consumer research and behaviour

The past, present, and future of consumer research

• Published: 13 June 2020
• Volume 31 , pages 137–149, ( 2020 )

Cite this article

• Maayan S. Malter   ORCID: orcid.org/0000-0003-0383-7925 1 ,
• Morris B. Holbrook 1 ,
• Barbara E. Kahn 2 ,
• Jeffrey R. Parker 3 &
• Donald R. Lehmann 1  

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In this article, we document the evolution of research trends (concepts, methods, and aims) within the field of consumer behavior, from the time of its early development to the present day, as a multidisciplinary area of research within marketing. We describe current changes in retailing and real-world consumption and offer suggestions on how to use observations of consumption phenomena to generate new and interesting consumer behavior research questions. Consumption continues to change with technological advancements and shifts in consumers’ values and goals. We cannot know the exact shape of things to come, but we polled a sample of leading scholars and summarize their predictions on where the field may be headed in the next twenty years.

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1 Introduction

Beginning in the late 1950s, business schools shifted from descriptive and practitioner-focused studies to more theoretically driven and academically rigorous research (Dahl et al. 1959 ). As the field expanded from an applied form of economics to embrace theories and methodologies from psychology, sociology, anthropology, and statistics, there was an increased emphasis on understanding the thoughts, desires, and experiences of individual consumers. For academic marketing, this meant that research not only focused on the decisions and strategies of marketing managers but also on the decisions and thought processes on the other side of the market—customers.

Since then, the academic study of consumer behavior has evolved and incorporated concepts and methods, not only from marketing at large but also from related social science disciplines, and from the ever-changing landscape of real-world consumption behavior. Its position as an area of study within a larger discipline that comprises researchers from diverse theoretical backgrounds and methodological training has stirred debates over its identity. One article describes consumer behavior as a multidisciplinary subdiscipline of marketing “characterized by the study of people operating in a consumer role involving acquisition, consumption, and disposition of marketplace products, services, and experiences” (MacInnis and Folkes 2009 , p. 900).

This article reviews the evolution of the field of consumer behavior over the past half century, describes its current status, and predicts how it may evolve over the next twenty years. Our review is by no means a comprehensive history of the field (see Schumann et al. 2008 ; Rapp and Hill 2015 ; Wang et al. 2015 ; Wilkie and Moore 2003 , to name a few) but rather focuses on a few key thematic developments. Though we observe many major shifts during this period, certain questions and debates have persisted: Does consumer behavior research need to be relevant to marketing managers or is there intrinsic value from studying the consumer as a project pursued for its own sake? What counts as consumption: only consumption from traditional marketplace transactions or also consumption in a broader sense of non-marketplace interactions? Which are the most appropriate theoretical traditions and methodological tools for addressing questions in consumer behavior research?

2 A brief history of consumer research over the past sixty years—1960 to 2020

In 1969, the Association for Consumer Research was founded and a yearly conference to share marketing research specifically from the consumer’s perspective was instituted. This event marked the culmination of the growing interest in the topic by formalizing it as an area of research within marketing (consumer psychology had become a formalized branch of psychology within the APA in 1960). So, what was consumer behavior before 1969? Scanning current consumer-behavior doctoral seminar syllabi reveals few works predating 1969, with most of those coming from psychology and economics, namely Herbert Simon’s A Behavioral Model of Rational Choice (1955), Abraham Maslow’s A Theory of Human Motivation (1943), and Ernest Dichter’s Handbook of Consumer Motivations (1964). In short, research that illuminated and informed our understanding of consumer behavior prior to 1969 rarely focused on marketing-specific topics, much less consumers or consumption (Dichter’s handbook being a notable exception). Yet, these works were crucial to the rise of consumer behavior research because, in the decades after 1969, there was a shift within academic marketing to thinking about research from a behavioral or decision science perspective (Wilkie and Moore 2003 ). The following section details some ways in which this shift occurred. We draw on a framework proposed by the philosopher Larry Laudan ( 1986 ), who distinguished among three inter-related aspects of scientific inquiry—namely, concepts (the relevant ideas, theories, hypotheses, and constructs); methods (the techniques employed to test and validate these concepts); and aims (the purposes or goals that motivate the investigation).

2.1 Key concepts in the late - 1960s

During the late-1960s, we tended to view the buyer as a computer-like machine for processing information according to various formal rules that embody economic rationality to form a preference for one or another option in order to arrive at a purchase decision. This view tended to manifest itself in a couple of conspicuous ways. The first was a model of buyer behavior introduced by John Howard in 1963 in the second edition of his marketing textbook and quickly adopted by virtually every theorist working in our field—including, Howard and Sheth (of course), Engel-Kollat-&-Blackwell, Franco Nicosia, Alan Andreasen, Jim Bettman, and Joel Cohen. Howard’s great innovation—which he based on a scheme that he had found in the work of Plato (namely, the linkages among Cognition, Affect, and Conation)—took the form of a boxes-and-arrows formulation heavily influenced by the approach to organizational behavior theory that Howard (University of Pittsburgh) had picked up from Herbert Simon (Carnegie Melon University). The model represented a chain of events

where I = inputs of information (from advertising, word-of-mouth, brand features, etc.); C = cognitions (beliefs or perceptions about a brand); A = Affect (liking or preference for the brand); B = behavior (purchase of the brand); and S = satisfaction (post-purchase evaluation of the brand that feeds back onto earlier stages of the sequence, according to a learning model in which reinforced behavior tends to be repeated). This formulation lay at the heart of Howard’s work, which he updated, elaborated on, and streamlined over the remainder of his career. Importantly, it informed virtually every buyer-behavior model that blossomed forth during the last half of the twentieth century.

To represent the link between cognitions and affect, buyer-behavior researchers used various forms of the multi-attribute attitude model (MAAM), originally proposed by psychologists such as Fishbein and Rosenberg as part of what Fishbein and Ajzen ( 1975 ) called the theory of reasoned action. Under MAAM, cognitions (beliefs about brand attributes) are weighted by their importance and summed to create an explanation or prediction of affect (liking for a brand or preference for one brand versus another), which in turn determines behavior (choice of a brand or intention to purchase a brand). This took the work of economist Kelvin Lancaster (with whom Howard interacted), which assumed attitude was based on objective attributes, and extended it to include subjective ones (Lancaster 1966 ; Ratchford 1975 ). Overall, the set of concepts that prevailed in the late-1960s assumed the buyer exhibited economic rationality and acted as a computer-like information-processing machine when making purchase decisions.

2.2 Favored methods in the late-1960s

The methods favored during the late-1960s tended to be almost exclusively neo-positivistic in nature. That is, buyer-behavior research adopted the kinds of methodological rigor that we associate with the physical sciences and the hypothetico-deductive approaches advocated by the neo-positivistic philosophers of science.

Thus, the accepted approaches tended to be either experimental or survey based. For example, numerous laboratory studies tested variations of the MAAM and focused on questions about how to measure beliefs, how to weight the beliefs, how to combine the weighted beliefs, and so forth (e.g., Beckwith and Lehmann 1973 ). Here again, these assumed a rational economic decision-maker who processed information something like a computer.

Seeking rigor, buyer-behavior studies tended to be quantitative in their analyses, employing multivariate statistics, structural equation models, multidimensional scaling, conjoint analysis, and other mathematically sophisticated techniques. For example, various attempts to test the ICABS formulation developed simultaneous (now called structural) equation models such as those deployed by Farley and Ring ( 1970 , 1974 ) to test the Howard and Sheth ( 1969 ) model and by Beckwith and Lehmann ( 1973 ) to measure halo effects.

2.3 Aims in the late-1960s

During this time period, buyer-behavior research was still considered a subdivision of marketing research, the purpose of which was to provide insights useful to marketing managers in making strategic decisions. Essentially, every paper concluded with a section on “Implications for Marketing Managers.” Authors who failed to conform to this expectation could generally count on having their work rejected by leading journals such as the Journal of Marketing Research ( JMR ) and the Journal of Marketing ( JM ).

2.4 Summary—the three R’s in the late-1960s

Starting in the late-1960s to the early-1980s, virtually every buyer-behavior researcher followed the traditional approach to concepts, methods, and aims, now encapsulated under what we might call the three R’s —namely, rationality , rigor , and relevance . However, as we transitioned into the 1980s and beyond, that changed as some (though by no means all) consumer researchers began to expand their approaches and to evolve different perspectives.

2.5 Concepts after 1980

In some circles, the traditional emphasis on the buyer’s rationality—that is, a view of the buyer as a rational-economic, decision-oriented, information-processing, computer-like machine for making choices—began to evolve in at least two primary ways.

First, behavioral economics (originally studied in marketing under the label Behavioral Decision Theory)—developed in psychology by Kahneman and Tversky, in economics by Thaler, and applied in marketing by a number of forward-thinking theorists (e.g., Eric Johnson, Jim Bettman, John Payne, Itamar Simonson, Jay Russo, Joel Huber, and more recently, Dan Ariely)—challenged the rationality of consumers as decision-makers. It was shown that numerous commonly used decision heuristics depart from rational choice and are exceptions to the traditional assumptions of economic rationality. This trend shed light on understanding consumer financial decision-making (Prelec and Loewenstein 1998 ; Gourville 1998 ; Lynch Jr 2011 ) and how to develop “nudges” to help consumers make better decisions for their personal finances (summarized in Johnson et al. 2012 ).

Second, the emerging experiential view (anticipated by Alderson, Levy, and others; developed by Holbrook and Hirschman, and embellished by Schmitt, Pine, and Gilmore, and countless followers) regarded consumers as flesh-and-blood human beings (rather than as information-processing computer-like machines), focused on hedonic aspects of consumption, and expanded the concepts embodied by ICABS (Table 1 ).

2.6 Methods after 1980

The two burgeoning areas of research—behavioral economics and experiential theories—differed in their methodological approaches. The former relied on controlled randomized experiments with a focus on decision strategies and behavioral outcomes. For example, experiments tested the process by which consumers evaluate options using information display boards and “Mouselab” matrices of aspects and attributes (Payne et al. 1988 ). This school of thought also focused on behavioral dependent measures, such as choice (Huber et al. 1982 ; Simonson 1989 ; Iyengar and Lepper 2000 ).

The latter was influenced by post-positivistic philosophers of science—such as Thomas Kuhn, Paul Feyerabend, and Richard Rorty—and approaches expanded to include various qualitative techniques (interpretive, ethnographic, humanistic, and even introspective methods) not previously prominent in the field of consumer research. These included:

Interpretive approaches —such as those drawing on semiotics and hermeneutics—in an effort to gain a richer understanding of the symbolic meanings involved in consumption experiences;

Ethnographic approaches — borrowed from cultural anthropology—such as those illustrated by the influential Consumer Behavior Odyssey (Belk et al. 1989 ) and its discoveries about phenomena related to sacred aspects of consumption or the deep meanings of collections and other possessions;

Humanistic approaches —such as those borrowed from cultural studies or from literary criticism and more recently gathered together under the general heading of consumer culture theory ( CCT );

Introspective or autoethnographic approaches —such as those associated with a method called subjective personal introspection ( SPI ) that various consumer researchers like Sidney Levy and Steve Gould have pursued to gain insights based on their own private lives.

These qualitative approaches tended not to appear in the more traditional journals such as the Journal of Marketing , Journal of Marketing Research , or Marketing Science . However, newer journals such as Consumption, Markets, & Culture and Marketing Theory began to publish papers that drew on the various interpretive, ethnographic, humanistic, or introspective methods.

