What is consumer psychology?
Consumer psychology is the study of human behaviour regarding buying patterns of consumer products. It includes the study of consumer reactions and preferences to advertising, packaging and marketing of products. To draw accurate results, consumer psychology draws on many disciplines, including social psychology, marketing and behavioural science, with the aim of evaluating and understanding consumers and the decision-making process. Psychological factors that influence consumer behaviour, such as demographics, personality, lifestyles are all studied in market research, as well as behavioural variables like product usage rates and occasions, brand loyalty, brand advocacy and willingness to make recommendations.
Why is consumer psychology important?
Wouldn't it be incredible if we could read minds? If we could know exactly what people wanted and how they wanted it? I imagine that would be the go-to super power for most people if they ever had the opportunity of becoming a super-hero! Just as we would like to know the thoughts, feelings and opinions of others, whether it's to be nosy, gain the latest gossip, understand how to rectify a problem, retailers want the same. They want to know what their consumers want! Imagine if we could find that out. We'd see more and more successful marketing efforts and an increase in product sales. How can a consumer say no if you give them exactly what they want?
Understanding psychological factors affecting consumer behaviour has always been a key challenge for marketers and business owners. Psychology’s role in consumer behaviour may be difficult to predict, however, new research methods such as consumer neuroscience are uncovering how consumers make decisions. In particular, we are beginning to asses the intention-action gap, in other words, the difference between what consumers say and what consumers do.
Furthermore, developing a positive relationship with the target audience is essential for brand management. Market research and consumer psychology can help brand managers design the most effective and positive brand management and advertising strategy. Social marketing, brand-name shopping and the consumer’s perception of price are all main factors for understanding consumer attitudes and help explain the reaction of market demand to price changes.
Where did the concept of consumer psychology come from?
Much of the connection between psychology and consumerism is attributed to Walter Dill Scott, a director of the Psychological Laboratory. His studies in the early 1900s made significant advancements in the field of consumer psychology and behaviour which continued to emerge in the 1940s and 50s as a distinct sub-discipline in the marketing area. Demographic market segmentation based on the socioeconomic status index and household life-cycle became increasingly fashionable.
With the addition of consumer psychology, the field of marketing displayed increasing scientific sophistication regarding the development and testing procedures of consumer psychology theories.
Today, consumer psychology is regarded as an important sub-discipline within marketing and is included as a unit of study in almost all entry level marketing programs.
How do marketers use consumer psychology?
Research into the psychological factors affecting consumer behaviour can inform how marketers and brand managers invest their time and money. Brand managers create strategies to take prospects on a journey to becoming brand advocates, creating an emotional connection between the company, its products/services and their consumers. Understanding the importance of consumer psychology can inform these strategies.
Consumer psychology and emotion
To begin with, here’s the science: when an emotion is triggered in the brain of a shopper, their nervous systems responds by creating sensations in their body and certain thoughts in their mind (what many people refer to as a ‘gut feeling’). Most purchasing decisions are based on these emotional responses as opposed to logical reasoning and rational thought.
Emotions are not particularly sophisticated or precise, but their speed more than makes up for what they lack in sophistication and precision. Emotions, provide information about circumstances in a simple, quick way that involves minimal cognitive effort. Emotions influence a consumer's psychological state, attempting to tell a shopper whether or not to make a purchase decision. This decision is based on our evolutionary fight, flight or find a mate need.
For example, imagine that you are shopping for a party outfit and you begin to feel anxious...ol
If something doesn't feel right it is your emotional system informing you to further evaluate the situation (outfit): does the outfit remind your emotional brain of someone or something in the past? Is your anxious response a reaction to an event, another person or to yourself, such as your fear of success or failure as a result of wearing the outfit?
Many people think that the best course of action is to suppress or ignore emotions rather than understand their amazingly powerful persuasiveness. It is why so many brands and retailers ignore emotion; an integral part of being human, something that has evolved over thousands of years just ignored.
Consumer psychology in-store
In-store, shoppers are constantly bombarded with an abundance of deals and other information that they are expected to process. They simply do not have time to make sense of everything in a reflective fashion, so their brains process input passively and unconsciously, using emotion.
If your brain comes across something that it first appraises as a ‘warning’, such as a large red ‘Special Offer’ sign, you’ll be sent a general, vague alert in the form of the feelings and thoughts created by an emotion.
This somewhat imprecise signal alerts you to pay attention, and that’s the pay-off. Strategically targeting emotions is a means of gaining the attention of shoppers, without sacrificing margin! Remember, shoppers buy emotionally and justify rationally. Tapping into shoppers’ emotional systems offers you the fantastic business advantage of being able to better influence purchase-related decision making.
In-store, emotions provide shoppers with a continuous feedback loop, constantly priming how they feel, their propensity to purchase and a host of other in-store decision related information. Shopper emotions are something to interpret and target rather than to be viewed as irrational annoyances to simply ignore.
An understanding of consumer psychology and purchasing behaviour must be based on knowledge of human emotion and include the paramount influence that emotions have on decision-making. Otherwise you end up with boring, sterile, bland retail environments, complete with uniform aisle widths, ubiquitous cream shelving and devoid of any emotional engagement… like all too many of those offered to shoppers today!
The power of emotion
Still hesitant about the power of emotion? Consider these case studies:
After a major bank introduced a credit card designed to inspire emotional connection, usage increased by 70% and new account growth rose by 40%.
A leading household cleaner turned market share losses into double-digit growth within a year of launching products and messaging to maximise emotional connection
When a clothing retailer reoriented its merchandising and customer experience to its most emotionally connected customer segments, same-store sales tripled.
Pet-care sales increased by 15% simply by adding emotion to the aisle in-store
Home furnishing sales leapt by 350% by emotionalising the in-store display
Given the enormous opportunity to create improved bricks and mortar retail and to offer a definitive alternative to the threat of online, brands and retailers should pursue emotional connections as a science based major strategy. But for most, building these connections is more haphazard guesswork than science. At the end of the day they have little or no idea what really works and whether their efforts have produced the desired results. So they just run more deals and offers instead.
Want to know more about emotional retail? Let’s talk!
Alternatively, you can learn much more about human emotions in my books Shoppology and Master Your Brain.