Identifying and Understanding

Consumers
 The Customer Is Always Right.
 “Thereis only one boss – the
customer. And he can fire everyone
from the Chairman down”
Sam Walton, Founder, Wal-Mart Stores
Need for studying consumer behaviour
 To understand how the need for the
product/ service was determined
 To understand the how information was
sought by the consumer
 The process of evaluation of various
products and stores
 The payment process
 The post purchase behaviour
What Makes Retail Shoppers Tick
 Demographics and Lifestyles

 Demographics  Lifestyles
◦ consumer data that is ◦ ways in which
objective, quantifiable,
easily identifiable, consumers and families
measurable like age, live and spend time and
gender, income, spend money
occupation etc
 Understanding Consumer Lifestyles:
Psychological Factors

Personality Attitudes

Perceived Lifestyle Class

Risk Consciousness

Purchase
Importance
Perceived Risk and Consumers
Why we Buy: The Science of
Shopping
 According to Paco Underhill:
◦ Purchasing decisions are influenced and made on the
shop floor.
 at least 70% of brand choices are made in the store
 - 68% of purchase decisions are not planned in advance
 - only 5% of shoppers are loyal to one brand of the product group

◦ Various aspects like signage, shelf position, display

space and fixtures, all influence the shopper in his
buying decision.
Factors…
 Range of merchandise
 Convenience
 Time to travel
 Socio-economic background and culture
 The stage of the family life cycle
 The Customer Decision Making
Process

Need Search for Evaluation of

Store visits Purchase decision
recognised Information options
Teen decides what parent buy
 Acc. To Disney’s kid sense 2007 survey,
63% of kids are discussing product beyong
their categories
 21% of parents turn to their teen for
information while buying high priced
items.
 46% of the parents believed that their
children’s opinion is based on research.
Alpha Pup
 It is a market research jargon for a kid
who is deemed by friends to be coolest
or junior early adopters.
 They are always tuned on to latest trend.
 Brand name is important for these kinds
of kids.
 They mostly discuss about mobile phones,
MP3 player, PC or laptop, latest software
and internet connections.
 Developing customer loyalty

Previous
Beliefs and
shopping
attitudes
experience

Recognise desire Store

Evaluate options & select store Decision Outcome
to shop visit(s)

Information on product, store,

location from different sources
The changing Indian consumer
 The media explosion
 Increase in disposable income
 The rise of the great Indian middle class
 Increase in the number of earning young people
 Change in expenditure patterns
 Increase in the number of working women
Implications of Consumer
Demographics and Lifestyles

 Gender Roles

 Consumer Sophistication and Confidence

 Poverty of Time

 Component Lifestyles
 Three Special Market Segments

 In-Home Shoppers

 Online Shoppers

 Outshoppers
In-Home Shoppers

 Shopping is discretionary, not necessary

 Convenience is important

 Active, affluent, well-educated

 Self-confident, younger, adventuresome

 Time scarcity is not a motivator

Online Shoppers

 Use of Web for decision- making process

as well as buying process
 Convenience is important
 Above average incomes, well-educated
 Time scarcity is a motivator
Out shoppers

 Out-of-hometown shopping
 Young, members of a large family, and new to
the community

 Income and education vary

 They like to travel, enjoy fine food, are active,
and read out-of-town newspapers
 Attitudes Towards Shopping

 Shopping enjoyment

 Shopping time

 Shifting feelings about retailing

 Why people buy or not on a shopping trip

 Attitudes by market segment

 Attitudes toward private brands

 Top Reasons for Leaving an Apparel Store
Without Buying
 Cannot find an appealing style
 Cannot find the right size
 Nothing fits
 No sales help is available
 Cannot get in and out of the store easily
 Prices are too high
 In-store experience is stressful
 Cannot find a good value
 Cross-Shopping

 Shopping for a product category at more

than one retail format during the year

 Visiting multiple retailers on one

shopping trip
Consumer Behavior
 It is a process by which people determine
whether, what, when, where, how, from
whom and how often to purchase good
and services.
 Those acts of individuals directly involved
in obtaining, using, and disposing of
economic goods and services, including
the decision processes that precede and
determine these acts.
The Consumer Decision Process

Demographics Lifestyle
Key Factors in the Purchase Act
Common features of consumer
behaviour models
 Consumer behaviour as a decision
process
 Behaviour is rational and can be explained
 Behaviour is purposive involving search,
evaluation and storing of data
 Preferences develop based on more
limited use of information
 Outcomes from purchase decisions,
whether satisfaction or dissonance shape
future purchase decisions
Who is the consumer?
ROLE DESCRIPTION
Individual who determines that some need or want is
Initiator not being met and initiates purchase behaviour to
rectify the situation
A person who intentionally, or unintentionally
Influencer influences the purchase decision , the actual
purchase and/or the use of the product or service

