Day: January 11, 2019

Understanding the types of consumer buying behavior and ways to influence them

Posted on by shopkick

Understanding the types of consumer buying behavior and ways to influence them

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While the basic types of consumer buying behaviors haven’t changed much over the years, the way in which marketers approach consumers has. Digital avenues have expanded the information that consumers have available, as well as their connection to brands. Whether a consumer is prone to impulse buying, or starting a more complicated purchase journey, there’s a digital solution for reaching them and increasing purchase potential. Technology strengthens the bond between brands and consumers as it can be leveraged to cater to any journey on the path to purchase.

CPG brands need to carefully monitor how consumers choose their products to help them stand out among the competition. Approaching these consumers as they’re in the shopping aisle and prepared to make a purchase can be an ideal method. Managing the brand’s online reputation is also critical for differentiating products. With technology, brands can cater to all four types of traditional buying behaviors: impulse, habitual, dissonance reducing, and complex.

The Types of Consumer Buying Behavior and Their Impact on CPG Brands

There is a basic model of human buying behavior established by Henry Assael, professor of marketing for NYU Stern. Assael broke down the consumer buying models according to consumer knowledge of products and the difference between brands. These categories break down as follows:

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Variety-seeking:

Consumers may enjoy reading about and trying new brands and will often make decisions to try new products impulsively. There’s very little time between product discovery and purchase. The consumer isn’t switching brands due to dissatisfaction, but simply because they want to try something new. Variety seeking is a substantial area of opportunity for CPG brands as CPG goods are typically priced lower than others, posing a low risk for consumers.

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Habitual buying:

Consumers stick to brands they know as they see little difference between products. Habitual buying challenges CPG brands when that loyalty is to a competitor, as it can be very difficult to pull the consumer away from the products they trust. The brand must be able to differentiate its products from the competitors to win consumer attention.

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Dissonance reducing:

There may be very little difference between the products available across various brands, but consumers may still choose to do extensive research. This research may stem from dissatisfaction with the product itself. Alternatively, this information gathering may come as a result of increased social awareness about the impacts of manufacturing. In either case, brands must invest in products and overall reputation to connect with these shoppers.

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Complex buying:

Consumers who do extensive research before buying may have little familiarity with the brands and choices available. This buying behavior is typical when making big-ticket purchases, but that does not mean it’s not a concern for CPG brands with lower price points. Complex does not have to mean costly. It can also occur when a consumer has a concern over a product’s impact on their well-being, like in the case of health and beauty products with unfamiliar ingredients.

While not every path to purchase will fit into one of the above models, they do a sufficient job of giving an overall look at the most common methods for purchase. These behaviors have no boundaries, as consumers will follow them whether purchasing online or in the store.  Understanding these models benefits brands as they can create individual plans to cater to these specific purchase behaviors, regardless of where the consumer makes the purchase.

Using Mobile Shopping Apps to Excite Variety-Seeking Consumers

Variety-seeking consumers are promising prospects for CPG brands as they’re open to trying new products. While they may not extensively research before making a purchase, digital marketing still makes an impact. Timely promotions delivered via mobile shopping apps can provide excellent ROI for impulse buying behaviors. Such messages target these consumers based on their location and drive them to interact with products. We see an example of this through Shopkick and how consumers use the shopping app.

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Notifying:

The first step to securing a purchase is brand awareness. With Shopkick, a timely notification lets the consumer know which products in the store offer kicks (aka rewards points) and how many. The alert makes the consumer aware of the brand and encourages them to seek it out.  

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Priming:

When a consumer physically handles a product, it establishes a sense of ownership. Shopkick encourages consumers to pick up products by offering incentives for scanned UPCs. The moment a consumer touches the product, the chance of purchase increases.

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Incentivizing:

Shopkick users receive rewards points when they locate certain products in the store, and even more points when they purchase them. By rewarding purchase path behaviors both in-aisle and through checkout, brands create customer affinity and increase sales potential.

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Gamification:

The entire process works as a digital scavenger hunt with various goals and rewards. Shopkick’s design turns an everyday shopping trip into an enhanced customer experience. This gamification improves the use and retention of the app, which expands the brand’s audience.

Brands often target variety-seeking consumers with discounts and coupons, but rewards points provide the same benefit without the need to cut the product price. As variety-driven consumers make impulse purchases, these apps target them more efficiently than other marketing methods.

