September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 1

Trends Tracker

Introduction

Welcome to Blueshift Research’s and SurveyMonkey’s third edition of Trends Tracker. This survey tracks opinions and actions

on roughly 20 of what we think are the most pressing issues affecting U.S. consumers and their choices, which in turn could

influence business and investment theses. We monitor trends on a monthly basis and will update our questions with new

issues that may emerge from Blueshift’s research and observations.

This month’s survey comprised 1,062 respondents who offer a general sample of the U.S. public. SurveyMonkey utilizes U.S.

Census data to balance the respondents by gender and age so that the sample aligns with the general population.

After researching multiple trends in previous months, we decided to remove two questions to make room for others that

address more pressing matters in emerging or long-standing markets. We eliminated questions specifically about Facebook

usage and consumers’ knowledge of Facebook’s social experiments, after seeing that the rate of decline in Facebook usage

was the same whether or not respondents knew about the site’s experiments. (Data about Facebook still can be derived from

our broad social media question.) We then added questions that discuss review sites, the consumption of entertainment in

cars, and wireless carriers.

Trend Findings

1. Our first hot-button topic of this month is the ever-evolving world of mobile and digital wallets, which we started tracking

in July. This month we saw adoption skyrocket 26.5 percentage points compared with August, possibly because we

offered examples to our respondents or because of the entrance of Apple Inc. (AAPL) and others into the market. The

adoption increase was led by our younger respondents. Apple’s iPhone 6 and 6 Plus phones offer NFC chips for easier

and faster adoption of mobile wallets, something the sector has been missing. We will see in the coming months whether

Apple Pay takes the market to new heights.

o We saw adoption of mobile wallets rise to 36.5% among our respondents, up from 26.5 percentage points

compared with August.

2. We also delved into the consumption of entertainment in cars, including built-in infotainment systems, traditional radio,

smartphones and satellite radio. We found a market dominated by traditional radio, with smartphone and satellite radio

tied for second place. Embedded systems are not being utilized as much, and received even fewer responses than the

option of not using any form of in-car entertainment. Smartphone use and embedded systems are more appealing to

younger drivers, while satellite radio is used more often by older and higher-income drivers. Many new embedded

features and apps are being rolled out, and SiriusXM Holding Inc. (SIRI) is using enhanced marketing strategies, making

the car a key battleground in the years to come.

o 53.9% of respondents listen to traditional radio in the car. Satellite radio and smartphone use captured 14%

each. Embedded systems brought up the rear with 4.1%, lower than the percentage of respondents who said

they do not consume entertainment in their vehicle.

3. Our final new trend was the use and trust of review sites. Yelp Inc. (YELP) recently won a court case to legally change

reviews and ratings on merchants for money, a major change in this consumer-based review sector. The case was

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 2

decided while our respondents were taking the survey, but we found that Google Inc. (GOOG/GOOGL) topped the list of

most trusted review sites, followed by Yelp and then Angie’s List Inc. (ANGI). Yelp and Google, which are free, attract

younger users, while subscription-based Angie’s List is more popular among our older respondents.

o Google topped all review sites, with 35.7% of respondents trusting its reviews the most. Yelp was in second

(25.1%) and was followed by Angie’s List (17.8%).

Topics

1) Adoption of digital and mobile wallet grows.

After providing our respondents with some examples of digital and mobile wallets, we saw a tremendous increase in their

reports of adopting and using such services. This also could be due to some of the changes in the market, most notably the

entrance of Apple Inc. (AAPL) and initiatives by eBay Inc.’s (EBAY) PayPal to include one-touch payments and Bitcoin into its

services. Share is constantly shifting in this market, which has no clear winner. PayPal may be challenged by Apple’s massive

following; its 12 well-known retail partners, including Walgreens, CVS, Target, Staples, McDonald’s, Sephora, Starbucks, and

Groupon; and the addition of the NFC chip in the new iPhone 6. Apple’s entry into the market could give digital and mobile

wallet adoption the push needed to become a regular payment option.

Have you used a digital or mobile wallet in the last month?

• Our digital and mobile wallet examples this month may be a major part of the 36.5% increase in adoption among

respondents, up 26.5 percentage points compared with August. However, the rise also could be due to some new entries

into the market. We will monitor the sustainability of this jump in adoption.

• The trend continues to be led by our youngest demographic and then tappers off among our older respondents.

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 3

23.4%

9.2%

6.0%

4.9%

21.2%

14.5%

5.5%

5.6%

18-29

30-44

45-60

60+

Age: Mobile Wallet Adopters

July Aug

3.6% 4.5% 1.7% 1.4%

88.8%

2.7% 3.4% 2.9% 0.9%

90.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

Yes, on regularbasis

Yes, more thanonce

Yes, once Just signed upand started

No

July Aug

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2) Traditional radio, smartphone and satellite radio all outpace embedded infotainment systems.

