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2020 Trends In Consumer Behavior

Consumer behavior is the study of individuals, groups, or organizations and all the activities associated with the purchase, use and disposal of goods and services. It includes consumer’s emotional, mental and behavioral responses. In short, it answers the following questions: “How do people buy? What do they buy? When do they buy? And, why do they buy?”

The COVID-19 pandemic had an abysmal effect on the world as we know it. People are altering their lifestyles, are purchasing in different ways, and are thinking outside the box. Supply chains have been tested. Some retailers were forced to close. The pandemic caused the consumers to look at products and brands through a fresh lens.

On that note, here are the observable trends in consumer behavior this year.

#1: “I DESERVE IT” MENTALITY

The pandemic tested our physical and mental strength. Many have turn to self-care for solace at home. As the Yuletide season began, we saw a rise in self-gifting. This “I deserve it” mentality came about due to months of being locked down at home. Moreover, treating oneself is a way to ease the mental worries of an individual. Thus, retailers who fall under the “self-care” category such as Bath & Body Works (fragrance), Cotton On Body (loungewear), and Sephora (beauty) can see an increase in sales this season.

#2: CONSCIOUS MENTALITY

Consumers moved further towards sustainability and away from mass consumerism this year. They are more mindful of what they are buying. It is likely that this trend started to emerge pre-pandemic. However, it has accelerated during pandemic. More and more people are eager to purchase sustainable options such as cloth masks and bamboo toothbrushes. They are limit food wastes and shop more consciously.

#3: HEALTH-FOCUSED MENTALITY

Health is wealth. Brands that focused on health have seen an ever-increasing demand this year. Consumers are eager to find ways to support their healthy lifestyles. Having a “health-focused strategy” will be a strategic differentiator for the foreseeable future.

#4: LOCAL MENTALITY

There has been a growing love for local brands and products during the pandemic. The desire to shop local was reflected in both the way people shop (e.g. supporting community stores or online market sites) and what the people buy (e.g. locally sourced or artisanal). Many small and local businesses have effectively capitalized on tools and online platforms to sell their goods.

Image Credits: unsplash.com

People who are no longer commuting to town have began to shop locally. With consumers both willing to shop online and from independent retailers, now is the time for you to react and adapt to this ecommerce trend.

Sources: 1 & 2

Everything You Need To Know About: Value For Money

When you hear the phrase “value for money”, what is the first thought that pops to your mind? Most people would say that it involves cost-effectiveness. Its definition goes beyond that. Value for money is a utility derived from every purchase or every sum of money spent.

It is based on the minimum purchase price and the maximum effectiveness of the purchase. Simply put, value for money should have four different dimensions. These four dimensions are: economic, efficient, effective, and equitable.

The value of money should be economic in terms of its processing. Inputs must have been procureed at the least cost for the relevant level of quality.

The value of money should be efficient in terms of its outputs. The value of outputs should be considered in relation to the total cost of the inputs.

The value of money should be effective in terms of achieving program outcomes. Sometimes, equity considerations are put in here.

Lastly, the value of money should be equitale in terms of ensuring that the benefits are distributed fairly.

EVALUATION OF VALUE FOR MONEY

There are different ways to evaluate the value for money. Here are just three of the common ones:

1. Cost Utility Analysis

When the evaluator needs to consider individual preferences, this is usually the method that they turn to. This approach takes two or more alternatives and compares their costs to their values. However, it can result to a number of potential outcomes.

2. Cost Effectiveness Analysis

This approach can be employed when you need to compare the programs that aim to achieve the same goal. It involves evaluation of two or more alternatives based on the relative costs and outcomes.

3. Cost Benefit Analysis

If you want to know whether the costs outweigh the benefits then, you must use this method. This approach is the evaluation of alternatives by determining the costs and benefits of each one. It highlights whether a course of action is worthwhile or not.

Image Credits: pixabay.com

It is essential for an evaluator to consider a variety of methods for determining whether an activity is value for money or not.

Sources: 1, 2, & 3

Newbie’s Basic Guide To Smart Shopping

1. BATTLE BETWEEN NEEDS AND WANTS

If you want to be a smart shopper, it is important to stick to what you need to buy and what your budget permits. Knowing the difference between a perceived deal and an actual deal is also a must. For instance, you find a studio that offers 80% off their Pilates classes, but you have no passion for it, then you are still wasting money if you purchase the deal.

2. CHOOSE THE RIGHT CREDIT CARD

Committing to smart shopping entails a credit card that has the best rewards. By that I mean, you must find the best card that aligns with your purchasing habits. For instance, if you intend to save more on flying then get a frequent flyer miles card. To each your own cards match.

3. GET OFF THE ELECTRONIC MAILING LISTS

Most of the stores especially those that are online makes you give out your email details. This can break your savvy shopping strategy. Being a newbie, you may not be able to resist the urge to shop once you learned about the deals available, so it is recommended to unsubscribe from the mailing list right away. This simple change will eventually break the bad habits.

