At its core, consumer behavior is the study of how people make buying decisions. It attempts to understand how buyers choose, use and dispose of products and services, as well as the various stages people go through before making a purchase.
Buying Patterns
Marketers also leverage modern analytics technologies to better understand and predict various aspects of consumer behavior. Such technologies can aggregate and analyze vast amounts of data on consumers, drawing relationships between demographics, buying habits and targeted marketing techniques. The power of modern analytics enables the scalable, personalized marketing methods consumers have come to expect, from automated product recommendations on ecommerce platforms to direct engagement through social media marketing.
Three months into the pandemic, consumer food sales at grocery stores are trending back to historical norms, but overall sales growth rates remain elevated. The spending patterns emphasize the following trends:
The study of consumer behaviour formally investigates individual qualities such as demographics, personality lifestyles, and behavioural variables (such as usage rates, usage occasion, loyalty, brand advocacy, and willingness to provide referrals), in an attempt to understand people's wants and consumption patterns. Consumer behaviour also investigates on the influences on the consumer, from social groups such as family, friends, sports, and reference groups, to society in general (brand-influencers, opinion leaders).
Specific brand names enter the consumer's consideration set based on the extent to which they satisfy the consumer's purchasing objectives and/or the salience or accessibility of the brand at the time of making the purchase decision.[28] By implication, brand names that are more memorable are more likely to be accessible. Traditionally, one of the main roles of advertising and promotion was to increase the likelihood that a brand name was included in the consumer's evoked set.[29] Repeated exposure to brand names through intensive advertising was the primary method for increasing top-of-mind brand awareness. However, the advent of the Internet means that consumers can obtain brand/product information from a multiplicity of different platforms. In practice, the consideration set has assumed greater importance in the purchase decision process because consumers are no longer totally reliant on memory. This is marketing, which could be defined as "the process by which companies create value for customers and build strong customer relationships, in order to capture value from customers in return."[30] This definition strongly implies that the relationship is built upon an exchange and the "creation" of value. This means that a need is built for a consumer, with the product presented or advertised to them through an analytical study of the user's patterns of consumption and their behaviors and habits. The implication for marketers is that relevant brand information should be disseminated as widely as possible and included on any forum where consumers are likely to search for product or brand information, whether traditional media or digital media channels. Thus, marketers require a rich understanding of the typical consumer's touchpoints.
The marketing organization needs a deep understanding of the benefits most valued by consumers and therefore which attributes are most important in terms of the consumer's purchase decision. It also needs to monitor other brands in the customer's consideration set to optimise planning for its own brand. During the evaluation of alternatives, the consumer ranks or assesses the relative merits of different options available. No universal evaluation process is used by consumers across all-buying situations.[36] Instead, consumers generate different evaluation criteria depending on each unique buying situation. Social media further enables consumers to share views with their peers about the product they are looking to purchase.[37] This way, consumers can gauge the positive and negative sides of each alternative, and decide even more conveniently as for the best product to buy. Thus the relevant evaluation attributes vary according to across different types of consumers and purchase contexts. For example, attributes important for evaluating a restaurant would include food quality, price, location, atmosphere, quality of service, and menu selection. Consumers, depending on their geographic, demographic, psychographic and behavioural characteristics, will decide which attributes are important to them. Potential patrons seeking a pleasant dining experience may be willing to travel further distances to patronise a fine-dining venue compared to those wanting a quick meal at a more utilitarian eatery. After evaluating the different product attributes, the consumer ranks each attribute or benefit from highly important to least important. These priorities are directly related to the consumer's needs and wants.[38] Thus, the consumer arrives at a weighted score for each product or brand which represents the consumer's subjective assessment of individual attribute scores weighted in terms of their importance. Using these scores, they arrive at a total mental score or rank for each product/brand under consideration.[39]