2.7 Aims after 1980

In 1974, consumer research finally got its own journal with the launch of the Journal of Consumer Research ( JCR ). The early editors of JCR —especially Bob Ferber, Hal Kassarjian, and Jim Bettman—held a rather divergent attitude about the importance or even the desirability of managerial relevance as a key goal of consumer studies. Under their influence, some researchers began to believe that consumer behavior is a phenomenon worthy of study in its own right—purely for the purpose of understanding it better. The journal incorporated articles from an array of methodologies: quantitative (both secondary data analysis and experimental techniques) and qualitative. The “right” balance between theoretical insight and substantive relevance—which are not in inherent conflict—is a matter of debate to this day and will likely continue to be debated well into the future.

2.8 Summary—the three I’s after 1980

In sum, beginning in the early-1980s, consumer research branched out. Much of the work in consumer studies remained within the earlier tradition of the three R’s—that is, rationality (an information-processing decision-oriented buyer), rigor (neo-positivistic experimental designs and quantitative techniques), and relevance (usefulness to marketing managers). Nonetheless, many studies embraced enlarged views of the three major aspects that might be called the three I’s —that is, irrationality (broadened perspectives that incorporate illogical, heuristic, experiential, or hedonic aspects of consumption), interpretation (various qualitative or “postmodern” approaches), and intrinsic motivation (the joy of pursuing a managerially irrelevant consumer study purely for the sake of satisfying one’s own curiosity, without concern for whether it does or does not help a marketing practitioner make a bigger profit).

3 The present—the consumer behavior field today

3.1 present concepts.

In recent years, technological changes have significantly influenced the nature of consumption as the customer journey has transitioned to include more interaction on digital platforms that complements interaction in physical stores. This shift poses a major conceptual challenge in understanding if and how these technological changes affect consumption. Does the medium through which consumption occurs fundamentally alter the psychological and social processes identified in earlier research? In addition, this shift allows us to collect more data at different stages of the customer journey, which further allows us to analyze behavior in ways that were not previously available.

Revisiting the ICABS framework, many of the previous concepts are still present, but we are now addressing them through a lens of technological change (Table 2 )

. In recent years, a number of concepts (e.g., identity, beliefs/lay theories, affect as information, self-control, time, psychological ownership, search for meaning and happiness, social belonging, creativity, and status) have emerged as integral factors that influence and are influenced by consumption. To better understand these concepts, a number of influential theories from social psychology have been adopted into consumer behavior research. Self-construal (Markus and Kitayama 1991 ), regulatory focus (Higgins 1998 ), construal level (Trope and Liberman 2010 ), and goal systems (Kruglanski et al. 2002 ) all provide social-cognition frameworks through which consumer behavior researchers study the psychological processes behind consumer behavior. This “adoption” of social psychological theories into consumer behavior is a symbiotic relationship that further enhances the theories. Tory Higgins happily stated that he learned more about his own theories from the work of marketing academics (he cited Angela Lee and Michel Pham) in further testing and extending them.

3.2 Present Methods

Not only have technological advancements changed the nature of consumption but they have also significantly influenced the methods used in consumer research by adding both new sources of data and improved analytical tools (Ding et al. 2020 ). Researchers continue to use traditional methods from psychology in empirical research (scale development, laboratory experiments, quantitative analyses, etc.) and interpretive approaches in qualitative research. Additionally, online experiments using participants from panels such as Amazon Mechanical Turk and Prolific have become commonplace in the last decade. While they raise concerns about the quality of the data and about the external validity of the results, these online experiments have greatly increased the speed and decreased the cost of collecting data, so researchers continue to use them, albeit with some caution. Reminiscent of the discussion in the 1970s and 1980s about the use of student subjects, the projectability of the online responses and of an increasingly conditioned “professional” group of online respondents (MTurkers) is a major concern.

Technology has also changed research methodology. Currently, there is a large increase in the use of secondary data thanks to the availability of Big Data about online and offline behavior. Methods in computer science have advanced our ability to analyze large corpuses of unstructured data (text, voice, visual images) in an efficient and rigorous way and, thus, to tap into a wealth of nuanced thoughts, feelings, and behaviors heretofore only accessible to qualitative researchers through laboriously conducted content analyses. There are also new neuro-marketing techniques like eye-tracking, fMRI’s, body arousal measures (e.g., heart rate, sweat), and emotion detectors that allow us to measure automatic responses. Lastly, there has been an increase in large-scale field experiments that can be run in online B2C marketplaces.

3.3 Present Aims

Along with a focus on real-world observations and data, there is a renewed emphasis on managerial relevance. Countless conference addresses and editorials in JCR , JCP , and other journals have emphasized the importance of making consumer research useful outside of academia—that is, to help companies, policy makers, and consumers. For instance, understanding how the “new” consumer interacts over time with other consumers and companies in the current marketplace is a key area for future research. As global and social concerns become more salient in all aspects of life, issues of long-term sustainability, social equality, and ethical business practices have also become more central research topics. Fortunately, despite this emphasis on relevance, theoretical contributions and novel ideas are still highly valued. An appropriate balance of theory and practice has become the holy grail of consumer research.

The effects of the current trends in real-world consumption will increase in magnitude with time as more consumers are digitally native. Therefore, a better understanding of current consumer behavior can give us insights and help predict how it will continue to evolve in the years to come.

4 The future—the consumer behavior field in 2040

The other papers use 2030 as a target year but we asked our survey respondents to make predictions for 2040 and thus we have a different future target year.

Niels Bohr once said, “Prediction is very difficult, especially if it’s about the future.” Indeed, it would be a fool’s errand for a single person to hazard a guess about the state of the consumer behavior field twenty years from now. Therefore, predictions from 34 active consumer researchers were collected to address this task. Here, we briefly summarize those predictions.

4.1 Future Concepts

While few respondents proffered guesses regarding specific concepts that would be of interest twenty years from now, many suggested broad topics and trends they expected to see in the field. Expectations for topics could largely be grouped into three main areas. Many suspected that we will be examining essentially the same core topics, perhaps at a finer-grained level, from different perspectives or in ways that we currently cannot utilize due to methodological limitations (more on methods below). A second contingent predicted that much research would center on the impending crises the world faces today, most mentioning environmental and social issues (the COVID-19 pandemic had not yet begun when these predictions were collected and, unsurprisingly, was not anticipated by any of our respondents). The last group, citing the widely expected profound impact of AI on consumers’ lives, argued that AI and other technology-related topics will be dominant subjects in consumer research circa 2040.

While the topic of technology is likely to be focal in the field, our current expectations for the impact of technology on consumers’ lives are narrower than it should be. Rather than merely offering innumerable conveniences and experiences, it seems likely that technology will begin to be integrated into consumers’ thoughts, identities, and personal relationships—probably sooner than we collectively expect. The integration of machines into humans’ bodies and lives will present the field with an expanding list of research questions that do not exist today. For example, how will the concepts of the self, identity, privacy, and goal pursuit change when web-connected technology seamlessly integrates with human consciousness and cognition? Major questions will also need to be answered regarding philosophy of mind, ethics, and social inequality. We suspect that the impact of technology on consumers and consumer research will be far broader than most consumer-behavior researchers anticipate.

As for broader trends within consumer research, there were two camps: (1) those who expect (or hope) that dominant theories (both current and yet to be developed) will become more integrated and comprehensive and (2) those who expect theoretical contributions to become smaller and smaller, to the point of becoming trivial. Both groups felt that current researchers are filling smaller cracks than before, but disagreed on how this would ultimately be resolved.

4.2 Future Methods

As was the case with concepts, respondents’ expectations regarding consumer-research methodologies in 2030 can also be divided into three broad baskets. Unsurprisingly, many indicated that we would be using many technologies not currently available or in wide use. Perhaps more surprising was that most cited the use of technology such as AI, machine-learning algorithms, and robots in designing—as opposed to executing or analyzing—experiments. (Some did point to the use of technologies such as virtual reality in the actual execution of experiments.) The second camp indicated that a focus on reliable and replicable results (discussed further below) will encourage a greater tendency for pre-registering studies, more use of “Big Data,” and a demand for more studies per paper (versus more papers per topic, which some believe is a more fruitful direction). Finally, the third lot indicated that “real data” would be in high demand, thereby necessitating the use of incentive-compatible, consequential dependent variables and a greater prevalence of field studies in consumer research.

As a result, young scholars would benefit from developing a “toolkit” of methodologies for collecting and analyzing the abundant new data of interest to the field. This includes (but is not limited to) a deep understanding of designing and implementing field studies (Gerber and Green 2012 ), data analysis software (R, Python, etc.), text mining and analysis (Humphreys and Wang 2018 ), and analytical tools for other unstructured forms of data such as image and sound. The replication crisis in experimental research means that future scholars will also need to take a more critical approach to validity (internal, external, construct), statistical power, and significance in their work.

4.3 Future Aims

While there was an air of existential concern about the future of the field, most agreed that the trend will be toward increasing the relevance and reliability of consumer research. Specifically, echoing calls from journals and thought leaders, the respondents felt that papers will need to offer more actionable implications for consumers, managers, or policy makers. However, few thought that this increased focus would come at the expense of theoretical insights, suggesting a more demanding overall standard for consumer research in 2040. Likewise, most felt that methodological transparency, open access to data and materials, and study pre-registration will become the norm as the field seeks to allay concerns about the reliability and meaningfulness of its research findings.

4.4 Summary - Future research questions and directions

Despite some well-justified pessimism, the future of consumer research is as bright as ever. As we revised this paper amidst the COVID-19 pandemic, it was clear that many aspects of marketplace behavior, consumption, and life in general will change as a result of this unprecedented global crisis. Given this, and the radical technological, social, and environmental changes that loom on the horizon, consumer researchers will have a treasure trove of topics to tackle in the next ten years, many of which will carry profound substantive importance. While research approaches will evolve, the core goals will remain consistent—namely, to generate theoretically insightful, empirically supported, and substantively impactful research (Table 3 ).

5 Conclusion

At any given moment in time, the focal concepts, methods, and aims of consumer-behavior scholarship reflect both the prior development of the field and trends in the larger scientific community. However, despite shifting trends, the core of the field has remained constant—namely, to understand the motivations, thought processes, and experiences of individuals as they consume goods, services, information, and other offerings, and to use these insights to develop interventions to improve both marketing strategy for firms and consumer welfare for individuals and groups. Amidst the excitement of new technologies, social trends, and consumption experiences, it is important to look back and remind ourselves of the insights the field has already generated. Effectively integrating these past findings with new observations and fresh research will help the field advance our understanding of consumer behavior.

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Malter, M.S., Holbrook, M.B., Kahn, B.E. et al. The past, present, and future of consumer research. Mark Lett 31 , 137–149 (2020). https://doi.org/10.1007/s11002-020-09526-8

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Consumer behavior

Exploring Meaning, Value, and Types of Consumer Behavior

What is consumer behaviour?

Consumer behavior is the study of how individuals select, purchase, use, and dispose of goods and services, reflecting their needs, desires, and aspirations. This multifaceted concept blends elements from psychology, sociology, social anthropology, and economics. It’s not just about what consumers buy, but also why they buy it, how they use it, and how their choices affect their own well-being and that of society.

Understanding consumer behavior involves delving into the decision-making processes of buyers, both individually and in groups. It looks at the influences on the consumer from psychological, social, cultural, and environmental perspectives, considering how emotions, attitudes, and peer pressure affect buying decisions.

In today’s digital age, consumer behavior also extends to how consumers interact with technology, influencing their purchasing decisions. From social media reviews to online shopping trends, technology has become a pivotal factor in shaping consumer preferences and expectations.

