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| NEWS : Papers : | |||
The Future of Market Research
The future of Market Research raises questions like - What will working in the industry be like in the future? What will the companies look like? Where will we be in the corporate food chain? Will we be at all? Some six years ago, we spoke at a market research conference on this very same topic. The market research industry at the time was two major players:
Then there were Australian affiliates of overseas companies which play a larger part today; and specialist/boutique companies. We talked about market research moving from being a cottage industry towards being a real business. We talked about some of the history: Entry barriers and competition Last 20 years:
Since then there have been many other mergers and acquisitions. Why did these things happen? And what did it mean for the future? Many companies when merged or taken over were trading at significant losses:
We saw the future as being driven by a greater focus on:
We also looked at suppliers, competitors, and alternatives or substitutes. Suppliers, you might ask? At the time, the audience was thinking, suppliers - do they really matter? As a researcher, aren't there more important things to think about? Who are they anyway? Suppliers are all those people and companies that enable the researcher to provide research on time as needed:
Today, suppliers are critical. Tomorrow, they will be more so! And just to make things really interesting, they may be our competitors, our partners, or our competitors' partners, or our owners. What about alternatives and substitutes? As an industry we have typically focussed on competitors and customers, and paid little attention to alternatives and substitutes. The obvious substitutes are ABS (Australian Bureau of Statistics), universities, and management consultants. Even more importantly, technology ® information systems, and information is real big business. We foreshadowed that data would be in abundance. The Internet would create the expectation of free information, and an ability to aggregate, analyse, and make sense of data, would be critical. We foreshadowed that more sophisticated data management systems would mean that increasingly, our clients would be able to glean what they need to know about their customers from their own systems. We were right about everything except the timing. Relative to other industries, the changes to our own industry have been gentle. We are very lucky we have been able to watch other industries, often our clients, as they have been transformed. Of particular relevance here is the insight of Andrew Grove, President and CEO of Intel, in his recently published book "Only the Paranoid Survive". He says "There are moments in any business when massive change occurs, when all the rules of business shift fast, furiously and forever". He calls such moments "strategic inflection points". A strategic inflection point can be set off by almost anything:
We believe today this industry - the market research industry - is at a strategic inflection point. The world of market research is on the cusp of a new era. This new era is one which will be defined by globalisation, technology and communication, reduction in traditional boundaries, and a strategic focus on the use of information. Globalisation means that efficient supply is increasingly taking precedence over geographic proximity. Global alignments are increasingly impacting on all industries including our own, and that of our clients. The virtual organisation has become a reality in technology and information based industries. Technology has increased the precision and speed with which we do almost everything - from the precision with which data can be captured, analysed, reported and disseminated, and the speed with which a highway or a car must be built, to the speed with which new technology itself can be created. Technology has also increased both the speed and complexity with which information can be transferred and processed with dramatic impacts on the speed of communication. If globalisation has removed or weakened traditional geographic boundaries, the combined impact of globalisation and communications/technology has weakened the boundaries which separated industries. Eg, a credit card is now in many ways doing what a bank does; a utility company which installs a direct line to its customers is potentially in the business of telephony; a manufacturer plus internet can be a retailer; any company with a website can be a researcher; any company with a customer base can be a researcher. There are opportunities and threats in abundance. We believe today this industry - the market research industry - is at a strategic inflection point. Today more so than ever before the industry must develop its own way. Grove points out that, managed wrongly, a strategic inflection point can mean the end of the game. Managed right, it can turn into a powerful force. Clearly, we all want to manage it right. So how do we go forward? The value of a market research company, and therefore its survival, has always been dependent on many factors, such as:
Ever-improving technology and communication is increasing the efficiency of data capture, analysis and reporting. We are seeing new methods of surveying including CAPI, internet, soon WAP, ever increasing sophistication in computer modelling, data, data mining, etc, larger more cost effective database systems. This kind of change, continuous improvement, has itself become almost a constant. And most of us are going with the flow. But as we've already said, the changes so far have been gentle. The .coms haven't quite made it into our business yet. As they have focussed dollars and energy as chasing clicks, they have not yet turned to the data analysis - the value of the data that happens to sit behind the visitation and transactions remains potential. What about when they move? Our clients - banks, insurance companies, telcos, retailers, are only just on the brink of where they can truly get valuable information from their customer databases. They will be dealing with a census of their customers - so many of our valued sampling, weighting and projecting skills will be redundant. We as researchers will need to be very aware - of where our traditional skills are no longer relevant, and where they are relevant. A lot of what we have traditionally undertaken as projects will be test ed in real life. For instance, with Internet advertising/Internet offers - you literally watch it happen. We will need to change what we see as our business. For instance, we used to articulate our business as: Our core activity is asking questions, counting, sorting and analysing the answers and reporting our findings. Clearly, if that's our business - we won't be around for long. We as researchers cannot be "precious". The boundaries will blur. And they will blur in areas that we as researchers hold "sacred", eg, direct marketing and interviewing. Telemarketing companies will do a great job of conducting surveys - and they have scale. We must be willing to embrace uncertainty, lead the industry (or at least go with the flow) and continually learn. And remember that it's times like these when there are threats around every corner - that there are also opportunities in abundance. |
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