Technology’s impact on the Consumer purchase decision process

 

The five stages of the consumer purchase decision process are; the recognition of a problem/need, the search for information, evaluation of alternatives, purchase decision, and post purchase behaviour. The effect of technology and digital platforms can be seen at each stage throughout this process.

1. Problem/Need recognition

As mobile, digital and social media platforms are  easily accessed by anyone with internet access, consumers are exposed to content published by both businesses and other consumers. The internet alone has enabled the Long-Tail Theory, meaning consumers can find niche products or services that fit their needs exactly, and also become aware to the vast range of offers on the internet. As I’ve mentioned in previous posts, Facebook and Instagram are being utilised by organisations in order to promote and sell their products.

Social media platforms such as Facebook and Instagram allow for consumers to see what their friends or peers have purchased,  which can influence the consumer to want to purchase the product for themselves. “Facebook Offers” has enabled the ability for businesses or consumers to create advertisements for promotions that can be claimed through social media.

Furthermore, as offers and advertisements are tailored to their feeds based on search history and the pages or posts that they have “liked”, consumers are being exposed to more and more offers. Due to being exposed to these offers, consumers identify needs or problems that they did not previously know existed.

For example, while browsing through Facebook, an advertisement for a line of clothing that you searched up months ago will appear on your feed, which will reinstate the need for new clothing.

2. Information Search

After identifying a problem or need, consumers require further information on the product or service, and conduct an information search. The information search is made easier and quicker for the consumer on digital platforms, as they no longer require the advice from retailers, due to all the information being accessible in different web pages.

Often, consumers refrain from making a purchase due to not knowing enough about the product and its features, however, with the use of social media platforms, potential buyers can see the reviews from previous buyers before making the purchase. As said in a previous post, consumers tend to trust the information and reviews provided by other consumers rather than the seller themselves.

3. Evaluation of Alternatives

The ability to access several webpages extinguishes the need to physically compare different products. The internet allows the consumer to compare products and services online, without leaving their chairs. As previously mentioned, the reviews and comments left by other users also assist buyers in evaluating their decision.

Group buying and peer-to-peer referrals allow for customers to see that their peers have previously purchased a certain product or service, and therefore decrease the doubt that they would have had.

For example, websites such as Trivago.com will allow for buyers to evaluate alternatives all on the same webpage, and select the best priced accommodation which best suits their needs.

4. Purchase Decision

Some consumers may find difficulty in finding the time throughout their week to physically go in store to purchase what they want. For example, a 9am-5pm worker may find difficulty throughout the week as most stores close at 5pm.

Digital platforms have decreased the need for consumers to physically go in store to make their purchases, therefore creating more convenience. As digital platforms evolve, these platforms enable customers to make the purchase on the spot, using several different platforms. Most retailers have recognised that consumers are becoming more reliant on technology, and have created mobile-compatible websites or apps, meaning that as long as consumers have internet access and a method of payment, shopping can be done at any point throughout the day.

For example, Coles has released an app where you can scan bar-codes of products to add them to your cart, browse for groceries online, and have them delivered right to your home address.

5. Post-purchase Behaviour

Post-purchase behaviour using digital platforms are easily tracked due to the use of comments and reviews. Most digital platforms allow for the buyer to make a comment or leave a starred review about the product. A consumer which is satisfied with the product may leave a positive review, which can aid future consumers in quickening their purchase decision. Buyers which are dissatisfied with the product may leave a negative review, which provides the business with feedback about their product.

As digital platforms evolve, convenience and accessibility of products and services increase, enabling consumers to make quicker and more informed decisions in regards to their purchases. Technology and digital platforms are increasing the ability for consumers to purchase what they want and when they want.

 

Loyalty Apps

In order for some businesses to provide extra value to their customers they provide loyalty programs. These loyalty programs businesses provide range from the business cards which are hole punched each time you make a purchase, plastic cards which can be scanned or swiped for each purchase, and now, as smartphone use has exploded over the years, loyalty apps are now becoming much more prominent. Loyalty apps can provide benefits to customers in a number of ways.

Customer benefits of loyalty apps:

1. Convenience

All sizes of businesses are using loyalty apps as they replace the need to physically have a loyalty card on your person when making a purchase. As people visit several different places to eat, shop or receive services, it can become hard to keep track and hold on to all of the different cardboard or plastic loyalty cards. Loyalty apps allow the customer to have access to all of the different business’ loyalty programs right in their pockets on their phones.

