The technology, which enables organisations to identify those customers that are most likely to purchase a certain product or service based on their data and to tailor marketing campaigns exactly to those customers has created a difficult situation for consumer research companies.
The most popular example is probably the recommendation system of the ecommerce power house Amazon. Based on historic purchase data and product views of its customers, Amazon tries to predict what the customer will buy in the future. Analysis of millions of rich consumer data allows Amazon to conduct more personalised online marketing. Targeted customers, for example, receive e-mails with suggestions to check out products that are similar to the items they bought or recently looked for.
However, consumer research agencies won’t yet be made obsolete by this trend, according to Procurement Leaders’ digital marketing category report.
The majority of total purchases in the retail sector are still done offline. Therefore, most retailers still heavily rely on consumer research agencies in order to obtain valuable consumer data. Furthermore, online retailers require consumer research data to reach out for new customers.
Finally, having access to a massive amount of data is one thing, using the right data and interpreting that correctly is the other thing. Many companies are still not able to cope with their huge amount of data and struggle with setting up a predictive model that uses the data appropriately.
However, this trend can create a noticeable threat for consumer research agencies allowing buyers of those services to pull this lever in the negotiation.
Members with access to category reports can find further information on consumer research and digital marketing here.
Peter Lückert is research analyst for Procurement Leaders.
