To Buy or Not to Buy

3 ways social media data can help brands understand purchase intent

A few weeks ago, two of the world’s biggest technology brands announced upgrades to their smartphone lines with much pomp.

One crowed about industry-leading improvements to their phones’ improved cameras, processors and speakers.

The other trumpeted their phones’…improved cameras, faster processors and louder speakers.

If you couldn’t determine the two tech brands behind these announcements, I’ll fill you in: The first was Apple, with its iPhone 8. The second was Google introducing the Pixel 2.

From a tech and features standpoint, the phones are nearly identical. But despite the similarities between its phones and its competitors’, Google has not had as much luck actually selling its handsets. If Google’s phones are so similar to those from the rivals, why was the tech giant only able to sell 4-5 million of the inaugural version of the phones while their competitors Apple and Samsung sold 25 million and 20 million phones, respectively?

Google vs. Apple, Nike vs. Adidas, Honda vs. Toyota — the question of how and why consumers pick one product or brand over another is at the heart of almost every major company’s marketing and product strategy. It’s also one of the hardest questions to answer; many brands end up simply follow their guts about why their customers buy (or don’t buy) their products.

Business decisions cannot be made by guessing based on opaque clues. This poses a quandary because purchase intent isn’t always transparent — they are incredibly murky and often idiosyncratic. But it sure helps that consumers consult the collective intelligence of social media to make purchase decisions. Are they leaving clues for brands?

As behavioral economist and psychologist Dan Ariely said, “It is true that from a behavioral economics perspective we are fallible, easily confused, not that smart, and often irrational.”

Brands are constantly perplexed trying to comprehend what tickles and what ticks off consumers.

Luckily social media data holds some of the answers. Platforms like Twitter and Instagram, as well as forums like Reddit, are littered with consumer conversations about their purchase decisions and frameworks..

In this post, we use the social media lens to identify three factors that determine purchase intent in three industry segments — electric cars, cosmetics and smartphones — to establish patterns in consumer purchase decisions, including how social media data can help brands:

  • Verify demand
  • Quantify brand values
  • Prioritize product features

Social media shows demand, market brings supply

The most fundamental question to answer about purchase intent is whether there’s consumer demand at all. No matter how pristine your brand reputation or industry-leading your product’s features, you’re not going to move product unless there is demand for what you’re selling. And if there isn’t demand where you think there should be, you need to find out why.

This is extremely relevant in the case of electric cars.

At present, electric vehicles make up only 1% of total monthly US auto sales. One can interpret this as the demand for EVs being lukewarm. But analyzing social data around the topic tells a different story.

Social media analysis of consumer conversations revealed that the discussion about electric cars first started to pick up in 2015, as consumers took to social to talk about climate change, vehicle efficiency, and renewable energy. Since then, electric cars have stolen the limelight and captured the conversation — by 2016, electric vehicles owned more than 70% of the overall eco-friendly car conversation, suggesting a thriving demand for green vehicles.

For several years, hybrid cars were considered the next step in the evolution of eco-friendly cars. But as social conversations around electric cars started to pick up steam, it became apparent that at least in consumers’ eyes, the time for 100% electric cars has arrived.

The volume of conversation and social awareness suggested that consumers don’t need to be sold on the idea of electric vehicles. But the real question remained: Why weren’t consumers buying electric cars?

It was prohibitively expensive to own one.

 

The used-car market for electric vehicles met consumer demand at an appealing cost. The FIAT 500e was the fastest selling used EV this year, in part due to its low average selling price of $9,055 (down from $21,000 before incentives on the lot). Today, electric vehicles now account for six of the ten fastest selling used car models in the US, and sell 27% faster than gasoline equivalents.

Social media helped identify that there’s a group of consumers who want the product but couldn’t afford a new one. As the market matured, a used electric car market developed to serve more cost-sensitive consumers.

Identifying what came first — consumer demand or market supply —  can often feel like a chicken-and-egg problem. But it doesn’t have to be. In this case, social media analysis had already identified the demand for electric cars before markets did.  It even quantified the impediment to  purchase.

Tracking purchase intent on social media through unsolicited consumer conversation can be tricky and one of the ways brands can do this is by analyzing the audience discussing the product category.

To further establish exactly where the demand is coming from, we looked at the audiences for both electric vehicles and used-cars and unsurprisingly found them coinciding —  Men above the age of 35.

 

Making bold business decisions in a fledgling market like electric vehicles can be hard. But also crucial. Social media data can point brands in the right direction by verifying the existence of demand and from there, following the breadcrumbs to purchase intent and sales.

