One of the biggest puzzles in retail business is consumer behavior.
Why do they buy goods?
What motivation do they have?
Why do they prefer online shopping?
Consumers’ behavior poses too many questions. Today we introduce our first e-book that will shed light on this topic. In the book, we’ll cover the main models of shoppers behavior, aspects of motivation, purchasing cycle, the difference between online and offline shopping on a psychological level and living use cases.
CHAPTER 1. The Model of Consumer Behavior
To understand why modern e-commerce consumers behave the way they do, we need to look at the model of behavioral psychology. This model was taken as a base by marketing specialists: Philip Kotler and Kevin L. Keller. The main idea of behavioral psychology is that every action is made due to some kind of stimulus.
Reflexes are the clearest example. The I. Pavlov experiments found principles of classical conditioning. He studied the digestive system of animals, and one day he noticed that dogs flow of saliva begins when they see assistants in a white coat. A famous series of experiments on dogs (he definitely wasn’t a vegan 🙂 ) where a flash of light or sound of a metronome were used as a stimulus confirmed the existence of conditioned reflexes. These experiments are the base of behavior therapy.
During the time in this model there appeared a black box between stimulus and response. No one can surely tell what is inside this box, but it’s definitely the moment when a person takes a decision on how to react to this stimulus. Not only psychologists but also marketers are interested in solving the black box riddle. Based on the idea of behaviorism, they assumed that a purchase is the result of some external stimuli. So the modern model of consumers behavior looks like this:
It was created by Philip Kotler. Let’s consider all parts of the consumers behavior model closer. Kotler identifies 2 types of stimuli: marketing and others. Marketing stimuli are products & services, price, distribution, communications. In other words, it’s a marketing mix (4P). This is a group of incentives that marketers can directly manage. Therefore, you need to remember that all 4 components must be in balance. Other stimuli include economic, technological, political, and cultural factors. Unfortunately, it is quite difficult to influence these factors, and we can only take them into account.
The black box he has split into 3 parts: consumer psychology, characteristics, and the buying process.
Consumer characteristics is a group of factors that affect the mindful behavior of the consumer. They change over time. This group includes:
- Personal factors: age, stage of the family life cycle, profession, income per family, lifestyle, etc.
- Social factors: membership groups, reference groups, family, social roles, and status.
- Cultural factors: culture, subculture, and social class.
Psychological factors are often hidden. Sometimes even customers themselves cannot analyze them. They include:
- Motivation. There are 3 groups of motives: rational, emotional, and irrational.
- Perception. This is the way we interpret information and analyze it.
- Learning. This is the previous experience and knowledge that affect customers’ behavior.
- Memory. If customers have remembered your brand via advertising and they had a great experience, they will more likely make repeat purchases.
The buying process usually has 5 steps:
- Need recognition,
- Information search,
- Alternative evaluation,
- Purchase decision,
- Post-purchase evaluation.
This cycle is endless because our needs are constantly growing. According to Maslow’s hierarchy of needs, people are motivated to achieve certain needs and that some needs take precedence over others. The idea is that you won’t have the desire to go to the art gallery if you are very hungry or want to sleep. He has created a pyramid where are 5 levels of needs:
- Physiological needs: food, drink, shelter, clothing, sex, sleep;
- Safety needs: security, health, property;
- Love and belongingness needs: friendship, intimacy, trust, and acceptance;
- Esteem needs: respect, status, recognition;
- Self-actualization needs: a desire to become everything one is capable of becoming.
The first 4 levels are deficiency needs (d-needs). These needs became weaker as people meet them. But self-actualization is a growth or being need. So even when people meet it, it continues to increase.
After the consumers have realized the needs, they start looking for all possible options to meet it. They compare goods and choose the most suited. They make their customer journey and make purchasing decisions. After purchasing, they analyze the results.
Sometimes it takes just a few moments to make all these steps (for example, for gum or any other impulsive purchase), sometimes the cycle is way longer (for example, property purchase).
Note: See infographic about 30 must-have features that will help you to retain customers on every step of their shopping journey.
Now, as we have considered the main principles of the customer’s behavior model, let’s compare online shoppers and offline shoppers.
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