ‘exciting’ execution. It was the one that clearly communicated the product’s benefits in a way that was relevant to the ‘big sports event’ theme – thereby driving a timely desire for the product.

    Read our linked press release: Humorous ads trigger greater response than sporty ads screened around a World Cup game

    For more information on how you can increase your ad performance with AdFIT pre-launch testing, please don’t hesitate to contact us.

  • Consumer sentiment in Europe improves slightly
    • 07/18/18
    • Retail
    • Consumer Goods
    • Global
    • English

    Consumer sentiment in Europe improves slightly

    Findings of the GfK Consumer Climate Europe Study for the second quarter of 2018

  • Ready for the next Black Friday? Never before seen sales peaks in Latin America
    • 07/17/18
    • Technology
    • Point of Sales Tracking
    • Global
    • English

    Ready for the next Black Friday? Never before seen sales peaks in Latin America

    Promotional events change traditional seasonality and strongly concentrate sales

    Promotional events are gaining more and more importance across the whole world – and Latin American tech markets are among those showing the strongest impact. These events are changing traditional seasonality and concentrating yearly sales volumes in a few weeks. This is why it is of utmost importance for manufacturers to plan well and participate successfully in these events.

    It is not only about Black Friday, but there is a multitude of different events, most of which are in Q2 and Q4. While Brazil focuses on Black Friday in November, following the US model, other South American countries have created purely online events in order to push online sales – the most successful ones are Hot Sale and CyberMonday in Argentina and Cyberdays and CyberMonday in Chile, which make online sales boom. Peru and Colombia are increasingly starting to follow these models. These “new” events take place in addition to the traditional ones, such as Mother’s Day, Father’s Day and Christmas promotions, and in most cases outperform them. They even “outperform” traditional climate-related seasonality. For example, in Argentina and Chile, the second most important week for refrigerator sales is now in winter (off-season) and vice versa for washing machines.

     

    Hot Sale Argentina: Boom despite macro challenges

    With +29%, the market volume of technical consumer goods this year topped the 2017 growth during Hot Sale week, despite macro-economic challenges. The sales volume in Hot Sale week was more than double of the average week in Jan-Jun18, concentrating 8% of sales. With +84% growth, PTV was by far the most successful category, which can mainly be explained by the soccer world cup effect.

    Cyberdays Chile: Beating records after records

    During this year’s Cyberdays, the technical consumer goods market grew again by 20% (units), with small domestic appliances, consumer electronics and major domestic appliances growing above average. Small appliances growth is coming from vacuum cleaners (+54%). The Cyber events created the perfect platform for selling robots, which showed huge increases. One third of the robots’ sales volume in first half-year was sold during the Cyberdays week. The value share of online channel within total tech market in Chile soared to 20% in the first semester and even 59% in Cyberdays week.

    Mother’s Day Peru

    In Peru the traditional Mother’s Day remains the most important week in the year (equal to Christmas), with double sales volume compared to the average week in the year to date. Yet it also increasingly shifts to online. Although the product focus is slowly shifting, it seems as if many Peruvian women do not yet feel offended being offered home appliances for Mother’s day, as small and major domestic appliances showed again the highest sales peak. This year consumer electronics increased by 23% during Mother’s Day. This trend is seen throughout the whole year 2018 and it became stronger week by week. The main reason is obvious: After 36 years Peru qualified for the soccer world cup in Russia. In order to be able to follow well their “selección”, many Peruvians invested in new TVs.

    Price, but premium!

    Latin American consumers tend to be very price sensitive, which is why strong price cuts are key to success of promotional events in the region. This makes it very important for manufacturers to decide carefully how much to decrease the price, in order to participate successfully without sacrificing more margin than necessary. Most aggressive price cuts can be observed in Chile, with almost one third of all units sold with >20% discount.