After initializing a pending report in which consumer adoption of embedded auto infotainment systems was discussed,

Blueshift decided to track which form of entertainment is winning over car owners. Traditional radio sits atop the car

entertainment throne, followed by satellite radio, such as SiriusXM, and smartphones, which are tied. Embedded car systems

received even fewer responses than even opting for no form of entertainment. Embedded system makers hope new feature

capabilities like Wi-Fi, apps and navigation will take off and meet estimates of 100% of connected cars by 2025. Adoption of

embedded systems will remain slow as long as smartphone apps produce better quality. Satellite radio continues to add

subscriptions through additional channels as well as “live” concerts.

How do you consume most of your entertainment in your car?

• Traditional radio still dominates respondents’ preferred method. Satellite radio and smartphone use each captured 14%.

Embedded systems brought up the rear with 4.1%, lower than the number of respondents who said they do not consume

entertainment in their vehicle.

• Smartphone use and embedded systems are more enticing to younger drivers, while satellite radio appeals more to older

and higher-income drivers.

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 5

3) Consumers trust Google over Yelp and Angie’s List.

Google topped the list of respondents’ preferred review sites, followed by Yelp and Angie’s List. Google and Yelp both

attracted younger respondents, which may bode well for the sites moving forward. Angie’s List was used most by those 60

and older, possibly because it is a subscription service. Yelp recently won a court case to legally be allowed to change reviews

and ratings on merchant sites for money, calling each review’s authenticity into question. We will follow the effects these

rulings have on consumers’ use of Yelp.

Which review site do you trust the most for reviews on merchants?

• Google topped all review sites, with 35.7% of respondents trusting it the most. Yelp was in second (25.1%), followed by

Angie’s List (17.8%). Both Google and Yelp are free to use, while Angie’s List users must pay for the service. Yelp and

Google attract younger users, while Angie’s List was more popular among an older demographic.

September 2014

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4) Verizon edges out AT&T for wireless carrier crown.

The wireless carrier market, our third new topic this month, has undergone rapid change as companies drop multiyear

agreements and add no-strings-attached plans. Still, Verizon Communications Inc. (VZ) and AT&T Inc. (T) remain at the top

above a slew of budding competition. AT&T is partnering with the Boy Scouts of America to build a loyal following. Meanwhile,

Sprint Corp. (S) and T-Mobile U.S. Inc. (TMUS) are rapidly cutting prices; Sprint also is upping its marketing and promotional

activity. Blueshift observed a large promotional push through billboards, stands, and sign twirlers for non-contract phones

through T-Mobile’s Metro PCS and others in Portland, OR. These lower-priced phones and contracts may be sandwiching

Sprint and T-Mobile between lower-cost and high-quality wireless carriers.

Who is your current wireless carrier?

• Verizon and AT&T dominated respondents’ wireless carrier choices, with 35.7% and 31.7% of the market. They

significantly outpaced T-Mobile and Sprint, which only captured 8% and 8.1% of the market.

5) GMO opposition strengthens and calls for GMO labeling.

Opposition to GMO foods continues to grow among those who do not buy GMO foods, the largest group, and even those who

still purchase GMO products. Older generations are leading the charge against buying GMOs. Most respondents (81.4%)

agree that GMO foods should be labeled. Oregon and Colorado both vote on GMO labeling in November, and support for the

bills is building. A poll in July indicated that 77% of Oregon voters support the measure, while in Colorado another poll

revealed 75% support. However, lobbyists against such labeling efforts, including those representing The Coca-Cola Co. (KO),

PepsiCo Inc. (PEP), Monsanto Co. (MON), and E.I. Du Pont de Nemours and Co. (DD), have tripled spending to $27.5 million

year to year compared with those lobbying for GMO labeling efforts, which have spent $1.9 million. This spending influx could

sway the 35% of consumers who are indifferent.

35.7%

31.7%

8.0% 8.1%

1.5% 0.7% 0.6%2.3% 1.7% 1.4% 0.8% 0.9%

4.1%2.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Verizon AT&T T-Mobile Sprint MetroPCS

BoostMobile

Cricket VirginMobile

TracFone StraightTalk

ConsumerCellular

U.S.Cellular

None Other

September

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 7

36.9%

33.6%

39.4%

31.6%

33.6%

32.9%

31.0%

36.7%

31.5%

30.5%

29.2%

35.7%

35.0%

23.9%

22.3%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Household Income: Opposed, don't buy

July Aug Sept

15.1%

32.6%

40.2%

47.7%

23.7%

36.3%

36.8%

37.7%

22.10%

32%

33%

38.40%

18-29

30-44

45-60

60+

Age: Opposed, don't buy

July Aug Sept

Are you opposed to buying genetically modified foods?

• Respondents still largely oppose GMO foods (55.5%), with 34.7% of those making an effort not to buy the modified

products. These figures grew in percentage points during the past two months. Still, GMO foods continue to have a

market, with 35.3% of respondents remaining indifferent on the subject.

• Older respondents were more likely to oppose and not buy GMO foods than their younger counterparts.

• The higher price of organic foods is not stopping low-income families from purchasing them. Roughly one-third of

respondents in all income levels reported being opposed to GMO foods and not purchasing the products.

Should GMO foods be labeled?

