FEATURE1 May 2010

Forward thinking

Duncan Stuart and Alastair Gordon pick out ten trends that are shaking up the way research is conducted.

Believe it or not, the term used to describe a sequence of earthquakes is a swarm. That’s a pretty good descriptor for the collection of seismic changes affecting market research. There’s no single quake that’s off the Richter Scale, but rather a swarm of tremors that fit into the broad themes of scalability, the need for speed and contextual change.

We have identified ten trends, which together are shaking up the way we work.

1. More connected
If you want to see how information management has moved centre stage in business, there are few better examples than IBM. In the 1950s the company sold boxes that processed information. By 2004 it had divested itself of its personal computer division and become an information consultancy – the people who can get your data warehouse to talk to your distribution arm to talk to your boardroom. Today they sound more like a research company than we do, and their shift is a bellwether for what’s happening in our industry.

Research is increasingly about linking data from a vast array of sources (shopper data, survey data, geo-code data, whatever) to the wider client organisation. Infographics, data automation and data mining tools are becoming standard in corporate MR departments, and agencies need to make more comprehensive use of them if they are to stay relevant.

But clever software alone is not enough. We will need more people with the brain power, marketing expertise and breadth of experience to link different types of data. This will affect many aspects of how we operate, from who we recruit to how we interact with clients and their data. It will also affect current outsourcing trends: ‘passive’ outsourcing of data processing (data and specs to India, bulk tables and charts back) will be threatened.

What to expect: Rising demand for software and systems that can fish out insights from information – and for the people with the skills to make the most of it. More ‘active’ types of outsourcing will emerge as the need to access valuable talent causes companies to operate in an increasingly virtual manner.

2. More targeted
Blame increasing consumer resistance, or blame technology ( 70% of all CATI calls in California are greeted with a voice message) but it is becoming increasingly hard to achieve a random representative sample of respondents. At the same time it has become increasingly possible to develop in-depth, cross-sectional profiles of specific types of consumers, using online customer surveys, MROCs, social media studies or customer loyalty cards. Fortunately this coincides (at least in developed markets) with marketers being more interested in diagnosis and depth and less interested in incidence and mass markets. It has also been accepted that globalisation means it often makes more sense to think of markets in terms of shared interests and needs than purely geographically. An affluent middle-class Indonesian may have tastes closer to someone of similar socio-economic status in Istanbul than they do to a poorer countryman living a kilometre away).

What to expect: Methods that allow clients to interact more closely with more appropriately defined sets of respondents.

“There will be increased focus on how individual consumers and citizens make decisions through cognitive psychology, networking theory and neuroscience”

3. More emotional, more behavioural
It is a mistake to think that the increasing use of market information in corporate decision-making is all about rational data: sales figures and demographics. Increasing use of data leads to an increasing demand for behavioural, emotional and motivational understanding of customers. Decision-makers don’t just want qual to provide broad themes, they want nuance, and they want it in the form of more systematic and replicable information.

This puts increasing pressure on researchers to develop more powerful USPs in the one area of MR that has not been challenged by other operators in the information and survey space: emotional measures and the rich resource of verbatim feedback. The standard snapshot survey design ( 1,000 respondents over one weekend) faces a serious challenge.

What to expect: Online qual will grow rapidly, with agencies rushing to develop new applications. More generally there will be increased focus on how individual consumers and citizens make decisions through cognitive psychology, networking theory and neuroscience.

4. More global, but more local
Historically research has been dominated by the US and Europe and the consumer goods sector. But new firms are emerging fast in growth markets such as China and Brazil, and it will not be long before some of these start to expand into western markets.

As growth in Asia starts to dominate strategic thinking, the locus of control in market research will inevitably shift. Companies in Europe and the US will forced to adapt services to the realities of developing markets, and experience in those markets will become essential for individuals’ career development.

Research organisations and their researchers will need to adapt to an increasingly fragmented and rapidly changing environment. The ‘one world view fits all’ idea is over.

What to expect: More sharing of expertise across borders, adapting approaches to new sectors and finding new ways to operate with new types of clients.

5. Working smarter, not harder
Research companies are too focused on throughput and volume and not enough on adding value. The problem increased in the 1990s with the huge emphasis on back-office and operational efficiency as industry consolidation and increasing competition saw the MR industry attempt to operate in as lean a manner as possible. The recession then exaggerated this, with cuts extended into training, client servicing and research functions.

Ten years of under-investment have left many agencies in a position where they will struggle when demand increases. Budget cuts led to good mid-level people leaving the industry and a generation of younger researchers missing out on decent mentoring and training. And clients are still demanding cost reductions. They’ve been sold on the efficiency message, and see the shift to online as another move towards cheaper research.

Research agencies are going to be caught between needing more (and better) people and the need to contain price increases.

What to expect: A new focus on controlling spending in the ‘softer’ aspects of the research process where the majority of costs are incurred: sales planning, research design, analyst efficiency, better use of reporting software and working in virtual teams – what has in the past been neglected in favour
of seeking savings in fieldwork and processing.

“A lot of research these days is about topics that a decade ago either did not exist or were off the radar”

6. More things to measure
A lot of research these days is about topics that a decade ago either did not exist or were off the radar. At the start of this century the core measures in FMCG had scarcely changed in the 105 years since the invention of the AIDA pyramid (the model based on awareness, interest, desire and action). But in the last ten years whole new issues have entered the consumer’s consciousness.