    However, the average prices per category often increase in promotional weeks, thanks to a strong push of premium segments. Especially during the online events, the share of ultra HD TV, ultra-thin laptops, wash dryers, side-by-side refrigerators or kitchen machines increased by up to 15 percent points, compared to an average week.

    What’s next?

    After all this recent promotional activity, it is not at all over. Important promotions are still coming at the end of this year, mainly from Black Friday and Cyber Monday, as well as Christmas promotions.

    What is the best strategy to optimize your sales in these promotional periods?

    The GfK Weekly Promotional Events Tracker helps you to figure out:

    • How successful were we during the last event?
      How did our competitors perform in that week and why?
    • Which is the most promising segment?
      Which models should we use for the promotion?
    • How aggressive should be our promotion?

    For more information, please contact us: Daniela.strebl@gfk.com

  • 3 key requirements for an optimal online pricing tool
    • 07/12/18
    • Technology
    • Online Pricing Intelligence
    • Global
    • English

    3 key requirements for an optimal online pricing tool

    The secret to choosing an online pricing tool that delivers real value

    We are inundated with tech solutions for our daily lives that are fast, easy to use and help to reduce time spent on the mundane. Having used pricing tools for over 10 years, it has always been an observation that pricing tools were a “one size fits all” solution to a very integral business issue.  So what should we really be focusing on when selecting a pricing tool?

    The fact is that not all online pricing tools are born equal – so how do you filter out the ‘also rans’ to find the front-runner that delivers the very best market analysis for you?

    Data quality

    Firstly, it’s easy to get distracted by a professional-looking user interface and fail to ask ourselves about the underlying data and analytics. Accurate data of the highest quality and comprehensiveness is essential… incomplete or poor data leads to poor analysis, which leads to poor business decisions.

    So ask yourself: when you peel away the theatrics, are you willing to trust your company’s future on the data and analytics being delivered? What are data sources? Are they comprehensive?

    Speed and frequency

    The next thing is speed. As multiple intra-day price moves become normal, the speed at which your solution can provide your data is essential.

    So look beyond the load speeds of your tool, and instead ask your supplier how frequently the data within your tool is refreshed each day. Is once or even twice a day really enough, when prices in the market are being changed multiple times a day?

    User interface

    After you’ve satisfied yourself the tool you’re considering fulfills these fundamental needs, it is time to consider the usability and functionality being offered.

    We all need tools that are easy to use and that deliver the information we need in the format we need it in. Gone are the days of software solutions that fail to reduce the time we spend on the mundane.

    So ask yourself: Can you customise your view of the data?  Can your tool inform you when key changes that affect your specific parameters have happened in the market?  Can you see beyond basic pricing and search on features, promotional activity or anything else that is pertinent to your business?

    If you can’t do these things, you may find you are not getting the value out of your tool that you hoped for – or find yourself wasting valuable time getting your data into the format you want and delaying the speed at which you can make your critical pricing decisions. Didn’t you pay for this tool to simplify things?

    Conclusion

    A high-performing, high quality online pricing tool will give you more time and better market analytics on which to make your business decisions. To find your best-fit tool, speak to your provider about the requirements I’ve outlined here – and any additional needs that you want your tool to fulfil – and challenge them to push the boundaries and deliver on these. As artificial intelligence (AI) and algorithms get used more and more to complete huge chunks of analytics, our online pricing tools will continue to develop and improve at a rapid rate. So make sure you tie-in with a provider who is also planning and developing for the future.

    To find out more, please contact Barry Meacher

  • German Consumer climate remains stable
    • 06/28/18
    • Press
    • Global
    • English

    German Consumer climate remains stable

    The trade conflict between the EU and the USA is intensifying and leaves a clear mark on the consumer mood in Germany in June. 

  • Map of the Month: Retail share of private consumption, Europe 2017
    • 06/26/18
    • Financial Services
    • Retail
    • Geomarketing
    • Geodata
    • Picture of the month
    • Global
    • English

    Map of the Month: Retail share of private consumption, Europe 2017

    European consumers spent 30.5% of their available funds for private consumption on brick-and-mortar retail in 2017.

