Lecture 2

Consumer Behaviour in the 21st Century

and the Internet
Consumers Online: The Internet
Audience and Consumer Behavior

 Millions of Consumers in America, UK and Canada

have Internet access – Digital Technology.
 Growth Intensity and scope of internet adoption and

social media usage are increasing.

Internet is regarded as Online
Oxygen.
Data-driven digital marketing tools
and techniques
 Online consumer behaviour is one of the biggest drivers
behind the growth of data-driven digital marketing tools
and techniques.

 Modern businesses simply cannot afford to ignore

consumer trends if they are to attract the right audience,
and then convert this audience.
 Understanding is the key here .

Businesses need to know:

1. Who their audience is,

2. What these audience members are doing, and

3. How to position products and services for the greatest

possible impact.
 What is consumer behaviour in
today's digital age?
 But what is consumer behaviour in today's digital age?

 How do you assess what your customers are up to and

then optimise your business to reflect this behaviour?

- Online banking requirements

- Online grocery purchases
Consumer behaviour: Driven by
expectation
 The modern consumer landscape is a little different from
the one our parents grew up with.

 In fact, it's also different from the one that we grew up

with.

 Digital technology has developed at such a rapid pace that

things that once seemed new and exciting have quickly
become standard expectations for consumers.
Internet Audience and Consumer
Behavior
 Some demographic groups have much higher percentages
of online usage than other groups
 Demographics to examine include:

 Gender

 Age

 Ethnicity

 Community Type

 Income

 Education
Understanding The Behaviour of
Online Shoppers
 Online consumer behavior is often described as the study
of trends, including the influence of online advertising,
consumer willingness to click on links, the prevalence of
comparison-shopping, and how this differs from a customer
in a physical store.

 Smart-phones, tablets and laptops have put consumers

ahead of the game and it’s up to retailers and business
owners to catch up and to try to understand how their
customers are behaving,
Actions of Online Customers
 Before customers have even seen the product in the store
(whether that is bricks and mortar or online), they have
developed an impression of the product.

 Due to increased access to technology, the moment a

consumer sees an ad, they can instantly jump online,
scan a barcode, search for a review, talk to their online
friends about it…the list goes on. These days a
prospective consumer researches a product to decide if they
will make a purchase.
Using Digital Resource to Engage
Potential Customers
 So, the stimulus for a consumer to buy a product is no
longer just an ad on TV, a poster on the wall, or fancy
packaging. Businesses now need to be one step ahead of
the consumer.

 They need to use online and digital resources to steer brand

interaction or customer engagement in their favour. There
are now many channels to market, many platforms on which
to engage potential customers.
Using Digital Resource to Engage
Potential Customers
 Consumers are, on average, spending more time on
social networking sites such as Facebook, Twitter and
LinkedIn than on email, despite the former only becoming
mainstream in many markets over the last few years.

 The use of social media is very high and is utilised by

customers to research and learn about products or services,
however, social media usage does not necessarily
translate into sales. Businesses need to think about how
social media fits into their overall communications strategy,
and not to rely on it as the only method of communication or
expect instant click-throughs for increased sales.
 Ways to Influence Online
Consumer Behaviour
 Learn how consumers search for your business or
product and think about all the relative searches.
 Do a web search for your product or service see what the

most popular searches are, and create relative search terms

for your company.
 Once you understand how people are searching for you, you

need to get creative! Advertise; listen to reviews and

ratings and think of more ways to get your business or
product promoted.
 Ways to Influence Online
Consumer Behaviour
 Research where your target market is spending their
time on the internet and how they
currently interact with your brand. Are they having a good
experience or a bad one? Then figure out what your
company can do to make the experience more favourable.
 Get into VIDEO! The second most-used search box in the

world is YouTube. Whether you use it to showcase your

product or to show consumers what’s going on at the head
office, start up your camera and get recording!
 Stay up to date! You need to constantly be ahead of new

consumer searches, questions and reviews. You also need

to stay fresh with your advertising and video posts.
Online Consumer Behaviour -
Dynamic
 The objective for companies should be to build a seamless
multi-channel experience that connects retailers with
consumers and provides relevant and factual information
in the search process.

