Consumers Still Prefer to Shop in Stores

According to a new report from The NPD Group, many U.S. consumers remain reluctant to purchase certain consumer electronics products online, even after using the Web to find out more about them. For some products, that makes sense. In other cases the reluctance is harder to figure out.

While 52 percent of consumers would seek out information about smartphones on the Web, just 23 percent could imagine themselves going online to purchase one. That might makes a great deal of sense to you. A smart phone is a highly personal item.

In some other cases, the findings are more puzzling. The research suggests that televisions are the fourth most-likely item that consumers research online prior to purchasing (56 percent); however, it's the least likely electronics product that consumers would actually purchase online (19 percent). TVs aren't personal. On the other hand, it's a bigger-ticket item than many other products, so that could explain the hesitance.

In contrast more people (66 percent) do both their research (66 percent) and expect to make an actual purchase (34 percent) online for PCs then for any other CE device.

Top consumer electronics products consumers were "extremely" or "very likely" to purchase online, included the following:

• Computer software | 34%
• Computer | 34%
• eReader | 32%
• Digital Camera | 30%
• Computer accessories/peripherals | 30%
• Tablet computer | 29%
• Printer | 24%
• Smartphone/mobile phone | 23%
• Camcorder | 21%
• Blu-ray player | 21%
• Home audio | 20%
• Television | 19%

People still prefer to buy at retail locations

Tablets are the New Gaming and Video Platform

Any brand-new consumer electronics category will feature some new lead app, feature and use case. For the iPod it was music, for the iPod Touch it arguably has been games and web apps. For the new category of tablets, it appears games and video consumption actually are emerging as the lead apps, even though tablets continue to be used for some business applications and light consumer computing tasks as well.

Wi-Fi remains the connection of choice. AT&T CEO Randall Stephenson says half a million tablets on the AT&T network had active 3G connections. But something on the order of three million tablets get sold each quarter.

For most consumer products, price remains the single most important factor in consumers’ purchase decisions. But tablets appear to have been somewhat different in the early going, largely because of the early adopter profile of most Apple iPad buyers. 

Price ranks fourth among purchase considerations in one survey by NPD Group. Only 77 percent of potential tablet buyers say price factors very highly in their purchase decision. Click images for a larger view. 

Yankee Group : Research Report

Cash for Content Online - Pew Research Center

About 65 percent of respondents polled by the Pew Internet & American Life Project have paid to download or access some kind of online or other intangible content from the internet, ranging from music to games to news articles.

Music, software, and apps are the most popular content that internet users have paid to access or download, although the range of paid online content is quite varied and widespread.

In a survey of 755 internet users between Oct. 28 and Nov. 1 2010, respondents were asked about 15 different kinds of online material that could be purchased or accessed after a payment. The online content assessed in this survey includes only 'intangible' digital products such as software, articles and music that need not have a physical form.

Some 33 percent of respondents say they have paid for digital music online, the same percentage reporting they have paid for software. About 21 percent have paid for apps for their cell phones or tablet computers. Some 19 percent report they have paid for digital games.

About 18 percent have paid for digital newspaper, magazine or journal articles or reports, while 16 percent have paid for videos, movies or TV shows.

Some 15% have paid for ringtones, while 11 percent have paid for members-only premium content from a website that has other free material on it. About 10 percent have paid for e-books.

Spending between $1 to $20 a month might not seem like a big deal, but it is a significant amount of spending, especially recurring spending, for any popular consumer service. 

Cash for Content Online - Pew Research Center

What People Do Online

There are generational differences in use of apps online.

"Everybody" uses email and search. You might be surprised at how high "health information" ranks.

Apparently, for most people that is a more frequent activity than using "news."

Of course, there are some things almost nobody, of any age, does.

Virtual worlds, blogging and podcasts are among those infrequent activities.

read more here

Device Demographics Show User Segments

With the caveat that demographics quite often are "blunt" predictors of end user behavior, the Yankee Group says males favor "HTC" devices, while females favor "Google"-branded devices, even when those devices are made by HTC.

Apparently, brand affects hardware preferences.

LG, Samsung and Sony Ericsson have a decidedly female bias, though it isn't entirely clear why. Devices made by LG, Samsung and Sony Ericsson are available in a wide range of prices, which could affect purchasing statistics, as 52 percent of all people in the United States are female.

Apple, Nokia, Palm and RIM products are equally attractive to both genders, the Yankee Group says. Despite Apple’s and RIM’s skew toward young buyers, their products appeal almost equally to both genders.

Perhaps the next step for device manufacturers is a more-direct effort to identify lead applications and the design of devices specifically optimized for those apps.

