Consumer psychology is the only constant in an evolving retail market

Years ago, Jeff Bezos famous saying:

“I get the question very often, ‘What will change in the next 10 years?’ And this is a very interesting question; it is very common. I hardly ever get the question, “What’s not going to change in the next 10 years?” And I submit to you that this second question is actually the more important of the two – because you can build a business strategy around things that are stable over time.

He went on to explain that what won’t change is that customers will want low prices, fast delivery, and lots of choice. He describes motivations that are part of an enduring consumer psychology upon which he based Amazon’s business strategy.

But Bezos’ truths – low price, fast delivery, and a huge selection – answer a small part of consumer psychology: the functional needs of consumers. He doesn’t tell all he knows about a much more complex story of why consumers do what they do and buy what they buy.

Jeff Bezos understands consumer psychology

“Buying behaviors are always a way to reach an emotional end,” says Founder of Buycology Christopher Gray, Psy.D.

Retailers therefore need to focus on these fundamental human motivations that shape shoppers’ behaviors. And most importantly, these underlying human motivations give other retailers plenty of ammunition to fend off the assault by a retail giant, like Amazon

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“Consumers are people and people are motivated by the same basic needs”, explains social psychologist Erica Carranza, Ph.D.., vice president of consumer psychology at Chadwick Martin Bailey.

“We all strive to maximize positive emotions, enhance and express our identities, cultivate social relationships and effectively achieve our goals. Because these are basic human needs, brands that help people meet those needs drive consideration, testing, loyalty and advocacy, ”she says and adds:“ People are thirty times more likely to try a brand if they expect it to generate strong emotion. , identity, social or functional benefits.

And people give different weights to these basic psychological needs in different circumstances depending on the context in which they find themselves. This year, with the pandemic rearing its ugly head, the bundle of consumer psychological needs has been mixed but has never gone away.

Here are five essential consumer psychology truths that Bezos doesn’t talk about: control (Bezos’ functional needs), emotion, personal identity, social belonging, and context.

Give control to consumers

People want to feel in control and be able to achieve what they want to achieve. In psychological terms, it’s called the agency. “It’s about their ability to achieve their goals effectively and efficiently,” Carranza explains. “Amazon’s functional benefits give people that sense of agency that allows them to shop efficiently. “

Consumer behavior is a function of both motivation, i.e. psychological needs, and ability, she continues. Due to the pandemic – first with so many retail stores closed and now with personal safety fears looming as stores reopen – they have lost some of that agency or the ability to do so. their purchases.

Online shopping has given consumers more agency in today’s environment, but there are still psychological challenges to overcome. Retailers and brands need to capture people’s attention online, which is harder to do than when they’re in the store ready to shop. “You try to get people’s attention when they’re home and doing other things,” she says.

And then the retailers have to persuade them to buy. With online shopping cart abandonment rate approaching 70%, e-commerce players are not doing such a good job.

In today’s environment, people have many reasons not to pull the trigger, even though retailers have captured their attention.

“Why should I buy these shoes? No one on Zoom can see my shoes. Why should I buy this handbag? I hardly ever leave the house, ”Carranza continues.

Activate positive emotions

People want to maximize their good feelings and minimize the bad ones. This is the emotional component of consumer psychology, but there are two dimensions that underlie all emotional experiences: valence, or the extent to which emotions are positive or negative, and activation, or quantity. of physical energy associated with emotion.

In the current context, consumers experience a lot of negative emotions (valence), which can be expressed (activation) in different ways. Carranza illustrates this by comparing anger to sadness, two negative emotional states, but with different levels of activation.

“Anger and sadness are at opposite poles of activation. When people feel angry, there is a lot of energy that makes them want to take action. When people feel sad, they withdraw. C ‘It’s a more boring and debilitating experience, ”she explains.

