Buying Habits: How Retailers Can Use Psychology and Analytics

Buying Habits: How Retailers Can Use Psychology and Analytics to Reach and Retain More Customers

Insights

March 15, 2017
Buying Habits: How Retailers Can Use Psychology and Analytics to Reach and Retain More Customers

In today's hyper-competitive omnichannel retail industry, businesses need to understand the buying habits of prospective customers more than ever. Appealing to consumers has always been a top priority in the retail industry, but with so many options literally at your customer's fingertips, catering to individual consumers' preferences is even more imperative to achieving success. To do so, retailers are increasingly looking into the science behind consumer buying habits, particularly when it comes to psychological aspects of the consumer experience both online and in the store.

Using Psychology to Improve In-Store Sales

While eCommerce continues to grow rapidly, people still want to shop in a brick-and-mortar store or have the option to buy online and pickup in-store so that they can touch the products before making a final decision. To influence customers' purchasing decisions, retailers are already using psychological tactics involving sight, smell, and sound.

In terms of sight, there are many strategies retailers can implement. For instance, if the store is neat and clean, people are more likely to make purchases. Color is also an important factor to consider; according to an article on Shopify, 62 to 90 percent of customers actually develop their first impression based on the display of color alone. Smells matter too, as women tend to buy more in stores filled with feminine scents and men are more likely to purchase in stores with masculine ones. Abercrombie & Fitch is using scent marketing combined with sight by spraying its own line of men's fragrance, "Fierce," throughout its retail locations, thereby giving male clientele the impression that they might look or "smell" like the models on massive wall displays.

How Psychological Tactics Can Boost Online Sales

There are several less tangible ways retailers can use psychology in the eCommerce world. Building a sense of urgency is a common tactic to speed up a user's purchasing decision. For example, while researching a product, many online retailers provide real-time details about how many items are still in stock to promote, and whether or not items are available for in-store pickup, creating the impression that customers might lose out on a deal if they don't act quickly. Customers may also want Customers are also more likely to purchase goods that other people—particularly their peers—have reviewed favorably on the website or through social media. Reciprocation is also an effective way to gain ongoing customer loyalty by offering rewards, free gifts, or special deals on additional purchases.

Using Data Analytics to Understand Buying Habits

In today's hyperconnected and omnichannel world, customers are demanding a more personalized shopping experience. By collecting and analyzing data on individual customer's product preferences, purchasing history, and customer service experience, retailers can gain a better understanding of the "psychology" that drives buying habits. Sources for this data include keyword research, focus groups, surveys, customer reviews, Q&A forums, social media, and search engine analytics engines to determine a range of customer demographics. Your customer care partner should also be analyzing the data captured during customer interactions to make recommendations and provide more personalized experiences whether it's via phone call, chat, or social media.

In the end, understanding the purchasing patterns and personalized preferences of your customers is absolutely critical in retail. Psychology plays a major role in developing an effective strategy to cater to these customers, and without a more scientific, analytics-based approach to understanding customers, retailers simply won't be able to compete across all available channels customers have instant access to.

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