Tag Archives: Consumer Behaviour

News

Consumer behaviour influenced by personal politics, research reveals

Following Donald Trump’s electoral victory in 2016, a large number of people changed their brand preferences and shopping behavior, preferring to purchase brands which they perceived shared their political views, research from the University of Mannheim Business School reveals.

According to Professor Florian Stahl, Chair of Quantitative Marketing and Consumer Analytics and the University of Mannheim Business School, this trend was much more noticeable for liberals than conservatives.

“A stronger polarisation among liberals after the election of President Trump is consistent with the notion of compensatory consumption. Members of the politically threatened group take compensatory actions such as purchasing more liberal-leaning brands to better establish their political identity,” says Professor Stahl.

With colleagues from ESADE and Columbia Business School, Professor Stahl analysed data on the political leanings of all Twitter users who followed one of 307 major brand accounts between February 2016 and December 2018.

The researchers also harvested data from the YouGov BrandIndex and Nielsen Retail Scanner Data (a record of weekly sales for 27,043 brands) during this time period.

Their findings show an increase in political polarisation in Twitter brand followership, stated behaviour intentions, and actual purchasing decisions, after the election results.

These results were most pronounced in liberal-leaning consumers, who favoured brands that were openly critical of the Trump administration. This is in line with the growth of liberal activism since 2016.

The study was published in the journal Marketing Science.

GDPR, News

More than half of businesses at risk of facing hefty fines for breaching GDPR requirements, warn researchers

Confusion over Consent Management Platforms (CMPs) is leaving businesses at risk of receiving hefty fines from the Information Commissioners’ Office for breaching GDPR requirements, running to 10s of 1000s of pounds, according to new research commissioned by data company fifty-five.

The survey of over 500 marketers revealed the majority (54%) haven’t set up a Consent Management Platform (CMP), which is critical for managing consent in line with legal requirements. 47 per cent say they do not need one, potentially putting their business at risk if they are not otherwise meeting the complex needs.

CMPs ensure consumers give consent for brands to store and use their data for tracking and marketing purposes. Brands cannot store data or market to customers if they haven’t provided a correctly administered pop up (or privacy notice), which requires active consent. However, the study highlights widespread confusion about this mainstay of the increasingly privacy-first internet. Of those surveyed who have a CMP in place, 37 per cent agreed the complexity of regulations and policies is confusing.

More than a quarter of all marketing managers surveyed (27%) admit they are not sure who was responsible for its implementation. 31 per cent think senior leadership are responsible and only 16 per cent thought it fell to the marketing department, despite marketers having most use for the information collected. Six per cent said the legal team is responsible, focusing on the compliance elements of a CMP.

For those who hadn’t implemented a consent management platform (CMP) there seemed to be a degree of potentially misplaced confidence about their reasons for not doing so. Nearly half (47%) said their business didn’t think it was necessary and 29 per cent were confident their business was compliant as it was.

According to Richard Wheaton, Managing Director at fifty-five: “We are in a new era for digital marketing and it is imperative that marketers act to fully ensure compliance with the law. Our study shows a majority of businesses have failed to implement one and this is concerning. A large part of the confusion stems from not understanding who has primary responsibility. However, confusion about complexity is not an excuse. Marketers as the brand communication owners must ensure they comply.”

Alongside widespread confusion, marketers are concerned about the impact implementing an CMP could have on their results and reporting. Of those who have implemented CMP, nearly three in 10 (28%) said it had impacted marketing’s ability to win customers, increasing to 35 per cent of large businesses. Meanwhile 17 per cent admitted they were confused about what to do in respect to data collection for website visitors.

With 43 per cent reporting that their customers were happy they had implemented a CMP, in comparison to only 15 per cent said they were unhappy with the inconvenience of pop-ups and privacy notices. Brands that provide a better privacy experience will benefit from increased trust and enhanced customer loyalty, which is crucial in a deteriorating economy, while a recent study* found that 43% of consumers said they would switch from their preferred brand to a second-choice brand if the latter provided a good privacy experience.

On the back of these findings fifty-five is warning brands that they must adapt to the new era to remain relevant for privacy-concerned consumers. Those that don’t risk going out of business in a tougher economic climate.

Richard Wheaton continued: “A CMP correctly installed need not be overly onerous and it is crucial to work with the right experts to ensure continued consumer trust and compliant data gathering. Implementing a CMP effectively can minimise the impact on marketing and build more content-driven and profitable relationships with more privacy-focused consumers.”

News, Retail & E-commerce

AR Shopping revolution: Over half of UK consumers choose shopping as their top reason to engage with augmented reality

New research from Snap reveals that as consumer expectations of the possibilities of augmented reality grow, a major gulf remains when it comes to brands’ perception of how consumers want to use it – with retail leading the way as the main reason people engage with augmented reality.

The study of more than 25,000 people across 11 markets, in partnership with Ipsos, highlights mainstream adoption of AR amongst consumers and reveals massive opportunities for brands to use AR to engage, inform, entertain and build customer loyalty.

The UK survey reveals 94% of brands still perceive ‘fun’ as the main draw for people to use AR. In fact, only 54% of people think of it this way, with over half (55%) of UK consumers listing shopping as their top reason for engaging with AR, revealing a huge opportunity for brands to provide shoppers with more relevant AR ecommerce experiences.

AR powers a new shopping experiencePeople said AR makes their shopping experience better, easier and quicker. 6 in 10 said it helps them shop in new and exciting ways; while 82% of brands that use AR said it allows them to provide a seamless customer experience, helping to drive conversion.

People see AR as a tool to experience a product before making a purchase. More than three quarters (79%) of respondents said they were interested in using AR to ‘place products’ in their environment to visualise how they’ll look. Meanwhile 57% revealed they’re more likely to buy from a brand that allows them to try on an item using AR.

