July 17, 2013Published by: Anton Perreau

Tracking Digital Consumer Behaviour: Deep Digging from McKinsey

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Understanding and tracking the way in which digital consumers behave is becoming more complicated by the minute. Different mediums that didn't even exist a month ago, let alone a decade or a century ago, change on an almost daily basis. Whilst skimming the surface of new digital trends is easy, the ability to gain insight, plan and act upon that knowledge simply can't be performed fast enough until we dig a little deeper.

To help brands with all of this this, McKinsey; the large American global management consulting firm, has produced a report from insights into how digital consumers behave. The report explains that,

'Understanding and acting on the probable contours of change requires reflection and a deep knowledge of customer behavior, industry dynamics, and feedback loops...'

The first comparison made by McKinsey is from their iConsumer research here in Europe. McKinsey defines four segments of the mobile market, stating that whilst they may all have the same mobile plan or handset, the way they consume on those devices is dramatically different.

Source: 2012 McKinsey iConsumer Survey (Europe)

Source: 2012 McKinsey iConsumer Survey (Europe)

The four segments - as shown above, are:

  • Traditionalists: these are consumers that use phones for the purpose they have always been intended - voice calls.
  • Data Principals: use lots of data and barely any voice calling functionality.
  • Data Entertainers: also use little voice but are heavy users of video, music, and games. According to McKinsey,

'Upward of two-thirds of music usage involves streaming services, MP3 files, or satellite radio.'

 

  • Mobile omnivores: are superusers of both voice and data services. Along with the Data Entertainers above, these consumers use over 85% of data traffic.

These segments are prevalent now due to the nature of content that is being consumed, as McKinsey explains,

'Almost half of all video viewing in the United States, for example, takes place in ways that barely existed a generation ago.'

McKinsey continue to explain that when working with a digital-publishing client they found that 80% of visitors to the clients website were very occasional. In analysing the audience, it became clear that to retain loyal profit-generating users a radical change in the business model had to take place, with tiering and specialisation.

Success may require a diversity of business models, one for high intensity users and others to address the broader audience

Source: 2012 McKinsey iConsumer clickstream database (United States)

Whilst focusing on this high-detail explains some of the insight McKinsey have shared through their research and experience. Some of the more broad segments can be explained through six shifts. To summarise:

  • Devices: In personal computing time, the share of mobile phones and tablets has almost doubled since 2008, to 44 percent.
  • Communications: Smartphone use is driven by streaming content, creating it's own issues for mobile carriers.
  • Content: The value in traditional media has eroded. The average number of apps installed on them has doubled since 2008 whilst spending is fragmented and growth uncertain.
  • Social media: Businesses are still trying to use social media as part of their marketing efforts. Achieving measurable returns on social networking platforms is a continuing challenge - at Battenhall we think this is because traditional PR strategies fail to realise the bigger picture of social networking.
  • Video: The increase in the number of video options will pressure traditional advertising-supported business models for distributors, advertisers, and content owners.
  • Retail: Ecommerce only about 5 percent of all retail sales. As connected mobile devices proliferate, they could transform the shopping experience. The combination of mobile retailing and true multichannel integration will transform the buying experience and begin what McKinsey calls, 'the era of Retail 3.0.'

To summarise, McKinsey confirms more echoed rumours amongst the digital community that the digital frontier must be understood and appreciated in order to work for brands and businesses. Data, streaming, captivating content and sharing dominates mobile use whilst the methods in which this media is being transmitted through hardware is out-dated and requires serious attention.

The challenge for brands now is to realise the potential of bespoke solutions for consumers, working with hardware providers, consultants and experts to make a solution that works for all their key stakeholders.

Learn more about the McKinsey report at McKinsey.com.

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