• For the third straight month, most respondents agreed that GMO foods should be labeled. 81.4% were in favor of

labeling, a 2-percentage point drop from prior months. This month we saw a lower percentage of respondents ages 18 to

29 who were in favor of labeling (74.3%) than in August (78%).

31.5%

18.1%

25.4% 25.0%

34.0%

19.0%

8.7%

38.3%34.7%

20.8%

9.2%

35.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

Opposed, and I don't buy them Opposed, but I buy themanyway

In favor, and I buy them Indifferent

July Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 8

6) Solar power interest rebounds.

Interest in solar power rebounded this month after taking a slight dip in August. The continued interest among respondents

age 30 to 44 years old and with high and low incomes alike are fueling the adoption. Solar power will become more readily

available and cost-efficient as new innovations take shape, such as printable solar cells. Also, Mosaic Inc. is offering no-

money-down loans to install solar panels in California and is increasing awareness through its hashtag #PutSolarOnIt. Solar

Energy World already is reaping the benefits of increased interest by topping installation charts in Maryland and ranks 18th

out of 400 for installations in the United States and Canada.

However, Wisconsin’s utility We Energies is trying to pass an initiative to raise fixed charges for electric bills and to tax

consumers who generate their own energy through solar panels. This new tax, if passed, could hinder solar growth in

Wisconsin and promote similar measures from other utilities to regain losses to solar energy.

How likely are you to adopt solar power in your home during the next six months?

• After seeing a dip in the number of consumers likely to adopt solar in our August tracker, respondents this month

seemingly regained their enthusiasm. 33.1% said they already have adopted solar power in their homes or were likely to

adopt during the next six months, with roughly half of those consumers being slightly likely.

• Interest has consistently risen during the past two months for all age groups except those 60 and older. Interest also

increased in all household incomes except the highest income level ($150,000 or more), which took a slight 2-

percentage point dip.

82.0%

3.7%

14.3%

83.1%

4.0%13.0%

81.4%

3.6%

15.0%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Yes No Indifferent

July Aug Sept

3.0% 2.1% 4.8%8.2%

16.8%

65.1%

1.70% 2.50% 3.80%7.20%

15.70%

69.20%

3.20% 2.40% 3.30% 6.50%

17.70%

66.90%

0.0%

20.0%

40.0%

60.0%

80.0%

I already have solarpanels

Extremely likely Very likely Moderately likely Slightly likely Not at all likely

July Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 9

35.1%

31.0%

34.3%

34.5%

39.3%

28.8%

26.8%

27.8%

31.0%

41.9%

42.5%

36.8%

35.0%

33.4%

35.9%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Household Income: Likely to Adopt

July Aug Sept

34.9%

37.9%

33.8%

28.0%

32.6%

35.5%

25.3%

30.6%

37.20%

34%

41%

27.20%

18-29

30-44

45-60

60+

Age: : Likely to Adopt

July Aug Sept

7) Support remains high for the legalization of recreational marijuana.

Our respondents have consistently supported the legalization of recreational marijuana use during the past three months.

Other states are seeing Colorado’s tremendous tax revenue gains from its legalization and want part of the action. Some

Oregon cities already are trying to enact bills to gain sales tax on marijuana before the state’s voters decide on the issue.

Senator Liz Krueger, D-New York, resubmitted an edited version of a bill to make recreational marijuana use legal later, while

Philadelphia just became the largest city to pass a bill to decriminalize marijuana.

What should the current law be regarding marijuana?

• The desire for marijuana legalization has been a consistent trend during the past few months. This month 42.4% of

respondents support the drug’s legalization. Younger respondents led the charge (47.7%) while those 60 and older were

less likely to back legalization.

42.5%

20.5%

23.7%

6.5% 6.7%

41.7%

23.3% 24.5%

5.8% 4.7%

42.4%

22.3%20.8%

7.1% 7.4%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Completely legal Medical use only Controlled on a state-by-state basis

Illegal with lowpunishments

Illegal will highpunishments

July Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 10

41.4%

40.0%

46.8%

42.9%

42.1%

49.3%

45.8%

40.6%

45.7%

48.6%

53.3%

50.0%

40.4%

39.4%

41.7%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Household Income: Legalization

July Aug Sept

47.7%

44.8%

43.1%

35%

51.2%

46.2%

37.2%

36.6%

48.1%

45.4%

43.3%

36.2%

18-29

30-44

45-60

60+

Age: Legalization

July Aug Sept

8) Cord cutting continues to eat away at cable subscriptions.

Cord cutting continues to grow at a rate of 1% a month, with respondents in all age groups reporting a decline in their use of

cable services compared with August. Dwindling cable subscriptions may begin to fall at an increased rate because of threats

like Roku Inc.’s partnership with TCL Corp. (SHE:000100) and Hisense Electric Co. Ltd. (SHA:600060) that will release low-

priced smart TVs with a simple search engine and streaming from such sites as Netflix Inc. (NFLX), Hulu LLC and Amazon.