Businesses study consumer behavior to understand and predict consumer needs and desires. This understanding helps them in product development, pricing strategies, and in choosing the most effective ways to communicate with their target markets. By aligning products and marketing strategies with consumer behavior, businesses can improve their market competitiveness and increase profitability.

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Understand consumer and shopper behavior, demographics, and loyalty with NielsenIQs solutions: modern, representative consumer panels and customer survey capabilities.

Why is Consumer Behavior Important?

Understanding consumer behavior is crucial for companies across various sectors, as it directly impacts marketing strategies, sales, and customer retention. By comprehending how and why consumers make their purchasing decisions, businesses can tailor their products and services to better meet the needs and desires of their target audience.

This understanding leads to more effective marketing and communication strategies, ensuring that messaging resonates with consumers and stimulates engagement. It also aids in developing customer loyalty programs that effectively retain customers by aligning with their buying habits and preferences.

Moreover, insights into consumer behavior assist in inventory management, ensuring that products in demand are readily available, thereby reducing waste and increasing efficiency. This knowledge also enables companies to anticipate market trends, adapt to changing consumer needs, and stay ahead of competitors.

In essence, understanding consumer behavior is not just about selling products; it’s about creating a brand experience that aligns with consumer lifestyles and values. This alignment not only increases sales but also builds a loyal customer base that is key to long-term business success.

Better Marketing and Communications

Effective marketing hinges on understanding consumer behavior. By analyzing how consumers make purchasing decisions, companies can create targeted marketing campaigns that resonate more deeply with their audience. This leads to higher engagement, improved brand loyalty, and ultimately, increased sales. Tailored marketing messages based on consumer behavior insights ensure that the right message reaches the right audience at the right time, maximizing the impact of marketing efforts.

Increase Customer Loyalty

Understanding consumer behavior is key to building customer loyalty. By recognizing and responding to consumer preferences and values, companies can create personalized experiences and products that foster a deeper emotional connection with their customers. This connection encourages repeat business and word-of-mouth referrals, which are invaluable for long-term business growth. Loyal customers are more likely to make repeat purchases and are often less sensitive to price changes, making them a crucial asset for any business.

Better Plan Inventory

Insights into consumer behavior enable businesses to forecast demand more accurately, leading to smarter inventory planning. By understanding purchasing trends, companies can stock products that are more likely to sell, reducing the costs associated with overstocking and stockouts. This efficient inventory management not only cuts down on waste but also ensures that customers find what they need when they need it, enhancing overall customer satisfaction and loyalty.

Increase Sales

A deep understanding of consumer behavior can significantly boost sales. By aligning products and marketing strategies with consumer preferences and needs, businesses can increase their conversion rates. Tailored promotions and personalized shopping experiences, informed by consumer behavior insights, are more likely to resonate with customers, leading to increased purchasing. Additionally, understanding consumer behavior helps in identifying cross-selling and up-selling opportunities, further enhancing sales potential.

Improve Customer Retention

Customer retention is directly influenced by how well a company understands and responds to its customers’ behavior. By anticipating and meeting consumer needs, businesses can create a positive experience that encourages customers to return. This involves not just meeting basic expectations but exceeding them, thereby fostering a sense of loyalty and trust. Retained customers often become brand advocates, spreading positive word-of-mouth and contributing to a sustainable business model.

Research Competition

Analyzing consumer behavior provides valuable insights into how consumers interact with competitors’ products and services. This knowledge allows companies to identify gaps in the market, develop unique selling propositions, and refine their offerings to better meet consumer needs. Understanding why consumers choose competitors’ products can inform strategic decisions, helping businesses to differentiate themselves and capture a larger market share. Competitive research based on consumer behavior insights is a powerful tool for staying ahead in a rapidly changing market.

Types of Consumer Behaviour

Complex buying behavior.

Complex buying behavior occurs when consumers are highly involved in the purchase of expensive, infrequent, or risky items and perceive significant differences among brands. This behavior is common in purchases like cars, homes, or technology products. Consumers spend considerable time and effort in information search and evaluation of alternatives.

For companies, understanding complex buying behavior is crucial for developing effective marketing strategies. They need to provide detailed, accurate information and comparisons to help consumers make informed decisions. The challenge lies in maintaining consumer trust and providing value that justifies the higher involvement and decision-making effort.

However, the advantage of complex buying behavior is that it often leads to stronger brand loyalty once the consumer is satisfied with their purchase. The key for businesses is to ensure a high level of customer satisfaction through quality products and excellent customer service.

Dissonance-Reducing Buying Behavior

Dissonance-reducing buying behavior is observed when consumers are highly involved in a purchase but see little difference among available brands. This often happens in markets where products are relatively similar, and the consumer’s main goal is to avoid post-purchase regret.

Companies can leverage this behavior by emphasizing the reliability and value of their products. Providing reassurances such as money-back guarantees or extensive customer support can be effective. The challenge is to maintain a high standard of quality and service to avoid post-purchase dissonance in consumers.

The advantage of targeting consumers exhibiting dissonance-reducing buying behavior is that once they are satisfied with a product, they are less likely to switch brands, leading to customer loyalty. However, the risk is that any negative experience can significantly impact their perception and loyalty.

Habitual Buying Behavior

Habitual buying behavior occurs with low-cost, frequently purchased items like groceries or household goods. Consumers make these purchases with minimal effort and involvement, often out of habit rather than strong brand loyalty.

For companies, the key to leveraging habitual buying behavior is ensuring consistent quality and easy availability of their products. Since consumers spend little time on purchase decision-making for these items, brand visibility and convenience are crucial.

The challenge in targeting habitual buying behavior is differentiating products in a saturated market. Innovative packaging, frequent promotions, and loyalty programs can be effective strategies. The advantage is that once consumers habitually purchase a product, they are likely to continue unless they have a negative experience.

Variety-Seeking Buying Behavior

Variety-seeking buying behavior is characterized by consumers who often switch brands, not due to dissatisfaction with the current brand but due to a desire for variety. This is common in categories like clothing, food, and beauty products.

Companies can attract these consumers by continually offering new and different products or variations. Limited-edition products, seasonal variations, and frequent product updates can appeal to variety seekers.

The challenge with variety-seeking behavior is the constant need for innovation and the risk of consumers quickly shifting to competitors. However, the advantage is the opportunity to attract new customers and create excitement around the brand.

What Affects Consumer Behavior?

Marketing campaigns.

Marketing campaigns significantly influence consumer behavior. Effective marketing can create brand awareness, shape consumer perceptions, and drive purchasing decisions. The challenge for companies is to develop campaigns that are not only persuasive but also authentic and relatable.

Well-executed marketing campaigns can elevate brand recognition, foster consumer trust, and ultimately drive sales. They can also help in segmenting the market and targeting specific consumer groups more effectively.

Poorly designed campaigns can lead to misinterpretation, consumer backlash, or indifference. Additionally, overreliance on aggressive marketing can alienate consumers who prefer a more subtle approach.

Personal preferences

Personal preferences play a critical role in consumer behavior. These preferences are shaped by individual experiences, cultural background, lifestyle, and personal values. Companies need to understand these preferences to tailor their offerings and marketing messages.

Catering to personal preferences can lead to increased customer satisfaction and loyalty. It allows for more targeted marketing and product development, reducing waste and increasing efficiency.

The challenge lies in accurately identifying and responding to these preferences, which can vary widely among consumers. There’s also the risk of alienating other segments of the market when focusing too narrowly on specific preferences.

Group influence

Group influence, including family, friends, and social networks, significantly impacts consumer behavior. People are often influenced by the opinions and behaviors of others in their social circle.

Understanding group dynamics can help companies tap into trends and leverage social proof in their marketing strategies. Influencer marketing and social media campaigns can effectively harness group influence.

The downside is the potential for negative word-of-mouth or backlash if consumers have poor experiences. Additionally, trends driven by group influence can be fickle, requiring companies to constantly adapt.

Economics conditions

Economic conditions, such as inflation, recession, or economic boom, directly affect consumer behavior. These conditions influence consumers’ purchasing power and willingness to spend.

Companies that understand and adapt to economic conditions can position themselves favorably during different economic cycles. This can involve adjusting pricing strategies, offering promotions, or diversifying product lines.

The challenge is the unpredictability of economic conditions and the need for rapid adaptation. There’s also the risk of misjudging the market’s economic sentiment, leading to poor sales.

Purchasing Power

Purchasing power refers to consumers’ ability to buy goods and services, influenced by their disposable income and economic conditions. Understanding purchasing power is crucial for pricing strategies and market segmentation.

Tailoring products and marketing to different economic segments can maximize sales and customer satisfaction. It allows for more effective targeting and positioning of products.

The difficulty lies in accurately gauging and responding to changes in purchasing power. There’s also the risk of alienating consumers if pricing strategies are not well-aligned with their economic reality.

Psychological Factors

Psychological factors, including motivation, perception, learning, beliefs, and attitudes, significantly influence consumer behavior. These factors determine how consumers interpret information and make purchasing decisions.

Companies that understand these psychological drivers can create more compelling and emotionally resonant marketing strategies. This can lead to stronger brand loyalty and higher customer engagement.

The challenge is the complexity of human psychology and the difficulty in predicting behavior. Misjudging these factors can lead to ineffective marketing and a disconnect with the target audience.

How to Collect Data on Consumer Behavior?

Surveys are a popular method for collecting data on consumer behavior. They involve asking consumers a series of questions to gather information on their preferences, attitudes, and purchasing habits. Surveys can be conducted online, by phone, or in person, and can reach a wide audience.

Surveys are a cost-effective way to gather large amounts of data. They can be easily standardized and are useful for tracking changes in consumer behavior over time.

The main challenge with surveys is ensuring a high response rate and avoiding bias in the questions or the sample. There’s also the risk of respondents not providing honest or thoughtful answers.

Focus Groups

Focus groups involve a small, diverse group of people discussing a product, service, or marketing campaign. This qualitative research method provides in-depth insights into consumer attitudes and perceptions.

Observations can reveal unspoken or unconscious aspects of consumer behavior. They are useful for understanding the actual behavior of consumers, rather than relying on self-reported data.

The main challenge is the potential for groupthink, where participants influence each other’s opinions. There’s also the risk of not having a representative sample of the target market.

Observations

Observational research involves watching how consumers behave in natural settings, such as in stores or using a product. This method can provide insights into how consumers interact with products and make purchasing decisions.

The challenge with observational research is ensuring that it is unobtrusive and does not influence consumer behavior. There’s also the difficulty in interpreting the observed behaviors accurately.

Experiments

Experiments involve manipulating one or more variables to observe the effect on consumer behavior. This method can provide causal insights into how different factors influence purchasing decisions.

In conclusion, understanding consumer behavior is a multifaceted process that requires expertise in data collection, analysis, and interpretation. NielsenIQ (NIQ) and GfK offer a comprehensive suite of services to help businesses navigate this complex landscape, turning consumer insights into strategic actions. By partnering with NIQ, companies can gain a deeper understanding of their customers, enabling them to make more informed decisions, enhance their marketing strategies, and ultimately drive business growth.

Explore our range of solutions to harness the full potential of consumer data:

• NielsenIQ’s Homescan : Track, diagnose, and analyze consumer behavior from more than 250,000 households across 25 countries.
• NielsenIQ’s Omnishopper : Capture consumer purchases across online and offline channels for a complete view of changing omnichannel behaviors.
• Consumer analytics : Go deeper and create more clarity around shopper behavior with custom surveys and segmentation.
• C onsumption moments : Reveal the true motivations behind customer consumption behavior and usage to guide product innovation and marketing strategy.
• gfknewron Consumer: Understand your consumers’ behavior to redefine your success
• gfknewron Consumer Audience Profiler: Simplify the complex consumer journey into a single framework to know your buyers better than ever before
• GfK Consumer Life: A robust and stable international consumer segmentation study based on values, lifestyle, buying behavior and affinity for tech. Can be customized by market and product.