  • Key insights within travel: Three current themes for exploration
    • 06/25/18
    • Travel and Hospitality
    • Trends and Forecasting
    • Global
    • English

    Key insights within travel: Three current themes for exploration

    With summer fast approaching – yes, it officially started on June 21st – Americans once again will be vacationing in record numbers. Recent forecasts estimate that over 246 million passengers will fly domestically between June and August (which averages to over 2.5 million per day).

    Flying of course is not the only travel option – with road trips being a normal part of the American genre. In fact, according to recent research from GfK Consumer Life, 67% of US leisure travelers have done so in a vehicle (vs. 54% traveling by plane).

    As more consumers look to travel, services such as Airbnb and Couchsurfing have become more popular – allowing many travelers to specifically land on what type of vacation they truly want. Here are three current travel trends that brands can leverage to further attract the traveler target.

    Surprise destinations

    Six in ten Americans now feel “the places where you spend your vacations” is an expression of themselves. This is now ahead of “the home you live in”, which has historically been on top when comparing both attributes (though consumers, led by Millennials are moving away from placing importance on the home).

    According to Airbnb’s own travel data, top destinations within the US are still considered mainstays (i.e. ‘tourist-y’) – places like New York City, Orlando, etc. However when looking at top trending destinations – those that have increased the most on searches and bookings from 2017 to 2018 – a different picture emerges. Middle American cities such as Indianapolis, Minneapolis, and Columbus, OH move towards the top of the list – one can assume that travelers are undoubtedly looking for a different experience in these places. The psyche of ‘been there, done that’ and/or ‘taking it slow’ could definitely be emerging among consumers. In addition, the ‘value for dollars’ equation probably gets solved easier when visiting places that are undoubtedly more affordable.

    ‘Last Chance’ Tourism

    Americans are also acknowledging that the world is rapidly changing today: 21% cite ‘global climate change’ as a top-three concern (from a list of 21), and +6 pts from just 2015. In turn, another travel trend that has gained popularity is the notion of ‘last chance’ tourism – visiting a place before the relevant experiences, or the destination itself, is gone forever. Many tourists have visited the Great Barrier Reef in Australia to see it “before it’s gone”, which may or may not happen anytime soon. Cuba has experienced increased tourism recently – with the idea that the native culture within the country might change if and when more Americans start traveling there. Authenticity (i.e. a feeling of ‘realness’) always seems to have a place within consumer sentiments – nearly seven in ten American feel authenticity as a ‘personal value’ is extremely/very important (consistently ranking it in the top-five among a list 50 personal values in recent years).

    The novelty factor will continue to be a hook for travels, as 69% of Americans agree, “I am always eager to see new places and do different things”. On the domestic side, a few US national parks are playing into this trend.

    Food and travel always mix

    Think of the last time you shared your travel experience with someone (or vice versa) – questions like “how was the food?” and “where did you eat?” were probably a part of the conversation. Well then, it’s probably not a surprise that 70% of Americans travelers agree, “I always like to experience local culture and foods when I travel”. And now, newer experiences such as food tours and cooking classes are increasingly sought after by travelers (Tripadvisor says both experiences rose ~50% in 2017 among US travelers). Coinciding again with the ‘sharing economy’ or ‘access economy’, offerings such as Meal Sharing and EatWith also allow for more local & authentic food experiences.

    As most of us all like to travel one way or the other, expect more and more consumers to curate the travel experience they truly desire. Companies can leverage these three areas of opportunity and offer solutions that will continue to appeal to the traveler mindset.

  • How to win the world cup with price and promotions
    • 06/15/18
    • Media and Entertainment
    • Retail
    • Technology
    • Global
    • English

    How to win the world cup with price and promotions

    A major sporting event offers a fantastic opportunity for manufacturers and retailers to take advantage of an increase in Television viewing and general spending amongst fans. No other event offers a greater opportunity than the FIFA football world cup.