Time Warner Inc. (TWX) has taken notice and is working on a cheaper cable package with just a few channels and HBO, which

it will test with broadband Internet users. Also, rumors have emerged that Time Warner’s HBO Go could become an a la carte

subscription channel. Verizon is planning to launch an Internet-cable service in which users would pay only for their desired

channels. Meanwhile, Sony Corp. (TYO:6758) and Viacom Inc. (VIA) are teaming up to launch an online TV initiative that would

give subscribers 22 Viacom networks.

Do you use cable in your household?

• Cable use continues to dwindle as consumers jump ship at a rate of 1% a month. This month we have seen the largest

number of respondents who have canceled their cable subscription (19.5%) and the lowest number of those with basic

cable (34.5%), 3 percentage points lower than in previous months.

• Subscribers ages 45 to 60 are keeping their cable and add-on services, while roughly 20% of respondents in all other age

groups abandoned their TV services more than a month ago.

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 11

9) Electronic cigarettes are hindering traditional cigarette sales growth.

Most of our respondents do not smoke tobacco, but those who do are decreasing their use of traditional cigarettes and

beginning to adopt electronic cigarettes, or e-cigs or vaping. Younger and lower-income respondents, the group most likely to

smoke tobacco, are consuming e-cigs faster than any other group. E-cig use in teens increased from 79,000 in 2011 to more

than 263,000 in 2013, which prompted the creation of groups to lobby for regulating these devices. Tobacco companies like

Reynolds American Inc.’s (RAI) R.J. Reynolds view e-cigs a threat and are calling for a ban. Vaping has quickly moved away

from manufactured e-cigs, which tobacco companies had invested in, to customizable apparatuses that use unregulated

nicotine liquid sold in vapor shops. This trend could be severely affected by any ban or regulation placed upon the industry

and could stifle e-cig adoption.

How do you smoke most of your tobacco?

29.9%

37.0%

13.1%

1.2%

18.7%

32.4%

37.7%

12.8%

0.8%

16.3%

32.2%34.5%

12.8%

1.1%

19.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Yes, including add onservices like HBO

Yes, just basic service No, I have never hadcable

No, I canceled my cablesubscription in past

month

No, I canceled my cablesubscription more than a

month ago

July Aug Sept

19.7%

9.6%

9.6%

11.9%

20.0%

14.5%

7.7%

10.5%

22.50%

11.90%

12.70%

7.10%

18-29

30-44

45-60

60+

Age: Never Had Cable

July Aug Sept

23.4%

33.3%

40.9%

30.8%

25.6%

29.4%

31.9%

41.5%

17.3%

31.2%

31.3%

36.9%

18-29

30-44

45-60

60+

Age: Add-on Services

July Aug Sept

20.2%

24.1%

15.0%

19.6%

15.8%

22.1%

14.0%

13.2%

20.4%

19.6%

19.5%

17.0%

18-29

30-44

45-60

60+

Age: Canceled Subscription

July Aug Sept

September 2014

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66.9%

8.8% 6.6%

18.2%

62.4%

14.0%

7.0%

16.6%

Percent of Just Tobacco Smokers

Aug Sept

• Only 15.7% of our respondents smoke a form of tobacco. Of those, cigarettes remain the primary form of tobacco

consumption, but this month we saw a rise in e-cig usage that was closing in on respondents’ cigar usage.

• Tobacco users ages 18 to 29 were the most likely to use e-cigs, almost twice the percentage as in August.

• Again, lower-income households were more likely to adopt the use of e-cigs than their higher-income counterparts.

10) Wearable technology interest rises, but adoption at a standstill.

Interest in wearable technology rose since August, but consumers remain slow to adopt the new technologies. Blueshift’s

recent wearable technology report revealed that businesses are reaping the benefits of the first wave of wearable

technologies. This market is predicted to reach $8.36 billion by 2018, but adoption has been slow due to the items’ high

prices. Many wearables have flooded the market, including in fashion shows, being knitted within fabrics, and in Ralph Lauren

12.1%

1.6% 1.2% 3.3%

81.9%

9.8%

2.2% 1.1% 2.6%

84.3%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

Cigarettes Electroniccigarette (ecig)

or vaporizer

Hookah Cigars I do not smokeTobacco

Aug Sept

17.9%

17.2%

17.1%

10.8%

23.3%

19.9%

19.0%

11.3%

18-29

30-44

45-60

60+

Age: Smoke Tobacco

Aug Sept

4.1%

0.8%

2.1%

1.5%

2.3%

1.9%

1.4%

0.8%

18-29

30-44

45-60

60+

Age: Ecig/Vapor

Aug Sept

23.4%

14.2%

15.2%

14.7%

15.9%

27.4%

26.1%

19.3%

17.9%

10.5%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Smoke Tobacco

Aug Sept

3.6%

2.6%

1.7%

1.7%

1.9%

5.5%

0.0%

1.5%

2.7%

0.0%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Ecig/Vapor

Aug Sept

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48.7%

48.3%

40.9%

28.9%

51.6%

42.4%

28.8%

30.2%

18-29

30-44

45-60

60+

Age: Likely to Adopt

Aug Sept

shirts, but the biggest entry was just announced: the Apple Watch, which will enter the market in 2015. As more options reach

the market, prices will drop and adoption will be able to catch up with consumer interest.

