GfK

Suddenly, smartphones are looking like a mature market.

Phillip Nones Business, Economics, Manufacturing, Social Commentary , , , , , ,
The smartphone diffusion curve. (Source: Business Insider)

In the consumer technology world, the pace of product innovation and maturation seems to be getting shorter and shorter.

When the television was introduced, it took decades for it to penetrate more than 90% of U.S. households. Later, when color TVs came on the market, it was years before the majority of households made the switch from black-and-white to color screens.

The dynamics of the mobile phone market illustrate how much the pace of adoption has changed.

Only a few years ago, well-fewer than half of all mobile phones in the market were smartphones. But smartphones rapidly eclipsed those older “feature phones” – so that now only a very small percentage of cellphones in use today are of the feature phone variety.

Now, in just as little time we’re seeing smartphones go from boom to … well, not quite bust.  In fewer than four years, the growth in smartphone sales has slowed from ~30% per year (in 2014) to just 4%.

That’s the definition of a “mature” market.  But it also demonstrates just how successful the smartphone has been in penetrating all corners of the market.

Consider this:  Market forecasting firm Ovum figures that by 2021, the smartphone will have claimed its position as the most popular consumer device of all time, when more than 5 billion of them are expected to be in use.

It’s part of a larger picture of connected smart devices in general, for which the total number in use is expected to double between now and 2021 – from an estimated 8 billion devices in 2016 to around 15 billion by then.

According to an evaluation conducted by research firm GfK, today only around 10% of consumers own either an Amazon Echo or Google Home device, but digital voice assistants are on the rise big-time. These interactive audio speakers offer a more “natural” way than smartphones or tablets to control smart home devices, with thousands of “skills” already perfected that allow them to interact with a large variety of apps.

There’s no question that home devices are the “next big thing,” but with their ubiquity, smartphones will continue to be the hub of the smart home for the foreseeable future.  Let’s check back in another three or four years and see how the dynamics look then.

Is Telephone Landline Usage Doing a Disappearing Act?

Phillip Nones Business, Demographics, Marketing Communications, Social Commentary , , , , , , ,

phoneIt may be a surprise to some people, but we’re getting pretty close to half of all households in America that are now without any sort of telephone landline.

[Actually, it’s not quite there yet – the percentage is ~44%.  But the trend is clear, and it’s accelerating.]

The latest statistics come to us courtesy of GfK Mediamark Research.  And GfK’s consumer survey findings align with other published survey data from U.S. government sources.

Just five years ago, only about one in four American adults lived in cellphone-only households.  But since then, the cellphone-only population has jumped by ~70%.

And when we look at a breakdown by age demographics, it becomes even more obvious that we’re in the midst of a transformation.

Here are the stark figures:

  • Pre-Boomers (born before 1946): ~13% live in cellphone-only households
  • Baby Boomers (born from 1946 to 1965): ~32% live in cellphone-only HHs
  • Generation X (born from 1965 to 1976): ~45% live in cellphone-only HHs
  • Millennials (born from 1977 to 1994): ~64% live in cellphone-only HHs

Mirroring the age statistics are ownership rates for smartphones:  very high among millennials down to very low among pre-Boomers:

  • Millennials: ~88% own a smartphone
  • Generation X: ~79 own a smartphone
  • Baby Boomers: ~56 own a smartphone
  • Pre-Boomers: ~20% own a smartphone

[Additional topline findings from the GfK research can be viewed here.]

Based on the trends we’re seeing, how soon will it be that telephone landlines become a thing of the past?  I’d be interested in hearing your perspectives.

Time spent online daily: 2.5 hours and growing.

Phillip Nones Marketing Communications, Social Commentary, Uncategorized , , , , , , , , , ,

Lots of time spent onlineIf you’re wondering what happened to all of the community volunteer activities people used to do – not to mention the popularity of participating in group social or recreational activities like softball or bowling leagues … you might look at the time Americans are spending online as one possible explanation.

The evidence comes in the form of research the Interactive Advertising Bureau did when they contracted with GfK Research to conduct an extensive online survey as part of a larger behavioral analysis of American adults.

Fielded in late 2013 with participation from ~5,000 adults between the ages of 18 and 65, the IAB/GfK survey revealed that Americans are spending an average of 2.5 hours of every day online.

Add that on to the average ~5 hours per day spent watching TV – a figure that’s hardly budged in years – and it’s little wonder that the Jaycees, Shriners’ and other service organizations are finding it more difficult to recruit new members … or that “old faithful” group social and recreational activities are in danger of becoming less relevant.