2. Transparency

Loyalty apps provide transparency in between the offer and the reward. With plastic loyalty cards, the customer cannot track how many purchases they have made, as all data is tracked by the businesses themselves. Having loyalty apps allow customers to see how much they have purchased, and how much more they will have to purchase in order to reap the reward.

3. Creativity and Entertainment

There are a range of different loyalty apps, with different features. For example, the Boost Juice app, which allows the customer to create their own drinks, track how many drinks they need to purchase until they receive a free drink, locate the nearest store, and accrue points to receive further benefits.  Customers being able to create their own drink, or tailor the product to their preference allows for a product suited everyone.

On the other hand, there is the Hungry Jack’s app, which allows customers to play a game on their on their phone in order to receive discount codes, free food, or other deals.

Business benefits of loyalty apps:

1. Understanding customers

Loyalty apps can provide businesses with analytics and data which can help the business understand their customers’ needs, enabling them provide offers to suit these needs. Most apps will allow customers to provide feedback on the products, services or the app itself, and the business can learn from this feedback to improve.

2. Competitive edge

Businesses with loyalty apps can influence customers to make repeat purchases by providing them with the extra benefits as listed prior. From the feedback learned from the analytics and data gathered, businesses can ensure that their app is better than that of their competitors and remain ahead of the pack.

3. Increase sales results and influence buyer behaviour

Every consumer loves a discount, and would love to pay less where they can. As loyalty apps provide customers with not only discounts, but other extra value such as the above example of being able to create their own drink, they will assist in improving sales results.

 

Rise of the machines – good or bad?

Every year, we see several improvements in technology which make it less and less necessary for a person to be completing a job. Computers, ATMs, self-serve check outs, online shopping, and several other technologies have replaced a large portion of the workforce, leaving less jobs that require a human mind and body. Computers took the jobs of secretaries, ATMs took the jobs of bank tellers, self-serve check-outs are taking the jobs of supermarket workers, and online shopping is creating less traffic in department stores, which could resultantly create less need for physical stores.

As technology advances, they can be used and applied in more situations. I read an article on LinkedIn about Amazon’s first trial making a delivery using a drone a few weeks ago, and it all went successfully. There was also a video on Facebook showing a machine that can be used to 3D print a house. If these gets implemented on a full scale, there may no longer be a necessity to have delivery drivers, or even builders.

These technological advances are not necessarily bad thing, the advancements in technology can also create jobs. Using the examples before, instead of having delivery drivers, businesses could employ drone pilots, and instead of builders, they can employ people who architects who the designs for these 3D printed homes. The underlying purpose of all advancements in technology is to make life easier for people.

Whilst working at a bank, there have been several implementations of new technology to make banking for people easier. People used to have to physically go into a bank branch in order to complete their banking, then ATMs were introduced, then telephone banking and now internet banking. Now that internet banking is in place, many people including myself do not have any contact with the bank’s staff at all. Almost everything can be done yourself using technology.

In terms of banking, from my point of view, advancements in technology benefit the consumer because you can do more for yourself, as all the necessities of banking can be completed on an app in the palm of your hand. Making a trip down to a bank branch seems very tedious, and time consuming, in my point of view.

However, there are still consumers who refuse to learn how to use the new services, and continue to either contact the bank via phone, or attend the branch itself. These people tend to be the older generations of the population, and those that are not so tech savvy. It can be seen in other stores such as in supermarkets, there are more and more people using the self-serve check outs and the same older generation tend to want to speak to a person.

Having workers like myself on the phone, workers within bank branches, and workers in supermarkets are still currently in place to cater for these people, but as the population becomes more familiar with technology, I believe that these services will slowly be phased out.

Already, we’re seeing some bank branches becoming ‘express branches’ where minimal staff are physically there, and there are iPads, or other devices there to encourage people to use internet banking.  This allows for people to complete what needs to be done, and get on with the rest of their day.

As time passes on, and technology continues to advance, which industries do you think will always need people? Do you think it’s possible for technology to replace us all as workers? Is the advancement of technology good or bad for people and businesses?

Virtual Reality

For years, people all over the world have dreamed and imagined the possibilities of Virtual Reality, I myself had an idea as a child of its applications it could have in gaming. I pictured sensors on your hands and feet, a helmet and that would be all you would need to immerse yourself in another world from the comfort of your living room. Back in the 90’s the closest thing you could get to VR was a 3D movie, or one of those shooting games in an arcade – home application seemed so far fetched.

