Consumers prefer search over friends, family: report

| March 17, 2019

New research from Salmat has found that Australian consumers are increasingly turning to technology – more specifically, Search engines – for recommendations, over their own friends and family. Search engines topped the list of 23 channels that consumers use to make purchase decisions (49%), making it more influential than recommendations from friends and family which came in second (46%).

The findings are from the third annual Salmat Marketing Report (SMR) which compares the behaviours of Australian marketers and consumers to give in-depth analysis and advice on marketing strategies.

Consumers are increasingly turning to technology for advice, over real people who they know and trust. The 26% decrease in consumers going to friends and family is a dramatic shift from 2017, when 72% of respondents chose to go to them before making a purchase.

Mismatch between marketer and consumer behaviour

Despite Search engines being the most influential channel for consumers, there is a mismatch between marketer investment and consumer behaviour – with only a quarter of marketers investing in Search Engine Optimisation (SEO) and Search Engine Marketing (SEM) (28% and 25% respectively) to reach their audience.

The SMR found that marketers are instead putting their money into social media, with over half (54%) of marketers investing in this channel in the last year. This is despite only one in four consumers (25%) saying they use social media as an information source for making purchase decisions.

Shane McClelland, Head of Marketing & Corporate Communications at Salmat said this mismatch between marketer and consumer behaviour is surprising and is of course leading to challenges in reaching new customers. Consumers’ habits, behaviours and expectations are rapidly changing, so as marketers we need to keep an eye on the data we have and adapt as needed.

“We need to do this regularly and quickly to prevent losing customers to competitors.”

Price counts for 70% of a purchase decision

Australian consumers are largely driven by price, and money is often the deciding factor for consumers when it comes down to their final purchase decision. In fact, consumers say that price counts for close to 70% of their purchase decisions. However, when asked about their top concerns when buying products, value for money came out on top (85%).

The research indicates that marketers are acutely aware of the role price plays in consumers’ purchase decisions and are discounting their products regularly – 26% are discounting weekly, and 28% discounting monthly. Given consumers’ focus on value for money as their top concern, this presents an opportunity for marketers to stand out from the crowd by highlighting the value for money of their products.

McClelland said everyone discounts in Australia and whilst price is still a huge deciding factor for consumers, it isn’t the only way brands can stand out.

“Looking outside of that, consumers are more receptive to brands that deliver value for money – this is still price driven but demonstrating value for money is something marketing can really own. Instead of discounting heavily or focusing on undercutting the competition on price, we should instead demonstrate why our products deliver the best value for money. Messaging can focus on this in addition to offering promotions. This of course needs to be delivered to the consumer via the channel they use to search and browse for brands.”

In-store tech fails to connect

Clearly, technology is becoming more influential in the customer’s buying journey – but not all technology is equally influential. When shopping in-store, consumers are more inclined to use their own phone to go online to compare prices, find the best deal or access specific retailer apps (57%), or research product information (56%), rather than use the technologies that retailers offer in store (31%). Therefore, in place of investing in tablets, iPads and virtual reality experiences in-store, marketers should look at investing in SEO/SEM, online catalogues, online reviews and owned online assets such as a brand’s website – areas that are holding the attentions of consumers.

“We already know consumers like to shop around – especially when it comes to finding the best deal. But what we’ve found is that they do that research on their own devices – mainly on their mobile whilst they are still in store.

“This makes a lot of the in-store technology redundant and rarely used by consumers. Instead, marketers should look at investing in creating in-store environments to harness consumer behaviour – charging points, relaxation areas, experiences to keep consumers in store for longer, and ultimately then converting them to a sale,” McClelland concluded.