As consumers approach the actual purchase decision, they are more likely to rely on personal sources of information.[45] For this reason, personal sales representatives must be well versed in giving sales pitches and in tactics used to close the sale. Methods used might include 'social evidence', where the salesperson refers to previous success and satisfaction from other customers buying the product. 'Scarcity attraction' is another technique, where the salesperson mentions that the offer is limited, as it forces the consumer to make a quicker decision and therefore spend less time evaluating alternatives.[46]
Following purchase and after experiencing the product or service, the consumer enters the final stage, namely post-purchase evaluation. Foxall suggested that post-purchase evaluation can provide key feedback to marketers because it influences future purchase patterns and consumption activities.[47][48]
In addition to panic buying throughout the pandemic, revenge buying was apparent during periods when non-essential stores reopened after COVID-19-related lockdowns.[87] Revenge buying was specifically observed in physical luxury retail stores.[87] For example, it was reported that an Hermes store in Guangzhou, China, made US$2.7 million in the first day it opened after lockdown, where consumers' purchases ranged from leather goods, scarves and homewares to a diamond-studded Birkin bag, among other things.[91]
Impulse purchases are unplanned purchases. Impulse buying can be defined as "a sudden and powerful urge to buy immediately" and occurs when a consumer purchases an item which they had no intention of purchasing prior to entering the store.[131] Impulse buying can be influenced by external stimuli such as store characteristics and sale promotions, internal stimuli such as enjoyment and self-identity, situational and product related factors such as time and money available, and demographic and socio-cultural factors such as gender, age, and education.[citation needed] Stern introduced the four broad classifications of impulse buying including pure impulse buying, reminded impulse buying, suggestion impulse buying, and planned impulse buying:[132]
Recent research carried out by Nielsen International suggests that about 72 percent of FMCG purchases are planned, but that 28 percent of supermarket purchases are unplanned or impulse purchases. The top unplanned purchases in the food category are candy (lollies), chocolate, cookies (biscuits), frozen desserts, and snacks and the top unplanned purchases in the non-food category are cosmetics, air-fresheners, toothbrushes, hand-soaps, and hand/body lotions.[135] This explains why supermarkets place these types of products at the front of the store or near the checkout where the consumer spends more time and is more likely to notice them and therefore more likely to pop them into the shopping basket. Retailers use insights from this type of research to design stores in ways that maximise opportunities for impulse-buying.
Affect may play an important role in impulse-buying decisions. Research suggests that consumers place higher weightings on immediate affective rewards and punishments, while delayed rewards receive less weighting.[141] For instance, the immediate pleasure of eating a sweet treat often outweighs the longer term benefits of eating a healthy alternative such as fruit. This occurs because the immediate emotional gain is a strong driver, and one that consumers can readily visualise whereas the more distant goal lacks sufficient strength to drive choice.
Wendy Moe (2003)[164] argues that in the offline environment, consumers who are shopping in stores can be easily classified by experienced sales employees only by watching their shopping behaviours. Such classification may not appear online, but Moe and Fader[165] argued that it is feasible to predict practical buying, surfing, and searching action online by investigating click patterns and repetition of visit within online behaviour. In addition, a report of E-consultancy about "benchmarking of user experience" outlined three kinds of online consuming behaviour as a valuable classification for the research of design of web pages to better serve different kinds of consuming behaviour. The three categories are: "trackers", "hunters", and "explorers".
As the preceding table shows, the first row indicates the process of a consumer buying a new product, while the second and third row illustrates the positive influences the Internet could have on buying process by creating effective communications with online consumers. For example, suppose a consumer carelessly see an advertisement about laptops on Wechat, a popular Chinese social media developed by Tencent. He begins to feel that his laptop is a bit out of date and want to buy a new one, which the outcome of good advertisement placed on the daily Internet tool. He doesn't know anything about how to buy a new one as business change so fast today, so he search on Google to find out the answer. On the result page, what he finds out is the promotional ads which mainly come from JD.com and Taobao, RingToRed.Com two main Chinese competitors of online retailer at this field. As always, he used to prefer JD.com, which provides comparison in detail on brands, price, place and ways of payment and delivery. After careful selection, he makes his order through payment of Wechat, which was placed inside of JD.com. JD.com has one of the fastest distribution channels within China and it support excellent post-purchase service to maintain its position in the market.
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