In the early 2000’s the next step into gaming was taken as the EyeToy was released for PlayStation 2, which strayed away from the necessity of having a handheld controller, the controller was now your body. Since it was new, what you could do in the games was quite limited, and it still wasn’t the VR experience I was seeking.

Over the last few years, the VR technology industry has been seeing rapid advancement as  computer and mobile technology improved and became more and more accessible to the general public. As smart phones with high-density displays improved, the capabilities and applications of VR have increased dramatically.

Recently companies such as Google and Samsung have released VR products such as the Google Cardboard and the Galaxy Gear, which are DIY headsets that use a smartphone to drive it. I would have imagined that due to this boom in the industry, we would be seeing more applications to gaming as I thought when I was younger. However, VR has been applied in several different areas other than entertainment, such as in the military, education, fashion and business.

Business applications of VR:

  1. Showcasing products

I came across an article the other day posted by Business Insider about implementing the use of VR in businesses for consumers to be able to see products with a 360 degree view. Sometimes when shopping online, I don’t purchase an item because I can’t see every aspect of the product itself, and leaves me unsure as to if the product will satisfy the purpose I need it for. With VR, I would he able to see the size of the product and also every aspect of it.

2. VR in the business itself

An article on Computer World outlined the possibilities of using VR within the business for things such as holding work meetings, giving a virtual tour of the office, interviewing candidates and training employees. With VR, it will be possible to do these things with much more ease, as it diminishes the need for people to have to physically at the office.

Although we’re yet to see a full scale application of VR gaming, the applications of VR are taking off in several different industries, including in business. How do you think VR will impact your life in the near future?

Reactions to marketing; Business to Consumer vs Consumer to Consumer.

In my previous blog post, I spoke about how I was exposed to several pieces of marketing material while trying to watch one simple trailer, but since then I have installed an adblocker on my computer and phone. Since I’ve installed the adblocker, I’ve found that there is (obviously) much less advertising and marketing material that shows up on my social media news feeds, and prevent pop-ups on other sites.

Like any other person, since I’m exposed to marketing material throughout my whole day, I believe that I’ve just grown to not respond to the marketing messages sent from businesses and organisations. While I’m doing my own thing I’d rather not be pressured to buy something, instead, I’d rather just zone out and go through content that I want to see on my own devices.

Installing an adblocking app on my phone has helped me to an extent, however, creative marketers still manage to have their products slip through the cracks and reach my feed. With the adblocker, I’m no longer seeing many direct marketing materials such as banners on the borders of pages, but instead I’m seeing products and other marketing messages conveyed through people’s posts. For example, as I’ve touched on in my last post, there are videos where people create things using the packaging of products, like Coca-Cola bottles, or using Bic lighters.

I believe that these types of videos are becoming more and more prominent, because businesses are becoming more aware of people like myself – people who do not really respond to marketing messages from businesses. To combat this, they’re sponsoring influential figures on social media, and providing them with products to show off for them. This is because consumers tend to respond to consumers more than they do respond to the business.

The benefits that businesses can receive from providing their products for their consumers to show off include;

  1. Influential people on social media have a large reach.

Although businesses themselves have massive reach on digital platforms, how often do consumers look into their posts and actually read them in depth? If a business makes a post on social media, any consumers will see the post as an advert, and simply skip past the post.

  1. Consumers feel like they can trust the influential user, due to the fact that they’re both consumers.

Consumers promoting products of businesses gives off the impression that other people already use the product, therefore it should be safe to use or buy. When a business tries to market a product, many consumers see this as the business trying to attract customers and earn money, whereas when the product is endorsed by a fellow consumer, the product seems safer because another consumer has purchased it and given it a good review.

  1. Marketing messages are more subtle, but more creative.

Traditional marketing techniques such as advertising on a website are not as influential on consumers because most consumers use an adblocker, or the consumer is focusing on the page itself rather than the advertisement. Incorporating products in a video not only exposes the product itself, but it can show the function of the product, and other possible uses.

