Brands need to spend time analysing consumer behaviour in order to get to a point of fully understanding consumer sentiment. Consumer behaviour mayhaps be one of the most demanding factors that allows brands to move in the markets. Businesses exist because of the existence of consumers, but what types of strategies does brands like yours make in efforts to adhere to what consumers are looking for in your products or what to make things easier for them to influence their purchasing decisions to actually buy your products?
What is consumer behaviour?
We can define consumer behaviour as the collective trends in consumer movement towards a specific good, tool, or other trends in a market. By perceiving which consumer behaviours are present can tell alot about what the consumers of a particular market wants and needs which helps businesses in their decision-making processes. Analysing consumer behaviour also means that businesses are analysing what factors could be influencing their behaviour, as well as determine how to leverage these consumer opportunities.
The importance of understanding consumer behaviour
What types of efforts are you making to understand how consumers interact with your brand? Did it ever occur to you that knowing what they think and how they engage with you could bring a huge difference to your business?
Consumer behaviour can be defined as the trends or behaviours that consumers exhibit, which affect their purchasing decisions. Influencing those purchasing decisions is what businesses care about.
Let’s have a simple example for this: Say, it’s the end of the day, and students from your town’s high school just got out of school, tired. It’s late afternoon, and they are thinking of having a quick yet warm snack to satisfy their hunger. As a business owner, what do you think you should do, especially if you were already thinking of launching a food business in the first place? Logic will tell you that you can make use of this as an opportunity to launch a small food stand business considering that you will not have direct competitors (to keep our example simple).
And so you launched your food stand—great! You were able to solve a problem that makes these kids happy and also allows you to earn significant profits for your business. Coincidentally, a beverage supplier happened to see you selling food in the area and would like to partner with you for consignment. You said yes, and now more people are starting to notice your business.
So what happened there? There are a few key points that we can take:
- One, you observed that there’s a problem and an opportunity for you to solve—students who want to have a warm snack after school. What you’re doing here is an observation analysis of consumer behaviour. You observed that students want something to eat, and hence you provided them with a solution to their problem.
- Two, you were able to create a business from a great opportunity simply because of the existence of demand from consumers, who have the spending power to do so, and you delivered it to them.
- Three, it turns out that a beverage supplier was also thinking of tapping into this market but didn’t have the opportunity to do so as they couldn’t find businesses that were operating in the area. When they found you, they immediately took the opportunity to sign a deal with you as their consignment partner and provided you with a wider variety of products to sell to your customers.
One of the primary goals of analysing consumer behaviour is to develop comprehensive consumer and customer profiles that shows the different characteristics, needs and preferences of your business' target audience. Compiling data for every customer profile will be difficult and will require a lot of time and effort for brands. But, the only way to fully develop a comprehensive understanding of consumer sentiment is through the use customer profiles which helps alot with simplifying customer personalities for brands. Consumer behaviour greatly influences a business’ ability to operate and succeed, which is why businesses ought to analyse consumer behaviour and figure out how they can leverage particular consumer trends to their advantage. Analysing consumer behaviour is not simply important for any brand; it is essential in order for your brand to exist in a competitive market.
Consumer behaviour analysis real-world example
Big brands take consumer behaviour seriously and one of those brands is Nike. As an example for this context, let's take Nike's significant decision of changing their entire business model from wholesaling to Direct-to-Consumer strategy.
You might be scratching your heads on why Nike changed their entire business model? Nike noticed the growing number of consumers' interest towards e-commerce ever since the height of the pandemic. The rise of internet shoppers also meant that consumers will be looking for a more personalised experience in the long term. Nike saw this as an opportunity, and thus made the huge change. This change also entailed that they might have to lose some significant relatioships with wholesalers but they also see the huge potential where this consumer shift is going to bring when catered to properly—where the consumer goes, the brands follow.
Let's also take a look at what Starbucks did for their customers where they made use of in-depth consumer analysis in order to drive more engagement and personalisation to their customers. Through their store app, customers can create accounts and as data, store information about their favourite drinks. What's even better, is that they can order their favourite drinks ahead of time, pay for it, so when they have already arrived at cafe, all they need to do is to request for the drink. What's more, they can do this in any Starbucks cafe! This is customer retention strategy became possible because of the following:
- The rise of mobile technology and the increasing preference for on-the-go solutions highlighted a need for streamlined ordering processes.
- Extensive market research revealed that customers were looking for ways to simplify their ordering experience, especially during busy times.
- The competitive landscape, with other brands also moving towards mobile and digital solutions, influenced Starbucks' strategy.
- Continuous feedback from customers using the app provided insights into how the service could be improved.
Key factors influencing consumer behaviour
From the example given above, several factors influenced the consumers. One key factor is the consumers' immediate need to satisfy hunger. Being students from morning until afternoon requires a lot of energy, and once that energy is depleted, they seek food to revive themselves.
For businesses, the question then becomes: What other factors can you examine to gather the right data on what influences consumer behaviour?
Personal Factors
Personal factors affect a consumer on a day-to-day basis, including age, generation, and needs. For example, young professionals may prefer quiet and convenient meals due to busy schedules, whereas retirees might prioritise health and nutrition for their meals and require a full-size meal.
Social Factors
Social factors pertain to the social environment in which the consumer is situated. This can be dependent on the type of crowds they subscribe to, such as those into music, tech, or nutrition, who adhere to the latest products in these industries.