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Home Market Research

Consumer Research: Examples, Process and Scope

What is Consumer Research?

Consumer research is a part of market research in which inclination, motivation and purchase behavior of the targeted customers are identified. Consumer research helps businesses or organizations understand customer psychology and create detailed purchasing behavior profiles.

It uses research techniques to provide systematic information about what customers need. Using this information brands can make changes in their products and services, making them more customer-centric thereby increasing customer satisfaction. This will in turn help to boost business.

LEARN ABOUT: Market research vs marketing research

An organization that has an in-depth understanding about the customer decision-making process, is most likely to design a product, put a certain price tag to it, establish distribution centers and promote a product based on consumer research insights such that it produces increased consumer interest and purchases.

For example, A consumer electronics company wants to understand, thought process of a consumer when purchasing an electronic device, which can help a company to launch new products, manage the supply of the stock, etc. Carrying out a Consumer electronics survey can be useful to understand the market demand, understand the flaws in their product and also find out research problems in the various processes that influence the purchase of their goods. A consumer electronics survey can be helpful to gather information about the shopping experiences of consumers when purchasing electronics. which can enable a company to make well-informed and wise decisions regarding their products and services.

LEARN ABOUT:  Test Market Demand

Consumer Research Objectives

When a brand is developing a new product, consumer research is conducted to understand what consumers want or need in a product, what attributes are missing and what are they looking for? An efficient survey software really makes it easy for organizations to conduct efficient research.

Consumer research is conducted to improve brand equity. A brand needs to know what consumers think when buying a product or service offered by a brand. Every good business idea needs efficient consumer research for it to be successful. Consumer insights are essential to determine brand positioning among consumers.

Consumer research is conducted to boost sales. The objective of consumer research is to look into various territories of consumer psychology and understand their buying pattern, what kind of packaging they like and other similar attributes that help brands to sell their products and services better.

LEARN ABOUT: Brand health

Consumer Research Model

According to a study conducted, till a decade ago, researchers thought differently about the consumer psychology, where little or no emphasis was put on emotions, mood or the situation that could influence a customer’s buying decision.

Many believed marketing was applied economics. Consumers always took decisions based on statistics and math and evaluated goods and services rationally and then selected items from those brands that gave them the highest customer satisfaction at the lowest cost.

However, this is no longer the situation. Consumers are very well aware of brands and their competitors. A loyal customer is the one who would not only return to repeatedly purchase from a brand but also, recommend his/her family and friends to buy from the same brand even if the prices are slightly higher but provides an exceptional customer service for products purchased or services offered.

Here is where the Net Promoter Score (NPS) helps brands identify brand loyalty and customer satisfaction with their consumers. Net Promoter Score consumer survey uses a single question that is sent to customers to identify their brand loyalty and level of customer satisfaction. Response to this question is measured on a scale between 0-10 and based on this consumers can be identified as:

Detractors: Who have given a score between 0-6.

Passives: Who have given a score between 7-8.

Promoters: Who have given a score between 9-10.

Consumer market research is based on two types of research method:

1. Qualitative Consumer Research

Qualitative research  is descriptive in nature, It’s a method that uses open-ended questions , to gain meaningful insights from respondents and heavily relies on the following market research methods:

Focus Groups: Focus groups as the name suggests is a small group of highly validated subject experts who come together to analyze a product or service. Focus group comprises of 6-10 respondents. A moderator is assigned to the focus group, who helps facilitate discussions among the members to draw meaningful insights

One-to-one Interview: This is a more conversational method, where the researcher asks open-ended questions to collect data from the respondents. This method heavily depends on the expertise of the researcher. How much the researcher is able to probe with relevant questions to get maximum insights. This is a time-consuming method and can take more than one attempt to gain the desired insights.

LEARN ABOUT: Qualitative Interview

Content/ Text Analysis: Text analysis is a qualitative research method where researchers analyze social life by decoding words and images from the documents available. Researchers analyze the context in which the images are used and draw conclusions from them. Social media is an example of text analysis. In the last decade or so, inferences are drawn based on consumer behavior on social media.

Learn More: How to conduct Qualitative Research  

2.Quantitative Consumer Research

In the age of technology and information, meaningful data is more precious than platinum. Billion dollar companies have risen and fallen on how well they have been able to collect and analyze data, to draw validated insights.

Quantitative research is all about numbers and statistics. An evolved consumer who purchases regularly can vouch for how customer-centric businesses have become today. It’s all about customer satisfaction , to gain loyal customers. With just one questions companies are able to collect data, that has the power to make or break a company. Net Promoter Score question , “On a scale from 0-10 how likely are you to recommend our brand to your family or friends?”

How organic word-of-mouth is influencing consumer behavior and how they need to spend less on advertising and invest their time and resources to make sure they provide exceptional customer service.

LEARN ABOUT: Behavioral Targeting

Online surveys , questionnaires , and polls are the preferred data collection tools. Data that is obtained from consumers is then statistically, mathematically and numerically evaluated to understand consumer preference.

Learn more: How to carry out Quantitative Research

Consumer Research Process

The process of consumer research started as an extension of the process of market research . As the findings of market research is used to improve the decision-making capacity of an organization or business, similar is with consumer research.

LEARN ABOUT:  Market research industry

The consumer research process can be broken down into the following steps:

• Develop research objectives: The first step to the consumer research process is to clearly define the research objective, the purpose of research, why is the research being conducted, to understand what? A clear statement of purpose can help emphasize the purpose.
• Collect Secondary data: Collect secondary data first, it helps in understanding if research has been conducted earlier and if there are any pieces of evidence related to the subject matter that can be used by an organization to make informed decisions regarding consumers.
• Primary Research: In primary research organizations or businesses collect their own data or employ a third party to collect data on their behalf. This research makes use of various data collection methods ( qualitative and quantitative ) that helps researchers collect data first hand.

LEARN ABOUT: Best Data Collection Tools

• Collect and analyze data: Data is collected and analyzed and inference is drawn to understand consumer behavior and purchase pattern.
• Prepare report: Finally, a report is prepared for all the findings by analyzing data collected so that organizations are able to make informed decisions and think of all probabilities related to consumer behavior. By putting the study into practice, organizations can become customer-centric and manufacture products or render services that will help them achieve excellent customer satisfaction.

LEARN ABOUT: market research trends

After Consumer Research Process

Once you have been able to successfully carry out the consumer research process , investigate and break paradigms. What consumers need should be a part of market research design and should be carried out regularly. Consumer research provides more in-depth information about the needs, wants, expectations and behavior analytics of clients.  

By identifying this information successfully, strategies that are used to attract consumers can be made better and businesses can make a profit by knowing what consumers want exactly. It is also important to understand and know thoroughly the buying behavior of consumers to know their attitude towards brands and products.

The identification of consumer needs, as well as their preferences, allows a business to adapt to new business and develop a detailed marketing plan that will surely work. The following pointers can help. Completing this process will help you:

• Attract more customers  
• Set the best price for your products  
• Create the right marketing message  
• Increase the quantity that satisfies the demand of its clients  
• Increase the frequency of visits to their clients  
• Increase your sales  
• Reduce costs  
• Refine your approach to the customer service process .

LEARN ABOUT: Behavioral Research

Consumer Research Methods

Consumers are the reason for a business to run and flourish. Gathering enough information about consumers is never going to hurt any business, in fact, it will only add up to the information a business would need to associate with its consumers and manufacture products that will help their business refine and grow.

Following are consumer research methods that ensure you are in tandem with the consumers and understand their needs:

The studies of customer satisfaction

One can determine the degree of satisfaction of consumers in relation to the quality of products through:

• Informal methods such as conversations with staff about products and services according to the dashboards.   
• Past and present questionnaires/ surveys that consumers might have filled that identify their needs.   

T he investigation of the consumer decision process

It is very interesting to know the consumer’s needs, what motivates them to buy, and how is the decision-making process carried out, though:

• Deploying relevant surveys and receiving responses from a target intended audience .

Proof of concept

Businesses can test how well accepted their marketing ideas are by:

• The use of surveys to find out if current or potential consumer see your products as a rational and useful benefit.  
• Conducting personal interviews or focus group sessions with clients to understand how they respond to marketing ideas.

Knowing your market position

You can find out how your current and potential consumers see your products, and how they compare it with your competitors by:

• Sales figures talk louder than any other aspect, once you get to know the comparison in the sales figures it is easy to understand your market position within the market segment.
• Attitudes of consumers while making a purchase also helps in understanding the market hold.      

Branding tests and user experience

You can determine how your customers feel with their brands and product names by:

• The use of focus groups and surveys designed to assess emotional responses to your products and brands.  
• The participation of researchers to study the performance of their brand in the market through existing and available brand measurement research.   

Price changes

You can investigate how your customers accept or not the price changes by using formulas that measure the revenue – multiplying the number of items you sold, by the price of each item. These tests allow you to calculate if your total income increases or decreases after making the price changes by:

• Calculation of changes in the quantities of products demanded by their customers, together with changes in the price of the product.   
• Measure the impact of the price on the demand of the product according to the needs of the client.   

Social media monitoring

Another way to measure feedback and your customer service is by controlling your commitment to social media and feedback. Social networks (especially Facebook) are becoming a common element of the commercialization of many businesses and are increasingly used by their customers to provide information on customer needs, service experiences, share and file customer complaints . It can also be used to run surveys and test concepts. If handled well, it can be one of the most powerful research tools of the client management . I also recommend reading: How to conduct market research through social networks.

Customer Research Questions

Asking the right question is the most important part of conducting research. Moreover, if it’s consumer research, questions should be asked in a manner to gather maximum insights from consumers. Here are some consumer research questions for your next research:

• Who in your household takes purchasing decisions?
• Where do you go looking for ______________ (product)?
• How long does it take you to make a buying decision?
• How far are you willing to travel to buy ___________(product)?
• What features do you look for when you purchase ____________ (product)?
• What motivates you to buy_____________ (product)?

See more consumer research survey questions:

Customer satisfaction surveys

Voice of customer surveys

Product surveys

Service evaluation surveys

Mortgage Survey Questions

Importance of Consumer Research

Launching a product or offering new services can be quite an exciting time for a brand. However, there are a lot of aspects that need to be taken into consideration while a band has something new to offer to consumers.

LEARN ABOUT: User Experience Research

Here is where consumer research plays a pivotal role. The importance of consumer research cannot be emphasized more. Following points summarizes the importance of consumer research:

• To understand market readiness: However good a product or service may be, consumers have to be ready to accept it. Creating a product requires investments which in return expect ROI from product or service purchases. However, if a market is mature enough to accept this utility, it has a low chance of succeeding by tapping into market potential . Therefore, before launching a product or service, organizations need to conduct consumer research, to understand if people are ready to spend on the utility it provides.
• Identify target consumers: By conducting consumer research, brands and organizations can understand their target market based on geographic segmentation and know who exactly is interested in buying their products. According to the data or feedback received from the consumer, research brands can even customize their marketing and branding approach to better appeal to the specific consumer segment.

LEARN ABOUT: Marketing Insight

• Product/Service updates through feedback: Conducting consumer research, provides valuable feedback from consumers about the attributes and features of products and services. This feedback enables organizations to understand consumer perception and provide a more suitable solution based on actual market needs which helps them tweak their offering to perfection.