How likely are you to adopt wearable technology in the next three months?

• We saw a 3-percentage point increase in respondents’ interest in adopting wearable technology in the next three months.

The shift was most likely caused by respondents ages 30 to 60 being interested in healthcare monitoring technology that

is emerging on the market. Also, consumers now have many more wearable options.

• This market will be a key area of focus for our reports. We will pay close attention to the Apple Watch, which has not even

been released but already has drawn considerable attention to the sector.

11) Local grocery store chains dominate the grocery sector.

Local grocery store chains continue to control the grocery industry, while big-box stores have lost some ground and specialty

stores experienced 1-percentage point increase compared with August. Each sector is using different strategies to attract

customers. The Kroger Co. (KR) now offers an online ordering system acquired in its purchase of Harris Teeter stores. Whole

Foods Market Inc. (WFM) is trying to shake its expensive image by dropping its prices to become one of the cheaper chains in

Manhattan. Our data shows that Whole Foods’ efforts may start to attract midtier household incomes from $25,000 to

$99,999. Big-box stores like Walmart Stores Inc. (WMT) are losing higher-income households but gaining lower-income

households from a new small-store strategy. We will examine such strategies to see if they take hold.

Where do you shop for the majority of your groceries?

• For the second straight month, local grocery stores are dominating the grocery market; 61.2% of respondents use this

type of stores over all others. We saw a 1-percentage point dip in respondents frequenting big-box stores, while use of

other grocery options remained consistent compared with August.

• Big-box stores are capturing low-income households, while specialty stores are attracting higher-income households. The

true winners, local grocery stores, attract all income levels.

62.6%

18.0%

7.0% 5.0% 2.9% 4.5%

59.0%

19.4%

9.3%3.9% 3.7% 4.8%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Not at all likely Slightly likely Moderatelylikely

Very likely Extremelylikely

I already have

Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 14

.

23.6%

12.0%

1.2%

61.1%

2.1%

22.0%

12.9%

1.5%

61.2%

2.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

Big-box stores (Walmart,Target, etc.)

Specialty grocery stores(Whole Foods, Trader

Joes, etc.)

Dollar stores (DollarGeneral, Dollar Tree, etc.)

Local grocery stores(Kroger, Safeway, etc.)

Farmers markets

Aug Sept

13.3%

12.3%

13.5%

12.7%

18.1%

14.9%

5.3%

11.3%

18-29

30-44

45-60

60+

Shopper Age: Specialty Stores

Aug Sept

54.6%

60.5%

64.8%

64.2%

52.6%

60.3%

66.7%

64.5%

18-29

30-44

45-60

60+

Shopper Age: Local Stores

Aug Sept

28.9%

23.0%

17.4%

19.6%

23.3%

22.9%

25.3%

21.5%

18-29

30-44

45-60

60+

Shopper Age: Big-box Stores

Aug Sept

14.4%

11.0%

11.5%

16.4%

22.4%

15.1%

9.9%

9.5%

10.3%

23.8%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Specialty Stores

Aug Sept

54.9%

58.1%

67.3%

57.6%

63.6%

53.4%

57.0%

64.8%

61.4%

60.0%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Local Stores

Aug Sept

27.0%

25.8%

18.9%

22.6%

9.3%

20.6%

29.6%

23.2%

27.7%

12.4%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Big-box Stores

Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 15

12) Computer gaming tops charts, smartphone and tablet gaming matches console use.

Respondents play the majority of their video games on a computer, followed by the ever-growing method of smartphone

gaming. This month’s survey also showed that tablet gaming is the next form to take a bite out of console makers like

Microsoft Corp. (MSFT) and Nintendo Co. Ltd. (TYO:7974). Sony is taking a different route by allowing its users to play PS4

games through its new Xperia Z3 and Xperia Z3 Compact smartphones and the new Xperia Z3 Tablet Compact. Major video

game releases for consoles still generate their fair share of revenue. Activision Blizzard Inc. (ATVI) just released Destiny for

consoles, and generated $325 million in the first five days; still, investors were not overly impressed. The real winners in the

gaming industry are companies like Qualcomm Inc. (QCOM) that manufacture the graphic chips for smartphones and tablets.

Qualcomm’s new Snapdragon 810 chipset will start to ship to smartphones and tablets early next year.

How do you play the majority of your video games?

• Computer gaming is still the top way respondents play video games, while smartphone gaming beat out console usage.

This month we saw tablet gaming catching up to the consumption level of console gaming. Such a switch could place

additional pressure on console game creators.

• Gamers using consoles or smartphones are more likely to be ages 18 to 44. Having the same target demographic reveals

smartphones’ true threat to console gaming.

11.7%

1.1%

14.1%

9.0%

16.0%

48.0%

11.5%

1.3%

14.0%11.3%

17.5%

44.4%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Console Handheld console Smartphone Tablet Computer I do not play videogames

Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 16

13) Facebook remains the top dog of social media platforms.

