The way consumers shop for everyday products continues its transformation towards the Web. In 2008, online retail accounted for approximately 7% of total retail sales in the U.S, with 1.5% of consumer packaged goods (CPG) spending done on the Web.

In the future, your children will likely conduct the majority of their shopping online. While online shopping accounts for a modest percentage of today’s sales, it is growing rapidly – Nielsen estimates that online CPG sales alone increased 25-30% between 2004 and 2008. And there are compelling reasons to believe that growth will continue, as overall online sales are projected to increase almost 200 percent between 2008 and 2012.

Shopping Evolution Centers on Convenience, Choice and Value

Shopping has evolved along three dimensions, with each new phase increasing consumer convenience, choice and value – the three main reasons consumers shop online today. Online shopping redefines convenience and choice and equips consumers with unprecedented way to seek value.

Convenience – online is a simpler, faster, more hassle-free way to shop for frequently purchased products.

Choice – online offers more variety, which services like Peapod’s “endless aisles” clearly demonstrates.

Value – while value isn’t the primary reason most consumers shop for “everyday” products online today, it will become increasingly important as e-commerce becomes more mainstream. Tools to rapidly compare product prices already exist and online coupon sites have become the rage in the down economy.

Smaller, Niche Retailers Can Reap the Benefits of an Online Presence

Whether searching for solutions to a specific need, directly accessing retailer Web sites or deciding to click on an advertisement or link, consumers have far more control over what they are or are not exposed to online than offline. This offers smaller brands the opportunity to generate an online presence that is effectively larger than their big brand counterparts are, while serving up compelling messages and undercutting leading brand prices – all at the point of purchase.

Take the beauty care category as an example. Boutique retailers with fewer stores and lighter foot traffic than the large offline chains are as readily accessible on the Web as a Walmart or Target, which sometimes do not carry the leading offline beauty care brands on their Web sites.

What is interesting to note though, is that the online commercial challenge for leading consumer brands has less to do with the “long tail” than with the collapse of physical structures that literally help distance leading brands from smaller brands offline. It is not the number of brands available online that matters, but that there is less separation between them, which levels the playing fields, creating a flatter, broader marketplace for everyday brands.

To learn more about digital opportunities for leading brands, download Building Great Brands in the Digital Age: Guidelines for Developing winning Strategies.

What’s driving all the excitement and energy around “listening?” After all, the basic notion of “listening” – observing and interpreting naturally occurring consumer behavior – is not new. In fact, when the first professional market researchers sat in consumers’ living rooms and talked with them about their lives and their needs, they were engaging in “listening” as much as they were asking questions. These pioneers were literally the eyes and ears of their organizations. They brought consumers to life in ways that inspired a host of innovations, improving consumers’ lives and their businesses in the process.

Market research evolved to become a valuable source of information to drive decisions, even as the connection between researchers and consumers became more distant. In a slightly ironic twist, the social media revolution and 21st century technology afford modern-day practitioners the opportunity to routinely engage in “old school” hands-on research – or at least a form of it- by listening to consumers online.

P&G and Nielsen conducted a series of parallel studies to understand how learning gleaned from “listening” to online consumer conversations compares to survey-based findings (”asking”), and how to best use these techniques going forward.

What We Heard

Findings from “listening” and “asking” were largely consistent. Most importantly, in every case, “listening” added to our understanding in important ways, meaningfully enhancing insights, and sometimes suggesting a different course of action. For example, a survey on cloth diapering identified cost savings and sustainability as key reasons for using cloth diapers. Listening took this further, revealing the passion cloth-diapering moms have for “CD’ing,” and connecting it to core values around parenting. This led to a fundamentally different, more holistic understanding of cloth diapering than was available from survey results alone.

Listening consistently provided valuable depth and context… adding listening to the picture was a little like going from an X-ray to a CAT scan. Furthermore, listening revealed the level of consumer passion or intensity associated with a specific topic. Understanding “intensity” can be just as important to winning in the marketplace as understanding size or “magnitude,” suggesting the need to pursue survey-based and listening-based approaches (or hybrid methods) going forward.

To learn more about the findings from this joint study and how to use listening to enhance your understanding of the marketplace and bring consumers to life in your organization, please join us for a complimentary webinar on Friday, June 26, at 2:00 p.m. EDT.

Register for the Listening Vs. Asking webinar.

Listening And Social Networks

Jon Gibs, VP Media Analytics, will be facilitating a Listening Zone Learning Presentation focused on social networking, citing the importance of fostering a listening environment. The presentation will feature new data from Nielsen Online’s social networking study and demonstrate how brands are getting the most out of their listening programs. Gibs will also be giving a talk called: “Measuring Clutter: It Matters.” Read more about clutter here.

Additionally, David Wiesenfeld, VP Marketing Solutions, Nielsen Online and Kristin Bush – CMK Senior Manager, Digital Research, The Procter and Gamble Company will speak on “Listening vs. Asking: Contrasting Consumer-Generated Content and Surveys”

The Future Of Research And Consumer Trends

David Calhoun, Nielsen’s Chief Executive Office will participate in ”The Research Industry Vision,” a panel discussion of strategies to respond to research transformation over the next five years.

Paul Donato, Nielsen’s Chief Research Officer will present “The Media, The Consumer, The Economy,” which investigates how news reports about policy and the economy affect consumer confidence as well as how this information affects purchasing and entertainment decisions.

For a complete schedule of events and for streaming video of select events visit thearf.org.