Buyer The individual who makes the purchase

transaction

User The person most directly involved in the

consumption of the purchase
Possible participants in the purchase
process
 S uggester
 P urchaser
 A dvisor
 D ecision maker
 E nd user
One more time – how do consumers
approach retail purchases?
 “A true understanding of shoppers’ decision making
processes is the key to retail success. Psychologists
have identified that we have two main shopping
modes: alpha and beta. In the alpha state, attention
is fully engaged and the decision process is
conscious. But 80% of our shopping is carried out
in beta mode..(when)..all decision making,
orientation and interaction is subconsciously
controlled.”
Siemon Scamell-Katz (2002)
 Types of Consumer Decisions

Extended High

Limited RISK & TIME

Routine Low
 Types of Impulse Shopping

 Completely unplanned

 Partially unplanned

 Unplanned substitution
Designing the Shopping Experience

 Price , availability, signage and advertising

matter a lot to consumers. But the
feature that contributes most to a
successful sale is the consumer’s shopping
experience
Shopping as holistic experience
SEARCH EXPERIENCE

PRODUCT

PLEASURABLE
FULFILMENT
PURCHASE RESPONSE
EXPERIENCE

CONSUMPTION
EXPERIENCE
Designing the Shopping Experience
 Customer centricity remains in the
forefront of the minds of both retailers
and consumers.
 Understand the Shopper’s Expectations.
 Inventory the “Pre-Sale Experience
Assets”
 Recognize the Gatekeepers
 Define the Experience
 Bind the Assets Together
Gone in 2.3 Seconds: Capturing Shoppers
with Effective In-store Triggers
 This survey analyzed 1,000 US shoppers
to identify which in-store and out-of-
store marketing communications get their
attention and influence their purchase
decisions.

 This was conducted by Miller Zell, who is a leader in strategic retail consulting
specializing in retail design, shopper marketing, shopper insights research & analysis,
and store implementation, serving some of the world’s best known brands, Mar
2009.
Insights from the Survey
 Store planners need to be attentive for
not only of their product assortment at
various locations around the store, but
also of their target shopper segment and
the type of messaging vehicle to use in
order to maximize effectiveness.
Insights from the Survey
 According to one study, two-thirds of
shopping decisions are made at the point
of sale. Furthermore, customer service
can have great effects on customer loyalty
and trust and that both are important in
reducing price sensitivity.
Insights from the Survey
 This research indicated that shoppers are
making brand decisions 60% of the time
after entering the store.

 In-store digital signage has yet to hit the

tipping point in terms of influencing
unplanned in-store purchases, but it
seems to be gaining some traction as it
relates to planned purchases.
Insights from the Survey
 Internet advertising seemed to have
minimal impact on planned or unplanned
purchases in store.
 Across all age, income, gender and
channels evaluated, in-store advertising
was considered more effective than out-
of-store advertising in raising product
awareness and communicating product
benefits.
10 SHOPPER INSIGHTS
 Shoppers have difficulty making decisions
 Shoppers want to feel smart when making
decisions.
 Shoppers’ limited ability to process too
much information.
 Shoppers use memory to give meaning to
objects.
 Shoppers need consistent messages in
and out of the store.
 10 SHOPPER INSIGHTS
 Discontinuity creates triggers to attract
shoppers’ attention.
 Shoppers recognize visual stimuli most easily.
 Shoppers use familiar segments to speed up
their selection process.
 Shoppers’ tunnel vision and “boomerang”
behaviour.
 Shoppers need to be reminded of the items
they need.
Adding Value To Wait Time
 Findings from one of the study suggest that
customers use distinct mental time clocks to
measure their behavior and retail personnel
behavior. They allow themselves the indulgence
of exploring the store for any desired amount
of time; however, when they are ready to
complete a transaction, the customer expects
the quickest service available and uses a more
conservative clock in measuring this time.
Adding Value To Wait Time
 Participants of this study expressed an interest
in having distractions at the point of purchase
to alleviate their perception of the passing time.
Distractions they deemed to be more appealing
included television sets that flashed local or
national news, LCD screens that provided
information on store promotions or
advertisements, magazines and publications to
be skimmed while in line, and gum or mints to
enjoy while waiting.
Adding Value To Wait Time
All of these suggestions present great
opportunities for marketing
communications.
Retailers can utilize this opportunity by
presenting customers in line with free
trials of new store products, news of
upcoming sales/events, local and
community news, or trials of new
telecommunications services available at
their location.
 Market Research
 Using research as a tool for understanding
consumers.
 Primary data

 Secondary data