Tablets, Smartphones and other content rich devices are driving a global change in the attitude towards ownership, according to research from Mindshare, the global media agency network, with ‘profound implications for many industries’.
Almost 50% of consumers now download music or video content to a device at least once a week, with this behaviour growing by 30% in the last two years as more and more devices flood the market. At the same time those consumers that say they prefer to own music as opposed to having it in purely digital form are becoming the minority, with a 10% decrease in those who prefer ownership in the same period.
Taken together these two statistics, from Mindreader, Mindshare’s proprietary research tool, reveal a growing trend of ‘virtual ownership’ as we become more accustomed to not seeing the CDs or DVDs on the shelf, but instead enjoy the immediacy of on-demand and downloaded content. This is being fuelled by the proliferation in new devices, with The Consumer Electronics Show 2013 (CES) in Las Vegas set to be home to the launch of 20,000 new products this week from phones and tablets, to smart TVs and wearable technology.
Norm Johnston, Global Digital Leader Mindshare Worldwide, an expert in marketing both in the United States and the UK, believes that this trend will also have an impact on business marketing strategies. He said: “Perhaps unsurprisingly the love affair with new devices such as tablets and smartphones has led to a boost for the content industry – Comscore saw a 25% increase in sales of digital content and subscriptions last year, the highest growing category."
“We’ve already seen the expected Christmas Day downloading rush. Many people now give vouchers as last minute presents because Apps and digital content are instant – there is no supply chain, which suits today’s consumer who doesn’t want to wait for anything – making it the perfect last minute gift.”
The implications are huge for established businesses that deal in physical goods and services that could be delivered ‘virtually’. The recent acquisition of Zipcar, the membership-based car sharing business, by rental giant Avis highlights the seriousness with which established players are treating this trend, also showing how it lives beyond simply music and video.
Across Europe spending on all gifts is increasing, but 70 per cent of German consumers, for instance, were planning to buy Christmas gifts online, according to recent Ernst and Young research. In Asia, where online sales dominate but there is more caution with the economy remaining fragile, there trend of virtual ownership is also flourishing.
Gowthaman Ragothaman, CEO, South and Southeast Asia, believes this has had an impact on marketing in the region. He said: “The rising convergence of technology will ensure that digital gifts are increasingly popular. There is a growth in demand for iTunes gift cards and Amazon gift coupons and the younger generation send each other such gifts more than ever before.”
The increase of digital is not the end of the high street, though, with Norm Johnston offering words of reassurance for bricks and clicks retailers.
He added: “I would advise companies not to panic. Christmas is not a virtual holiday and the increase of digital consumption is merely a change in how consumers are finding, buying and having their gifts delivered. This means that an increasing focus on the consumer journey – from initial awareness, through to research and the decision to purchase – is required. Companies have to pay more attention to more different channels and in particular the role digital plays, but they should see it as an opportunity rather than a setback.”