As a retailer with a wide range of products, the consumer buying cycle varies based on the product type, cost, brand, and more. This path to purchase is completely within your control when all of these factors are taken into account and weighed accordingly. Owning this process puts you in a favorable position to be able to increase sales.
Two Extremes of the Consumer Buying Cycle
Not all products are quick buys, instead some take days or months to decide on. This includes big ticket items, like computers and TVs. Many consumers put these products to use for years, therefore they want to be sure that they make the right choice. The information on your website, from pricing to product information to reviews, will influence their decision.
Pricing has a huge impact on the average buying timeline. The price point of a $4000 handbag indicates to most shoppers that they need to do more research before buying, compared to a $9.99 pair of socks. Although repricing is often a requirement to stay competitive in the online sphere, buying cycle should be taken into consideration when it comes to the frequency of repricing.
Shoppers don’t take too kindly to drastic price changes when they are in the middle of researching a big ticket item. Seeing a luxury item drop or raise in price significantly will disrupt the buying cycle and cause the shopper to reconsider their potential purchase. While a temporary price drop might be what it takes to get a shopper to finally jump the gun and check out, it might also have the unintended effect of making the shopper question the value of the item. “If this item dropped tens or hundreds of dollars since I last checked, is it a good investment after all?” Don’t put this doubt into the minds of shoppers.
On the other hand, a low priced item won’t typically take as much time to research. The shopper simply isn’t shelling out enough to warrant hours of research. These lower prices items are much better candidates for repricing, as shoppers are much less likely to be deterred by price changes. After all, a 10 percent increase on those $9.99 socks is a mere dollar, compared to a sizable $400 increase for that handbag. While these items are changing at the same rate, one feels much more significant than the other. Not all products should be treated the same way, as their buying cycles can differ significantly.
Stages in the Buying Cycle
The stages in the buying cycle vary based on many of the factors that we’ve covered above, but most products still fit into at least four of the five stages below.
Awareness: When a shopper first hears about a product, whether it’s a witty ad of yours they came across or their sister telling them about this great new product they bought, they start to become aware of a want or need. At this point, they may not have any brand allegiance just yet. A shopper might want to buy from you or do a bit of research and make sure they are getting the best deal.
Consideration: At this phase, a shopper does some research and figures out what features are important to them. They gain an understanding of what is available in the market and stack up your offerings alongside what your competitors carry. Pricing plays a significant role at this stage because the shopper is gauging the average price for the item at hand and deciding whether your product provides what they need and want a price they are willing to pay.
Anchor pricing is a psychological pricing strategy at play during this stage and puts the most weight on the first price a shopper sees. Whether it’s a bargain basement price offered by a competitor or a slightly higher price crossed out with your new, lower price highlighted, this first price sets the tone for the consideration stage.
Due to the importance of pricing here, having a continuously optimized price is a requirement to compete on an even playing field. Otherwise, you run the risk of being ignored based on just one factor in the buying cycle. To combat this, the world’s leading retailers employ price optimization engines (home grown or third party) to keep them aware of competitor prices. The next step is to reprice according to the competition, supply, demand, price elasticity, and more.
Preference: As a shopper inches closer to a decision, they start to gain a preference for a certain brand. Maybe your brand has the best price or has hundreds of reviews or a store associate said it was a best seller as they browsed. This preference doesn’t have to be rooted in logic, it can even just be an emotional inclination a shopper feels towards your product because of your packaging or logo. In your market research, find out what drives positive consumer customer sentiment to make sure you are always on the right side of it.
Purchase: The stage you’ve been waiting for. You had a great price, raving reviews, a commendable return policy, and made the path or purchase easy on your shopper. But winning the sale is half the battle.
Return: Getting a shopper to come back time and time again is the holy grail in retail. The lifetime value of loyal shoppers is many times that of a one-timer. The price tier and category of the item might impact your ability to drive return trips, but it is still worth the effort. If a shopper loves the socks they bought from you, they might buy a few more pairs. However, if they bought a laptop, they most likely won’t return next month for another one. Based on what a shopper buys, follow up with add-on purchase suggestions by email and ask them to review the item. Even if a shopper doesn’t buy the item again, don’t let them forget about you. After all, you won the sale for a reason. Give them an incentive to come back again. Perks from your loyalty program could be what gets them to return, like a small discount or free gift on their next purchase.
For retailers that sell a wide range of products, the buying cycle for each one should be taken into account when it comes to pricing and promotion. Not every product should be treated the same way and it’s important to note that the price tier and product type will likely impact the time it takes a shopper to move through the buying cycle stages. Presenting the most robust product information and an optimized price to your shoppers will put you in a positive light and get you closer to the purchase and return stages of the buying cycle.
Need better data to inform your decisions? Whether in-store or online, Wiser has you covered from pricing to assortment to promotions. Schedule a meeting today to learn how to turn retail data into action.