Cultivating Habitual Buying Through Data-Driven Personalization

Customer loyalty is entirely relationship-driven. Brands wishing to pull loyal customers from competitors, while also growing their faithful following, should look to personalization to establish these relationships. Profiles created with existing consumer data aid in this process by helping brands deliver personal messages on a mass scale.

Consider a brand trying to cultivate a following for a new ultra-moisturizing lipstick. That brand could use existing social media data to locate a general group of consumers who have an overall interest in makeup. That data can be used to target a specific age range, location, or consumer need. The brand might consider targeting users in hot, arid climates with a message about how this lipstick prevents chapped lips. As the message is designed to solve a problem that is unique to them, the consumer feels a deeper connection to the brand.

Any time a brand uses data, consumer privacy must be a concern. If a consumer feels their personal information is unsafe, there’s a risk of alienating them. However, consumers are receptive to data use for personalization, and consider value the number one driver of trust. As long as their data is used to provide them with a heightened experience, consumers are willing to share it.

The key component of any data-driven campaign is how it improves the customer shopping experience. Brands must consider if the information the consumer will receive is more valuable than the data used. It also helps to have a clear data collection policy which explains how consumer information is used, and provides an opportunity to opt out. Through transparency, brands can use data to cater to consumers without invading their privacy.

Attracting Dissonance-Reducing Buyers With Online Reputation Management

Dissonance-reducing consumers are researchers who are well-informed about products. Differentiative marketing is critical as this buying often occurs in the CPG market, where branded products are similar to those of their competitors. Brands may not be able to rely on their product but instead must focus on their overall reputation to stand out.

Campbell’s creates an excellent example of a brand leveraging their reputation to gain attention in the competitive canned food segment. The brand works hard to cater to consumers’ desires when it comes to social responsibility. They created several features to offer greater transparency to consumers, including their “What’s in My Food” database. They also spearheaded several corporate initiatives by increasing their focus on sustainable sourcing and providing aid to people in impoverished regions. These initiatives helped boost Campbell’s to the top of the USRepTrak 100 list, which ranks companies based on consumer trust perception.
By using their reputation as a differentiator, Campbell’s stands out in a crowded category often filled with lower cost competitors. A consumer may find themselves drawn to Campbell’s products due to the positive brand affinity their social efforts created. Brands can use social channels like Facebook, YouTube, and Instagram to help share news regarding the causes in which they invest, and invite consumers to participate as well. This strategy aligns their goals with those of the consumer, which creates a loyal relationship.

How Video Marketing Supports Complex Buying

When consumers make complex buying decisions, they’re often at a disadvantage. They know they need to do significant research but may not be familiar with the product. A typical example of complex buying is car purchasing. Consumers may not understand the differences between several different options and will turn to the digital space to learn more about them. However, CPG brands need to stay on top of this buying behavior as well, because it can impact lower-cost, mass-produced items.

Consider a broad category like whitening toothpaste, which encompasses thousands of diverse products and active ingredients. Some focus solely on whitening, while others combine whitening with other treatments like enamel protection or cavity prevention. Consumers may seek out information not just on efficacy, but on safety.

Catering to complex buyers requires a simplified approach. Explainer videos are ideal as they allow a brand to share information about a product while making those details easy to digest for the consumer. In some cases, they can drive the success of a debut product.

Dollar Shave Club discovered the power of explainer videos in 2016 when they rolled out their introduction. The funny ad garnered enough views to create significant clout for the brand which later led to its acquisition by Unilever. Through a short video clip, the brand created a connection with individuals on a complex purchase path. Dollar Shave Club provided the information that consumers needed in an easy to digest format. It also solved a common concern—the high expense and inconvenience of buying replacement razors. By making the process easy to understand, the brand built consumer trust and reached a broader market. The company went from a simple niche service to an industry disruptor that gained the attention of larger, established CPG brands all through the power of video.
It’s possible to cater to the types of consumer buying behavior by taking advantage of new technology. Mobile marketing can help brands connect with impulse buyers, while video helps guide those making complex buying decisions. Brands can differentiate themselves through reputation, rather than products. Alternatively, they can pull market share from competitors with personalization created through data. All of these methods help brands connect with consumers even when their path to purchase is less predictable than it was in the past.
Shopkick partners connect with consumers in the shopping aisle with our intuitive app that incentivizes product interaction. To leverage it to guide consumers to your products in the store, contact us.