Yankee Group Research Report

Will Tablets Depress Mobile Broadband Sales?

It's too early to tell, but one wonders whether tablet sales actually will depress some amount of mobile broadband data plan sales int he short term, even though logic suggests they will increase demand, long term.

It has become routine over the last two years to hear executives at cable and telecom companies point to the sluggish economy and low housing starts as the reason for similarly stubborn consumer resistance to spending more money on some services.

It looks like nothing has changed since the start of 2009. That's significant because it suggests consumers are making deliberate choices in spending on tablets that basically come down to funding tablet purchases by not spending elsewhere in the household budgets. 

It might only be slight issue at the moment, or a near term issue, but one wonders whether a shift to Wi-Fi-using mobile devices is beginning to lessen demand for smartphones, higher-end smartphones and data plans. And, if so, the related question is whether the substitution is just a temporary issue.

Most reports seem to suggest that most iPads, for example, are Wi-Fi units, not 3G-connected. If tablet popularity grows, and at this point it seems to be growing, then more discretionary end user income could be shifted to device purchases and reliance on Wi-Fi, and away from smartphone data plans or PC dongles.

It won't take a user long to figure out that he or she can buy an iPad for about 10 months worth of a 3G mobile data plan costing $60 a month, or an Android tablet for the equivalent of 10 months of smartphone service at $30 a month.

For many users, that will be a trade off that seems logical, since at least half of all iPad use seems to occur at home, where most people have Wi-Fi, while perhaps 10 percent to 25 percent takes place at work, where there often is Wi-Fi. It does not appear that many people actually use their iPads "in transit."

Long term, one suspects tablet ownership will increase appetite for, and use of, mobile broadband services. Ironically, such demand might also lessen appetite for sizable smartphone data plans. Some users might conclude that a Mi-Fi type service, which can supply Wi-Fi for a tablet, smartphone and notebook, all at once, works well enough.

Moms text at home, use apps outside the home

We have a tendency to think of some products as "commodities." Even when that characterization is correct in some ways, it very often is not completely correct, with some important potential marketing implications.

Unless I completely miss my guess, I'd say the "Droid" and "Evo" probably appeal mostly to men, for example.

My unscientific sample suggests the typical first impression some women have is that the Droid and Evo are "heavy," the implication being that neither is a device  would prefer to carry and use.

The point, whether the characterization is mostly right, or not, is that user segments likely exist that service and app providers, as well as device manufacturers, have only begun to assess and design around. To be sure, a smartphone is a multi-purpose device. But most people have lead apps that are more important than most others, and could create opportunities to differentiate the end user experience.

Moms and Millennials

The millennial generation is in one sense not a "market segment," but rather an indication of where all future markets are headed. As you might guess, behaviors of Generation X, sandwiched between Boomers and Millennials, have some characteristics of both preceding and succeeding generations, though it is the differences that normally get the attention.

In a more immediate sense, Millennial behavior is important because it influences the behaqvior or older age cohorts, thus driving behavior now, and not simply in the future.

Moms and Millennials

eMarketer Webinar: Tips for Reaching & Engaging the Elusive Millennial

View more presentations from eMarketer.

Millennials are in one sense not a "market segment," but rather an indication of where all future markets are headed. As you might guess, behaviors of Generation X, sandwiched between Boomers and Millennials, have some characteristics of both preceding and succeeding generations, though it is the differences that normally get the attention.

In a more immediate sense, Millennial behavior is important because it influences the behaqvior or older age cohorts, thus driving behavior now, and not simply in the future.

Mobile is Most-Owned U.S. Gadget

Of what it calls the "seven key appliances of the information age," the mobile phone is far and away the device of choice for U.S. consumers, say researchers at the  Pew Research Center’s Internet & American Life Project.

Fully 85 percent of Americans now own a cell phone, including 96 percent of people 18 to 29 years old.

About 76 percent of Americans own either a desktop or laptop computer as well. Since 2006, laptop ownership has grown dramatically (from 30 percent to 52 percent) while desktop ownership has declined slightly.

Just under half of American adults (47 percent) own an MP3 player such as an iPod, a nearly five-fold increase from the 11 percent who owned this type of device in early 2005, the Pew Research Center says.

Game consoles are nearly as common as MP3 players, as 42 percent of Americans own a home gaming device. Parents (64 percent) are nearly twice as likely as non-parents (33 percent) to own a game console.

Tablet computers and e-book readers, as you would expect, have not reached those levels of ownership, yet. However, these devices are proving popular with traditional early adopter groups such as the affluent and highly educated, the Pew Center reports.

Ownership rates for tablets and e-book readers among college graduates and those earning $75,000 or more per year are roughly double the national average.

