New Deloitte Study Shows Inflection Point for Consumer Products Industry; Companies Must Learn to Compete in a More Transparent Age New Technologies Provide Consumers with a Wealth of Information to Make

Purchase Decisions, While Also Empowering Them to Shape Reputations of

Companies and Brands



    NEW YORK, Oct. 1 /PRNewswire/ -- Enabled by new information
 technologies, consumers have real-time access to information, insight and
 analysis, giving them an unprecedented arsenal to help make purchase
 decisions. At the same time, these technologies provide a voice and a venue
 for anyone with something to say, allowing individuals to shape reputations
 of consumer companies and their products, according to a new Deloitte
 study.
     To build their knowledge arsenals, consumers are turning to online
 reviews in large numbers -- and those reviews are having a considerable
 impact on purchase decisions. According to a recent survey by Deloitte's
 Consumer Products group, almost two-thirds (62 percent) of consumers read
 consumer- written product reviews on the Internet. Of these, more than
 eight in 10 (82 percent) say their purchase decisions have been directly
 influenced by the reviews, either influencing them to buy a different
 product than the one they had originally been thinking about purchasing or
 confirming the original purchase intention. Interestingly, while the
 percentages were slightly higher for the younger generations, all age
 groups are reading and acting on online reviews at significant rates. In
 addition, the reach of consumer reviews isn't limited to the online world;
 seven in 10 (69 percent) consumers who read reviews share them with
 friends, family or colleagues, thus amplifying their impact.
     "This increasing market transparency can adversely impact the margins,
 market share and brand equity of consumer products companies," said Pat
 Conroy, vice chairman and US consumer products group leader at Deloitte &
 Touche USA LLP. "In the past, clever marketers and advertisers shaped
 brands, but now consumers are increasingly empowered, everyone has a voice,
 and information and opinions are instantly dispersed. Consumer product
 companies need to determine how best to capitalize on this new landscape.
 Clearly, there will be consequences for those who don't."
     While the survey found that reputation and word of mouth -- both
 factors that are greatly influenced by online reviews -- are the key
 factors that influence consumers' decisions to purchase a new product or
 brand, many other factors also play a significant role. "Better for you"
 ingredients or components, eco-friendly usage, and sourcing were each cited
 by approximately four in 10 consumers as important factors in making
 purchase decisions, while eco-friendly production and/or packaging was
 cited by more than one-third (35 percent). "Information about products,
 pricing, ingredients and sourcing, as well as corporate practices around
 labor, environment, healthcare and other issues is now instantaneously
 available to potential customers -- and, increasingly, consumers are making
 decisions based on this information," commented Conroy.
     Recent recalls of imported products are also contributing to this
 trend: one-third of survey respondents (33 percent) said that, as a result
 of recent recalls, they now look for more information on the
 packaging/product and almost one in five (18 percent) said they now look
 for more information on the Internet or in other locations.
     "As knowledge proliferates, there is a tendency for products to
 commoditize," remarked Conroy. "In order to successfully compete, it's
 imperative for consumer brands to build and maintain their images, create
 differentiation, and enhance loyalty. For example, consumer product
 companies with exemplary supply chains can achieve differentiation by
 making their processes more transparent. Embracing higher-than-required
 quality and safety standards can reassure customers and built trust. And
 co-opting customers to create value with the company can create not only
 loyal customers, but also brand emissaries."
     About the Survey
     The survey was commissioned by Deloitte & Touche USA LLP and conducted
 online by an independent research company between August 28 and September
 6, 2007. The survey polled a sample of 3,331 consumers over the age of 16.
 The margin of error for the entire sample is plus or minus two percentage
 points.
     For more information about Deloitte's Consumer Products group, please
 visit www.deloitte.com/us/cpg.
     About Deloitte
     Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss
 Verein, its member firms and their respective subsidiaries and affiliates.
 As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any
 of its member firms has any liability for each other's acts or omissions.
 Each of the member firms is a separate and independent legal entity
 operating under the names "Deloitte", "Deloitte & Touche", "Deloitte Touche
 Tohmatsu" or other related names. Services are provided by the member firms
 or their subsidiaries or affiliates and not by the Deloitte Touche Tohmatsu
 Verein.
     Deloitte & Touche USA LLP is the US member firm of Deloitte Touche
 Tohmatsu. In the United States, services are provided by the subsidiaries
 of Deloitte & Touche USA LLP (Deloitte & Touche LLP, Deloitte Consulting
 LLP, Deloitte Financial Advisory Services LLP, Deloitte Tax LLP and their
 subsidiaries), and not by Deloitte & Touche USA LLP.
 
 

SOURCE Deloitte Services LP

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