Explore more: 300 + FREE survey templates to use for your research

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Consumer Behavior

Advertising, Consumerism, Materialism, Marketing

Reviewed by Psychology Today Staff

Consumer behavior—or how people buy and use goods and services—is a rich field of psychological research, particularly for companies trying to sell products to as many potential customers as possible. Since what people buy—and why they buy it—impacts many different facets of their lives, research into consumer behavior ties together several key psychological issues. These include communication (How do different people respond to advertising and marketing?), identity (Do our purchases reveal our personality ?), social status, decision-making , and mental and physical health.

• Why Consumer Behavior Matters
• The Psychology of Buying and Spending
• How Advertising and Marketing Work
• How to Appeal to Consumers

Corporations, political campaigns, and nonprofit organizations all consult findings about consumer behavior to determine how best to market products, candidates, or issues. In some cases, they accomplish this by manipulating people's fears, their least-healthy habits, or their worst tendencies. And consumers themselves can be their own worst enemy, making rash purchasing decisions based on anxiety , faulty logic, or a fleeting desire for social status. But consumers aren’t powerless: Learning more about the different strategies companies employ, as well as the explanations for people's often confusing purchasing decisions, can help individuals more consciously decide what, why, and whether to buy.

In developed countries, people spend only a portion of their money on things they need to survive, and the rest on non-essentials. Purchasing decisions based on want, rather than need, aren’t always rational ; instead, they are influenced by personality , emotion , and trends. To keep up, marketers continuously investigate how individuals and groups make buying choices and respond to marketing techniques.

Political marketing is, in many ways, similar to product marketing: it plays on emotions and people’s desire for compelling stories , rather than pure rationality, and aims to condense complex issues into short, memorable soundbites. Smart politicians use marketing research to tailor their messages, connect with voters who share their values, and counter their opponents’ narrative.

Humans are social animals. We rely on a group to survive and are evolutionarily driven to follow the crowd . To learn what is “correct,” we look to other people—a heuristic known as the principle of social proof . Fads are born because a product’s popularity is assumed to signal value, which further bolsters its popularity.

Natural or man-made disasters can trigger panic buying or hoarding behaviors, either before the disaster or after it has passed, usually of products deemed necessary for survival. In the weeks and months after a disaster, some evidence suggests that “hedonic purchases”—such as alcohol or unhealthy foods —rise as victims of the disaster attempt to cope.

After large-scale recessions, such as the Great Recession of 2007 to 2009, consumers typically become more frugal and sensitive to price. These changes become permanent for some consumers, especially for those who were particularly hard-hit; for others, behaviors revert back to baseline once the economy has stabilized and any personal financial challenges have been overcome.

It already has. Consumers are buying less , shifting more purchasing online, and spending less on travel and in-person events. Whether those changes will endure, though, is unclear. Some experts predict that most people will revert back to old habits post-COVID; a small few, it’s predicted, will become more frugal and less materialistic in the long term.

Much of what people purchase—like food, shelter, or medical care—is necessary for their health and security. But what compels someone to buy things that aren’t necessary, like the latest iPhone or an impractical pair of high-heeled shoes? The study of why people make such purchases—which are often irrational—is closely related to the field of behavioral economics , which examines why people deviate from the most rational choice available.

Behavioral economists, marketing professionals, and psychologists have concluded that extraneous purchases may be driven by a need to display one’s social status, or in response to an emotion like sadness or boredom . In other instances, retailers may successfully manipulate the desire for a “good deal” by making an unneeded item seem especially affordable or portraying it as being in limited supply.

Learning how to recognize common manipulation tactics may help individuals and families save money—and stress —in the long term.

Many human behaviors are driven by reward. Purchasing a new gadget or item of clothing triggers a surge of dopamine , which creates pleasurable feelings. Though the glow of a new purchase may not last long, the desire to once again be rewarded with a burst of dopamine drives us to buy more .

It depends. Some research suggests that experiential purchases like vacations bring more happiness than material goods, in both the short- and long-term . However, this rule may not apply universally. For lower-income people, spending on material goods that meet basic needs is often more conducive to happiness, especially if the items remain useful over time.

Consumers are often irrational. Instead of only buying things they need, they also buy unnecessary items—often because the purchase makes them feel good, soothes negative emotions, or boosts social status. A consumer may also buy something that has been framed by a marketer as especially attractive; “buy one get one free” offers, for instance, are hard to resist and encourage people to buy things they don’t need.

Certain buying impulses can ultimately be harmful , but they often serve a psychological purpose. Purchasing unhealthy foods or excessive alcohol, for instance, can temporarily offer comfort from painful emotions; buying a new pair of designer jeans might break the bank, but can also help the purchaser prominently display their social status.

Dissonant buying impulses—or purchases that conflict with one’s resources, needs, and goals —can be difficult to manage, especially when they’re driven by negative emotions. Learning emotional regulation skills —such as naming any negative feelings, redirecting attention to productive activities, or practicing mindfulness —or creating physical “barriers” (such as freezing credit cards so they can’t be used impulsively) can help.

Anxiety is known to spur impulsive purchases —in part because buying things offers a sense of control and can be used to self-soothe. Anxiety can also lead someone to prioritize products that promote safety or a sense of security—such as toilet paper, hand sanitizer, or canned goods.

In a word, panic. Anxiety and fear make the world appear frightening and senseless; stocking up on certain items like toilet paper is one way to restore a feeling of control. Panic buying is also driven in part by herd mentality; if people see that others are hoarding hand sanitizer, they assume they should too.

Impulse buying may be motivated by negative emotions, as purchasing something often temporarily boosts mood. It may also be driven by personality—the naturally more impulsive or less conscientious may be driven to more frequently purchase items on a whim. Marketing strategies, like advertising products as “limited time offers,” can increase the tendency to impulse buy.

Two vast, interrelated industries—advertising and marketing—are dedicated to introducing people to products and convincing them to make purchases.

Since the public’s desires tend to change over time, however, what works in one product’s campaign won’t necessarily work in another’s. To adapt messages for a fickle audience, advertisers employ focus groups, market research, and psychological studies to better understand what compels people to commit to purchases or become loyal to brands.

Everyone has heard the advertising maxim “sex sells,” for instance—but exactly what, when, and why sex can be used to successfully market a product is the subject of much debate among ad makers and behavioral researchers. Recently, some evidence has suggested that pitches to the perceived “lowest common denominator” may actually inspire consumer backlash.

Marketers regularly use psychology to convince consumers to buy. Some common strategies include classical conditioning —training consumers to associate a product with certain cues through repeated exposure—creating a scarcity mindset (suggesting that a product only exists in limited quantities), or employing the principle of social proof to imply that everyone is buying a product—so you should, too.

Marketers often exploit cognitive shortcuts , known as heuristics, to convince consumers to make purchases. One example of this is the anchoring bias , or the brain’s tendency to rely heavily on the first piece of information it learns. A savvy marketer may say, for instance, that a car costs $20,000, then quickly offer to take $1,000 off. Since the consumer “anchored” on to the initial $20,000 price tag, a $1,000 discount seems substantial and the consumer may leap at the offer. But if the car was truly worth $15,000, it would still be overpriced, even with the supposed discount factored in. 

Renowned marketing researcher Robert Cialdini found that advertisements are perceived very differently depending on consumers’ state of mind. Fearful consumers, for instance, are more likely to respond negatively to ads that promote standing out from the crowd. However, consumers in a positive state of mind respond well to ads encouraging uniqueness; thus, timing and context are often critical to an ad’s success.

Limited time offers trigger a sense of urgency and force consumers to make quick decisions. A product only being available “for a limited time” (either at all or at a lower price) creates a sense of scarcity. Scarcity—whether real or manufactured—increases a product’s perceived value, heightening the chance of an impulsive purchase.

Because the majority of humans desire and seek out sex, sexual stimuli naturally capture attention; thus, marketers often make use of attractive models or erotic imagery simply to make consumers take notice. Being “primed” with erotic content can change behavior, too; research has found that sexual priming can lead consumers to make riskier financial choices.

The effectiveness of sex in advertising likely depends on several factors, including gender and context. Women appear to respond more negatively to sexual ads than men, research finds. When the product is unrelated to sex, using erotic imagery in ads can trigger dissonance and trigger negative feelings about the brand.

In a crowded marketplace, anyone hoping to sell a product or service will need to stand out. To succeed at this, marketers often turn to psychological research to identify and target their most likely consumers, grab their attention, and convince them that a product will fill a specific need or otherwise better their life. Aiming to inform and persuade consumers—rather than manipulate them—is widely considered to be the most ethical approach, and is likely to help build brand loyalty more than cheap marketing tricks.

Both the message and the messenger matter for  persuasion . Marketing researcher Robert Cialdini has found that first impressions matter greatly—a company (or individual) that appears trustworthy and warm is more likely to gain their audience’s trust. Cialdini also coined the term  “pre-suasion”  to argue that marketers must grab consumers’ attention  before  making an appeal—by offering free samples, for instance, or couching a product pitch in an amusing commercial. 

Turning to psychology can help. Appealing to consumers’ emotions and desire for connection with others are often powerful marketing strategies, as long as they’re not interpreted by consumers as manipulative. Introducing novelty, too, can be effective—research shows that consumers respond to surprising ads, humorous ads, or even “experiential” ads (such as parties or events designed to promote a product). Repeating an ad enough times so that a consumer remembers it—but not so much that they become frustrated—is also a critical part of any effective ad campaign.

Humans are creatures of habit and slow to adapt to change. To spread a new message or idea,  advertisers  have learned that simplicity is key; overcomplicated appeals can be frustrating or confusing for consumers. Summarizing the benefits of a new product, service, or political campaign in pithy, memorable phrases or images—and then repeating the message as often as possible—is more likely to grab consumers' attention and convince them to take a chance on a new object or idea.

Customers trust businesses that are honest with them, sharing accurate information about everything from the benefits of using their products to how they run their business.  Other guidelines for ethical marketing  include clearly distinguishing ads from other types of content (news, entertainment, etc.), prioritizing the interests of children or other vulnerable groups (by not marketing unhealthy products to children, for example), avoiding negative stereotypes, and respecting consumers’  intelligence  and privacy.

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Understanding and shaping consumer behavior in the next normal

Months after the novel coronavirus was first detected in the United States, the COVID-19 crisis continues to upend Americans’ lives and livelihoods. The pandemic has disrupted nearly every routine in day-to-day life. The extent and duration of mandated lockdowns and business closures have forced people to give up even some of their most deeply ingrained habits—whether spending an hour at the gym after dropping the kids off at school, going to a coffee shop for a midday break, or enjoying Saturday night at the movies.

About the authors

This article, a collaboration between McKinsey and the Yale Center for Customer Insights, was written by Tamara Charm, Ravi Dhar, Stacey Haas , Jennie Liu, Nathan Novemsky, and Warren Teichner .

Such disruptions in daily experiences present a rare moment. In ordinary times, consumers tend to stick stubbornly to their habits, resulting in very slow adoption (if any) of beneficial innovations  that require behavior change. Now, the COVID-19 crisis has caused consumers everywhere to change their behaviors —rapidly and in large numbers. In the United States, for example, 75 percent of consumers have tried a new store, brand, or different way of shopping  during the pandemic. Even though the impetus for that behavior change may be specific to the pandemic and transient, consumer companies would do well to find ways to meet consumers where they are today and satisfy their needs in the postcrisis period.

Behavioral science tells us that identifying consumers’ new beliefs, habits, and “peak moments” is central to driving behavioral change. Five actions can help companies influence consumer behavior for the longer term:

• Reinforce positive new beliefs.
• Shape emerging habits with new offerings.
• Sustain new habits, using contextual cues.
• Align messages to consumer mindsets.
• Analyze consumer beliefs and behaviors at a granular level.

