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 third article highlights insights about the third phase of the path to purchase: selection.
Why focus on the “Selection” phase?
With options to shop for common household products in large chain stores, at the corner shop or local bodega, and even online, global middle class consumers are often overwhelmed with choices when deciding what to buy. Companies and brands that understand the features of their product that spur shoppers to select it from among the crowd on the store shelf or online results list (or leave it there) can better position themselves within the marketplace, meeting the desires of current customers and anticipating future trends.
Four Things to Know about the “Selection” Phase:
1. Even though incomes continue to rise, particularly among the growing middle class in many emerging markets, price is still a critical factor for global consumers. Companies should be aware that their customers will shop accordingly.
Price is the most important feature middle class consumers take into consideration when purchasing nearly all household items and consumer electronics.
Cost is particularly a concern for middle class consumers who are shopping for a new computer; 60% list price as a top feature for this product. Several factors may drive the desire to get the lowest price on a computer, including the large overall expense of the purchase and the presence of many options and competitors in the market.
Regardless of product, consumers in developed countries, hit hardest by the recent recession and with only marginal (or even flat) economic growth, tend to prioritise low prices and discounts more than those in emerging markets.
2. Even if they cannot win on price, companies have an opportunity to stay ahead of the competition and gain market share by emphasizing the non-cost-related features of their products.
One common motivation for middle class consumers buying household products is to make their lives easier. Offering products with such functionality should help shoppers overcome a higher price tag.
Retailers selling coffee makers should emphasize any programmable or “one-touch” features of their products, perhaps allowing consumers to set the machine the night before and wake up to a fresh pot of coffee. Similarly, companies offering tablets should emphasize their product’s portability and mobile internet access, providing many of the same functions as a larger computer in a much smaller device.
While middle class consumers generally prioritise the functionality of a product over its aesthetic characteristics, when looking for new furniture and other decorative items, shoppers prioritise colour, style, and overall appearance.
3. Companies do not need to add an environmentally-friendly element to all of their product lines…yet. Although middle class consumers are becoming more environmentally-conscious, very few prioritise “green” features over other product characteristics.
“Green” product features, such as recyclable packaging or low-impact manufacturing practices, are rarely ranked over price or even warranties when middle class consumers are shopping for household items.
However, as environmental concerns grow among global shoppers, green product features will become more important in their purchase decision-making.
Already, global consumers have demonstrated a willingness to pay extra for green features in their food. Over half consider green features important in their fresh food and one-quarter are willing to pay a premium of 50% or more for these features.
This willingness to pay extra for environmentally-friendly features will likely continue to extend to other product categories, with consumers becoming particularly interested in “natural”, “organic”, and “sustainably-produced” items.
4. Even within product categories, different shoppers seek different product features. Segmenting and profiling key buyer types can help companies craft better marketing campaigns and even tailor products to appeal to their target markets.
Renters in developed markets are looking for less expensive, highly portable home furnishings, while more established home owners in emerging markets are motivated by status and current trends.
Doting grandparents, perhaps seeking to spoil their grandchildren, typically look for the latest premium toy or game. In contrast, adult gamers are drawn to products that are on sale or have a good warranty.
Coffee connoisseurs are willing to sacrifice price for premium brand coffee makers with good reputations, while appliance replacers seek value and ease of use.
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.