Retailers have always
looked for techniques to provoke customers to spend more or purchase
higher-margin items – but much of what has been done thus far are merely
pseudo-psychological “tricks” based on specious theories and scant
evidence. It is only within the past
few decades that computers are powerful enough to handle the calculations, and
“reward card” programs enable retailers to recognize the buying activity of
individual customers, that any real science can be applied.
It’s also observed that
most of our buying behavior does not involve decision-making. It’s
habitual. When we purchase a product
for the first time, there is intense thought and scrutiny – but if we are
satisfied with the outcome, we tend to purchase the same brand automatically
the next time, and the next. People
remain “loyal” to the same brand for decades not because they repeatedly
re-evaluate their options and find that a given brand is superior ever time, but
out of laziness” they do whatever seemed to “work” last time to avoid the
effort of decision-making.
However, this analysis
considers the point of decision, which loses context of the shopping
behavior. The decision of “Brand A or
B” is an event made in the context of the shopping excursion – everything that
led the individual to be standing at that particular shelf at that particular
moment to make that particular decision – and all this must have taken place
for that decision to be relevant at all.
Consider this: people fall
into patterns for habitual purchases. A
person may have fallen into the pattern of doing their grocery shopping at a
particular store. Beyond that, they
have developed the habit of using a shopping list, pre-making many of their
buying decisions before they even arrive at the store. And beyond that, they pattern they take as
they proceed through the store, gathering items, is also subject to
habituation: a carefully-considered trick to cause a person to purchase your
brand of multivitamin is totally missed by a consumer whose weekly routine
doesn’t involve walking down the vitamin aisle at all.
To their current brand of
preference, the habituation and inertia of the market is an asset: once a
customer has become habituated to a brand, it is very difficult for anyone else
to break that habit and take the customer away. This is also a strategic advantage to
established brands, in that the cost and effort required to break habitual
patterns is significantly higher than that required to maintain them – which is
very often zero, but it generally takes no effort on anyone’s part to cause
things to remain the way they are (if no-one is putting any effort into causing
them to change).
The corresponding
disadvantage, however, is stagnation in the marketplace: while the established
brand can rely upon inertia to preserve their market share, they must disrupt
this inertia in order to gain market share, and any act of disruption for the
sake of growing into new markets or acquiring new customers jeopardizes the
stasis required to maintain existing ones.
That is, the change necessary to break the non-buying habit also has the
tendency to break the buying habit.
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