Facebook Inc. (FB) continues its reign as the most frequently used social media platform. The site is used by more than 50%

of respondents in all groups, making it a target for advertising from large, midsize and small businesses. Facebook’s

Instagram is attracting 18- to 29-year-olds, giving its parent company an additional advantage.

Which social media platform do you use the most?

• Facebook consistently has ranked high above all other social media sites during the last two months, and this month was

no exception, with 58.9% of respondents reporting that they use the site most often for social media.

• Instagram took a 1.5-percentage point dip in use this month but still attracts 18- to 29-year-olds. Twitter Inc. (TWTR)

picked up some steam and returned to levels slightly above July, thanks to adoption by 18- to 60-year-olds. Google’s

22.9%

14.9%

8.5%

1.9%

24.7%

17.2%

7.4%

1.1%

18-29

30-44

45-60

60+

Age: Console

Aug Sept

18.8%

18.4%

13.2%

5.8%

14.9%

23.7%

11.2%

7.2%

18-29

30-44

45-60

60+

Age: Smartphone

Aug Sept

14.4%

11.0%

12.1%

11.9%

9.4%

16.4%

14.1%

12.2%

9.8%

7.6%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Console

Aug Sept

15.3%

14.2%

13.1%

10.2%

20.6%

6.9%

20.4%

15.9%

13.0%

13.3%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Income: Smartphone

Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 17

Google+ sank back to July usage levels; respondents 60 and older were the most likely to use the site. LinkedIn Corp.

(LNKD) usage has remained consistent during the past two months and consistently attracts users ages 45 to 60.

3.2

%

3.7

%

0.8

%

58

.1%

0.0

%

1.5

%

6.7

%

0.5

%

1.5

%

2.0

% 4.5

%

0.2

%

0.5

%

15

.8%

0.8

%2.9

%

4.6

%

1.0

%

55

.8%

0.0

%

1.3

%

6.1

%

0.8

%

1.1

% 3.6

% 6.1

%

0.0

%

0.0

%

16

.0%

3.0

%

3.5

%

3.1

%

0.8

%

58

.9%

0.0

% 2.2

% 6.3

%

0.7

%

1.5

%

2.8

%

4.4

%

0.1

%

0.3

%

14

.9%

0.6

%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

July Aug Sept

6.4%

4.6%

2.1%

0.0%

14.4%

4.2%

1.1%

1.1%

12.60%

3%

1%

0.70%

18-29

30-44

45-60

60+

July Aug Sept

4.6%

3.8%

4.3%

1.2%

2.8%

5%

2.5%

1.5%

6.5%

3.7%

2.7%

0%

18-29

30-44

45-60

60+

July Aug Sept

58.6%

66.3%

54.1%

57.3%

52.1%

61.5%

54%

55.1%

55%

63.9%

56.7%

57.5%

18-29

30-44

45-60

60+

July Aug Sept

Age of Social Media Users

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 18

14) Improved living habits spell disaster for fast-food giants.

This month’s survey found a slight increase in those with unhealthy living habits, but most respondents are changing their

living habits for the better. Consumer changes in diet and exercise have already affected McDonald’s Corp. (MCD), which is in

its worst slump in a decade. The company is losing millennials to fast-casual restaurants like Chipotle Mexican Grill Inc. (CMG)

that offer fresh, healthier ingredients. One study that coincides with our findings found that U.S. consumers have improved

their living habits compared with years ago. Still, other sources state that lower-income households remain unhealthy, which

could allow fast-food companies to survive.

Compared with six months ago, how have your living habits (diet, exercise, sleep, etc.) changed?

• Approximately two times the number of respondents have improved their living habits as those who have seen a decline

in their living habits. This is a slight shift from previous months when three times the number of respondents reported an

improvement rather than a decline, but our data still shows a focus on healthier living.

1.8%

2.7%

5.3%

6.3%

1.4%

2.3%

10.2%

9.1%

1.7%

2.2%

7.2%

5.9%

18-29

30-44

45-60

60+

July Aug Sept

1.8%

4.6%

11.0%

6.5%

2.8%

3.1%

10.9%

7.2%

0.9%

6.3%

9.6%

8.9%

18-29

30-44

45-60

60+

July Aug Sept

2.5% 3.9%

7.0%

36.7%

23.1%

17.4%

9.4%

2.3%4.2%

9.3%

34.9%

26.8%

13.7%

8.8%

3.4%4.8%

11.5%

35.6%

21.6%

15.1%

8.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

Decreasedsignificantly

Decreasedmoderately

Decreased slightly Stayed the same Improved slightly Improvedmoderately

Improvedsignificantly

July Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 19

15) Apple continues to dominate the smartphone market.

Apple dominates the smartphone market and could grab even more market share with the release of its iPhone 6 and 6 Plus.

Our survey was conducted before the latest iPhone release, but respondents’ responses show similar market share

percentages for Apple and Samsung Electronics Co. Ltd. (KRX:005930) as in ComScore’s market share report from July.

During the past three months we saw Sony’s minimal market share dwindle; based on the company’s downward adjustment

in its earnings forecast, its plans to offer a midrange phone appeared to have failed. In the next few months we will monitor

the effects of the iPhone 6 and 6 Plus on Apple’s market share, as well as Microsoft Corp.’s (MSFT) and Nokia Corp.’s (NOK)

three new phones, which are expected to be released by year-end.

