Consumer purchasing is what makes the world go around, people make purchases daily and many do not know the reason behind what drives them to make a decision, despite doing it every day.
Understanding your consumer purchasing habits is the key to a successful marketing campaign as it allows you to truly know and connect with a consumer. However, there is now a range of influences that can drive consumer purchasing and can have an impact on a company’s sales, without a business having to do anything.
1. Reviews
It is no secret that consumers control how a brand is perceived. This is largely controlled through both offline and online reviews, which influence the purchasing process.
In 2017 the North-western University’s Spiegel Research Centre had conducted a study alongside PowerReviews, to discuss how online reviews influence sales. Throughout this study, the key areas that have been identified are:
Online reviews matter, a lot
The research has identified that almost 95% of shoppers read online reviews. Reviews have transformed the way consumers make purchase decisions and the factors that influence them, for example when purchasing a big-ticket or risky item.
Reviews do not have to be from friends or family members, as long as they have had an experience with the product.
Reviews can increase conversion rates
Shoppers look at reviews to see if the price of the product is worth purchasing.
The research showed that one high-end gift retailer saw its conversion rates massively increase after adding reviews to their website and landing pages. The purchase likelihood for a product with 5 reviews is 270% greater than a product with no reviews.
Although reviews are important, quantity isn’t key. In general, it was found that more reviews lead to more purchases, however, after 5 reviews, the sales figure doesn’t increase it stays at a steady level.
Five-stars is too much
Although 5-star is perceived to be the best, consumers see it differently. They are likely to become suspicious as to why the product is so good. Throughout the study it was identified that prices typically peak between the 4.0 – 4.7 range, so your product might be fantastic but consumers are less likely to purchase it if it has a 5-star rating.
Negative reviews benefit a business
The Spiegel report found that negative reviews bring out authenticity to a website’s review sections. A lot of shoppers actively seek out the negative reviews so it is best not to hide them – PowerReviews previously discovered that 82% of shoppers make a point to reach negative reviews.
2. Brand familiarity
When consumers are deciding on purchasing a product, consumers are more likely to go with a brand they are familiar with as a first choice in comparison to any other brand. In today’s world, we are a generation that consumes brands, from clothes that we wear to the restaurants we eat at. But why?
Making a purchase can be identified as a form of problem-solving and it is brands that make this process slightly easier. Consumers first search for the information, evaluate it and then decide whether to make a purchase or not. A lot of brands gain purchases through brands being passed down through generations, for example, a washing-up liquid that your grandparents or parents use. It will automatically seem like the right product for you.
It can be noticed that brands who have higher levels of familiarity enjoy higher levels of liking from consumers and retailers, however, as a business it can be extremely hard to know if your brand is visible and well-known to customers if you aren’t at the top of the leader board.
3. Pricing
When purchasing a product price may be the single most important factor that consumers take into consideration. However, the price of a product usually determines the quality. Price too low, and it impacts the quality perceptions of the product but, too high, and it impacts sales based on a consumer’s willingness or ability to pay the desired price.
Within the FMCG market, for example, pricing a product too low can effectively train consumers to always look for the sale price and wait until that price before purchasing it; which can have a serious knock-on effect for business.
However, some companies have introduced The Decoy Effect; which affects consumers without them knowing it. For example, when you go to the cinema. Do you ever think when you go to the cinema you spend a fortune? This is because the Decoy Effect influences your decision and here’s how:
The Decoy Effect was first demonstrated to a select sample of University students who were asked to make decisions in various situations. During each product testing, students first had two options to choose between. Then a third option was introduced – a decoy designed to sway their decision to pick the target over the competitor. This worked for every product test apart from the lottery.
When consumers have too much choice, they often experience choice overload. Having several options to choose from increases anxiety and slows down the decision-making process, which is why it might take you a while to decide on a Sunday evening take away!
4. Convenience
Convenience is a major factor that influences consumer purchasing, especially within this day and age. Brands can convince the consumer and get them to commit, through reviews and quality for example. Once consumers have made a decision, they generally tend to stick to it. This is because it makes life simpler for them.
Consumers are living their lives at a fast pace: busy lifestyles and hyper-connectivity are influencing consumer purchasing decisions around the whole globe and because of it they are faced with new challenges each day. So, how do you solve consumer needs through convenience?
Adapt and enhance solutions to make the consumer's life more comfortable.
Think about it, consumers are making a lot more of their purchases online due to the high levels of convenience. E-commerce makes it possible for consumers to shop from home or anywhere else with an internet connection and find the exact product they want without having to look hard, can purchase and arrange delivery with a few simple clicks on a computer or smartphone. So why would take time out of your busy schedule to travel for the same item?
5. Social Acceptance
As mentioned, consumers today are majorly influenced by brands due to social media and influencers. If consumers are exposed to a brand, they are more inclined to pick one that they know is popular or socially accepted. This is down to the conscious brain.
Instant decisions are made with consumers' subconscious, however, once questioned on this and they have to explain their reasoning it may change due to the rational mind being involved in the decision.
The crowd leads the way to buyer preferences
Some products are perceived as the best in the market, even if they aren’t the most flavorsome or reliable – this is because the brand has established a high awareness and status making it the leader of their category, for example, Apple, Coca-Cola or Heinz Ketchup. These factors can have a major influence on sales just because consumers want to ‘fit in’.
If you want to know what is driving sales in your industry, please get in touch today.
