The 4 top challenges and opportunities in market research industry
The fourth industrial revolution is here
According to Klaus Schwab and many other experts, we are entering the so-called “4th industrial revolution”:
“Of the many diverse and fascinating challenges we face today, the most intense and important is how to understand and shape the new technology revolution, which entails nothing less than a transformation of humankind. We are at the beginning of a revolution that is fundamentally changing the way we live, work, and relate to one another. In its scale, scope and complexity, what I consider to be the fourth industrial revolution is unlike anything humankind has experienced before.”
First paragraph of the book “The Fourth Industrial Revolution”.
Klaus Schwab, Founder of the World Economic Forum.
In preparation for this revolution, many companies have already started their digital transformation to be more competitive, which by definition supposes a deep change in organizations. The digital transformation is much more than just the acquisition of technology: it demands that we are up to speed on new technological advances and implement those that fulfill strategic objectives. In this sense, Microsoft remarks that the transformation must encompass four basic pillars: optimization of operations, empowerment of workers, achievement of higher engagement with clients, and transformation of products.
Digital transformation will have a great impact on all sectors, and market research is no exception. On one hand, market research must think about how to apply the technology within the sector. And on the other hand, it must address important challenges associated with digital transformation such as loss of exclusivity at the time of obtaining insights on the clients. Next, the biggest challenges and opportunities are explained in detail.
Challenge 1: On the optimization of operations
One of the clearest effects of digital transformation on the market research sector has been the optimization of data collection processes. Currently more than 56% of today´s market research has been digitized (digitization process).
In quantitative research, data compilation carried out with digital technology surpasses 70%, which has helped collect large amounts of data, reduce prices and times, and improve data quality. In qualitative research, there is a slightly growing interest in online communities, but this currently only represents 37% of data collection.
Regarding other research tools, there are no concrete data but, for example, typical neuromarketing techniques such as implicit response tests have been digitized and can already be taken online (learn more about neuromarketing techniques).
Nevertheless, technology can contribute even more to the sector, for example, through the automation of many operations required to carry out research. Although automation is already used for the development of graphics and infographics, in survey analysis, data analysis and analysis of social media, there is still a wide margin for automation and optimization of processes.
In this line, some experts estimate that 90% of the typical tasks carried out in market studies could be automated in 10 years [Dirk Huisman] and that the probability of teleoperators, data transcriptors and encoders disappearing is 99%, while the probabilities of interviewers and market research analysts disappearing are 94% and 61% respectively [Benedikt, C. y Osborne, M. A.].
How to make better use of technology to offer more reliable and cheaper market research that will not disappear along the way?
Challenge 2: On the empowerment of the worker
Regarding the possibility of empowering the employees, the market research industry, as other sectors, has adopted cloud and mobile devices/technologies that have helped researchers collaborate anywhere, anytime. However, market research is technologically behind in comparison with other industries and should be aware of some innovations that start to be a reality. For example:
The use of collaborative platforms to outsource specific and limited tasks to market research professionals located anywhere in the world.
The use of virtual reality (VR) to train human resource interviewers to be more empathic.
The use of artificial intelligence (AI) tools to help the researcher (learn more about artificial intelligence and feelings). It is especially interesting that ESOMAR has implemented an intelligent search tool ANA, to obtain 70-year data on scientific papers, videos and white papers, but ANA seems to remain underexplored and underutilized.
The use of new technologies, such as neurotechnology to improve cognitive performance of employees.
Being on the cutting edge and empowering employees is fundamental in the case of millennials, who do not accept to work in companies that are sub-optimal in this sense. Maybe this is why the data scientist is the most attractive and in-demand occupation of the 21st century, being much more attractive than the market researcher position, despite the fact that both professionals are responsible for obtaining actionable insights.
How to make use of technology to offer an attractive professional career and attract/retain talent in the industry?
Challenge 3: On how to connect with the client
During many years it has been said that “the customer is always right”. However the truth was that very few companies focused their strategy on the client. The digital transformation of the society has empowered the client and this has changed the strategy of companies, which now focus on creating customer experiences: rather than being only good practice, now it is mandatory to be “customer-centric”.
The companies are not only concerned on whether their product is going to be sufficiently liked and purchased, but they also know that connecting with the client is increasingly important and that if they do not project attractive values and personality, sales will be affected. This is an excellent opportunity for the market research firms, as now, more than ever, it is important to know the consumer. However, technological companies have also detected this necessity (and also business opportunity), and numerous Big Data solutions have started to emerge, along with DIY (do it yourself) solutions that enable data collection from clients, putting at risk the privileged position once occupied by the market research industry. Nowadays, traditional market research is no longer the only way to obtain consumer insights.
The development of Big data is unstoppable: real-time data that is currently already collected (such as the digital behavior of consumers) will be soon complemented by data from the Internet of Things IoT (information on how consumers relate to any object) and from the revolution of wearables with neurotechnology (information on the emotional and cognitive reactions of consumers). Regarding the latter, it will be very important to implement ethics to support the use of neurotechnology in our society.
How to coexist the new “parallel world” to market research created by Big Data and DIY?
Challenge 4: On how to transform products/services
The digital transformation of companies leads to indispensable innovation in the development of products and new business models. Highly technological startups have been converted into references to all types of companies. More specifically, the extremely popular Lean Startup methodology created by Eric Ries in 2011 is crucial to with traditional market research methods, as a tool to design new innovative products or business models.
According to Ries, companies must establish a market hypothesis, design a basic version of the product to validate the hypothesis (the so-called minimum viable product, MVP), place it in the hands of clients and target market, and then observe and learn whether the hypothesis was actually correct. Once there is sufficient and validated knowledge, this process is repeated with a new hypothesis. With this iterative process, business decision-making is agile and risks are reduced when launching innovative products because failures are detected early and can be corrected in time.
How to address the perception that market research is not compatible with agile methodologies and innovation?
Some additional opportunities, ideas and thoughts
Thanks to the artificial intelligence tool ANA, we have analyzed the information compiled by ESOMAR since January 2011 on the future of market research and we now share some ideas and new opportunities:
Industry must develop a more powerful brand identity.
High standards must be defended and valued, along with the rigorousness of industry and the capability of asking the right questions.
Innovation is mandatory and agility and intelligence must be added to processes in a proactive manner (it might be too late to do this later on…)
It is important to understand which research methodology is better for each specific problem: “What” versus “Why”.
It is necessary to find partners and generate collaborations that help us grow, adapt and learn. And as a result, offer more holistic investigation approaches.
Business and strategic recommendations must be made, based on the results of the research. The “must know” has to be separated from the “nice to know”. Focus on the message and not on data.
Therefore, the implementation of these ideas is absolutely mandatory for the market research sector to face the technological revolution that emerges, but it is still unknown whether this will be sufficient. The changes that will come in the following years are unpredictable.
These and many more ideas were debated in the digital research event La @ de AEDEMO, in which María López, Bitbrain’s CEO participated.