Who made the smartphone you currently own?

• 36% of respondents own an iPhone. Samsung remains the only company close in adoption, with 23.1% of respondents

owning one of its phones. In surveying only smartphone owners, we found that Apple consistently captures 45.5% of the

smartphone market while Samsung holds 29.2%.

• After seeing users ages 18 to 29 leading in iPhone adoption, this month shows roughly the same adoption rate in age

groups 18 to 29, 30 to 44, and 45 to 60.

• Based on household income levels, iPhones are more frequently adopted by those with higher incomes while Samsung

phones are more prevalent among those with incomes of $25,000 to $49,999.

33

.5%

21

.7%

0.2

%

0.2

%

1.1

% 2.9

%

5.4

% 7.0

%

1.3

%

0.5

%

0.2

%

0.6

%

0.5

%

0.5

%

0.0

%

23

.0%

1.5

%

35

.6%

24

.2%

0.8

%

0.3

%

0.9

% 2.8

%

6.0

%

5.1

%

2.1

%

0.3

%

0.1

%

0.6

%

0.5

%

0.0

%

0.0

%

19

.9%

1.0

%

36

.0%

23

.1%

1.1

%

0.3

%

1.2

% 2.5

%

5.9

%

4.6

%

1.3

%

0.2

%

0.2

%

0.3

%

0.8

%

0.1

%

0.0

%

20

.8%

1.5

%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

July Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 20

27.0%

23.9%

36.4%

47.5%

57.0%

31.5%

32.4%

33.6%

39.7%

54.3%

25.8%

28.0%

34.3%

45.1%

53.4%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Household Income: Apple

July Aug Sept

16.2%

26.5%

24.2%

20.9%

20.6%

17.8%

27.5%

23.2%

28.3%

22.9%

25.0%

23.1%

20.4%

21.1%

19.4%

0-$24,999

$25,000-$49,999

$50,000-$99,999

$100,000-$149,999

$150,000+

Household Income: Samsung

July Aug Sept

16) Consumers are comfortable with robot-assisted surgery, which should increase adoption.

For the third straight month, respondents reported being comfortable with the idea of robot-assisted surgery, which is paying

off for Intuitive Surgical Inc.’s (ISRG) da Vinci robot. Hospitals across the country are buying and upgrading their robotic

systems. The systems have become more prevalent in urology cases and recently were used in a lung cancer patient. Robotic-

assisted surgeries will continue to thrive in new departments and increase in usage as consumer confidence in the systems

remains high.

How comfortable would you feel about a doctor using a robot to assist in your surgery?

• Respondents remain comfortable with robot-assisted surgery, with 80% voicing a varying degree of comfort. This

percentage represents a slight decline compared with the previous two months but also still a high level of acceptance of

robot-assisted surgeries.

39.0%

38.3%

37.7%

30%

43.7%

37.0%

31.6%

32.8%

43.3%

34.9%

33%

27.2%

18-29

30-44

45-60

60+

Age: iPhone

July Aug Sept

14.1%

23.8%

30.0%

15.3%16.8%

15.5%

21.8%

30.0%

15.5%17.1%

15.1%

20.5%

28.9%

15.5%

20.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Extremely comfortable Very comfortable Moderately comfortable Slightly comfortable Not at all comfortable

July Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 21

17) Delayed Internet service is here to stay.

For the third straight month, roughly one-third of respondents reported experiencing slow or delayed Internet services.

Regulations for expanded high-speed Internet services are in flux. Two cities in Tennessee and North Carolina were denied the

ability to expand their high-speed Internet services in order to compete with Comcast Corp. (CMCSA) and Time Warner Inc.

(TWX). Internet users also could be affected the net neutrality ruling expected in April that would allow companies like

Comcast and Verizon to create an Internet “fast lane,” for which companies and consumers would pay extra. Many companies

like Netflix Inc. (NFLX), Reddit and Mozilla are opposed to the proposed rules.

Are you having more problems with slow or delayed Internet compared with six months ago?

• Roughly similar to August, one-third of respondents are experiencing slow or delayed Internet services.

18) 11main.com remains a ghost in the United States.

11main.com, Alibaba Group Holding Ltd.’s (BABA) consumer site in the United States, remains unknown for the third straight

month as it acts as an invitation-only site. 11main.com struggled from its start when it received an “F” rating from the Better

Business Bureau for not responding to the 79 complaints against its businesses. Alibaba’s effects on Amazon.com Inc.

(AMZN) and eBay Inc. (EBAY) continues to be speculation. Some industry experts believe Alibaba will have no effect on

Amazon in the United States but will stifle the latter’s international growth efforts. Others believe 11main.com is a threat

through its close proximity to suppliers, which provides a leg up in becoming a dominant wholesaler and B2B supplier. Also,

Alibaba now has the money to lead an aggressive charge in both the United States and Europe after its IPO raised $21.8

billion. The next few months should provide a real view into 11main.com’s power as it focuses on expanding in the United

States.