 Online consumer behaviour is constantly changing and

as more channels of interaction open up, businesses must
find ways to interact and meet the needs of the online
customer.
 Expectations of Customers in Digital
Era

Today's consumers expect:

1.a smart and intuitive user interface (UI),

2.swift delivery of products and services,

3.real-time support around the clock,

4.easy site navigation,

5.rapid loading speeds, and much more.

Lifestyle Impacts

 Intense Internet usage may cause a decline in

traditional social activities
 Social development of children using Internet
intensively instead of engaging in face-to-face
interactions or undirected play may also be negatively
impacted
 The more time people spend on the Internet, the less

time spent using traditional media

Consumer Behavior Models
 Attempt to predict/explain what consumers purchase and
where, when, how much and why they buy.
 Consumer behavior models based on background
demographic factors and other intervening, more immediate
variables
Consumers Online: The Internet
Audience and Consumer Behavior
 All Households and Greater Internet
access
 Intensity and scope of use both increasing

 Some demographic groups have much

higher percentages of online usage than

others
 Gender, age, ethnicity, community type, income,
education

Copyright © 2014 Pearson Education, Inc. Slide 6-18

The Online Purchasing Decision
 Stages in consumer decision process
 Awareness of need

 Search for more information

 Evaluation of alternatives

 Actual purchase decision

 Post-purchase contact with firm

 Factors that most influence purchasing decision

 Price, free shipping, trusted seller status

Copyright © 2014 Pearson Education, Inc. Slide 6-19

 The Consumer Decision Process and
Supporting Communications

Copyright © 2014 Pearson Education, Inc. Slide 6-20

The Online Purchasing Decision (cont.)
 Decision process similar for online and
offline behavior
 General online behavior model
 Consumer skills
 Product characteristics

 Attitudes toward online purchasing

 Perceptions about control over Web environment

 Web site features: latency, navigability, security

 Clickstream behavior

Copyright © 2014 Pearson Education, Inc. Slide 6-21

A Model of Online Consumer Behavior

Copyright © 2014 Pearson Education, Inc. Slide 6-22

Shoppers: Browsers and Buyers
 Shoppers: 88% of Internet users
 72% buyers
 16% browsers (purchase offline)
 One-third of offline retail purchases influenced by
online activities
 Online traffic also influenced by offline brands and

shopping
 E-commerce and traditional commerce are

coupled: Part of a continuum of consuming

behavior

Copyright © 2014 Pearson Education, Inc. Slide 6-23

What Consumers Shop for and
Buy Online
 Big ticket items
 Travel, computer hardware, electronics
 Consumers now more confident in purchasing costlier items
 Small ticket items ($100 or less)
 Apparel, books, office supplies, software, etc.

Copyright © 2014 Pearson Education, Inc. Slide 6-24

How Shoppers Find Vendors Online
 How shoppers find online vendors
 Search engines
 Marketplaces
 Amazon, eBay
 Direct to retail sites
 Other methods

 Online shoppers are highly intentional

Copyright © 2014 Pearson Education, Inc. Slide 6-25

Why More People Don’t Shop Online

 Largest factor: trust

 Want to see and touch before buying
 Concerns about financial information

 Delivery costs too high

 Concerns about returning items

Copyright © 2014 Pearson Education, Inc. Slide 6-26

Digital Commerce Marketing and
Advertising Strategies and Tools

 Internet marketing (vs. traditional)

 More personalized
 More participatory
 More peer-to-peer
 More communal
 The most effective Internet marketing has all four features

Copyright © 2014 Pearson Education, Inc. Slide 6-27

Establishing the Customer Relationship

 Web site functions to:

 Establish brand identity and customer expectations
 Differentiating product
 Inform and educate customer
 Shape customer experience
 Anchor the brand online
 Central point for all marketing messages

Copyright © 2014 Pearson Education, Inc. Slide 6-28

 Tutorials

Questions:

1.Provide your own definition of an online customer.

2.Explain how an offline customer is different from an online
customer. Support with concrete examples.
3. Discuss how online consumer behaviour has evolved over
the past years in both developed and developing nations.
4. Are there more impulse purchases in online or/and offline
contexts. Justify your answer.