Consumer Buying Behavior
What is Consumer Buying Behavior
Consumer buying behavior is the study of a consumer’s actions and how they behave while buying a product that solves a problem or fulfills a desire they have. Understanding this behavior and what comprises purchase decisions is a major piece of the puzzle of effective marketing.
Understanding consumer behavior means taking a closer look at the actions customers take leading up to a purchase, and then dissecting the decision-making process. When you think about someone entering a store, contemplating the options before them, and making choices that resonate with their needs, that’s the essence of consumer buying behavior. Envestnet® | Yodlee® works to unravel the intricacies of consumer buying behavior through comprehensive data analytics solutions. Explore them on our data analytics page.
The Importance of Consumer Buying Behavior
Understanding the nuanced behaviors that go into a consumer purchase is critical for retailers. Looking into consumer buying behaviors isn’t just about understanding what influences people to buy specific products and services, it is also about staying tuned into the pulse of the market, anticipating market shifts, and aligning your offerings with what consumers are seeking. This data provides insights into the factors that influence consumers and it ultimately aids in strategic decision making. With the ability to predict market trends to custom-tailoring your marketing strategy, understanding consumer behavior is the “unlock” many retailers seek.
What are the Four Types of Buying Behaviors?
1. Complex Buying Behavior
With some items, it’s easy to predict the frequency a consumer will purchase them. Household goods, for instance, are replenished at specific rates that don’t vary too much. Complex buying behavior, however, deals with high-value products that require extensive research. A new smartphone is a good example of complex buying behavior — where multiple factors come into play and where “one size fits all” does not apply.
2. Dissonance-reducing Buying Behavior
When consumers struggle to differentiate between brands and begin to fear they may make the wrong choice, you get dissonance-reducing behavior. If a customer, for instance, walks into a grocery store and sees 38 varieties of decaf coffee from different brands, they may find themselves overwhelmed and make no decision at all.
3. Habitual Buying Behavior
If a customer regularly purchases paper towels, but does not have a preferred brand, they are likely participating in habitual buying behavior. Here, brand recognition takes a back seat to affordability and availability.
4. Variety-seeking Behavior
Occasionally, consumers will seek a new experience and buy a product from a different brand. Back to the coffee example: if a customer has purchased Brand X Coffee for the last few years, they may suddenly develop the urge to try a bag of Brand Y Coffee to inject a little variety into their morning routine. This consumer buying behavior is known as variety-seeking behavior.
What are the Five Stages of Consumer Buying Behavior?
Stage 1: Problem Recognition
In this stage, the consumer recognizes that there is a problem in their life. Usually, it revolves around simplifying a daily routine or filling a more basic need such as hunger or the desire for comfort.
Stage 2: Gathering Information
In this stage, the consumer understands what their problem is and begins to think about potential solutions for this problem.
Stage 3: Search for Solutions
Here, the consumer starts to take action, either by researching products or going to a store to search for a solution. In the process, they may compare several brands to determine which one is best for their needs.
Stage 4: Purchase
In this step of the customer journey, the consumer makes a buying decision and takes physical action to solve the problem.
Stage 5: Post-Purchase Phase
Ideally at this stage, a customer would be satisfied with their purchase and leave a review for future consumers to help guide their decision-making process.
Identifying Buying Behavior with Transaction Data
Analyzing customer buying behavior can deliver the possibility of actionable insights for business decisions. With the right customer behavior analysis data in hand, a retailer can begin to develop and refine marketing campaigns while tailoring products to their customer base.
Consumer Buying Data Sets From Envestnet | Yodlee
Envestnet | Yodlee’s robust de-identified consumer spending data sets give the power back to retailers and merchants. Leverage valuable insights into consumer behaviors to tailor your strategies effectively. Explore more about our corporate data solutions.
Ready to understand your target markets? More specifically, are you ready to start harnessing the power of consumer buying behavior insights with de-identified customer data? Request a demo and transform your approach to strategic growth.
