A consumer in the swinging paleolithic era would have loved Amazon Prime, and the possibility of getting meat delivered to their cavestep, without the inconvenience of being eaten, beaten, dying of starvation or from exposure to the elements. It would have been a pretty compelling value proposition for $119 a year.
A caveman, we can say, had a very high level of “friction” in their product search and selection.
As time wore on and we moved out of the cave, this friction has decreased and our expectations have changed, impacting the ways we search and how we perceive products and brands.
A cave man’s product search was existential in nature: how do I get the items I need (food, fuel, tools) without unnecessary exposure to danger. Some of his considerations would have included:
- Safety: how can I safely get the thing I need?
- Distance and convenience: can I get it close by, and is it repeatable? If I go to the river to fish, will I be able to do the same tomorrow?
- Information and discoverability: low word (grunt?) of mouth-finding products limited to the cave man’s immediate group, bounded by limited communication skills.
Your Grandma’s Search: Information Asymmetry and The Emergence of Brands
With time and the increased ease of shopper mobility and product distribution, access to products increased and product messages through advertising emerged. Product selection usually came down largely to two sources of truth: advertising and its inherent bias towards making the sale, and “true” word of mouth, the quality of which being a function of social group size, composition and affinity to buy and discuss products. Selecting the best products often became a function of the quality of your social group.
As access to a greater breadth of products increased but unbiased product information remained limited, brands emerged as a shorthand to trust. It became important to be able to find the companies that would consistently deliver on their product’s promises. Similarly, merchant brands also became important, as the right merchant carrying the right products could be an effective shortcut to identifying quality product brands, while also limiting travel distances to acquire a variety of products.
Some characteristics of your Grandma’s Product Search:
- Access to information limited: word of mouth and circle of friends, product awareness from advertising
- Brands as trust marks and as a product selection shortcut (not just “product” brands, but merchant brands)
- Lack of options in individual product categories
- Distance & convenience: how can to conveniently get all of the products needed without unnecessary travel
Online Search: The Product Information Age and the Primacy of the Product
As commerce has come online, friction has declined. Now plenty of information exists on products, including what products are “best” in a category, in depth product reviews and product vs product comparisons, from a wide variety of online niche and broad-focus publishers and retailers. The challenge that remains is around information quality and whether the information source is reliable. No longer are brands as necessary as a vouch for product quality, as product information abundance and user reviews are enough to allow upstart brands to challenge incumbents.
At an IPO roadshow for Netscape, then CEO Jim Barksdale once told the assembled crowd that there are two ways to make money: bundling and unbundling Examples of this simple yet profound principle are abundant in the evolution of TV, Cable and streaming services, as well as in the unbundling of newspapers and their mixed offering of news, sports and classifieds by the internet, online media and easy access to specific topics of interest. In a slightly different take on bundling and unbundling, access to information has allowed products to unbundle from the umbrella of brands and stand on their own, based on the merits of the product itself. A good example of this are razors from Dollar Shave Club, a combination of quality, price point and the channels to evangelize directly to potential customers. Previously, Gillette had been the trusted brand, and consumers had some built in notion of the quality of the product based on the Gillette’s history making razors.
With the growth of e-commerce and affiliate marketing, finding information on products no longer poses the same challenge, rather the challenge becomes about trusting the information that is found. In the same way that the fake news phenomenon has made readers more suspicious of the news they consume, marketing dollar funded reviews and promotion methods have made users sceptical about where they buy and the information they use to make the purchase. This is one reason why user reviews are such a powerful force in getting consumers to click the buy button . Consumers are also increasingly looking to Youtube to find user reviews of products of interest to virtually “try before they buy”. Travel is a category where views of videos showcasing consumer experiences have grown by 600%.
Some Considerations in the Online Search Era:
- Product information trust: can I trust the information I’m seeing about products online?
- Transactional trust: will I be getting scammed, can I trust the seller/retailer?
- Delivery time: can I get this thing faster/more conveniently than brick and mortar, or the next online retailer
Product Search Next: Amazon, Commerce Search Consolidation and the Personalized Long-tail
Generally speaking, broader search on a product category, such as “how to choose___” or even “Best ___” is an upper-funnel activity establishing the initial consideration set, and often validated by looking at in-depth product reviews by merchants, trusted publishers or other users.
The majority of online publishers who review products are not the seller of record but instead rely on driving transactions elsewhere through affiliate marketing. The vast majority of those transactions occur through Amazon, who in turn, provide those publishers with affiliate revenue usually in the range of 5 to 10 percent of the value of the gross sale. Amazon currently serves lower funnel searches fairly well (particularly with user reviews) and the consumer behaviour of searching Amazon first is already present, as 49% of consumers already start their product searches directly on their platform. It stands to reason that Amazon, already owning product-level information and user reviews, will push up the funnel and bring some of these profits in house, targeting more broad based product and category searches through in house content production, including “best” product by category and product category explainer and “how to use” level. In effect, product search will continue to become “bundled” within Amazon, and it will become the default search destination for consumers at all stages of the purchase decision-making process.
At the same time, consumer product searches are always changing, and the once-contentious internet-era trade off between user data and personalization is morphing into the expectation of personalization everywhere. According to Google, mobile searches of “Best __for me” have grown by 60% in the past two years. Here, Amazon’s trove of data on search and purchase history, as well as it’s increased capacity to gather consumer information from voice platforms like Alexa, can help power some of these results. Clearly, there is a greater incentive for Amazon to gather consumer data outside of their current purview, including demographic, psychographic and social network data.
How to Avoid Being an E-Business Caveman…
What this means for your business depends on your business, but first and foremost, bad products can’t hide behind behind good brands and hope for sustained success in the future, which could have a bearing on budget tradeoffs between product development and marketing. Speaking of marketing, understanding how users are searching for your products online (and how that search is evolving) is critical for targeting, messaging and product development. In the age of product data transparency, it is important to know the product features that matter most to consumers and to focus your marketing efforts on extolling those product virtues. Finally, the segments your consumers are identifying with continue to fragment, and their expectations of how products fit in to their lives are increasing. There has never been a more important time to understand your consumers through research, data and insights, it will inform both your marketing and product development efforts, and ensure that your business has evolved while competitors may continue to hunt for scraps outside the cave.