Adception

When I was procrastinating today, I noticed that Facebook has introduced advertisements in videos uploaded by users and pages now.  I noticed this when I was watching a teaser for the upcoming Pirates of the Caribbean movie, and all of a sudden, out of nowhere one of those “life hack” videos appeared. In this video, a bottle of Coca-Cola was being sawed into bits and glued onto a Coca-Cola can to create a rather pointless can with an unscrew-able lid. Beneath the video showed “Products shown in this video” and had a link to follow to go to Coca-Cola’s Facebook page, or another link to go to the Life Hack video page. I thought nothing of it, waited for it to finish and continued procrastinating and watched the rest of the teaser.

The Pirates of the Caribbean video I was watching was just the teaser for the movie, and had a link in the description to follow to see the full trailer on YouTube. I noticed at this point that I had been exposed to marketing for the movie, for the life hack website, Coca-Cola, and now YouTube, so out of curiosity this time (instead of procrastination), I followed the link to see how deep this string of advertisements will go.

Once on YouTube, before watching the trailer, there was a 5 minute trailer at the beginning of the video, for a completely unrelated short film/documentary about a man driving across the Antarctic. Within this ad was only on brand of car; Hyundai. On the video, it left links to click on to visit either the full video for the film/documentary, or Hyundai’s website. The video didn’t provide an option to skip the ad like YouTube usually does, and I found that quite odd, so I watched the rest of the video, still hoping to just watch the Pirates of the Caribbean trailer.

At the end of the ad, yet another ad shows up, this time as a pop-up beneath the video, asking if I want to skip remove ads by trying YouTube Red. I selected “No thanks”, and finally at this point, was I finally able to watch my trailer. After about 15 minutes trying to watch one trailer, I was interrupted by 7 different and unrelated videos and other digital marketing materials.

By the end of the trailer, I was exposed to marketing from the Pirates of the Caribbean movie, the Life Hack Facebook page, the Coca-Cola Facebook page, YouTube, that short film/documentary, Hyundai, and YouTube Red.

I feel like this is really effective marketing by each of these businesses, some marketing materials are more subtle than others, and without me scrutinising each and every detail for this blog, I probably would not have noticed.

After all that trouble to watch one video seeing ads within ads within ads, I have now installed an adblocker to my browser so that I can procrastinate in peace.

 

 

The Long Tail theory in the Music Industry

Chris Anderson’s Long Tail Theory about how technology and the internet enables niche markets.  In the past, traditional walk-in stores had limited, specialised products. Take the music industry for example. Ten or so years ago, for access to music, most people would either go into a store like Sanity or JB HiFi in order to purchase the music of their choice, and discover new music on the radio. To share music, people would lend their tapes or CD’s to each other or provide each other with a copy.

As time went on and technology progressed, people began to have access to their own personal libraries of music through devices such as iPods, where music could be bought off iTunes or like most people, downloaded off the internet. People could create playlists of their own taste and more and more genres and types of music emerged and became popular due to the internet. The internet also enabled for people to share their music with their peers with sources such as YouTube, where the song could be downloaded using a converter.

Nowadays, music streaming services have emerged, and with a small subscription fee, users have a vast range of music at the touch of their fingers. Songs no longer have to be downloaded, allowing for ease of access and the exploration of new music.  Music is now shared still through the use of the internet, YouTube and other websites still exist for listening to music, but now playlists and songs can be shared through apps like Spotify.

Going back to 10 or so years ago, the genres of music that were available seemed to revolve around a few popular genres, such as pop, RnB, rock, country, etc. Now that music is so easily accessible, there are more and more sub-genres emerging, causing people to steer away from the main genres and listen specifically to what they want to listen to.

Business Implications:

  • As anyone can post music online, both existing and new music artists are using online streaming websites or applications like SoundCloud or Spotify to expose themselves online. The streaming services are being used as a platform for these artists to further progress their music careers. Regardless of the genre produced, these services are available to anyone with an internet connection, and therefore there is bound to be someone in the world who will listen to your music.
  • Rather than playing generic radio music, businesses are taking advantage of music being so easily accessible, and creating playlists to suit their brand and brand image and identity. As different genres of music generally have a particular demographic or segment that listens to it, businesses can target these segments by playing their preferred music in store. For example, within a clothing store like Glue, having a younger target market, they play music such as deep house or pop music playlists.

In my opinion, there are definitely a much larger number of genres of music nowadays, and I believe that it is due to ease of access caused by the internet and technology. Do you agree? Do you think that your favourite genre of music would have existed 10 years ago?