No retail business can succeed without having an understanding of the behavior of consumers. Identifying and understanding consumers in retailing helps the retailers to know who buys which product and when. This paves way for better know-how of the buying behavior of the consumers.
Studying consumer behavior is important because this can help marketers understand what influences consumers’ buying decisions. It can help retailers/companies decide how to present their products in a way that generates a great impact on consumers. Understanding consumer buying behavior is key to reaching and engaging your clients, and making them your ‘permanent client.’
“Whether it is stocks or socks, I like buying quality merchandise when it is marked down”.(Warren Buffet)
The retail industry of Pakistan lags behind when it comes to understanding the consumers in retailing because there is no reliable mechanism of data analytics and a number of local FMCGs and MNCs face challenges when it comes to identifying the purchasing attitude of the consumers. This is the reason why most of the retail companies fail to understand the proper response of sales promotion. Therefore, different marketing strategies fail because there is no way to extract accurate information about the behavior of consumers and their response to the launch of a new product.
Identifying and understanding the consumer is the retail industry is essential for the survival and growth of the business.
Difference between a Consumer and Customer
A consumer is the direct user of the product or the service while a customer is a buyer of that product. A customer might not be a consumer as if a mother buys some product for her child, she is the customer and her child is the consumer. A number of companies divide a customer into 2 categories that include customer and consumer. As a matter of fact, it is at times not easy to understand the role of a decision-maker in this regard. The next important thing is how to identify a customer.
The following cycle is the normal cycle that every consumer and customer go through. First, they identify what they need where the role of the retail industry comes to play. The next thing is looking for the new product that would fulfill their need and that too in a better way. This paves way for the shelf presence of the product. If your product is a magical one, they will get to know it by means of word of mouth or if your advertising skills are too strong, they will learn about it through TV ads and other marketing campaigns.
Identifying a Customer
It is important to understand and identify the buying patterns of the consumer because there are a number of factors that influence their buying behavior. Consumers are of different gender, ages, educational backgrounds, religions, nationality, etc. the next important thing is the buying behavior of the customer. Whether he is shopping or buying is another important aspect. A number of customers head towards a retail store because they want to look for something new and not interested in buying it right away. There are certain elements that convince the consumer to buy a new product or something that they have not used earlier.
Customer’s Buying Behavior Patterns vary for every consumer and companies must identify this as a trend.
The consumer’s behavior is largely influenced by the following factors:
- Availability/Shortage of product
- Perish ability of product
- Type of commodity
- Degree of necessity involved
- Lifestyle of customers
- Festivals and customs
- Requirement of product
- Storage requirements
- The purchasing power of the consumer
- Location of customer
The role of consumer behavior can be gauged with reference to the following points.
The Latest Marketing Philosophy: The behavior of consumers can be understood through modern marketing philosophy – identifying consumers’ needs and satisfy them more efficiently than competitors. It makes marketing consumer-oriented.
Knowledge of Consumer is Important for Retailers: It is always important to know more about consumers as it is not useful for the company only. The knowledge of consumer behavior is equally useful for retailers to perform their tasks effectively in meeting consumers’ needs and wants. This improves the performance of the entire distribution system.
The Growth Factor: The way to an organization’s life is to get more profits and experience growth in marketing. It should develop the ability to satisfy unfulfilled consumer needs better and sooner than the competitors.
Essentials of Marketing Programs: Numerous marketing courses based on the product, price, promotion, and distribution decisions, can be prepared more objectively. Such programs can become more pertinent if they highlight consumer behavior as it is instrumental in realizing marketing goals.
Forecasting Market Trend: Consumer behavior can also help in projecting future market trends. The retailers get suitable time to prepare for exploiting the emerging opportunities, and/or facing challenges and threats.
Recognition of Customer’s Needs: Those are successful retailers who cater to customer needs and know the way to cater to their needs. A company or retailer finds it easy to sell its products as they constantly study consumer behavior and make attempts to meet changing expectations of the buyers, can retain their consumers for a long period.
When Competition Happens: Through consumer behavior study, the marketers face competition, too. Based on consumers’ expectations, more competitive advantages can be given. It is useful in improving the viable strengths of the company.
With the entry of Pak Retailers digital solutions in the retail market, retailers can now make direct contact with the companies by using Pak Retailers mobile app. Retailers can log complaints, make orders, receive direct information from companies and much more. On the other hand, companies can now easily get their hands on the market pulse with authentic information that comes directly from the market. Pakretailers have started to pave the way for organized retail in Pakistan.