Where Consumers Spend Their Communications-Related Money

Whatever else we might say about where U.S consumers spend their money on communications and entertainment, it seems clear enough they prefer to spend on broadband and Internet than voice, on video entertainment more than wireless.

see more here

Will Communications or Entertainment Spending Take a Dip?

There generally is a very-stable relationship between household income and household spending on communications and entertainment.

Over quite long periods of time, the percentage of household income spent on communications or entertainment is unusually stable as a percentage of total household disposable income.

What could be important, for that reason, is any change in the amount of household income. One wouldn't be surprised to see an unexpected bit of a dip in the percentages as the "recovery" continues to struggle along.

If household income falls, people will wind up paying a higher percentage of total disposable income, or will have to adjust communications or entertainment spending downward.

UCalling Yesterday, Texting Today, Using Apps Tomorrow

If it seems like American teens are texting all the time, it’s probably because on average they’re sending or receiving 3,339 texts a month. That’s more than six per every hour they’re awake, and an eight percent jump from last year.

Using recent data from monthly cell phone bills of more than 60,000 mobile subscribers as well as survey data from over 3,000 teens, The Nielsen Company analyzed mobile usage data among teens in the United States for the second quarter of 2010 (April 2010 – June 2010).

No one texts more than teens (age 13-17), especially teen females, who send and receive an average of 4,050 texts per month. Teen males also outpace other male age groups, sending and receiving an average of 2,539 texts. Young adults (age 18-24) come in a distant second, exchanging 1,630 texts per month (a comparatively meager three texts per hour).

The undeniable area of growth is in data usage: 94 percent of teen subscribers self-identify as advanced data users, turning to their cellphones for messaging, Internet, multimedia, gaming, and other activities like downloads.

While teen usage does not reach levels of activity seen by young adults, it has increased substantially compared to the second quarter of 2009, from 14 MBytes to 62 MBytes.

U.S. Teen Mobile Report: Calling Yesterday, Texting Today, Using Apps Tomorrow

Heavy Texters are Heavy Callers, Study Finds

Want a clue about which consumers, of whatever age, will be heavy text message users? Just look for users who are heavy voice users, a new study by the Pew Internet & American Life Project.

Heavy adult texters who send and receive more than 50 texts a day also tend to be heavy users of voice calling. Light texters, who exchange one to 10 texts a day, do not make up for less texting by calling more. Instead, they are light users of both calling and texting.

Texting by adults has increased over the past nine months from 65 percent of adults sending and receiving texts in September 2009 to 72 percent texting in May 2010. Still, adults do not send nearly the same number of texts per day as teens ages 12-17, who send and receive, on average, five times more texts per day than adult texters.

Adults who text typically send and receive a median of 10 texts a day; teens who text send and receive a median of 50 texts per day.

About five percent of all adult texters send more than 200 text messages a day or more than 6,000 texts a month. Fully 15 percent of teens ages 12 to 17, and 18 percent of adults ages 18 to 24 text message more than 200 messages a day, while just three percent of adults ages 25 to 29 do the same.

The average adult cell phone owner makes and receives around five voice calls a day. Women tend to make slightly fewer calls with their cell phones than men.

Men and women are equally likely to be represented at the extreme high end of callers, with eight percent of men and six percent of women making and taking more than 30 calls a day.

link to study

Multigenerational Homes on the Rise

Here's a trend you might think was created by the recession: younger people moving back home instead of living out on their own.

But it appears the number of younger people, and older people, living in multi-generational households has been growing for decades, according to the Pew Research Center.

It appears 1970 was the peak year for formation of single-generation households.

How Do You Segment When Users Carry Multiple Devices?

You might wonder how application and service providers are going to have to refine their customer segmentation assumptions in a world where users carry multiple mobile devices with them as a matter of course.

It's bound to be a growing question. According to a recent survey by Ofcom, the U.K. communications regulator, 97 percent of users carry at least two mobile devices.

Perhaps more significantly, 49 percent carry three or more mobile devices. That tends to suggest the old "business" or "consumer" distinction is woefully inadequate.


Up to a point, some things remain constant. Customers still can be sorted by age, lifestyle or perhaps brand preference. The issue is that behavioral measures probably will be more important. Even users within a single age demographic, socio-economic bracket or lifestyle segment might differ radically based on the number of devices they typically carry, as well as by what applications they use.

The most-obvious potential change is that a single-device user might not have too many qualms about flat-fee pricing for broadband access on a device basis. A user with multiple devices almost certainly is going to have greater resistance to uniform pricing of that sort, and should be more receptive to an integrated access plan that provides access to multiple devices in less expensive and more flexible ways.