    The ‘World Cup’ effect

    With the tournament kicking off in Russia this month, May and June represent crucial months for sales in the UK TV market. Our forecast is that 814,000 TV’s will be sold in the UK over these two months – an increase of over 20% against the same period in 2017. To win the lion’s share of this opportunity, TV manufacturers and retailers are focusing hard on competitive pricing and promotional activity to entice shoppers.

    ‘Bigger and better’ line-up to combat falling unit sales

    World Cup themed promotions are very evident online, with a large number of major retailers pushing promotions and football themed messaging on both category and product web pages.

    In addition, many are focusing on premium ranges, with promotions of larger screen sizes (55+ inches) and the latest high-resolution technologies (4K/UHD), to bring the stadium atmosphere in to the living room. In a market that has been showing a steady decline in the number of units sold over the last years, this strategic focus on promoting higher-end products can deliver increased margin levels and profitability.

    Throughout May 2018, the average selling price (ASP) of a 55 inch 4K/UHD TV was over £1000. Although this is still a significant outlay for the consumer, it is 23% lower compared to last year. We have also seen similar ASP decreases with other screen sizes, such as the 43-49 inch category, which is, on average, 15% cheaper in May this year than a year ago.

    So overall, we are seeing a market focus on promoting higher specification units at a price that makes them a more affordable proposition for customers looking for an upgrade.

    Online specialist retailers leading the promotions field

    On the day of writing, the average TV retailer has 54% of its range on promotion. Within that, the online specialist retailers are showing the largest offers for UK shoppers, with retailers, on average, offering promotional cuts of 21%, whereas major high street retailers are offering 11%.

    Summary

    Discounts on larger screen TVs and the latest display technologies look set to bring the World Cup experience closer to home for UK football fans – but will more TV sales move online this month? And will World Cup promotions help to drive growth of over 20% against last year? Watch this space for our next update.

    To find out more, please contact Barry Meacher at Barry.Meacher@gfk.com or Daniel Wellman at Daniel.Wellman@gfk.com

    Source: GfK Online Pricing Intelligence (OPI) – May – June 2017 and 2018 and GfK’s ‘The World Cup & TV sales – What’s the real impact?’

  • Redefining forecasting
    • 06/05/18
    • Retail
    • Technology
    • Trends and Forecasting
    • Global
    • English

    Redefining forecasting

    Download our whitepaper and discover the three most important factors for spot-on forecasting: continuity, accuracy, and granularity. It’s your guide to getting it right. 

  • In the fourth industrial revolution, customers remain king. What about workers?
    • 06/05/18
    • Technology
    • Trends and Forecasting
    • Global
    • English

    In the fourth industrial revolution, customers remain king. What about workers?

    There is no doubt we are in the midst of a fourth industrial revolution – one in which digital technology is more than just an accessory. We are past simply talking about the internet as a business enabler; instead, we are seeing the lines between the physical, biological, and digital worlds begin to blur. AI and automation are being integrated into the very fabric of our lives, as workers and consumers, such that we may not know when we are talking to a real person on the phone as in the case of Google Duplex, or whether the competition for our next job is human or android.

    This is also a time marked by hugely accelerated change. Twenty years ago, smartphones and social media did not exist, and “digital targeting” was something you did in a video game. (Who remembers “Monkey Ball”?) There is no sign that this speed of revolution will let up.

    According to research by GfK Consumer Life, many Americans agree that change is good, and that we need more of it – a sentiment that has dramatically increased since 2011. Technology is boosting efficiency and productivity, giving employees room to focus on more valuable tasks; but it can also be so effective that it makes humans expendable. Many of the jobs our children will hold do not exist yet; and many of today’s jobs are destined to become obsolete. Some argue however that AI will generate more jobs than it will kill.

    So how can we prepare for this uncertain future, as workers and concerned consumers?