The IAB/GfK survey also revealed which types of online activities are engaged in the most.  The chart below, created by Statista from the IAB/GfK report’s data and published in The Wall Street Journal, gives us the lowdown:

Online Time (average per day)

 

I wasn’t surprised to discover that social networks chew up the most online minutes per day.  Online video viewing and search time seem about as expected, too.  And who doesn’t enjoy a nice game of Spider Solitaire or Internet Spades to wind down after a long day?

But at ~30 minutes per day, the e-mail average seems on the high side.  People must really be struggling with managing personal inboxes stuffed with marketing e-mails.  (But if work-related e-mails are part of the equation, the half-hour figure seems more expected.)

Comparing these results to similar research done in prior years, the most recent survey charts an increase in online video watching; it’s doubled over the past four years.

Other activities that are on the rise include online gaming, and listening to online radio.

Adding it all up, total time spent online is continuing its inexorable rise thanks to mobile connectivity and the “always-on” digital environment in which Americans now live.

Perhaps the way to stem reduced interest in group social activities and volunteerism lies in giving people free reign to “multitask” even as they participate in the local bowling league or Ruritan Club meetings …

What are your thoughts on the time people are spending online – and if it’s crowding out other forms of daily activities?  Please share your thoughts with other readers here.

What do consumers think of America’s corporations?

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Corporate Trust ... Corporate ReputationWith the budget negotiations in full swing – and high dudgeon – on Capital Hill, naturally the public’s critical eye is trained on our political figures. And Congress is most assuredly taking a beating in the political polls, with approval ratings plunging astonishly below the 20% figure.

[Of course, is that really so surprising? After all, Congress is pretty evenly matched between the two parties … so partisans see much to criticize on both sides.]

The focus of attention on Washington has taken the spotlight off of corporate America – at least in terms of media attention. But that doesn’t mean that “John Q. Public” is giving companies much of a break.

I’ve blogged before about corporate reputations — most recently commenting on a field survey conducted early this year by Harris Interactive that measured the appeal of 60 of the “most visible” American corporate brands. That survey showed an uptick in positive opinions about those firms when compared to prior-year results.

But a May 2011 survey by GfK Custom Research North America shows otherwise. The findings from GfK’s online field survey of ~1,000 U.S. consumers include this doozy: Two-thirds of respondents believe that it’s harder today for American companies to be trusted than it was three years ago.

Furthermore, ~55% say it will be harder for companies to gain their trust in the years to come.

What’s bothering people about U.S. corporations? In order of significance, here are the key concerns:

 The perception that CEOs and other senior executives of corporations are overpaid.

 Corruption in senior management circles.

 Companies make up lost earnings at the expense of their customers.

 More products than ever are being manufactured overseas.

Interestingly, there’s less concern about declining product or service quality as a reason for lower levels of trust. And as has been found in other studies, the public’s view of technology companies is somewhat higher than its trust for companies in other industry segments.

But back to the rather grim overall findings … fewer than one in five survey respondents anticipate that corporate corruption will become better over time – a result that’s substantially lower than what was found in similar field research conducted by GfK a few years ago.

This survey underscores the fact that corporate America has a long way to go to change the sharply negative impressions consumers have of the world of business. Clearly, the financial crisis of 2008 continues to extend its long shadow more than two years later.

And it looms over everyone – public and private sector alike.

This helps explain the generally sour mood people are in these days.

A Green Fog

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Green marketing hypeI’ve blogged before about evolving consumer attitudes on “green” products, and the telltale signs that “green fatigue” may be setting in with at least some people.

And now we have survey results that lend additional support to this observation. Harris Interactive conducted an online survey of ~2,350 U.S. adults in November, 2010 – one which is done annually by the polling firm. A comparison between the 2010 and 2009 survey results suggests that fewer Americans are engaging in various green behaviors in their daily lives.

While the year-on-year differences may be slight, the overall trend in participation is down. To illustrate, here are the comparative percentages of respondents who report that they “always” or “often” engage in certain “green” activities:

 Turning off lights when leaving a room: 81% (versus 83% in 2009)
 Making an effort to use less water: 57% (vs. 60%)
 Purchasing locally grown produce: 33% (vs. 39%)
 Purchasing locally manufactured products: 23% (vs. 26%)

Are there any areas where the trend is up rather than down? Actually, no. But Harris did find one area of stability: The same percentage of respondents in both years reported “always” or “often” engaging in recycling activities (68%).

What about other environmental activities? Again, the trend lines aren’t going in green’s favor:

 Purchased energy-efficient appliances (e.g., Energy Star): 30% (versus 36% in 2009)
 Donated or recycled electronic devices or parts: 32% (vs. 41%)
 Switched from bottled water to filtered tap water: 23% (vs. 29%)
 Purchased a more fuel-efficient car or hybrid vehicle: 8% (vs. 13%)

In fact, only one of the nearly 20 activities that were surveyed by Harris showed a positive “green” trend for 2010 versus the year prior — and that was switching to paperless statements for personal financial accounts.