Retailers want to stay on the positive side of the emotional valence and encourage more activation of those positive feelings that drive consumers to buy. “High activation and positive emotions make people want to take action. They feel energized, excited and inspired. There’s a lot of energy there, ”she says.

High activation can prevent customers from abandoning their online shopping carts. A limited-time sale or offer can be just that, which Bezos knows well. It’s also important to have a simple and seamless payment experience, with the promise of hassle-free returns.

Confidence is another factor that can activate purchases. If consumers are confident that the retailer will deliver on their positive emotional promise, they are more likely to buy.

“The brands that have built this trust should take advantage of it. Confidence falls into this category of emotional benefits. If you trust a brand, you will buy even if something is a little more expensive. Luxury and more premium brands play in this space.

Emotions such as peace, calm, relaxation, comfort and security are also high in emotional valence but lower on the activation scale. As shoppers return to the store, consumers will need more of these feelings. Therefore the physical shopping environment will become even more important in the current context.

Strengthen personal and social identity and belonging

“People want to cultivate a strong personal identity. Personal identity in consumer psychology is about how a brand improves consumers’ self-image, pride, and self-esteem, ”Carranza explains.

“Personal identity is about helping people feel good about themselves,” she continues. “Then there’s identity or social belonging, which is about how strongly people identify with the type of person who uses that brand or that store’s stores. “

Traditionally, fashion brands have played in this space, choosing a fashion brand both reinforcing its personal identity and aligning itself with a group or tribe sharing common values ​​and aesthetics.

“Social connection is so important to retail, whether it’s the literal encounter in the store or shopping done in the store as a form of social expression, like carrying a Louis Vuitton handbag. which provides a personal and social psychological benefit. It makes people feel like they’re part of a community even though they’re not in the store, ”she explains.

She also notes that Amazon with its 150 million Prime members did a good job in satisfying both the benefits of personal identity and social belonging. “Amazon customers tend to feel like a lot of people like them use Amazon and can relate to them,” she says.

Context shapes consumer perception

And finally, through these stable psychological motivations of the consumer – control, emotion, personal identity and social belonging – comes the constantly changing context in which the consumer operates.

“Context shapes how we perceive the environment, the conclusions we draw from it and the emotional responses we have to it,” says Gray of Buycology.

“The motivations stay the same over time, but the ways consumers satisfy those motivations may change. By understanding these underlying motivations, retailers have the ability to offer new options to shoppers who meet those needs, ”he continues, citing the rapid adoption of online purchase-in-store pickup as an example of that.

With so much social and emotional turmoil bombarding buyers today, a retailer’s or brand’s mission and stance on social issues have taken on even more importance. “Brands must give themselves an energizing mission,” emphasizes Carranza.

And because of the stressful environment people find themselves in, it calls on retailers to pay more attention to the less energizing, but more emotionally reassuring good feelings that Carranza talks about, especially in creating a peaceful, calm physical environment. , relaxed, comfortable and secure. environment.

“It’s really important for retailers to go too far in creating a positive, friendly, welcoming and safe environment,” said Gray.

This is complicated by the need to wear face masks in stores. Face masks eliminate the ability of people to read facial expressions that are so important in the social context. This can be overcome by more vocalizations that communicate friendliness, like a laugh, and more expressive and open body language, like friendly hand gestures and no crossed arms.

“A positive emotional response in a shopping environment results in increased time spent in the store, increased spend, increased cart size, and an increased desire to come back. On the other hand, a negative experience, such as frustration or anxiety, is contrary to a positive shopping experience and leads to less time spent in the store, less spending and less desire to come back ” , Gray shares.

In conclusion, consumer psychology – empowering people, activating positive emotions, strengthening personal identity and belonging – is the enduring foundation on which to build a successful business strategy, while being ready to adapt quickly. to the changing social and cultural context of consumers. .

Note: Correction to the above statement: “People are thirty times more likely to try a brand …” Original incorrectly stated three times; corrected to thirty times, at 4:05 p.m. on August 23.