4. STICKING WITH THE MONEY YOU HAVE

If you cannot trust yourself with the responsibility of holding a credit card, then stick with cash and debit card. It is best to spend the money you already have rather than to swim in a pile of debt. You may allocate a portion of your budget per month to a category called “shopping money” so you will be sure that you always have money to spare.

5. FREE SHIPPING IS NEVER FREE

Free shipping is usually offered in more expensive items and by comparing prices you will find out that an item at a lower price is much cheaper with shipping included!

Image Credits: Yoel Ben-Avraham via Flickr

So, when a website offers a free shipping minimum, it is smart to shop what you need and observe if your virtual shopping cart has reached the minimum. This not only gives you a chance to see the prices go up and down to fit your desired budget but it also gives you a chance to save even more money.

6. LOOK OUT FOR DISCOUNT COUPONS AND DEALS

Online shoppers need to know this. Why pay full price for your cart when you can save even more with discount coupons? There are many aggregators out there that offer coupons and deals for online shopping. These sites help benefits customers by giving them varied discount coupons and choices in their shopping experience, by leveraging our relationship with merchants.

For example, shoppers can easily save up to 70% with a promo code for Zalora that can be found on Paylesser.com.

Should You Buy Things Based On Their Values Or Prices?

In this day and age, how much are you willing to pay for a Smartphone?

Are you willing to spare a couple of hundreds or thousands of dollars? Would you rather purchase the Samsung J1 for S$168 or the Samsung Galaxy S6 Edge for S$1168?

For most of us, price by itself is not only the crucial factor that determines our purchase because we compare all the products that the market has to offer. In this case, Samsung Galaxy S6 Edge has been raved with good reviews and superior capabilities which makes it a strong contender against its counterparts. Beyond its price, we analyze several valuables and come up with a mental assessment of the product’s overall value.

This goes to show that price and value are two different things!

In economics, price and value are influenced by supply and demand.

A product’s price is determined by the intersection of supply and demand while, the value determines the demand. For example, if you are willing to pay S$10 for designer coffee then, you would be willing to pay S$6 or anything less. And, if the intersection of supply and demand prices the designer coffee at S$5, you are more likely to buy it. It does not mean that you place a S$5 value on the product but, it means that getting it at that price is worth it (for you).

Image Credits: pixabay.com (License: CC0 Public Domain)

Just because people are not willing to pay a lot of money for something does not necessarily mean that we do not “value” it. Take the “free” air you are breathing right now as an example. Need I say more?

In the marketer’s viewpoint…

Price is their monetary reward for providing us with the product or service while value is equal to our perceived product’s or service’s worth.

For example, the total cost for a repairman to fix a dripping air conditioner including the materials, travel, and labor is S$45. However, the value of the service to the customer, who has been tolerating the water leakage all over the room, is far greater than S$45! So, the repairman may charge you a total of S$60. Aside from observing the competitor’s prices, pricing is in lined with the perceived benefits that a business provides.

With all these in mind, ask yourself: “Should you buy it based on its Value or its Price?”

For what it is worth, I think it is best if you purchase products for their value, assuming you have the means to do so.

Image Credits: pixabay.com (License: CC0 Public Domain)

Frugal people buy products or services for their value using several techniques such as couponing. They value quality more than the price tag because premium products last longer. Thus, they get the most out of their money.

Sources: 1 , 2 , & 3

Be a Smart Consumer: Avoid These 4 Marketing Tricks

To be a smart consumer, you must spend within your needs and not over your means. Marketing or Sales Agents like any other businesses are using the power of persuasion to gain profit. I’m not saying it is a bad thing (personally I think it is a talent), but it may influence the consumers to buy something that is rather unnecessary.

Image Credits: Andrew Stawarz via Flickr

On that note, here are 4 Marketing Tricks you shall learn to avoid…

1. Foot-in-the-Door

It is a technique that starts with small requests in order to gain a “YES” with bigger requests. This works because of our desire to be consistent in our commitments.

For example, Fitness Studios will make you test their services first by giving a 1-week free pass before offering you their packages. Do you really need a $1,800 worth of Gym Membership when you rarely have the time to go?

2. Door-in-the-Face

In contrast, this trick starts with a huge and unreasonable request in order for you to settle with a smaller request.

For example, your friend asks you to donate $100 to a charity institution and you declined. Your friend will then say: “can you at least donate $10”. And, you will agree and comply. The truth is, your friend only intends for you to donate $10.

3. Low-Balling

Technique to purposely offer a product at a lower price than one intends to charge. This tactic will make you buy something at an affordable price before revealing the hidden costs (i.e., insurance, the phone casing, or batteries).

Image Credits: JOHN LLOYD via Flickr

For example, a Car Salesman offers you an initial attractive offer that you can’t resist but then later increases the price because of a “mistake in labeling”. Once again, Psychology dictates that it works because of our need to be consistent in our choices.

4. Brainwashed by Advertising

There you have it! As Warren Buffett once said: “Rule No. 1: Never lose money. Rule No. 2: Never forget rule No. 1”. I hope that by knowing these, you will be able to make smarter consumer choices in the future.

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