Big whoop.

In trying to understand what is causing the change in behavior, it’s too simplistic to cite the economic recession. After all, 2010 was a less challenging year on that front compared to 2009, when the economy was really in the dumper.

For clues, we might turn to several other consumer research studies. The 2010 Green Gauge® Study conducted by GfK Roper gives us some possible reasons. That study concluded that there’s a sense of “green fatigue” among U.S. consumers. Clear majorities believe that green products are “too expensive” … while one–third of the people surveyed believe that green products “don’t work as well” as the alternatives.

But a more startling statistic from the GfK Roper study is that nearly 40% of the people surveyed feel that “green products aren’t really better for the environment.”

That shows a pretty skeptical public! And what about the issue of truth in advertising? The newest Green Gap Trend Tracker survey from Cone, just released this month, found that well over half of the ~1,035 adults surveyed do not trust the “green” claims made by products and brands.

Interestingly, even with so much of the consumer participation trending down rather than up, these surveys also found that more people today actually consider themselves to be environmentalists or green/environmentally aware.

So, consumers see themselves as green-friendly … but it’s all in how someone defines the term. As it turns out, it’s a murky definition that has people all over the map when it comes to the actual behavior.

Is Green No Longer Golden?

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Green Marketing HypeA funny thing’s happening on the way to nirvana in the environmental world. Consumers are balking.

That’s the conclusion drawn by several articles appearing recently in The Wall Street Journal and Advertising Age.

The Wall Street Journal article, written by Stephanie Simon and published in October 2010, focuses on what motivates consumers to “turn green.” Is it the strength of the environmental message? Appealing to our better nature? A feeling of affinity with nature?

Hardly. It turns out it’s good old fashioned guilt. In particular, if people are aware that their colleagues or neighbors are doing a better job than they are on the green scene, they’re more likely to respond to the peer pressure.

Simon references two recent studies to illustrate the point. In the first, a mid-size hotel attempted to promote towel reuse by placing placards in guest rooms. One placard was headlined “Help Save the Environment,” while another one trumpeted, “Join Your Fellow Guests in Helping to Save the Environment.”

Guests who saw the second placard were 25% more likely to reuse their towels. And in a follow-up to the initial experiment, guests who were informed what percent of past guests in their room had reused towels, the compliance rate went even higher.

In the other study, middle-income residential utility customers in San Marcos, CA were given one of four doorknob hangers that promoted the use of fans instead of air conditioning, each touting a different message:

Hang-tag #1: Save $54 a month on your utility bill!
Hang-tag #2: Prevent the release of 262 pounds of greenhouse gases per month!
Hang-tag #3: Conservation: It’s the socially responsible thing to do!
Hang-tag #4: 77% of your neighbors already use fans instead of air conditioning – it’s your community’s popular choice!

The result? Consumers presented with the fourth hang-tag reduced their energy consumption by an average of ~10% … compared to 3% or less reduction in energy consumption for any of the other hang-tags.

But peer pressure lasts only so long, as the study found that all four groups slipped in their conservation as time went on.

If the Wall Street Journal article poses some interesting perspectives regarding motivational factors, a November 2010 Advertising Age article by Jack Neff claims that a quiet backlash may be growing against green products and green marketing. Neff reports slowing sales in key green categories such as cleaning products and water filtration devices.

Timothy Kenyon, a senior marketing analyst at GfK Roper Consulting and author of the 2010 Green Gauge® study, dubs the slowdown “green fatigue.” But the phenomenon may be more than simply fatigue, because greater numbers of people are exhibiting outright disbelief in claims that up until now have gone essentially unchallenged.

In fact, 61% of the respondents in that Green Gauge® study believe that green products are too expensive, up significantly from the 53% who held this view in 2008. One-third of respondents think that green products “don’t work as well” (the figure was closer to 25% in 2008). Most startlingly, nearly 40% of the respondents feel that “green products aren’t really better for the environment” – again, up from 30% two years earlier.

With this degree of environmental skepticism now charting with American consumers, the Advertising Age article suggests several ways for companies to keep green marketing relevant and worthwhile as a message platform:

Don’t expect any real sacrifice from consumers – whether it’s paying more, accepting lower performance or sacrificing convenience, it’s likely to be a non-starter.

Don’t overstate the case – many people already think green products don’t work as well as their conventional counterparts, and they will punish brands that purport to perform better but fail to live up to the claim.

Promote product benefits that go beyond “green” – green features are really just tie-breakers in the decision to purchase a product, so it’s better to have something else to talk about as well.

The bottom line these days: Green is no longer gold, and consumers have moved well beyond the siren call of “green for green’s sake.”

The novelty has worn off … and the skepticism has set in.