Reinforce positive new beliefs

According to behavioral science, the set of beliefs that a consumer holds about the world is a key influencer of consumer behavior. Beliefs are psychological—so deeply rooted that they prevent consumers from logically evaluating alternatives and thus perpetuate existing habits and routines. Companies that attempt to motivate behavioral change by ignoring or challenging consumers’ beliefs are fighting an uphill battle.

The COVID-19 crisis, however, has forced many consumers to change their behaviors, and their new experiences have caused them to change their beliefs about a wide range of everyday activities, from grocery shopping to exercising to socializing. When consumers are surprised and delighted by new experiences, even long-held beliefs can change, making consumers more willing to repeat the behavior, even when the trigger (in this case, the COVID-19 pandemic) is no longer present. In other words, this is a unique moment in time during which companies can reinforce and shape behavioral shifts to position their products and brands better for the next normal.

When consumers are surprised and delighted by new experiences, even long-held beliefs can change, making consumers more willing to repeat the behavior.

For example, approximately 15 percent of US consumers tried grocery delivery for the first time during the COVID-19 crisis. Among those first timers, more than 80 percent say they were satisfied with the ease and safety of the experience; 70 percent even found it enjoyable. And 40 percent intend to continue getting their groceries delivered after the crisis, suggesting that they’ve jettisoned any previously held beliefs about grocery delivery being unreliable or inconvenient; instead, they’ve been surprised and delighted by the benefits of delivery.

Another example of changing beliefs involves at-home exercise. The US online fitness market has seen approximately 50 percent growth in its consumer base since February 2020; the market for digital home-exercise machines has grown by 20 percent. It’s likely that many people who tried those fitness activities for the first time during the pandemic believed that at-home exercise couldn’t meet their exercise needs. That belief has clearly changed for many of these consumers: 55 percent who tried online fitness programs and 65 percent who tried digital exercise machines say they will continue to use them, even after fitness centers and gyms reopen. To reinforce the new belief that online fitness can be motivating and enjoyable, NordicTrack, in a recent TV ad titled “Face Off,” shows that online workouts can foster the same friendly competition and connection that people look for when they go to the gym or attend in-person exercise classes.

An effective way to reinforce a new belief is to focus on peak moments—specific parts of the consumer decision journey that have disproportionate impact and that consumers tend to remember most. Peak moments often include first-time experiences with a product or service, touchpoints at the end of a consumer journey (such as the checkout process in a store), and other moments of intense consumer reaction.

Some companies have focused on enhancing the consumer’s first-time experience. Plant-based-meat  manufacturer Beyond Meat, for instance, was already benefiting from delays in meat production in the early days of the COVID-19 crisis: its sales more than doubled between the first and second quarters of 2020. In collaboration with local restaurants  and catering companies, the company has been delivering free, professionally prepared food to hospitals and other community centers. By giving away Beyond Burgers prepared by professional chefs, Beyond Meat is creating positive first experiences with its product at a time when consumers are more open to trial.

As the consumer journey has changed, so have the peak moments, and it’s crucial for companies to identify and optimize them. For example, a peak moment in a grocery store might be the discovery of an exciting new product on the shelf. In the online-grocery journey, however, a peak moment might instead be on-time delivery or the “unboxing” of the order (the experience of taking the delivered items out of the packaging). Grocers could consider including a handwritten thank-you note or some other surprise, such as a free sample, to reinforce consumers’ positive connections with the experience.

Highly emotional occasions can spark intense consumer reactions and therefore present an opportunity for companies to create peak moments associated with their products or brands. For example, when graduations shifted from formal, large-scale ceremonies to at-home, family celebrations, Krispy Kreme offered each 2020 graduate a dozen specially decorated doughnuts for free. With that promotion, the company connected its brand with an emotional event that may not have been a key occasion for doughnuts prior to the pandemic.

Shape emerging habits with new products

Companies can nudge consumers toward new habits through product innovation. For instance, the COVID-19 crisis has spurred consumers to become more health oriented  and increase their intake of vitamins and minerals. Unilever reported a sales spike in beverages that contain zinc and vitamin C, such as Lipton Immune Support tea. The company is therefore rolling out such products globally. It’s also aligning its innovation priorities with consumers’ emerging health-and-wellness concerns.

Similarly, packaged-food companies can encourage the habit of cooking at home. Spice manufacturer McCormick’s sales in China have sustained double-digit increases compared with 2019, even as the Chinese economy has reopened  and people go back to their workplaces. The same pattern could play out in other countries. Kraft Heinz’s innovation agenda for its international markets now prioritizes products that make home cooking pleasurable, fast, and easy—products such as sauces, dressings, and side dishes. These will be targeted at “light” and “medium” users of Kraft Heinz products.

Sustain new habits, using contextual cues

Habits can form when a consumer begins to associate a certain behavior with a particular context; eventually, that behavior can become automatic. To help turn behaviors into habits, companies should identify the contextual cues that drive the behaviors. A contextual cue can be a particular task, time of day, or object placement. For example, more consumers are keeping hand sanitizer and disinfecting wipes near entryways for easy access and as a reminder to keep hands and surfaces clean. Product packaging and marketing that reinforces the put-it-by-the-door behavior can help consumers sustain the habit.

Some companies may need to identify—and create—new contextual cues. Before the COVID-19 crisis, a contextual cue for chewing-gum consumption was anticipation of a social interaction—for instance, before going to a club, while commuting to work, and after smoking. As social occasions have waned during the pandemic, a chewing-gum manufacturer must look for new contextual cues, focusing largely on solo or small-group activities, such as gaming and crafting. Gum manufacturers could consider designing packaging, flavors, and communications that reinforce those new associations.

Align messages to consumer mindsets

People across the country have felt an intensified mix of anxiety, anger, and fear because of recent events, making marketing a tricky terrain to navigate. The heightened emotions and increased polarization of the past few months could drive lasting changes in consumers’ behavior and shape their long-term preferences. Companies should therefore ensure that all their brand communications are attuned to consumer sentiment. The quality of a company’s communication  and its ability to strike the right tone will increasingly become a competitive advantage.

McKinsey’s consumer-sentiment surveys  show that consumers are paying closer attention to how companies treat their employees  during this crisis—and taking note of companies that demonstrate care and concern for people. That has implications for how brands connect with consumers and what types of messages will resonate. Hair-care brand Olaplex, for example, became one of the most mentioned hair-care brands on social media when it started an affiliate program: the company donated a portion of its proceeds from product sales to customers’ local hairstylists, helping them stay afloat during salon closures.

That said, consumers will see through—and reject—messages and actions that are performative and that seek to commercialize social issues. A brand’s communications must align with its purpose ; otherwise, the messages won’t ring true. Testing marketing messages among a diverse group of consumers, in the context in which those messages will appear, could help prevent costly missteps.

Analyze consumer beliefs and behaviors at a granular level

Consumer beliefs, habits, occasions, and emotional-need states will continue to evolve rapidly over the next year or two as the world awaits a COVID-19 vaccine. For consumer companies to stay abreast of those changes, monitoring product sales alone won’t be sufficient. Companies must also conduct primary consumer-insights work, with a focus on identifying changed behaviors and associated changed beliefs and motivators to get a comprehensive picture of the changing consumer decision journey.

Qualitative, exploratory research will have a particular role to play as a precursor to (and, in some cases, a substitute for) quantitative research. Digital data-gathering and monitoring techniques—such as mobile diaries, social-media “listening,” and artificial-intelligence-driven message boards—will be vital tools to help companies understand emerging behaviors and contextual cues. When structured well, those insights generate new thinking within an organization that can be validated through larger-scale surveys and in-market testing. Companies can then refine their product offerings and marketing messages accordingly.

In addition, granular analyses of footfall data and omnichannel sales will unearth telling details, such as which geographic regions are seeing in-person commerce rebound first and which products consumers are buying (such as smaller pack sizes to avoid sharing, activewear versus office wear, and so on). Whereas in the past, companies might have fielded high-level usage and attitude surveys and brand trackers a few times a year, it’s especially important now for companies to keep a closer eye on the evolution of consumer behavior on a weekly or monthly basis.

The COVID-19 crisis has changed people’s routines at unprecedented speed—and some of those changes will outlast the pandemic. Even in states and cities that have reopened, consumers remain cautious about resuming all of their precrisis activities. We’ve seen differences in consumer behavior across geographic markets and demographic groups, and those differences will only widen during the recovery phase, given that the health, economic, and social impact of COVID-19 isn’t uniform. Companies that develop a nuanced understanding of the changed beliefs, peak moments, and habits of their target consumer bases—and adjust their product offerings, customer experiences, and marketing communications accordingly—will be best positioned to thrive in the next normal.

Tamara Charm is a senior expert in McKinsey’s Boston office; Ravi Dhar is director of the Center for Customer Insights at the Yale School of Management; Stacey Haas is a partner in McKinsey’s Detroit office; Jennie Liu is executive director of the Yale Center for Customer Insights; Nathan Novemsky is a marketing professor at the Yale School of Management; and Warren Teichner is a senior partner in McKinsey’s New Jersey office.

This article was edited by Monica Toriello, an executive editor in the New York office.

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Research: Consumers’ Sustainability Demands Are Rising

• Ashley Reichheld,
• Cory Ritthaler

We’re on the brink of a major shift in consumption patterns, where brands that make good on their promises to people and the planet will have the advantage.

Three factors are driving us toward a major shift in consumption patterns where consumers will consider sustainability as a baseline requirement for purchase: 1) Trust drives behavior and, ultimately, business outcomes; 2) Sustainability promotes trust, particularly among younger generations; and 3) Younger generations will soon have most of the purchasing power in the U.S. Companies that understand these trends — and create truly sustainable brands that make good on their promises to people and the planet — will seize advantage from brands that make flimsy claims or have not invested sufficiently in sustainability.

For most consumers, sustainability has been considered a “nice-to-have” in the brands they buy, but it’s rarely been table stakes . That’s about to change. Our research suggests we’re on the brink of a major shift in consumption patterns, where truly sustainable brands — those that make good on their promises to people and the planet — will seize the advantage from brands that make flimsy claims or that have not invested sufficiently in sustainability. We’re fast approaching this tipping point where sustainability will be considered a baseline requirement for purchase, and companies should prepare now.

• Ashley Reichheld , a principal at Deloitte Consulting LLP, created TrustID, a groundbreaking system to help companies measure, predict, and build trust with their customers, workforce, and partners. Ashley is the lead author of The Four Factors of Trust .
• JP John Peto , a principal at Deloitte Consulting LLP, is a reformed cattle farmer who now leads the practice of sustainability-oriented offerings across Deloitte Consulting in the U.S.
• CR Cory Ritthaler is a principal at Deloitte Consulting LLP in the power, utilities, and renewables industry.  He helps clients drive profitability and growth by increasing customer engagement, reducing cost to serve without sacrificing quality, and combining digital capabilities and a human touch.

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Understanding Customer Behavior with Market Research

Customer behavior is one of the foremost areas of concentration in marketing, as consumers are the bedrock of a company’s success. 

Businesses must therefore understand their customer behaviors in order to suit their needs and drive revenue. In fact, 66% of customers expect businesses to understand their needs and expectations.

But there is far much more to customer behavior than customer desires and expectations. This concept encompasses several facets of customer actions, along with the driving force behind them.

This article explores customer behavior, its importance, aspects and how a well-established campaign of market research techniques allows businesses to be well-acquainted with the customer behavior within their target market. 

