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Global: Consumer Psychology Is The Only Constant In A Changing Retail Market

‘What’s not going to change in the next 10 years?’ This question is actually the most important — because you can build an offline and online business strategy around the things that are stable in time.” according to Jeff Bezos (Amazon).


He went on to explain that what is not going to change is that customers will want low prices, fast delivery, and vast selection. He is describing motivations that are part of unchangeable consumer psychology on which he based Amazon’s business strategy.


“Consumers are people and people are driven by the same core needs,” explains social psychologist Erica Carranza, Ph.D., vice president of consumer psychology at Chadwick Martin Bailey.


In addition there are six more essential truths of consumer psychology: control (Bezos’ functional needs), emotion, trust, personal identity, social belonging, and context.


Giving consumers control

People want to feel in control and that they can achieve what they want to achieve. In psychological terms, this is called agency. “It’s about their ability to efficiently and effectively achieve their goals,” Carranza explains.


Online shopping has provided consumers more agency in the current context, but there are still psychological challenges to overcome. Retailers and brands have to capture people’s attention online, which is harder to do than when they are in the store already primed to shop. “You’re trying to attract people’s attention, when they’re home attending to something else,” she says.


And then retailers must persuade them to buy. With online shopping cart abandonment rates approaching 70%, e-commerce players aren’t doing such a good job of that.

In the current context, people have many reasons not to pull the trigger, even if retailers have got their attention.


Activating positive emotions

People want to maximize their good feelings and minimize bad ones. That is the emotional component of consumer psychology, but there are two dimensions that underlie all emotional experiences: valence, or the extent to which the emotions are positive or negative, and activation, or the amount of physical energy associated with the emotion.


Retailers want to stay on the positive side of emotional valence and encourage more activation of those positive feelings that stimulate consumers to buy. “High activation and positive emotion makes people want to act. They feel energized, excited, and inspired. There is a lot of energy there,” she says.


Also high in emotional valence but lower on the activation scale are emotions like peaceful, calm, relaxed, comfortable, and secure. As shoppers return to the store, consumers will be needing more of those feelings. So the physical shopping environment will assume even greater importance in the current context.


Trust

Trust is another factor that can activate purchases. If consumers have confidence that the retailer is going to deliver on its positive emotional promise, they are more likely to buy.

“Brands that have built that trust should be leveraging it. Trust falls into that category of emotional benefits. If you trust in a brand, you will buy even if something is a little more expensive.”


Reinforcing personal and social identity and belonging

“People want to cultivate a strong personal identity. Personal identity in consumer psychology is about how a brand enhances consumers’ self-image, their pride, and their self-esteem,” Carranza says.


“Social connection is so important for retail, whether it’s the literal coming together in the store or the purchases made through retail as a form of social expression, like carrying a Louis Vuitton purse that provides both a personal and social psychological benefit. It makes people feel like they belong to a community even if they’re not in the store,” she explains.


Context shapes consumers’ perception

“Context shapes how we perceive the environment, the conclusions we draw from it, and the emotional responses we have to it,” says Buycology’s Gray.


“Motivations remain the same over time, but the means consumers use to satisfy those motivations can change. By understanding those underlying motivations, retailers have the ability to provide new options to shoppers that meet those needs,” he continues, pointing to the rapid adoption of buy-online-pickup-in-store as an example of that.


“It is really important for retailers to go overboard in creating a context that is positive, friendly, welcoming, and safe,” Gray says.


“A positive emotional response in a shopping environment leads to increased time spent in store, increased spending, increased basket size, and increased desire to return. On the other hand, a negative experience, like frustration or anxiety, are antithetical to a positive shopping experience and leads to shorter time spent in the store, less spending, and less desire to return,” Gray share.


Conclusion

Consumer psychology – giving people control, activating positive emotions, reinforcing personal identity and belonging – is the unchangeable foundation on which to build a winning online and/or offline retail business strategy, all the while being ready to adapt expeditiously as consumers’ social and cultural context changes.


Click here for more: https://www.forbes.com/sites/pamdanziger/2020/08/23/consumer-psychology-is-the-only-constant-in-a-changing-retail-market/#20ea2da37003




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