What’s the first thing you do when you want to purchase something? Research, right? I know that’s what I do. We’re all looking for the best quality and the best price. All it takes is a couple of seconds for us to search ‘January sales’ to discover which retailers have the biggest discounts. Not only is it as easy as that, but we also have millions of other products and services that we can compare with.
Consumer behaviour has developed immensely over the years, with various challenges having impacted that change. From technology and social media, COVID-19 and the recession, to Brexit and gas supply issues; these are all some of the main factors that have shifted our behaviour.
What is consumer behaviour?
Consumer behaviour is a study that delves into what our thought processes are before, during and after we make a purchase. It studies how we act and how we make our decisions by also taking into account a variety of factors, including influence, technological developments or simply lack of choice.
There are lots of opinions as to how many steps there are in the consumer’s decision-making process. But to narrow it down, here are the five most important ones according to Lucidchart:
- Problem recognition: recognising the need for a service or product
- Information search: gathering information
- Alternatives evaluation: weighing choices against comparable alternatives
- Purchase decision: making an actual purchase
- Post-purchase evaluation: reflecting on the purchase that was made
Over time, consumer behaviour evolves, which is why it’s important to observe these changes to prepare for forthcoming events.
How has technology affected consumer behaviour?
Technology has made online shopping hugely accessible for everyone and has drastically impacted the way consumers think and behave.
If we go back to the early ‘90s, the main options were brick and mortar retailers. Consumers still had choice, but it was extremely limited. Reviews and ratings were created by word of mouth and finding quality low-priced products or services forced consumers to physically browse multiple stores.
In today's era, we have access to almost anything and everything. Ordering food to your doorstep through Deliveroo; travelling to a desired location through Uber; video calling a friend who’s thousands of miles away via Facetime — there are no limits to what we’re able to do.
Technology creates a world where individuals can be themselves and have the freedom to make their own decisions and create their own opinions. However, it also allows for people to be heavily shaped by the media they’re exposed to.
Social media platforms such as YouTube, Instagram and TikTok influence our purchasing process. A study by Jeetesh et al suggests that eWOM (electronic word of mouth), social media advertising and online ordering systems are central factors that determine a user's buying behaviour.
Word of mouth is amplified by social media, as people frequently leave reviews which impact the way others may view a product or service. A popular example would be YouTube ‘hauls’ — this is where people, typically influencers, buy and try on items and leave their personal feedback.
Influencers have loyal followers on social media who are highly persuaded by them. For influencers, it’s as simple as posting a photograph in an outfit or posting a product. By doing so, they're able to boost a brand's awareness and sales drastically. According to Twitter, users are 5.2 times more likely to purchase when exposed to promotional content from influencers, and 49% of people rely on recommendations from influencers when making purchase decisions.
Social media not only provides a platform that enhances influencing, it also ensures that purchasing the products or services is only two clicks away. It shortens the customer journey by directly advertising links that take customers straight through to the point of purchase.
How has the pandemic and the recession affected consumer behaviour?
The pandemic was a confusing and difficult time for the majority of the world. We were experiencing things that were unusual to our normal daily lives. As such, the impact on consumer behaviour was something that took immediate effect.
Lockdown restricted where people were able to consume, and industries such as wholesale, retail, transportation, storage, accommodation, food services, arts, entertainment and recreation were the most affected by this change. Many of these industries had to shut down during COVID-19 due to government rules and regulations. This created a shortage in available services and caused many people to be out of work with little or no income.
The recession affected consumer behaviour in a similar way to COVID-19, with consumers shifting to a more frugal lifestyle. People have been watching their money more and only spending on essentials such as gas, electricity and food. Many people are using online shopping as a way of reducing fuel costs by eliminating the need for travel. Consumers are also going out for food less, and replacing takeaways for a more cost-effective option of home cooking.
Both the pandemic and recession created different consumer groups who all responded differently to the crisis situations.
Those who have a very low income generally become more frugal and tend to do more research into what they are purchasing, opting for the lowest priced products such as supermarket own-brand food and only buying essentials.
Those who are comfortably well-off are able to continue as normal with their daily lives and spending habits. For this group, COVID-19 put a halt on their outside spending which caused their online consumption to increase — companies such as Amazon, Uber Eats, Netflix and ASOS all benefited from this.
What does this mean for marketing?
For marketing, it means we have to study our audience better. With so much choice, we have to stand out from our competitors. It’s vital that we learn and understand consumer buying decisions so that our marketing strategies can be specifically targeted for our desired consumer. Change can take place over time, but it’s also important to be aware that it can occur suddenly, such as in the case of the pandemic. Change is something that we have to monitor and be ready for so that we’re able to adapt.
