Consumer purchase behaviour is changing

26 June 2009

NEW YORK: Consumers are increasingly "moving outside the purchasing funnel" and adopting new behaviours when it comes to researching and buying products, according to research published by McKinsey.

The management consultancy defines the main purpose of marketing as to "reach consumers at the moments that most influence their decisions."

Examples of this include Amazon, the online retailer, "offering targeted product recommendations to consumers already logged in and ready to buy", and Procter & Gamble producing "soap operas" that are likely to be watched by its target audience.

Traditionally, marketers' view of the purchase process has been based on a "funnel" with five successive stages: "awareness," "familiarity," "consideration," "purchase" and finally, "loyalty", McKinsey says.

However, the company argues this model is becoming increasingly outdated, as shoppers no longer start with a long list of brands which they slowly cancel down to their product of choice.

Rather, and based on an examination of the purchase decisions of nearly 20,000 people on three continents, the company found that behaviour is "changing dramatically."

According to a presentation by David Court, McKinsey's director and global marketing leader, this is largely due to the fact that there has been an "increase in consumer empowerment."

This means people are "much more actively reaching out to friends and family, to the internet, to blog sites to understand their options."

Moreover, the purchase process is becoming "more circular", and can be divided into four stages that occur on a cyclical basis.

The first of these is "ongoing exposure", during which time "people see and hear about brands."

This is followed by a "trigger" that causes consumers to "move towards purchase", a process that starts with the "initial consideration" of what is often a "relatively narrow list" of brands.

Court argued the "bombardment of media" and busy lives experienced by many consumers means it is particularly difficult for brands to establish themselves on the "initial consideration set."

Once shoppers have decided they are going to buy a product, they move into the "active evaluation stage" where the number of brands they evaluate increases, a broadening of the old "funnel."

Here they investigate various products and their options for where to make a purchase, as well as paying more attention to ads.

The third stage is "the moment of purchase", which is "critical" for many products in a retail setting, as most consumers "still have not decided which brand they are going to buy; they make that decision in the store."

The last part of the process is the "loyalty loop", where some shoppers become "actively loyal" to a particular property, and don't consider other brands when making future purchases in the category.

More often, however, shoppers demonstrate "passive loyalty", meaning they are open to buying the same brand as before, but are also willing to consider other options.

Data sourced from McKinsey; additional content by WARC staff