Understanding Consumer Shopping Behavior
The article discusses the decision process of what makes retail customers prefer one product over another. It also argues that because of the increase in technology such as social media, consumers now have immense access to information more than they ever had. The section I focused on was the three R's- Research, Recommendation and Returns.
The gap between online retail and actually store front shopping is widely expanding and this is also affecting consumer preferences. The biggest concern is for retailers, who do not have any choice, but to evolve and interconnect both the online world and store front shopping to remain successful. Herein lays the complexities for all marketers, as they try to get into the minds of today's retail shopper.
One of the R's is "Research." Today's consumers can make better product decisions based on their ability to do their own research. With the increase in technology, more and more consumers will access information online before purchasing a product, whether in be online or in person at a retailer's venue.
The next R is "Recommendations and Reviews." Today's consumer also has the access to an abundant amount of reviews pertaining to a particular product before they make any kind of decision on purchasing the product. Consumers are starting to feel more comfortable with reading and trusting these reviews and using this information initially when researching a product. Because of this, the retailer now faces a new set of challenges because the control they once had over the consumer is now dwindling. To challenge this, retailers are now building in unique interactive features on their websites to help encourage feedback and discussions. Reviews have also been scrutinized lately because people have been paid by some retailers to boast their product. Incidentally, consumers are now trusting third-party reviews more than ever because of the little scandal.
The last R to be discussed is "Returns." Returns today have become a normal part of the shopping experience with consumers as well as retailers. Today's consumer will return items not just because of dissatisfaction, but other factors such as buyer's remorse. One of the main issues around returns concentrate on when consumers "don't" do their research and purchase a product only to find out that they are dissatisfied with the product. This holds mostly true for products such as apparel. People do not have the option to try products online so they are gambling that the product will fit. It is a lot easier to shop online for a product then it is to shop at an actual store. Consumers today see this as an expense, not an investment. To confront this issue, retailers are now offering a liberal return policy which entitles the consumer to "unlimited return windows" and a "no questions asked" policy. But it is hard to say if this will work out for the retailer, as today's decision making process for both the consumer and retailer are becoming more complex.
https://dupress.deloitte.com/dup-us-en/industry/retail-distribution/understanding-consumer-behavior-shopping-trends.html
Andrew Kipila/MKTG356
The enclosed Forbes article discusses why giving consumers too many choices could ultimately hurt a company's bottom line. Given the endless number of products and services available online, we could assume it would be easy for consumers to find exactly what they're looking for. Although having a vast selection assures that most people will find something that suits their needs, having too many options can ultimately make it more difficult for consumers to make a choice. When consumers are burdened with so much information, they get frustrated and uncomfortable and will forgo making a purchase altogether. Psychologists refer to this feeling of discomfort as "choice overload" (it's also sometimes referred to as overchoice).
Part of the article outlines a study that was done in an upscale grocery store with jam. Researchers put out two tables, at two different times. One contained a selection of 24 jams, while the other contained only 6. Shoppers were offered samples at each table .Researchers wanted to know two things: Did the number of jams 1) impact how many shoppers would stop to try samples, and 2) influence how many people would buy a jar of jam. What they found was that while shoppers were more likely to stop by the table that offered the greater selection of jams, they were far more likely to make a purchase at the table with less selection. Only 3% of shoppers who stopped at the table containing 24 jars made a purchase, whereas 30% of those who stopped at the table with 6 jars did.
It is interesting that as consumers, we would be drawn to the table that had more choices, but would be more likely to buy from the table with fewer choices. Seems like such an odd behavior and reaction, yet makes so much sense when you think about how over stimulating it is to have so many different options available to you.
Attitudes
COLLAPSE
Consumer's attitudes towards products and services are always changing. Attitude is a persons overall evaluation of a concept. The attitude of a consumer is much harder to predict over the behavior of the consumer because you really have to know how the person is feeling and what they are thinking behind how they act. Consumer's attitudes change constantly and I came across an article that predicts just how consumer's attitudes will continue to change over the next year. Specifically in this article there were 4 key factors of consumer attitudes that will shift by next year. In the article, millennia's are expressed as "balls in a pin ball machine" and I cant disagree with the fact that the media definitely effects and puts pressure on people to always want the next best thing. They say that generations today care about the experience above all else.