Defining Customer Behavior

Also called consumer behavior, customer behavior denotes the study of customers, particularly those in a target market, including the processes they use to choose, consume and discard products and services . 

This field of study involves recording and examining customers’ mental, behavioral and emotional responses . Observing c ustomer behavior goes beyond studying behaviors in a customer journey , that is, the actions customers take prior to making a purchase.

Rather, consumer behavior studies how customers choose products, why they avoid certain products, their buying behaviors, along with how they interact with a product or service. Thus, this concept transcends looking into what customers want and don’t want. 

When studying these behaviors, researchers often incorporate scientific approaches, using notions from psychology and economics and even chemistry and biology. 

Studying customer behavior can also involve studying organizations , especially for B2B businesses. However, B2C businesses can also stand to scrutinize companies as a kind of competitive analysis. 

Consumer behavior is the study of individuals and organizations and how they select and use products and services. It is mainly concerned with psychology, motivations, and behavior.

The Key Aspects that Customer Behavior Investigates

As aforementioned, customer behavior takes various elements of customers into account, going beyond its subsets of customer journeys and customer buying behavior , which themselves span different concepts.

The following enumerates several key aspects that customer behavior encompasses.

• Buying habits, including locations, devices and frequencies 
• Social trends and background factors that influence customers to make or avoid purchases
• Customer sentiment around product/service alternatives, such as related products/services, those from different brands
• Preferred methods of purchasing such as in-store versus online or both, at a large retailer or at a mom-and-pop shop, etc.
• Behaviors of customers as thy shop
• How customers search for companies
• How customers find businesses during their research 
• Customer reasoning behind different alternatives
• How customers are influenced by their environments such as their friends, media, culture and other target market members 
• How marketing campaigns influence or affect their behaviors

The Importance of Examining Customer Behavior

Studying this concept may appear to be laborious at worst and tedious at best, however, brands ought to avoid omitting it. This is because the aspects of customer behavior paint a critical picture of who customers are, allowing businesses to market and cater to them accordingly.   

Understanding the customer behavior of customers allows companies to adapt and improve their marketing campaigns, sales promotions, customer service and more. Most importantly, it allows brands to influence their customers more productively. 

Additionally, by understanding how customers choose, consume and discard products, businesses can identify issues in the products themselves and make innovations . In this way, studying customer behavior helps with product-related issues such as customer development and product satisfaction .  

Businesses can therefore study it to find gaps and flaws in existing products and improve upon them. Or, they can create products with alternative features and even new products to gain a competitive advantage.

Studying consumer behavior also allows marketers to present their products more effectively, so that they can drive a maximum impact. That way, customers will be more keen on interacting with a business, whether they’ve long known about it or recently discovered it.

When customers engage with a business more frequently , they become far more exposed to marketing and advertising messages that can influence them to make purchases . In this way, engaging with a company, whether it is viewing their content or browsing their offerings lodges that company in customers’ minds, which is key for brand awareness .

Generally speaking, it is also ideal for customers to have businesses on their minds subconsciously. In fact, a Harvard Business School professor declares that 95% of purchases are made subconsciously in his book, How Customers Think: Essential Insights into the Mind of the Market. This book also discovered that the biggest drivers of unconscious urges are emotions. 

All in all, examining consumer behavior enables businesses to become more attuned to their customers , thereby allowing them to better tailor their marketing efforts and retain customers for the long term . 

Customer Behavior Patterns

It is important to identify the patterns that makeup customer behavior. Patterns are not to be confused with buying habits , as the latter refers to inclinations for an action that can become spontaneous , whereas patterns exhibit predictable occurrences .

Customer behavior patterns are also contrary to buying habits in that patterns are indicative of groups, while habits are more unique and individual-based .

The following explains the four customer behavior patterns:

• Customers tend to buy products based on the products’ perishability, a unit of sale, price, number of users of the product and the buying power of the customer. 
• Businesses must study place of purchase patterns, in that it will reveal customers’ choice of place, helping marketers understand which areas their customers visit. 
• Customers can window shop online, then make up their minds at home and buy a product online. Or, they may buy a product in-store, via different payment options such as cash, debit or credit card.
• Businesses that gain this kind of insight into behavior patterns help them find ways to make customers buy again and more frequently.
• This pattern can also help businesses upsell products.
• Businesses can meet customer demands by studying their purchase timing and frequency in order to serve them better. 
• Studying these concepts will help businesses adapt to regional (and global) time differences, along with seasonal variations. 

The Things That Affect Customer Behavior

There are various influences and facets that can affect how customers behave. Businesses ought to acclimate themselves with these customer behavior factors , in that they all have a bearing on customer behavior and behavior patterns in one way or another.

When studying customer behavior based on these factors, businesses will be able to understand it more holistically. This helps in market segmentation and building customer personas , two market research tactics that allow businesses to gain a deeper understanding of their target market. 

The following lists the critical factors of customer behavior:

• Purchasing power : even the wealthiest of customers are constrained to some sort of budget or need to buy things within their means. Thus, much of what customers buy depends on their purchasing power.
• Marketing campaigns : Specifically designed to persuade customers as well as reel in new ones, marketing campaigns have the capability to influence buying behaviors, when done correctly. They can prompt customers to switch brands or opt for a more expensive product with the correct messaging — which requires understanding your customers. 
• Personality traits : Personality affects many kinds of behavior, including customer behavior. These spring from background and upbringing, which affect how people will behave in different settings. Some customers will be drawn to events (grand openings, sales, etc.) due to extroversion, while others may not be and some may fall in between.
• Personal preferences : The way customers choose purchases often relies on their personal preferences. Advertising and marketing campaigns can surely affect these but some preferences are unyielding. For example, a vegan will not buy animal-based products, while a meat lover is not going to shop for exclusively vegan items. Businesses should therefore be well-acquainted with the preferences of their target market. 
• The economy : Economic conditions play a role in customer behavior, especially in relation to more expensive products; positive economic environments are bent on making customers more willing to indulge. In times of inflation, consumers are less likely to spend on expensive items, as well as make frequent purchases. Negative economic conditions are fruitful for businesses to introduce promotions and bargains. 
• Group influence : Peer pressure and the opinions of others can also weigh heavily on buying and usage decisions. When customers’ friends and peers speak negatively or positively about an item or brand, it affects the way the customers perceive it. In some cases, group influence provides a setting of brand advocacy, while at other times, it can cause major reputational damage to a business. 
• Social trends : Related to group influence, social trends set the scene in terms of what is popular and acceptable. From social media, to movies, blogs and podcasts, various talking points and fads can form and leave strong impressions among customers. Some of these platforms provide a breeding ground for new trends, the kinds that marketers can access, depending on their budget and strategy. 

How Market Research Helps Businesses Understand Customer Behavior

Conducting market research enables businesses to understand all the key facets of customer behavior . There is much involved in market research, all of which can help marketers deliver more effective campaigns. 

First off, market research encompasses a wide breadth of studies, from secondary research to primary research and from quantitative research to qualitative research . There is a vast pool of available resources, i.e., secondary sources available. These can take the form of industry news sites, statistics sources, published studies and more.

While secondary research is an important starting point for conducting market research, it does not address all the specific needs that a business may have , let alone the specific questions that businesses intend to probe their customers with.  

As such, all businesses should turn to primary sources to understand their consumer behaviors. There are different routes for market researchers to take on this front; effective survey studies are the most useful. This is because surveys allow researchers to understand where their target market lies in all the factors and patterns of customer behavior . 

For example, market researchers can conduct surveys to learn more about their customers’ purchasing power and how it relates to what they buy and how much. In addition, they can qualify only certain people from taking a survey, so that they can study respondents who fall within a particular income bracket.

Another example involves surveying customers based on their awareness levels of cultural trends and their opinions thereof. 

In relation to studying customer buying patterns , surveys provide value, in that customers can ask detailed questions about all patterns , whether they are concerned with purchasing methods, the place of purchase, frequency, etc. 

A strong online survey platform will allow businesses to gain a deep understanding of these aspects, through the use of advanced skip logic , which routes survey respondents to appropriate follow-up questions based on their answers to previous questions.

Finally, surveys allow market researchers to make decisions in an organized way, as they help form a customer behavior analysis report . This report reveals:

• How customers behave while researching, browsing products and purchasing
• How customers use products
• How long customers use their products
• What customers think and feel about different brands and product options
• How their environments affect their behavior

Improving Business Goals and Scaling by Understanding Your Target Market

Customer behavior to a business is like blood to mammals. While this may sound dramatic, it analogizes the importance of understanding your target market’s behavior. When businesses fail to study their customers’ behaviors, they are remiss on so many meaningful opportunities.

Thus, marketing campaigns of all sizes and calibers are at a much larger risk of failing. Market research, particularly survey research helps combat ignorance of customer behavior. This is because surveys give researchers the freedom to study any factor and pattern that relates to this behavior , arming them with critical insights on how customers shop throughout their journeys. 

The most crucial component of survey research is using the correct online survey platform. Not all surveys offer advanced skip logic and can qualify respondents based on various demographics and psychographics. Thus, businesses and market researchers must invest in an online survey tool wisel y, as it can make or break any market research campaign . 

Do you want to distribute your survey? Pollfish offers you access to millions of targeted consumers to get survey responses from $0.95 per complete. Launch your survey today.

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The Survey of Consumer Attitudes and Behavior series (also known as the Surveys of Consumers) was undertaken to measure changes in consumer attitudes and expectations, to understand why such changes occur, and to evaluate how they relate to consumer decisions to save, borrow, or make discretionary purchases. The data regularly include the Index of Consumer Sentiment, the Index of Current Economic Conditions, and the Index of Consumer Expectations. Since the 1940s, these surveys have been produced quarterly through 1977 and monthly thereafter. The surveys conducted in 2021 focused on topics such as evaluations and expectations about personal finances, employment, price changes, and the national business situation. Opinions were collected regarding respondents' appraisals of present market conditions for purchasing houses, automobiles, computers, and other durables. Also explored in this survey, were political affiliation and respondents' feeling the coronavirus. Demographic information includes ethnic origin, sex, age, marital status, and education.

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Parent item expand the sub menu, jonathan anderson talks costumes for ‘challengers’, robert pattinson fronts dior icons campaign, richard baker’s firm, bernd beetz confirm deal to buy galeria in germany, the two trends researchers say will influence consumer behavior in 2024.

Global research from Bazaarvoice Inc. reveals how macroeconomic factors are influencing consumer behaviors.

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Location is everything, so it was hardly a surprise when in-store shopping levels declined over the past few years as consumers settled into new remote work routines — they were in front of a computer and that’s where they shopped. Today, however, as consumers continue to express a desire to get back into the world and return to office, will shopping trips to local stores resume?

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Klarna launches 'wikipink' in a bold move for greater transparency in credit industry, mmgnet group's new consumer report sheds light on 2024 fashion shopping trends and preferences.

Bazaarvoice Inc.’s research team found that with 64 percent of U.S. consumers reporting a partial return to a physical office, 53 percent of those consumers are spending more money in physical stores compared to online platforms. Authors of the report said retailers should be focused on optimizing both physical and digital shelves, given the divide, which also shows diverse spending patterns and behaviors where 30 percent of consumers prefer to spend online, 41 percent favor in-store spending and 29 percent feel that their in-store and online spending are quite similar.

Notably, the company’s report found diverse spending and shopping behaviors among Americans can also be seen in how consumers are tackling the ongoing cost-of-living crisis. While 68 percent of consumers said they take pleasure in retail therapy, 17 percent of Americans said they “cannot afford essential purchases right now” due to the strain of current economic conditions.

