Just a quick note from Argus Insights to give some hints as to what we have cooking for 2015. 2014 has been a year of expansion and growth for Argus Insights. Not only has our coverage of Consumer Products expanded to include Wearables, Appliances, and Internet of Things devices, but we are also pulling consumer data globally from Chinese smartphone users, and Indian and German Consumer Electronic consumers.
Our ability to beat Wall Street Analysts on where consumer markets are headed continues to be validated with accurate predictions on Apple, Best Buy and other brands during 2014. We have also expanded our analysis of consumer behavior in social media to include B2B categories such as Software Defined Networks, Embedded Vision, Network Function Virtualization, Internet of Things, Cloud Computing and more. Please do not hesitate to contact us with any questions.
In November we covered the new kids on the block in the smartphone market, Chinese manufacturer OnePlus. Their goal was to disrupt the market by selling high-end smartphones for more than half the price of Apple, Samsung, HTC, etc. They succeeded in driving awareness to their campaign and gained approval from the consumers who took notice of their budget friendly smartphone, which boasts the same high-end features that are sought after in the iPhones and Samsung Galaxy phones.
OnePlus got off to a fast start as consumer demand quickly overwhelmed the limited supply of smartphones available. Due to the fact that the company is microscopic compared to the juggernauts in the industry, careful planning and strategic production were essential in growing the company and lowering the risk of bankruptcy. OnePlus came up with an invite system for consumers that were interested in purchasing the One, which allowed them to only produce what they can sell to prevent excess inventory. Lucky adopters that got their hands on an invite purchased the phone and delight numbers grew rapidly.
Unfortunately, success sometimes is a double-edged sword, being that high praise and reviews led to demand magnifying at a rate that OnePlus could not keep up with. Consumers were left wanting to get their hands on the product, and found it almost impossible to get an invite. The struggle led to frustration, and that frustration gave way to sellers that took advantage the limited supply. OnePlus One smartphones started to emerge on Amazon, and other secondhand vendors, where the phone was being sold to those willing to pay a higher premium in order to get the phone they wanted. Many buyers were misled, and bought phones from sellers that got their hands on the Chinese variant of the OnePlus One that was not supported on the GSM networks in the United States. This drove down consumer delight scores, as users filed angry reviews about the second hand sellers.
The combination of hungry buyers waiting for OnePlus to refill their buffet stations, and scalpers taking advantage of eager buyers, led to a drop in delight for the company towards the end of October as consumers began to voice the unpleasant experience in OnePlus’s supply chain and useless Chinese variants that are now nothing but expensive paperweights. It is also vital to point out that the drop in delight mostly reflects unhappiness due to limited supply, high prices on Amazon, and consumers that were duped into buying the Chinese variant of the OnePlus One. Overall, those fortunate enough to get their hands on the unicorn phone are still delighted in the One as a viable alternative to the more expensive smartphones on the market.
Argus Insights will continue to keep a close eye on OnePlus and the rest of the smartphone market as the year comes to an end and manufacturers push to move more inventory from retailers into the hands of consumers. To learn more, sign up for our free weekly updates about consumer smartphone perceptions.
The smartphone market seems to have paused in anticipation for Apple’s iPhone 6 launch. As has been the trend before with big Apple launches, consumers took a breath while awaiting what Apple had in store.
The chart below maps consumer mindshare across different major brands in the smartphone market. It is clear that mindshare overall dropped about a week before Apple’s new product launch on September 9th. While at first glance this trend could appear to indicate a lack of interest in smartphones, it actually demonstrates how consumers are willing to drop everything to wait for Apple’s new toys. While this is beneficial for Apple, it is not for Samsung who suffered a steep drop in mindshare, and Motorola, and LG which remained mostly stagnant after Apple merely announced their announcement of new products.
While other brands experienced a steady decline before Apple’s announcement, Apple saw a slight increase in the weeks leading up to it. This increase was caused by retailers lowering the price on old iPhone models to clear the shelves before news of the iPhone 6 broke. If the retailers did get people to upgrade to 5S iPhones with promotions just weeks ago, Apple will have a few disgruntled customers to deal with. Verizon and other retailers are already offering promotions to encourage people to upgrade to the iPhone 6, because that is crucial for the new Apple Pay system to thrive. With the sale of almost 4 million iPhone 6s in pre-sale, it appears as if Apple has once again shaken the market awake after sending it into anticipatory hibernation.
Argus Insightswill continue to investigate the effects of the iPhone 6 on the smartphone market, sign up today to receive reports on a regular basis.
What is it that people think and then talk about? In this highly connected world in which we now live in this question is vitally important. Why do consumer packaged goods brands like Coke and Pepsi continue to spend millions of dollars on advertising every year? Surely, at this point there are very few people who do not consume one of these products relatively frequently let alone have little to no knowledge of the brand at all. The same can almost be said for those durable goods companies such as Ford, Apple, and BestBuy. These companies enjoy a great amount of brand penetration into the market, but the purchase cycle for these products is very long and yet they also spend millions on advertising. The answer to this question is mindshare. When a consumer goes into a store to buy a product, companies not only want their products to be recognized when they are seen, they want it to be in that consumers’ mind before even walking into the store. If a customer is thinking about your product before they even look at the options, they will be more inclined to purchase the item.
