Understanding consumer buying behavior a top retail challenge
Consumer buying behavior is a mystery that many retailers are still trying to figure out. What makes a customer purchase a particular item? What makes them decide to abandon the purchase at the last minute? Why do they buy when they do? Why do they choose one item over another? By getting to the bottom of this question, retailers may be able to generate more sales in the future.
Still, a recent poll conducted by ShopperTrak make it clear that pinning down consumer buying behavior is still a core challenge for many retailers. As many as 44 percent of attendees at the recent ShopperTrak Users Group Conference listed understanding consumer behavior as the biggest challenge that stands in between them and success. The other obstacles listed include the use of big data, omnichannel pressures, implementing new technology and merchandising and store design.
It should come as no surprise that many of those obstacles all play a pivotal role in helping retailers better come to terms with consumer buying behavior. For example, there are several technologies that can provide retailers with greater insight into consumer buying behavior both in stores and online.
The rise of the beacon
Beacons are tools that retailers can use to create measurable interactions in physical stores. One of the biggest obstacles with trying to improve in-store conversion rates is the lack of data surrounding this area. Retailers can use metrics such as foot traffic to try to discern interest but at the end of the day, these metrics are quite limited compared to data available on the Web such as page views and clicks.
So what is a beacon? As Digiday noted, “beacons are devices that communicate with a shopper’s smartphone in the hopes of improving the in-store shopping experience. When placed in a store, beacons use Bluetooth technology to detect nearby smartphones and send them media such as ads, coupons or supplementary product information. They can also be used as point-of-sale systems and to collect information on those consumers — particularly how consumers maneuver through stores.”
Beacons are proven effective tools for encouraging measurable interactions with retailers. For example, one inMarket study found that in-store beacons cause a 19-fold increase in engagements with advertised products. They also improved in-store app usage by 16.5 times and a 6.4 times increase in the likelihood of shoppers keeping a retail app on their phone.
Even more important, however, is the ability of beacons to influence buying behaviors. Think back to a time before smartphones – what could merchants do to affect buying behaviors? Sales associates are one tool, but at bigger stores, customers are likely to significantly outnumber people on the floor.
Signage is another tool, but at the end of the day, they were quite limited in that fashion.
With beacons, merchants can send promotions straight to the customer in real-time. Imagine, as the customer, standing in front of a product and considering making the purchase, then they get a coupon for 10 percent off. Small things like that can make encouraging a purchase that much easier.
Replicating the online experience
In many ways, retail brands were already influencing online buying behaviors in a similar way. They could look at which items people had viewed or placed in shopping carts and offer them coupons straight on the website or through email. This remains a pivotal way of encouraging customers to make purchases online, the rise of the beacon allows retailers to do it in-store as well.
That said, it’s pivotal merchants actually make use of this technology to improve in-store and eCommerce operations. According to ShopperTrak, only 5 percent of merchants have actually implemented beacon technology.