The most influential Megatrends set to shape the world through 2030, identified by Euromonitor International, help businesses better anticipate market developments and lead change for their industries.
Introducing Euromonitor International’s Path to Purchase model
In a recent white paper, Euromonitor used its extensive global consumer survey results to map out the purchase decision-making process. The outcome of this analysis is a new path to purchase model that synthesizes the many aspects of buying into three key phases: opportunity, research, and selection.
To help marketers and other strategic decision-makers reach consumers throughout the buying process, Euromonitor presents a series of three articles highlighting business opportunities in each of these three phases. This first article highlights insights about the first phase of the path to purchase: opportunity.
Why focus on the “Opportunity” phase?
Understanding the factors driving a consumer’s consideration of a particular product is the first step for brands and companies hoping to get inside the minds of their potential customers. Identifying trends in purchase motivation can help marketers fine-tune advertising and better understand the key influencers pushing shoppers toward or away from their product.
Five Things to Know about the “Opportunity” Phase:
1. Companies and retailers selling common household items should recognize that consumers most often buy new products to make their lives easier, and be sure to advertise accordingly.
With the exception of toys and games, middle class consumers are typically motivated to buy new household items that they think will make their lives easier.
To effectively capture these potential customers, companies should highlight aspects of their products that simplify the lives of consumers.
“Smart” household appliances, such as refrigerators that will alert the home owner when an ingredient is about to expire, are a great example of relatively new products, typically with higher price tags, that may be easier to sell to the large number of consumers willing to buy products that simplify their life.
2. Creative marketing can be used to remind shoppers that it may be time to replace a previously-purchased item that is now broken—or at least, no longer functioning in peak condition.
For some household goods, consumers only seek to buy a new item after the previous version breaks. This replacement-only buying decision is especially common for functional household products, such as furniture and cooking pans.
Computers also fall into this replacement category, cementing their status as a staple, rather than a luxury, in the middle class home.
Computers, and technology in general, are one area where companies and retailers can take advantage of shortened replacement cycles. Recently, many consumers, particularly those in younger age groups, have become more accustomed to replacing their tech devices every few years, or even every year, even if the device is still working.
By creating messaging that highlights replacement and upgrade needs to consumers, firms can accelerate the buying process and encourage shoppers to update products in other areas of life as frequently as they update their smartphones.
3. While many consumers are practical with their purchases, companies should also look for opportunities to appeal to the “wants”, rather than “needs”, of potential customers.
Tablet buyers are more likely than other shoppers to be trend-seekers, purchasing a new device as a status symbol.
Beyond tablets and other new tech devices, other products can also be positioned as status symbols or simply as “nice to have.” Consumers may even be willing to pay more for an item that meets both their household need and is personally appealing to them.
Common household items, such as vacuum cleaners, toasters, and even coffee makers now come in a wide range of colours and designs, spurring the shopper to choose the one that appeals most to them aesthetically, rather than focusing exclusively on functionality.
4. Recommendations from other shoppers—whether friends, family, or simply a customer who has shared their opinion online—can be more powerful than any traditional advertisement to nudge consumers to first think about buying a particular product for the first time.
Unlike more established household products, tablet computers are still relatively new tech devices for the global middle class. Because of this, word of mouth and peer recommendations are major drivers in initiating the purchase process.
When buying a toy or game, parents, in particular, value the opinions of other shoppers, whether direct endorsements from friends or online consumer reviews, over typical information sources such as manufacturer websites and even in-person comparison shopping.
The pervasiveness of social media, especially microblogs such as Twitter, has even broader implications for companies than shopper reliance on online reviews found on retail websites. Just a few initial negative reviews on Twitter can spark a tidal wave of retweets and public exposure, killing the chances of a product’s success almost instantly. In contrast, positive comments shared through the site can boost a product’s image and spur thousands to buy, or at least take a closer look.
5. Companies and retailers often have the opportunity to convince potential customers that they should buy a new product when the customer is already shopping for something else.
o One key consumer segment, Impulse Buyers, spends less than 24 hours between first considering buying an item and making their purchase, often pulling an item from the store shelf and purchasing it without further consideration.
Even among the wider group of shoppers, some purchases, such as toys and games, are often spur-of-the-moment. Nearly one in five consumers first began to think about purchasing a toy or game after seeing it in a store.
Amazon.com and other online retailers have taken this idea of unplanned purchases to a new level by implementing algorithms that track a shopper’s previous purchases and product searches, ultimately creating a list of items they are likely to buy and sharing it with them on-screen when they next visit the site.
For more on the path to purchase, including in-depth analyses of the purchase decision-making process for individual household products, read Euromonitor’s recent white paper.