The four ways that consumer's attitudes will change over the next year according to this article are, passion, slouch, memory, and uniform. Passion, meaning that, "... a brands purpose and mission makes a difference." Consumers are paying more attention to authenticity of products more than ever and apparently, "its very cool to care right now," (Ghize) When a retailer shows passion towards their product, consumers will care more about it. Slouch, this has to do with consumers crave or relaxation. In such a busy world obviously something like relaxing and taking a nap throughout the day is something we all crave. But now there are apps to help you do so. Two that were mentioned in this article were Hello Alfred and Yule Log, which are supposed to help relieve the stress of the user. Memory, "We will rely more and more on technology to be our memory," that is why apps such as Snap Chat and Instagram are so important to our generation because we fear that if we don't post something we will forget the memories. Lastly, consumers are building uniformity through their actions with the help of apps like Uber and Airbnb, apps like this help consumers customize what they like and basically build convenience in every aspect of their life. Characteristics like convenience and customization are what consumers now crave.
4. Product Strategy
COLLAPSE
The article I read was an interesting glimpse into the development and success behind Sephora, the popular luxury costmetics chain. The article discussed how Sephora took advantage and tapped into a world otherwise non-existent, setting themselves apart and at the top.
If anybody has ever been in Sephora, they know that there are endless beauty brands to choose from. Whether it be a hair, makeup, skin care, fragrance, nails, beauty tools, the options are pricey, but endless. The article discussed how before Sephora opened its doors, there was not one place where consumers could find all of the above. There were the economical options confined to that one isle at the local drugstore and then there were the awkward, limited, uber expensive counters at department stores. Sephora closed the gap and expanded the makeup magnitude. By offering luxury products and their own line of cheaper alternatives in addition to a massive array of products, Sephora was able to capitalize and make them the one stop shop for all things beauty.
They also created an environment 100% focused on providing the customers with not only the products, but the experience and expertise to truly make the products worth the purchase price. The article said something I thought was so accurate about Sephora, and I think is the main reason for their success and customer loyalty - they make shopping there like "open[ing] up their mom's makeup bag and just play[ing]." I remember being a little girl, always peeking into my mom's makeup bag or playing with all of my Nanna's makeup, hair supplies, perfumes while painting my nails in her bathroom. Sephora's product strategy (making these products all accessible in one place, having fun and upbeat artists assisting purchases, and allowing hands on trials and sampling of products) is so successful because it makes all of us feel included and beautiful just like when we were playing in our Nanna's bathroom.
Also in the article, it explains how the younger demographic is less brand loyal - research that Sephora has taken into account by making hundreds of brands and products available for purchase in one location, and a location you can always come back to and try something new in. By making the products ready for trial use, they reassure consumers, ensuring they will know what to expect and truly love the product they purchase.
All of these components make Sephora's product strategy and business model and company as a whole successful and a staple in modern culture.
Link to article:
https://www.washingtonpost.com/news/business/wp/2015/03/09/the-sephora-effect-how-the-cosmetics-retailer-transformed-the-beauty-industry/
Consumer Behavior and Promotion Strategy
COLLAPSE
Is is very important for brands to take consumer behavior into account when adapting their promotion stradegy. Promotion strategies are used by marketers to help achieve their objectives; examples include advertising, sales promotions, personal selling and publicity. In recent times many brands have not been paying close enough attention to the behavior of the consumers they are marketing to and therefore their promotion strategy is falling short. Many companies found that markdowns drew customers in and kept them shopping during the recession but have stuck themselves in a rut of constant promotions. "Now these customers simply expect this rythm and won't pay full price, knowing another promotion is right around the corner."In attempt to fix this issue they have calculated in these markdowns, increasing the product price to begin with so that they can still make the margin they need. However, customers in many cases are too smart for this and know the quality of the product isn't worth the price it's being sold for, making their customers loose trust in them. These issues have arisen for brands such as Anthropologie, J. Crew, Banana Republic, Gap and Ann Taylor. Reteaching their consumers to not expect promotions so regularly while also continuing to expect them to shop with them will be very difficult for these brands. Analysts suggest that a major change in style for these brands could be very refreshing for their customers and possibly change their image of the brand to one that doesn't have promotions so frequently. The trick for these brands will be changing their style to something that their consumers will still want to shop and only time will tell if they can break their reputation.
https://www.washingtonpost.com/posteverything/wp/2016/08/26/why-are-sales-suffering-at-so-many-womens-stores-they-made-bad-clothes/?utm_term=.fdaec11e4453