Virtual try-on represents an untapped opportunity for retailersWhile 77% of people are interested in using AR to interact with a product before buying it, only 48% of brands have implemented virtual try on experiences. 

  • People want to learn more about products before they purchase: 73% of people are interested in using AR scanning codes to find more product information. Currently only 30% of brands who use AR have implemented these.

  • AR makes fashion more immersive: 64% of people say AR makes it easier to experience the work of their favourite designers.

  • AR has potential to make shopping more sustainable: 80% of people and 82% of brands believe AR has the potential to help the environment by reducing returns.

AR boosts loyalty for brandsBrands already using AR report its significant positive impact on loyalty. 64% said it improves loyalty and customer experience. 82% of brands said it helps to drive sales, acquire new customers and drive performance metrics, while 88% said it improves engagement and appeal to young audiences. It helps their customers to explore the world, connect with others and improve themselves.

Fintan Gillespie, Head of UK Business Solutions Snap Inc. said, “250 million Snapchatters engage with AR everyday and this report highlights the huge untapped potential of AR for retailers. This technology is transforming the way we shop and it isn’t an opportunity way off in the future – it’s happening right now. We’re excited to see the scale of opportunity for brands to showcase products, push creative boundaries, drive value and most critically – improve conversions to drive real business results.”

News

Two thirds of consumers cutting back spending on considered purchases

The cost of living crisis has had a dramatic impact on consumer spending with brands needing to focus on value and the longevity of their products to win customer loyalty. These were some of the key findings from a new research report by marketing agency Gekko.

The survey of 2,165 British respondents carried out by YouGov and commissioned by Gekko, revealed that two thirds, 66% have cut back spending on ‘considered purchases’. These are defined as non-essential purchases that have a degree of financial or emotional investment.

Meanwhile more than 4 in 10 (43%) of people have cut back on spending on ‘essential household items’ due to the increased cost of living.

The re-considered purchase

For considered purchases, 52% of 18-24 year olds have cut back on spending, compared to 68% of 25-34 year olds and three quarters (75%) of 35-44 year olds. The categories hit hardest by a cut back in spending of consumers of these goods are: Consumer electronics and homeware and home furnishings with 61% of consumers of these goods reducing spending. Next was Clothing & apparel 60%, DIY and garden, 50% and Baby and child, 41%.

In today’s environment the number one factor making people consider a purchase in the consumer technology space is that something is within budget, 69%, durability/ being fit for purpose was next, 52%. Third in the list was sustainability, still favoured by 23% of respondents. Brand awareness was considered by just 13% of respondents. For Gen Z (18-24 year olds), the result for sustainability was far higher at 38%, suggesting the need for a tailored approach for brands to remain relevant in the current environment.

Consumers cutting spending on essential items

For essential household items, more than 2 in 5 respondents revealed they had reduced their spending (43%). Of these, 1 in 3 (32%) have cut spending on essential household items by more than 15%. 3% have cut spending on essential items by more than 50%. There are some significant variations, based on gender, location, age and financial situation. 48% of women have reduced spending on household items, vs 38% of men. Of those who have reduced their essential household spending, home owners (of any type) are the most affected, with 63% saying they had cut spending by up to 15%, compared to 51% of renters.

Londoners are least likely to cut spending significantly. Of those who have reduced their spend on household essentials, just 2% of Londoners are cutting spending by more than 50%. Meanwhile in the East of England this rises to 6%, and 7% in the North West.

Millions of consumers looking to switch brands

Brand loyalty has plummeted in the current climate. 60% of people would switch brands for essential items and 48% of people revealed they are more likely to switch non-essential considered purchase brands. Men are less likely to consider switching their considered purchase brand choices, 43% versus 52% of women.

Commenting on the findings Daniel Todaro, Managing Director of Gekko said: “The results highlight the dramatic but also the uneven impact of this cost of living crisis. There is certainly no generic strategy for brands wanting to remain relevant in the current economic climate. These huge variations in choice are clearly based on income level, age, gender and location. No longer is desire beating need when making choices.”

He continued: “While large numbers of people are being seen to be cutting spending on considered purchases, it is now implied that brands should focus on price and durability as the two key factors driving buying decisions. Ephemeral qualities like brand values seem less important in today’s climate. However it is important for brands to have expertly crafted messages for different audiences with sustainability still crucial, in particular for younger audiences. Having the right tone and audience-centric approach may assist brands in weathering the turbulent times predicted ahead.”

News

Why some societies are more likely to buy eco-friendly products

Materialism is not necessarily bad, it can actually do good in societies that put the community first, according to new research by Vienna University of Economics and Business (WU).

The study, conducted by Professor Bodo B. Schlegelmilch, compared the values of consumers in the US to consumers in China, India, and Thailand.

In Asia, rapid economic growth and increasing prosperity among the middle classes have led to a surge in consumption – this is often seen as a move towards materialism and individualism.

They found that materialists living in individualistic societies make the kind of expensive purchases expected from a self-serving brand of materialism that some people frown upon.

Whereas materialists from collectivist societies, often in Asian countries, who also make pricey purchases, do so in order to strengthen their reputation as a socially responsible member of society.

“A self-serving materialist in individually orientated countries may opt for a flashy sports car, but a materialist from a collectivistic society might opt for a high-end and eco-friendly car, which they can enjoy together with friends and family,” says Professor Schlegelmilch.

The researchers believe that these insights into the brighter side of materialism are valuable to international businesses and organisations looking to engage consumers in pro-social spending, whether it is buying socially responsible goods and services or donating to charities.

The research was published in the Journal of International Business Studies.