Psychological Factors
Consumers engage with brands based on how they relate their products to their daily lives. For instance, a consumer might purchase a pair of Nike shoes to feel more powerful, influenced by the brand's strong marketing. Additionally, the decision might be driven by the brand's social acceptance within the consumer's peer group, providing the buyer with a sense of belonging.
Cultural Factors
Cultural factors are highly dependent on the type of community that consumers are in, including shared beliefs, values, or religion. Cultural factors are extremely important to consumers as culture often dictates what they can and shouldn’t purchase.
Market Factors
Macroeconomic factors can also directly affect consumers’ purchasing power. Triggers like inflation, unemployment, and economic growth can directly impact a consumer’s purchasing decision. Market factors do not only affect a single consumer’s decision but also influence millions of consumers to the point that what the market dictates can be considered normal for a particular period.
How to determine consumer behaviour
By now, you understand what influences consumer purchase behaviour and why consumers act the way they do. But simply knowing that they are influenced by certain factors, how do we actually determine changes in consumer behaviour, especially on a larger scale?
There are a lot of way that brands can do behavioural analysis for their businesses. There are certain methods you need to use to determine these changes. Regardless of the research method or tools, it will require time for analysis and observation to derive important insights.
We will show you different tools and methods by scale that you can use right now, starting with the simplest method to the most complex.
Observational Research
Observational research, in the context of consumer behaviour, involves observing your environment and how it affects the subject. For instance, from our previous example of students finding a place to buy warm food after school, you, as a business owner, noticed that these kids are actively looking for a food stand that can provide for their needs. As a result, you established a food stand near the school, and your business has been booming.
You can also conduct observational research through different social media channels that show you what topics are trending the most. This can help you determine what consumers are getting into and if that’s something they want to consume in both the short term and long term.
Social Media Monitoring
Especially for Gen Z, social media is where they find their next hottest purchases. Social media platforms serve as a dynamic marketplace where trends are born, and consumer preferences are shaped. By monitoring social media, businesses can gain real-time insights into what products are trending, how consumers are discussing brands, and what factors are driving their purchasing decisions.
Web Analytics
This research method makes use of different web metrics to gauge what consumers are actively doing. Just like social media monitoring, it utilises certain metrics to figure out consumer activities. Common metrics for this would be search volume, growth rate, and seasonal trends, which can significantly measure consumer behaviour over a particular timeline.
Whenever businesses want to determine how to grow their brands, metrics are used to figure out in what aspects their business is lacking.
The same goes for research companies, which make use of statistics and population/research metrics to find trends that are unusual (or even usual) and translate metrics to serve as a crucial tool for translating raw data into meaningful insights about consumer behaviour. By analysing various metrics, businesses can understand and predict how consumers interact with their products and services.
Ethnographic Research
Ethnographic research provides a deep understanding of the context in which consumer behaviour occurs. This helps businesses understand not just what consumers are doing, but why they are doing it. The researcher immerses itself in the environment of the consumer in order to observe factors that affect their behaviours and hence gain important behavioural data that they can use later on for their marketing studies.
Survey and questionnaire
Surveys and questionnaires are other forms of research methods that allow brands to understand how consumers work in their environment. This time, the researcher, instead of immersing themselves in the world of the consumer, they are tasked to gain data from each consumer themselves by letting them answer some questionnaires relating to a specific research topic. These answers are then compiled later for analysis.
Market research reports
These are readily available reports that are updated constantly by market research companies. It provides comprehensive insights about consumer behaviour and because it doesn’t require much effort to compile when needed, it’s easily purchasable when you need one, you just need to purchase a report constantly for updates.
These are just a few research methods that we recommend in order to have an effective consumer research analysis. However, some, if not most of these research types will require a lot of resources and efforts that brands would rather steer away from investing into in order to refrain from indulging in what they would think as unnecessary cost.
But, implementing consumer research shouldn't be costly and it shouldn't be limited only to businesses who have a large capacity of resources to spend on. Thankfully with the continuous rise of technology also means the continuous rise of solutions that solve problems such as this which allows brands of all sorts of levels to implement analyses on their own.
How &facts can help you analyse consumer behaviour
One of the key main trends right now in business is customer personalisation. Because of the heightened use of technology, more consumers stay connected with brands through their phones. Nike and Starbucks are just a few of the brands that exemplify this trend. And for brands to fully understand their customers on a micro level, brands need to utilise consumer data in their industry.
The &facts platform has a lot of features that can provide brands a smooth consumer behaviour analysis experience. Now that you already understand the importance of consumer analysis to a brand's decision-making process, the platform can you help you on your tasks towards fully understanding the consumer or costumer perception as it provides you with a comprehensive suite of tools to help decode consumer trends. Now, thanks to &facts, brands can now have access to real-time consumer data without having to break the bank, as it allows brands to gain consumer behaviour data right at their fingertips
What is &facts?
&facts is a market insights platform for consumer brands that helps brands understand how consumer demand is changing in real-time.
The platform provides on-demand, real-time data reports and insights on particular markets where brands’ target consumers are. The platform will reveal details on search intent, searched keywords over a period of time, search volume data, and so on which reveals a lot information on consumer perception and insights towards different markets that they are in.
Are you ready to start implementing consumer behaviour analysis for your business? Sign up at &facts now and see for yourself what your brand is missing out all this time!
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