The second important part of brand awareness is mouthshare, or how much a customer talks about a topic, or in this case, a brand. The amount of time a customer discusses about a subject is related to how much they think about said topic and how important it is to them on an aggregate level. Thus the more a customer talks about a brand, the greater the chance they interact with that product and the greater its importance. In addition, talking about a brand serves to enhance brand awareness in other individuals thus furthering the cycle.
1) Coca ColaOver the past couple weeks Argus Insights has delved into what drives mouthshare, or people’s conversational topics. For this study, we chose Twitter due to the greater volume of data available compared to other social media outlets. We looked at the related Twitter feeds for twenty-six companies and name brands over a two-week period ranging from Subway and Coca-Cola to Tide, Urban Outfitters, Ford, and Apple. In general, the majority of discussed brands will fall into one of two main categories: 1) common interactions, such food and drink; and 2) major purchases, such as electronics and automobiles. It should not be much of a surprise then that the top five mentioned brands were:
These top brands also all had approximately 10% share of our total tweets for the examined time with Coke obtaining an impressive 95,537 tweets.
If we look at these brands, we instantly see that the most talked about brands also share product passion and market permeation. Many people have strong feelings about these brands and everyone knows and uses them. Now lets look at the last five brands:
22) Charles Schwab
23) Famous Footwear
26) Heinz Ketchup
We can see that two of the five are clothing companies. While the brand of your clothing may be very important to a teenage girl, or some incredibly clothes conscious males, to a majority it is of primary importance that the clothes fit and look good. Even when the brand matters for their purchase decisions, it will infrequently makes its way into casual conversation. One is a tech company that, while it may be a global player in the industry, does not have a great amount of mindshare for the average person.
All of this chatter is relatively small however compared to the fire hose that is Twitter with its average 250 million tweets a day. All of these brands together make up 0.049% of the tweets for the week period. Though while the percentage of the total stream is small,there can be an enormous impact on a given company. A single positive or negative tweet can be picked up by another person and retweeted hundreds if not thousands of times within minutes, which depending on the message can have a real fiscal impact on a company.
Now let’s examine these same ideas in a more concrete dollars and cents way. First let’s take several representative companies from consumer packaged goods, durable goods, and clothing comparing the projected revenues for the analyzed time period per tweet we get some interesting results. For each section we are looking at popular and well-known brands:
Consumer packaged goods are consumed on a regular basis and their message is constantly advertised giving them a high revenue to tweet ratio. On the other end durable goods like those purchased at BestBuy while not a frequent purchase, elicit high consumer passion resulting in nearly twice as high of a revenue to tweet ratio. In the middle there is almost a dead-zone of consumer engagement with the clothing sector. Even these three well know and popular brands have a paltry revenue to tweet ratio of less than $400 each.
With the proper understanding, the social media sphere can be a useful tool to promote and monitor a company’s mouthshare. A company that uses this knowledge can help to direct the fire hose of social media and not simply be washed away by it.
Argus Insights would not exist if not for Steve Jobs, period.
He made user experience the focal point of our lives and brought the speeds and feeds of nerdom into the hands of every child, woman and man on the planet willing and able to. When I was finishing up my PhD research on connecting good design to good business Apple was one of the inspirations for my research. Imagine my surprise at my graduation from Stanford in 2005 when I found out that Steve Jobs was our commencement speaker. His speech is the most listened too bit of audio on my iPod. Thank you Steve.
When I made the choice to move into industry, I was lucky enough to land at one of Apple’s suppliers, Synaptics, the creator of the capacitive scroll wheel that defined the iPod experience for so long. As the fortunes of Apple rose, so did those of Synaptics so that when I made the decision to leave SYNA my options provided the initial seed capital to chase my own entrepreneurial dreams. Thank you Steve.
The catalyst for starting Argus Insights came from trying to help companies
like Nokia and Samsung compete against Apple. The data and information these big firms were using to guide their decisions lead to countless, now infamous, dead-ends. Argus was founded to help companies measure what matters, the user experience, so they could be less like Bill and more like Steve. Without the genius of his leadership and vision, we wouldn’t have our purpose or market to chase at Argus Insights. Thank you Steve.
His final words that June in 2005 were “Stay Hungry. Stay Foolish.” They have stayed with me ever since. His hunger for perfection combined with his foolishness to attempt the impossible has give the world gifts we will never understand the full value of. To me his biggest lesson and legacy is that through hard work, patience, and conviction, the American dream is attainable without our lifetimes even though his was cut short too soon.
Our heart goes out to the family and friends he leaves behind. We promise to honor his legacy by staying hungry and staying foolish all the days of our lives.