    New generations, new expectations

    At the World Economic Forum this year, Alibaba founder Jack Ma stressed the values of creativity and emotional IQ as critical to human success when competing with machines for the jobs of tomorrow. A new focus on future education and training will also be critical to prepare workers; this means re-training and re-skilling the current workforce to ready them for the changing environment.

    There is also no doubt that the workforce itself will be much different from today. Looking at the youngest segment of American consumers – known alternately as the Now Generation, post-Millennials, Gen Z, Centennials, or the iGen – we see that these future employees represent the most diverse generation in US history (according to the US Census Bureau).

    Compared to Millennials when they were the same age, this young generation is also highly ambitious. Being creative and imaginative is one of their core values, and technology is seamlessly embedded in their everyday lives. This means that they are tailor made for the flexible workplace, whether its self-motivated entrepreneurship or working at a distance for a traditional company.

    According to GfK MRI research, roughly 12.9 million US employees (employed either full or part time) report working primarily from a home office – up from 10.7 million just a decade ago. And GfK Consumer Life data shows that roughly 1 in 2 Americans want to work for themselves, with some of the prime reasons including the ability to be one’s own boss and flexibility in schedule and location.

    But this flexibility may come at a price – a loss in job security. We might see more companies leverage AI to match employees with gig jobs in real time; platforms like Working Not Working  already match freelancers and creative talent for various assignments. But there are often no benefits and no guarantees about tomorrow with such situations.

    When workers become consumers

    As consumers, we can now be targeted with offers so specific to our needs that we wonder if Google and Facebook can read our minds. Customization is no longer a perk, but a must-have, and consumers today are empowered to find the right products at the right prices as never before. Over 60% of Americans say they spend quite a lot of time researching brands before making a major purchase, thanks to real-time access to product information.

    AI and robotics will continue to streamline the processes that deliver speed and value to consumers – and put growing pressure on traditional retailers to compete on price, convenience, and customer service. This may mean that there will be fewer of the retail jobs we already know, but also potentially a variety of opportunities that we cannot yet imagine.

    The streamlining of tech devices working together to deliver seamless experiences is also something we might see replicated in the way businesses operate, with an increase in partnerships and collaboration to create new, unique consumer experiences. As digital devices enable communication in more and more ways, the hurdles that prevent co-working will slowly disappear.

    This even applies to intercontinental business. Internationalism – learning about other people, cultures and equality – is among the differentiating values for the youngest consumers (the Now Generation), when compared to Millennials at the same life stage. Working with people in different cultures, environments and time zones will be a huge benefit for tomorrow’s workers – and likely a source of added competition in some cases.

    The worry factor

    In all of this, a key factor for workers and consumers is privacy. As news reports of hacked corporate databases have mounted, anxiety among digital consumers has grown. The youngest generations are by far the most concerned about the security of their personal information – and, perhaps in a related point, also more environmentally conscious. Doing things the right way will be a must for companies that want to earn and keep consumer trust; these concerns will be every employee’s responsibility in workplaces of tomorrow.

    So where is this fourth industrial revolution leading us? Today’s world is just the tip of the iceberg – but it is surely an exciting time to see technology and its effects on many areas of our lives, as products and business models become more fluid. Consumers remain king – but workers may not always get the royal treatment. As employers and employees, we need to be sure we see tomorrow as clearly as possible – and start to take action today!

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  • GfK rises in ranking of innovative MRX companies
    • 05/31/18
    • Technology
    • Consumer Panels
    • Trends and Forecasting
    • Global
    • English

    GfK rises in ranking of innovative MRX companies

    GfK has once again placed among the most innovative market research firms, according to an annual ranking published by the American Marketing Association’s New York chapter.

  • Slight decline in consumer climate in Germany
    • 05/24/18
    • Retail
    • Consumer Goods
    • Global
    • English

    Slight decline in consumer climate in Germany

    Findings of the GfK Consumer Climate Study for May 2018