If you’re not cruelty-free, I’m not your customer

In a burgeoning market of electric vehicles, tracking the path to purchase intent starts from the elemental step of identifying if there is appeal for the product. But in more developed industries, measuring purchase intent can be more evolved.

In the cosmetics business where personal preferences and brand loyalty determine purchase, consumers’ perception of brand matters takes precedence above all else.

Conscious consumers extend their support to a brand for its values and ethics by buying its products. In return, brands build loyalty by acknowledging the allegiance and holding up to that reputation — this matters in an industry where brands can be easily replaced and their products substituted.

Social media data would suggest that for the makeup industry, a lot rides on how consumers feel about certain brands and what the values those companies represent.

One foolproof way to discover this is by checking consumer sentiment. This is especially relevant for cosmetic brands that are constantly under pressure to adhere to ethical standards of quality of production to abide by values of their customers. And for an industry that makes $62 billion a year, the stakes can be high. And this can be an uphill task as today’s consumers care not just about a particular shade of lipstick that suits them, but also about how that lipstick made.

When we analyzed the makeup conversation on social, we found that the use of eco-friendly products has captivated makeup users and is the main trend in the cosmetics conversation, especially over the past couple of years. People have become much more conscious of how their makeup is produced and the ingredients that are involved.

But is this propelled by a larger concern among consumers? It appears so. As we dove deeper into the data, we found that there are very specific topics driving this overall trend — the most prominent being the discussion of cruelty-free products.

Rising from just 20% share of voice in 2010 to 50% in 2016, the cruelty-free discussion made up well over half of all discussion about natural ingredients/eco-friendly makeup ingredients. It is by far the most discussed topic in social.

People are rabid when it comes to discussing animal cruelty on social media and have zero tolerance for products that are tested on animals. And they don’t shy away from supporting some brands and calling out others that don’t meet the ethical standards.

When people are disgusted by a practice, it’s natural that it has a bearing on the products they buy. For instance, out of the dozen brands that were most discussed as not being cruelty-free, MAC received more than double the mentions, but mostly negative. People took to social to protest and criticize the brand, and even announce they were switching brands or dumping their MAC cosmetics.

And more recently, NARS also came under the line of fire after the brand launched in China which mandates animal testing. This made its loyal customers turn against the brand who took to social media to express their disappointment and withdraw support.

At a time where a tweet travels faster than news and the social network is built on a circle of influencers, brands have to be attentive to consumer sentiment as it directly determines purchase decisions. Luckily, consumers flock to social media to assert their opinions and proclaim both love and hatred towards brands.

Dear Apple, it’s always product before brand

The cosmetics example told us that brand perception matters for determining purchase intent. But is brand all that matters? Social media analysis of a popular brand like Apple would say no.

Few brands have the clout to keep consumers restlessly waiting in anticipation of their product releases and Apple is a brand that definitely enjoys that level of prestige.

When Apple released the iPhone 7 last year, it claimed that it was “the best iPhone it had ever made.” To which consumers said, “we respectfully disagree.”

Consumers waited with bated breath for the release and as shown in the visual, the conversation progressively increased since August 1st, and focused on several topics, such as the arrival of the iPhone 7, purchase intent of the new phone, as well as rumors about its features and design.

And on the day of the release, the social chatter peaked to more than 1.7 million posts. But the hype died soon after consumers evaluated the phone for its features.

One of the most controversial features of the new iPhone was the removing of the headphone jack, just like the leaked information had confirmed. The 43% negative sentiment came from the fact that most people thought that the AirPods will get easily lost since they are wireless.

Consumers were also upset about the the inability to use an auxiliary cord when playing music in places such as a car or a speaker that doesn’t support wireless connection.

The headphone issue was definitely a setback for Apple which couldn’t meet the hype with the product.

Another beef consumers had with the product was with the water-resistant feature on the phone. This generated a lot of negative conversation as people expected a waterproof phone, not just a water-resistant phone, especially since competitors, such as Samsung or LG, their devices have the ability to be submerged underwater, not just for accidental purposes. This debate led to a higher negative sentiment rather than an overall positive one.

The Apple example illustrates that even an authoritative brand like Apple cannot rely the good graces of its brand equity — if the product fails, purchases will too.

Conclusion

There are different approaches to determining consumers’ intention to buy a product — by identifying if there is a will to purchase, what factors will hinder the purchase and the weight brand perception carries against the product. Social media conversations can ascertain and quantify these factors for brands and help direct the course sales strategy should take.

See more examples of consumer insights that can help brands understand purchase intent in our Consumer Trends Report:

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