THE BLOG
12/11/2012 05:44 pm ET Updated Feb 10, 2013

The Rise of the Connected Consumer

Four years ago, I witnessed an intriguing development. I'd seen many layoffs working at a digital agency, but this time the agency was replacing those roles with new roles for social media experts. For me, social media was a fad and not something I thought much about. I didn't understand why the agency was hiring people who were "fooling around on Facebook" instead of doing real work. Ironically, it took leaving the agency and re-entering academia to get a Ph.D. to understand why this shift was happening. Embedding myself with a student population helped me gain perspective. The agency was right.

When I returned to school in 2010, I saw undergrads constantly checking their phones between classes. That year, students mostly texted one another using simple feature phones. As semesters passed, updating your Facebook status on a smartphones, and checking others' status became the norm.

Clearly, social and mobile technologies are fundamentally changing the way people communicate and share with their peers. No longer are fashion trends set in the hallways; they are decided on Facebook Newsfeeds and Twitter timelines. The intersection of mobile and social technologies has given rise to the connected consumer, and I've found myself in the perfect laboratory to study them.

The Numbers

Facebook recently announced they have more than one billion active users, half of which check into the community at least once a day. Students checking Facebook between classes are now the majority. Over half of Facebook users access Facebook on a mobile device, and they are twice as active as other internet users. Heck, even my mother joined the site, which she fondly refers to as her "Face-Page." Granted, I'm giving sites like Pinterest, Linkedin, and Twitter the short shrift here, because Facebook's numbers are amazing.

In 2010, when I asked students whether they carried a smartphone, only about a quarter raised their hands. Now, most students in marketing classes carry smartphones, which account for half of all phones purchased. Feature phones, flip phones and weird slider bar form factors that had been popular for years are receding as people increasing rely on instant access to information and social networks to solicit and share opinions before, during, and after purchase/consumption experiences. This was the start of some remarkable research.

Location and Social Sharing

The emergence of location and social sharing proliferated with the connected consumer. Ten years ago, marketing scholars declared location (aka "Place" -- the second of four "P"s in the marketing mix) was dead. The internet was seen as the great equalizer. Someone in Lubbock, Texas could sell his product to a consumer in New Zealand (and vice versa). Since then, smartphone GPS systems and programs like Foursquare have made location based marketing effective again. Instead of sharing photos when we return from vacation, we can share them as they happen on our trips (or at dinner, or at the mall, or anywhere else we deem worthy). In fact, for some people, connecting while on the go has become an addiction. Foursquare recently announced they reached 6 billion check-ins and more than 1 million merchants offering location-based incentives. Variants such as Foodspotting for food, Goodreads for books, and GetGlue for TV and movies further prove that people LOVE sharing their daily consumption in real-time.

Watch this trend -- It's just beginning to take hold!

Marketers can target consumers based on their exact location and their consumption behavior. Has a consumer repeatedly checked into a location? Then incentivize their behavior to complete an action while they're in that spot, or point out a nearby deal.

Research & BusinessNext Social

As part of my Ph.D., I am undertaking an immersive look at mobile technology, social media usage factors and the psychographics of the connected consumer. What this will do is provide much needed new research to academia on these phenomena and provide crucial consumer research to marketers struggling to understand the connected consumer.

Although I have months of number crunching ahead of me, I can make a few initial observations. Companies like Betabrand and Fab.com are already capturing the attention of the connected consumer. Betabrand, an innovative clothing company in San Francisco, harnesses the power of its brand advocates to crowd source Web imagery. The company rewards fans for submitting photos to the site featuring themselves in Betabrand clothing. Betabrand then sends users a link which leads to a page that features the customer's photo and a generous discount. On average, the link to the page with the user submitted photo gets passed along to 20 friends, and 60 percent of those who upload a photo and receive the discount code make a purchase within 24 hours! In the process, the company has driven word of mouth marketing, made additional sales, and sourced new images for their marketing, all of which is an authentic way to reward existing customers and recruit new raving fans.

Similarly, Fab.com has taken off in the social shopping space. They too reward users for recruiting new members. What's unique about Fab.com is they allow customers to show off their individual tastes on their Facebook timeline, with a dedicated content section featuring their Fab acquisitions. With a unique and quirky product mix, Fab.com allows connected consumers to become design mavens; seamlessly sharing on Facebook allows them to influence their friends instantly.

Smart brands will follow the lead of Fab.com and Betabrand in deputizing the connected consumer to share their unique brand messages. Firms need to make it simple and provide a compelling reason (discounts, rewards, recognition) for style mavens to share their unique purchases with friends and fans. When executed in a seamless, authentic way, the connected consumer's shared purchases can become powerful word of mouth marketing. And in today's crowded marketing space, word of mouth wins.

This post is part of a series co-produced by The Huffington Post and Blogworld, in conjunction with
the latter's NMX BusinessNext Social 2013. That event will feature some of the world's leading social-
business luminaries and influencers, each of whom will be speaking at the event to provide an up-close
look at how the world's most successful businesses harness the power of social.