In fact, it might actually simplify segmentation in some ways to consider "number of devices used" as a key driver of packages and features.

iPad Users Change Reading, Browsing, Gaming Habits

If results of a U.K. consumer poll are any indication, tablet PCs are about to change Web browsing, gaming and reading preferences.

According to survey conducted by Cooper Murphy Webb, Apple’s iPad is the preferred method of reading newspapers and magazines among consumers already owning the device.

The poll also found that a plurality of iPad owners prefer the device for reading books and gaming. Perhaps surprisingly, respondents indicated they used their dedicated gaming consoles and iPads about equally when gaming. If that holds up, it could mean trouble for game console suppliers. 

And a significant percentage prefer the iPad for Web browsing as well. That finding is less surprising, if one assumes the tablet device is designed to be used as a content consumption device.

Cooper Murphy Webb  polled 1034 U.K. iPad owners.


It's hard to tell at the moment whether the behavior of early adopters will be the same, or similar to, habits of more mainstream users.


The results, if they are replicated by other surveys, suggest the tablet has potential to disrupt and replace user behaviors for any number of other consumer electronics devices. Mobile phones and MP3 players are probably safest. PCs, notebooks, netbooks, ebook readers and game consoles would seem to be most at risk.


That's a rather broad base of devices threatened by tablet devices.

iPad Consumer Usage Study | Cooper Murphy Webb

Not Your Imagination: People Do Different Things on Their Mobiles

The way U.S. consumers spend their Internet time on their mobile phones is different from the way they spend their time when interacting with Internet applications and services on their PCs, the Nielsen Company has found.

If total Internet use were one hour, the top PC apps would be social networking and blogs, at 13 minutes, 36 seconds of use. Games would occupy six minutes, six seconds. Email tasks would consume five minutes. Use of portals would come in at two minutes, 35 seconds. Search would occupy two minutes, six seconds.

On a mobile device, applications usage patterns are very different. Email activities account for 25 minutes, while seven minutes are consumed interacting with portals. Social networking and blogs would occupy six miinutes, 18 seconds, while search would occupy four minutes.

The Nielsen survey also found a28 percent rise in the prevalence of social networking behavior on the part of mobile Internet users, but the dominance of email activity on mobile devices also was highly pronounced, with an increase from 37.4 percent to 41.6 percent of U.S. mobile Internet time.

Portals remain as the second heaviest activity on mobile Internet (11.6 percent share of time), despite their double digit decline and social networking’s rise to account for 10.5 percent share means the gap is much smaller than a year ago (14.3 percent vs. 8.3 percent).

Other mobile Internet activities seeing significant growth include music, video and movies, both seeing 20 percent plus increases in share of activity year over year. As these destinations gain share, it’s at the cost of other content consumption. News, current events and sports destinations saw more than a 20 percent drop in share of U.S. mobile Internet time.

There seems to be a clear lesson here. People do not have unlimited money or time to spend with applications. So as applications proliferate, users will have to make choices about how they use their time. A day, after all, is a zero-sum game. People might be able to multitask up to a point, but only up to a point. Even if users had unlimited funds, they would not have unlimited time to spend on mobile applications.

“Despite the almost unlimited nature of what you can do on the web, 40 percent of U.S. online time is spent on just three activities, social networking, playing games and emailing leaving a whole lot of other sectors fighting for a declining share of the online pie,” said Nielsen analyst Dave Martin.

more detail here

Nexus One Lessons

There are perhaps some lessons Google and everybody else can learn from the mixed results of the "direct to consumer" Nexus One effort.

Though it is hard to say for sure, the experiment might have influenced the current direction of the leading Android devices, ranging from the HTC Evo to the Droid Incredible and Droid X. If that was the intention of creating the Nexus One, the experiment bore fruit.

It might also be important to note that we had a test of two retailing concepts: the idea that U.S. consumers actually hate contracts so much they will pay full retail prices for advanced devices, and the notion that such devices can be sold direct from a website, bypassing the retail distribution chain the leading mobile companies use.

One might conclude that demand for unlocked phones is not as significant as one might have thought. The other observation is that the current retail model works pretty darn well, compared to "web only."

Also, after-sales support proved to be another weakness. Customers do not appear to have been happy with "email-only" customer support, and seem to have been scarcely happier with the added "by phone" support.

There's nothing wrong with experimentation, to test such notions. But we might remember that Apple was highly criticized for opening its retail store network. It now appears those critics were wrong. The retail store experience is helpful, maybe even necessary, as a distribution channel for advanced mobile devices.

Consumers Use the Web, Companies Should Do the Same

If consumers are using video, social applications, wikis and other web applications to get and share information about companies and products, shouldn't companies be doing the same?