Have you heard of 11main.com?

33.2%

66.8%

32.7%

67.3%

32.6%

67.4%

0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% 70.0% 80.0%

Yes

No

July Aug Spet

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 22

• 97.6% of consumers have not heard of 11main.com, a decrease of 1 percentage point compared with the previous two

months.

19) First-time homebuyers take another hit.

The number of respondents looking to buy a home in the next six months fell by 2 percentage points compared with August.

This decline also was reflected in first-time buyers on the market, who continue to face challenges of higher-priced housing

(such as single-family homes in Austin, TX, which experienced a 9% price increase year to year) and rapidly rising required

down payments. Although mortgage lending is at a six-year high, analysts agree that the housing market is waning compared

with previous months this year. Also, home construction dropped 14.4% in August after a record high in July not experienced

since November 2007. Additional data from the upcoming months will determine if this slump will be the tipping point in the

decline of the housing market or just another bump in the road.

Are you looking to buy a home in the next six months?

• 7.6% of respondents are looking to purchase a home in the next six months, a small decrease from the previous two

months.

o 36.8% of consumers looking to purchase a home are first-time buyers, down roughly 2 percentage points from

previous months.

0.2% 0.2% 0.3% 1.0%

98.4%

0.2% 0.1% 0.0% 1.1%

98.6%

0.3% 0.1% 0.3% 1.8%

97.6%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

120.0%

Yes, I used it often in thelast month

Yes, I used it a few timesin the last month

Yes, I used it once in thelast month

Yes, but I’ve never used it No

July Aug Sept

3.4% 5.4%

91.2%

38.6%

3.6% 5.7%

90.7%

38.7%

2.8% 4.8%

92.4%

36.8%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

Yes, it is my first-time buying ahouse

Yes, but it is not my first-timebuying a house

No Percentage of homebuyers thatare first-time buyers

July Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 23

60.6%

55.2%

39.9%

33.5%

61.4%

48.9%

41.1%

34.7%

18-29

30-44

45-60

60+

Age: Neither Party

Aug Sept

20) Consumers shift slightly toward having positive opinions of U.S. economic prospects.

Respondents continue to be divided in their views of the United States’ economic prospects. However, slightly more held

positive opinions compared with last month’s slant toward the negative. Again, respondents contend that neither major

political party is to receive praise or blame for the country’s current status. The federal government offered positive signals by

not raising bank-lending rates in order to encourage additional lending by businesses; it also reported lower-than-expected

unemployment applications. Still, a poll done by Bloomberg showed that the number of consumers who believe the economy

is improving has dropped to the lowest level in years based on a lack of wage increases. Businesses may be boosting the

United States’ economic prospects, but consumers will not have a grasp on the overall economy and will remain divided as

long as wages stay low.

Do you think economic prospects in the United States are improving or declining? Which political

party, if any, is responsible?

• Consumers are again split in their views of the country’s economic trends, but lean toward economic prospects

improving. 51.3% believe the economic status is improving while 48.7% forecast a decline compared with last month,

when 47.6% thought prospects were improving and 52.4% saw a decline.

• Approximately half of our respondents (46.6%) held neither major political party responsible for the economic

environment—roughly the same as in August.

21) Support is strong for childhood vaccinations.

Respondents (96.1%) believe children should be vaccinated. Still, school vaccinations in neighborhoods like Santa Monica

and Beverly Hills have dropped off a cliff, possibly because of celebrities speaking out against such vaccines. Some schools in

these areas have student bodies with 60% to 70% unvaccinated, leaving them susceptible to outbreaks of whooping cough,

measles and other diseases.

Should children be vaccinated?

• Again, most respondents (96.1%) believed children should be vaccinated.

3.8%

16.0% 16.0%18.5%

27.8%

17.9%

3.8%

19.4%

13.5%

16.8%

28.1%

18.5%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Improving andRepublicans

are responsible

Improving andDemocrats are

responsible

Declining andRepublicans

are responsible

Declining andDemocrats are

responsible

Improving, butneither party is

responsible

Declining, butneither party is

responsible

Aug Sept

September 2014

1 Ferry Building, Suite 255, San Francisco, CA 94111 | www.blueshiftideas.com 24

22) Top apps include FB Messenger, Clash of Clans, banking, Fantasy Football, and The Simpsons:

Tapped Out

What apps/mobile games are you using now that you were not using a month ago?

• Facebook Messenger, Clash of Clans, various banking tools, Fantasy Football, and The Simpsons: Tapped Out were the

most frequently mentioned apps this month. Two of these top two apps show how much mobile gaming is taking over the

video game industry.

23) Trends pointed out by respondents ranged from wearable tech to police brutality.

What is the most interesting new trend you have seen in the last month?

• Respondents commented on multiple trends again this month: smart devices (specifically the Apple Watch), police

brutality, ISIS, mobile wallets (specifically Apple Pay), younger demographics giving up cars for public transportation,

being environmentally conscious, Google Fiber, and solar panel devices and adoption.

96.1%

3.9%

95.5%

4.5%

0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%

Yes

No

Aug Sept