With eco-friendliness, carbon miles, fair trade, organic production and a host of health indicators now part of the consumer mindset, researchers are being asked to measure, monitor and understand many new things. A brand that was once tracked on simple awareness is now hooked up to all kinds of monitors to determine its perceived green credentials, health impact and overall reputation. How volatile might the brand turn out to be if it experienced a Toyota moment?

What to expect: To stay healthy brands will have to measure more things in more ways. Be prepared for social media to bring about explosive successes and declines and for brand managers to become increasingly risk-averse.

7. More mash-ups, more modelling
IT specialists and a new generation of creative analysts are using technology to construct new ways of looking at our world by mashing data sources together: geo-spatial data, survey data, real-time sales data.

Market researchers will increasingly triangulate data from various sources without requiring fieldwork. Clients will increasingly say: “Look, we’ve got the data already – but now we want to make sense of it.”

What to expect: Rising demand for researchers with expertise in forecast modelling, risk modelling, and in creating useful predictive models that work in our increasingly complex business universe.

8. Cloud computing
The IT set-up of most multinational research companies today is one of disparate offices each with their own servers and each employee running a laptop or PC. The money people groan at the replacement rate for PCs and the licensing costs of software. This is one reason why firms centralise their data processing and analysis into a few hands, causing information bottlenecks.

The internet changes all this. All data can be hosted in ‘the cloud’ (which in reality might mean India or Silicon Valley) and various applications allow any member of staff anywhere to access and play with it. The company doesn’t need a huge IT infrastructure investment. It will rent capacity only as required. The advantages are lower costs, easier access, more potential for custom applications and the ability of your analyst in China to collaborate with your analyst in Brazil.

What to expect: Cloud computing is slated to be the biggest single IT trend over the next ten years and, though figures are fuzzy, by every estimate the growth will be exponential. It has the potential to re-engineer the structure of large research firms and to allow small firms to tap into powerful resources.

9. Real-time research
With Twitter providing a minute-by-minute avalanche of collective dialogue, and with the blogosphere expanding fast, many social media monitoring companies are offering clients the ability to put live dipsticks into this stream. How many people are mentioning your brand? How has the product recall affected the dialogue? All this monitoring happens live, is fully automated and costs only a few hundred dollars a month.

But real-time research isn’t just happening in the blogosphere. Qualitative research groups are now quite routinely run online and applications are available which enable researchers to send pre-registered pedestrians a question the moment they’re in the vicinity of, say, a fast food outlet. Clients will apply pressure to make this sort of thing mandatory.

What to expect: The demise of questions that begin: “Thinking back this last six months, how often…”

“Why bother delivering a big report to the marketing team for them to relay to their agency and on to the factory? Researchers will increasingly integrate their analysis with dashboards that can be viewed at all levels of the client organisation”

10. Nimbler organisations
In the 1990s, fashion chain Benetton revolutionised the marketplace by shortening the distance between production and retail. Their innovation was this: if blue tops sold like hotcakes in Paris, then within hours the factory in Spain was making more blue tops and dispatching them to Paris. It was a whole new level of responsiveness.

A similar approach has helped in the success of Walmart, which used barcodes and RFID technologies to enable real-time feedback between what’s going through the checkout and what the factory needs to make back in China.

Researchers in Japan have been using 3G networks to experiment with services based on geo-location and scanning of barcodes on outdoor advertising and magazines. Information about where people are and what they are buying and looking at is suddenly very accessible.

So why bother delivering a big report to the marketing team for them to relay to their agency and on to the factory? Researchers will increasingly integrate their analysis with live dashboards of decision-oriented metrics that can be viewed at all levels of the client organisation – from the head of marketing to the factory manager who is, this minute, deciding to switch the dye from yellow to blue.

What to expect: Market research will become more integrated with the other information that drives business decisions, including spot prices in other markets, currency rates and what the weather’s going to be like. The days of the 12-month strategy planning and research cycle may be numbered.

And overall?
Ignoring these trends and carrying on with business as usual will damage confidence in market research and cause a loss of business to clients managing their own research or to consultants outside the MR sector. To an extent this is happening already. A more positive outcome is possible for those who embrace flexibility and diversity. Researchers will need to be prepared to change their approaches and career paths more often. We see some signs of this happening: researchers usually like to talk and share, and online networks make this easier. Creative problem-solving is increasingly collaborative and competing companies are pooling their creativity to create solutions. The flood of web-based opportunities and a changing marketing and media context have opened the marketplace to new ideas and new ways of thinking. Perhaps we can yet ride out the swarm.

Duncan Stuart runs New Zealand-based research consultancy Kudos Organisational Dynamics

Alastair Gordon is a managing partner in Gordon & McCallum, a consultancy providing business support services to the research community

2 Comments

10 years ago

Great article -- very informative and forward thinking. A must read for any research organization!

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10 years ago

While online qual is taking on many forms these days. Only one company is delivering the total package. From recruit to report QualVu's solution is 100% online using video and web-cam enabled participants who can easily upload their videos. Videos are analyzed and organized into an online report that is easily digested for any industry. All that happens within 2 weeks or less. No other f2f, online, or focus group can accomplish this in the world. http://www.QualVu.com

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