This strain on spending can also be seen when looking at sentiments around the importance of sustainability with 76 percent of Americans reporting that they feel a company’s commitment to sustainability and ethical practices are important, coming up against many cash-strapped consumers who see the appeal in fast-fashion options. Bazaarvoice Inc.’s survey found that 64 percent of Americans have purchased at least 25 percent or more of their wardrobes from fast fashion retailers, constituting the largest region (79 percent) admitting to purchasing clothing items that end up rarely or even never worn.

“Our research delves into the intricate tapestry of American consumerism and examines how macroeconomic factors influence consumption trends,” said Zarina Stanford, chief marketing officer at Bazaarvoice. “We found that from the lure of fast fashion to the joy of retail therapy and an increasing interest in sustainable practices, financially constrained consumers exhibit a complex set of behaviors. These findings highlight the need for brands and retailers to not only understand but actively engage with these diverse consumer preferences, adapt their commerce strategies to align with industry-changing trends and foster lasting connections by meeting the dynamic expectations of today’s consumers.”

To earn brand loyalty, the company’s survey revealed that quality is the main factor that influences consumers today, followed by price. Forty percent of consumers also said they are influenced by personalized recommendations while 48 percent said they prefer loyalty programs that enhance their experience. Notably, 64 percent of consumers have purchased a private label product in the last six months with preferences contrasting across categories led by food and beverage (71 percent), health and beauty (48 percent) and fashion (41 percent). Forty-four percent of consumers said they have permanently switched select staple products to private label products.

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'Nudging' consumers is a common marketing tactic, but study finds it carries risk

by Jared Lindzon, University of Toronto

Marketers have found so-called "nudging" to be an effective way to influence consumer behavior—but new research suggests those who are prompted, either subtly or directly, to select a particular product or service may be quicker to abandon it.

A recent study, published in the Journal of Consumer Research , is among the first to consider the long-term impact of the widely utilized marketing tactic, which capitalizes on psychology and carefully designed prompts to encourage people to make a particular purchase. Examples include limited time offers or presenting people with a "compromise" option between two extremes.

Study co-author Sam Maglio, a professor of marketing and psychology at the University of Toronto Scarborough and the Rotman School of Management, says the research findings make it clear that nudging can have negative consequences for brands.

In particular, he points to subscription offerings, which are becoming more prominent across a broad array of product and service categories.

"If you want someone to continue renewing or using whatever service you provide for a long period of time, it turns out that nudges backfire," he says.

Maglio conducted two experiments to test three of the most popular nudging strategies to see how they affected long-term utilization.

In the first experiment, he offered students and faculty a free air plant. Among the control group , participants were offered the choice between a plant that was said to be lower maintenance and lower quality, and another that was higher maintenance and higher quality. For the nudged group, he offered a third "middle" option that was average in both maintenance and quality.

In reality, all plants were identical.

"Research has shown that when people look at three options that include one extreme and another extreme, they gravitate towards the middle, compromise option," Maglio says. This form of nudging is referred to as the "compromise effect," and proved effective in this experiment.

In exchange for getting a free plant, participants received an email every two weeks asking whether they still had the plant. After the first 10 weeks, Maglio says there was little difference in the likelihood of caring for the plant between the nudged group, who were subtly persuaded with the "compromise" option, and the control group.

"[But] once you get to about three months in, then we start to see the rate of [retention] separate," he says. "People in the nudged condition who picked the middle option were more likely to start saying, 'Yep, I let it die,' or 'Yep, I threw it out.'

"It ended up being a total of nine months that we kept checking in, and the longer we waited, the bigger the gap between those two groups got."

At the end of the experiment, the researchers found that those who were nudged into a selection were 16% quicker to discard their plant than those in the control group.

In the second experiment, researchers offered participants a free membership to a website that provided a new "fun fact" each day. In the control group, members were offered the choice between a "Trivia Expert" subscription plan or a "Back to School" membership option.

Another group of participants were automatically opted-in to the "Trivia Expert" plan, but were provided the option to switch, utilizing a nudging strategy known as the "default effect." In the final group, a third "decoy" option was added, titled "Trivia Expert for Kids," which was designed to nudge the adult participants towards the "Trivia Expert" option.

As with the previous experiment, all of the options led to an identical product and both nudging strategies proved effective at influencing participants' behavior—and both had a negative impact on participant retention.

"In the control condition, where they just chose between 'Trivia Expert' and 'Back to School,' they [logged in consistently] about 14 days in a row, and then they stopped," Maglio says. "In both of the nudge conditions—default and decoy—they were only logged on for an average of eight days, so it's a hefty drop-off after getting nudged as far as losing interest in the subscription."

Yet, despite the findings, Maglio suggests that nudging shouldn't be abandoned as a marketing strategy , as its effectiveness in influencing buying decisions is well established. Instead, he suggests marketers think twice before leaning on such tactics "in situations where you care about longevity, or you want the customer to use your products for a long time."

Maglio adds that there is little data on the long-term consequences of nudging, which could have significant implications for brand loyalty and consumer trust.

"We need to get more specific about which kinds of nudges have a counterproductive effect, which kinds of nudges have no effect—and which tactics work as a win-win for customers and brands," he said. "We're coming in with two experiments after decades of nudging, so there's still a long way to go."

Journal information: Journal of Consumer Research

Provided by University of Toronto

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Artificial intelligence, what matters to today’s consumer: 2024 consumer behavior tracker for the consumer product and retail industries.

In this Capgemini Research Institute report, What matters to today’s consumer: 2024 consumer behavior tracker for the consumer product and retail industries , we take a closer look at how consumer behavior is changing today and the factors that are shaping it.

We focused this third installment of our annual research series on five broad themes around consumer behavior. What we found is that many of the trends from our 2023 report have persisted, especially with consumers continuing to express concern about their personal financial situations amid rising inflation. However, on an optimistic note, this concern has dropped significantly in the past twelve months as the share of surveyed consumers who fear their personal finances will worsen in the next 6‒9 months has dropped from 80% to 43%.

Additionally, as generative AI makes headwinds across industries, its impact on consumers’ purchasing behaviors is being felt too. We look at the ways in which this technology is being used and adopted by consumers within different demographic cohorts.

We also explore the increase in social commerce, as well as greater consumer concern around issues like sustainability, product origin, business practices, and more. Finally, we examine what makes for a positive shopping experience in the post-digital age. We conclude this report with key actions for brands and retailers to take in order to manage and adapt to the ongoing shifts in consumer behavior.

Download the full report to find out more about how consumer behavior is evolving into the future.

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What matters to today’s consumer.

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Inflation Expectations are Mixed; Consumers Express Concerns about Retaining and Finding Jobs

NEW YORK—The Federal Reserve Bank of New York’s Center for Microeconomic Data today released the March 2024 Survey of Consumer Expectations , which shows inflation expectations remained unchanged at the short-term horizon, increased at the medium-term horizon, and decreased at the longer-term horizon. Labor market expectations were also mixed. While expectations about earnings growth and an increase in the unemployment rate were unchanged, respondents were more pessimistic about losing their job and finding a new job. Finally, although household finance perceptions and expectations were largely unchanged, the perceived probability of missing a minimum debt payment rose to its highest level since the onset of the COVID-19 pandemic.

The main findings from the March 2024 survey are:

• For the third consecutive month, median one-year ahead inflation expectations remained unchanged at 3.0% in March. In contrast, the median three-year ahead inflation expectations increased to 2.9% from 2.7%, whereas the median five-year ahead decreased to 2.6% from 2.9%. The survey’s measure of disagreement across respondents (the difference between the 75th and 25th percentile of inflation expectations) rose at the one- and three-year ahead horizons and remained unchanged at the five-year ahead horizon.
• Median inflation uncertainty—or the uncertainty expressed regarding future inflation outcomes—was unchanged at the one-year ahead horizon, rose slightly at the three-year ahead horizon, and declined marginally at the five-year ahead horizon.
• Median home price growth expectations were unchanged for the sixth consecutive month at 3.0%. The series has remained within a narrow range of 2.8% to 3.1% since June 2023.
• Median year-ahead expected price changes increased for all goods in the survey, by 0.2 percentage point for gas and food to 4.5% and 5.1%, respectively; 1.3 percentage points for the cost of medical care to 8.1%; 2.6 percentage points for rent to 8.7%; and 0.7 percentage point for the cost of a college education to 6.5%.
• Median one-year ahead expected earnings growth was unchanged at 2.8% for the second consecutive month, matching the series 12-month trailing average.
• Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—remained essentially unchanged at 36.2%, below the series 12-month trailing average of 38.6%.
• The mean perceived probability of losing one’s job in the next 12 months increased by 1.2 percentage point to 15.7%. This is above pre-pandemic levels and the highest reading since September 2020. The mean probability of leaving one’s job voluntarily in the next 12 months also increased (by 1.1 percentage points) to 20.6%, above the series 12-month trailing average of 18.9%.
• The mean perceived probability of finding a job (if one’s current job was lost) decreased for the third consecutive month to 51.2% in March from 52.5% in February, the lowest reading in almost three years, and well below its February 2020 pre-pandemic level of 58.7%.

Household Finance

• Median expected growth in household income was unchanged at 3.1% in March. The series has been moving within a narrow range of 2.9% to 3.3% since January 2023 and remains above the February 2020 pre-pandemic level of 2.7%.
• Median household spending growth expectations declined by 0.2 percentage point to 5.0%. The series has remained stable between 5.0% and 5.3% since August 2023, but remains well above its February 2020 pre-pandemic level of 3.1%.     
• Perceptions of credit access compared to a year ago improved slightly with a larger share of respondents reporting that it was easier to obtain credit than 12 months ago, and a slightly smaller share of respondents reporting that it was harder to obtain credit. In contrast, consumers were slightly more pessimistic about future credit access with a larger share of respondents expecting tighter credit conditions a year from now, and a smaller share of respondents expecting looser credit conditions.
• The average perceived probability of missing a minimum debt payment over the next three months rose by 1.5 percentage points to 12.9%. This is the highest reading in four years since the onset of the COVID-19 pandemic. The increase is most pronounced among respondents between the ages of 40 and 60, and those with income below $50,000.
• The median expected year-ahead change in taxes (at current income level) increased by 0.3 percentage point to 4.2%, marginally above the series 12-month trailing average of 4.1%.
• Median year-ahead expected growth in government debt increased to 9.6% from 9.3% in February.
• The mean perceived probability that the average interest rate on saving accounts will be higher in 12 months decreased by 1.9 percentage points to 24.2%, a new series low since the inception of the survey in June 2013.
• Perceptions about households’ current financial situations improved slightly with more respondents reporting being better off than a year ago, and fewer respondents reporting being worse off. Year-ahead expectations were mostly unchanged.
• The mean perceived probability that U.S. stock prices will be higher 12 months from now rose by 0.3 percentage points to 39.2%.

About the Survey of Consumer Expectations (SCE)

The SCE contains information about how consumers expect overall inflation and prices for food, gas, housing, and education to behave. It also provides insight into Americans’ views about job prospects and earnings growth and their expectations about future spending and access to credit. The SCE also provides measures of uncertainty regarding consumers’ outlooks. Expectations are also available by age, geography, income, education, and numeracy. 

The SCE is a nationally representative, internet-based survey of a rotating panel of approximately 1,300 household heads. Respondents participate in the panel for up to 12 months, with a roughly equal number rotating in and out of the panel each month. Unlike comparable surveys based on repeated cross-sections with a different set of respondents in each wave, this panel allows us to observe the changes in expectations and behavior of the same individuals over time. For further information on the SCE, please refer to an overview of the survey methodology here , the interactive chart guide , and the survey questionnaire .

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