Shopping Behavior In 2010: Phoning It In

If retailers think the Internet permanently changed the way people research and ultimately shop, they haven't seen anything yet, says writer Steve Smith. If merchants want to get scared in a hurry, they should try downloading either the eBay app or the new Amazon Price Check mobile app (both for iPhone).  Each app lets you scan a UPC code on any package and not only call up product information, but even see better offers. The Amazon app lets you buy from a range of sources on the spot using your Amazon account. 

This is scary because American's retail shopping habits have changed and are changing even more radically in the next few years. A new study from Leo Burnett and Arc Worldwide demonstrates that the recession helped alter the mindset of consumers. They come to retail now fully armed with information. Retail will continue to have a role in the final purchase decisions, especially involving brands the consumer doesn't already know. Many shoppers now come into the store having already decided what they want and treat retail as a "final check" or simply a "pick-up station," the report says. They are ginned up on research and pity the sales assistant who doesn't know when to get out of the shopper's way.

Mobile takes that dynamic and accelerates it. In just about any aisle in a major retailer you will see people peering into their phones at something, and according to new research on mobile's influence on shopping behavior these folks aren't checking email. The Yahoo Mobile Framework Study performed with Nielsen shows that 9 out of 10 mobile users access the mobile Web in a store. And about half of all mobile Web activity in a store is related to shopping. In fact, mobile users are demonstrating behaviors that are already far ahead of the mobile ecosystem. Almost half of all of those using mobile phones in-store have sent phone camera images of a product to someone.

Only 16% of consumers use their phones for shopping research, but 57% of mobile internet users express interest in doing so in the coming year. And when it comes to having tried or being interested in different types of shopping-related activities, the mobile platform is almost on par with the PC. While 96% of PC users cited visiting a Web site, 91% of mobile users did as well. Down the line, from search to accessing user reviews, the number of people either actively performing an activity on mobile phones or interested in doing so is tracking only slightly below the Web. The upshot of this is that people seem ready to transfer a number of common online research behaviors to their phones. 

While retailers need to be aware of the ways in which mobile is poised to reshape consumer behaviors, the Leo Burnett/Arc Worldwide study offers a cautionary note. According to its survey of consumers, "Technologies appear often to be putting more distance between the shopper and the retailer by encouraging shoppers to work completely independently of retailers." While retail needs to get out in front of the mobile behaviors their shoppers already demonstrate, the long-term risk is that the technologies will undermine the need for the store even further. Understanding that shopping is an experience and that in-store mobile apps can enhance that shopping "journey" will be critical in bringing technology into the store in a creative rather than a destructive way.

For a company like Amazon, however, just imagine the behavioral data it can now collect on consumers who are bringing their apps into the field and other stores. From geolocation to retail vs online shopping habits, this kind of mobile extension adds layers of invaluable data to a users' profile and Amazon's understanding of how they fit within the shopping journey. The line between brick and mortar and online retail is about to get muddier.

Demographics and Psychographics: Target Tactics

Demographics are the average or typical characteristics of the people who buy your products or services. Such characteristics include age, income, education, status, type of occupation, region of country, or household size. Demographics can also include the age of children, the status of home ownership, one's home value, and whether one's home is located in an urban or a rural location.

Psychographics take this idea a step further: These include people's lifestyles and behaviors — where they like to vacation, the kinds of interests they have, the values they hold, and how they behave. Even though you may have determined your demographic group, people within that group still have very different perceptions about the benefits or value of your product and will be motivated for different reasons. These differences are known as psychographics. To further target your efforts, you've got to determine not only who buys (or will buy) your product, but what makes them want to buy it. Include as much psychographic information as you can dig up, such as what their spending patterns are, whether they are brand conscious when it comes to your product type, what influences their buying behavior, what promotional efforts they respond to most often, etc. You also want to know how they go about buying it and what you can do to encourage them to buy more. You need this information so you can, in effect, clone your best customers. It is important to really pick apart what motivates them to buy.

The information you glean from a journey into your target audience's brain is often key to your marketing efforts, particularly the positioning of your product. It includes the audience's activities, interests, and opinions. You have to work through behavioral factors, economic factors, and even interpersonal factors to get to the root of purchasing behavior.

To hone this information to fit your marketing needs, you will need to conduct research — survey people who have bought your products or those who use similar ones.

You need to know both demographics and psychographics in order to advertise and sell your product effectively. You'll need to match the audience's characteristics of the media you choose with the characteristics of your desired purchasers. In that way, you won't lose precious dollars on wasted advertising and marketing. Moreover, you need information about your customers so that you can meet their needs better than the competition does.

There are many new and exciting ways of collecting that makes marketing demographics and consumer profiling sound easy. You can have your website set “cookies” and track your customers’ web-browsing habits. You can get information from price clubs at grocery stores where customer cards are scanned along with their groceries. Computerized information from the local phone company or cellular service provider can tell you a person’s habits on the phone.

With so many technical options for collecting demographic data from and about consumers, how do you decide which options to employ and how to use the information you get? You need to have your eyes “on the street” and to make sure you’re in touch with changes in demographics, buying habits, wants and needs. First, you need to decide what information is important to you. Then you need to figure out how to get it. Many people do this in the wrong order- they do their research on what information they can get, then try to figure out how to use it! Although you should take advantage of windfalls when they happen, don’t let the “tail wag the dog” by determining your needs based on what appears to be available at the moment.