Facts – Why People Buy

 

Buying Decisions

Psychographics

BUYING DECISIONS

FACT: “What do you want brands to offer you online?” (Ad Age/Ipsos survey of digital media habits; Ad Age, 2/27/11):

  • Coupons = 65%
  • Better customer service = 42%
  • Games or other entertainment = 28%
  • Company news = 22%
  • Nothing = 19%
  • Other = 7%

FACT: Retailers with looser return policies experience far higher return rates, but also have better sales, profits and word-of-mouth than stricter competitors (study published in the Sloan Management Review; Wall St. Journal, 12/27/10). “Psychologically, people perceive less risk in buying from retailers with more relaxed policies; it makes people buy more,” says Georgia State University professor V. Kumar.

FACT: What consumers say is their “greatest influence when shopping” (National Retail Federation holiday survey, Wall St. Journal, 11/24/10):

  • Price = 43%
  • Product quality = 13%
  • Customer service = 5%

FACT: “We receive more than 3,000 commercial images a day; our subconscious absorbs more than 150 images and roughly 30 reach our conscious mind” (Advertising Age, 9/23/10).

FACT: Some 85% of purchase decisions are driven by emotion (Andy Murray, worldwide CEO, Saatchi X; Advertising Age, 3/15/10).

FACT: Though most campaigns cluster ads in a short period of time, consumers retain information better if it's spaced out over longer intervals (The Future of Advertising project, a review of seven marketing databases and 388 marketing studies underwritten by the Wharton School and performed by the Advertising Research Foundation; Ad Age magazine, 6/1/09).

FACT: Store redesigns and other factors that make it easier and faster to shop actually increase purchases, contrary to the old strategy that making things hard to find boosts sales by making people spend more time in the store (The Future of Advertising project, a review of seven marketing databases and 388 marketing studies underwritten by the Wharton School and performed by the Advertising Research Foundation; Ad Age magazine, 6/1/09).

FACT: Slightly more than 50% of consumers surveyed (in 10 countries throughout North America, Western Europe, South America and Asia) said they would pay more for a brand if it supported a good cause — even during a recession (Second-annual Edelman Goodpurpose study of 6,000 consumers, Ad Age magazine, 11/17/08).

FACT: More than two-thirds of consumers surveyed (in 10 countries throughout North America, Western Europe, South America and Asia) said they would willing to pay more for eco-friendly products (Second-annual Edelman Goodpurpose study of 6,000 consumers, Ad Age magazine, 11/17/08).

FACT: Since a ground-breaking study in 1999, the assumption has been that most supermarket purchases (as many as 70%) were unplanned impulse buys. But new research shows that just 20% of supermarket purchases are impulse related, according to Wharton marketing professor David Bell and two European colleagues (Seattle Times, 1/18/09).

FACT: A recent Nielsen survey found that 62% of consumers believe store brands to be as good as name brands (Today Show, 1/8/08).

FACT: In the current economic recession, 82% of Americans say the first expense they'll cut is eating out at restaurants. Following that is outside entertainment, clothing (for themselves), vacation and pleasure travel, buying lunch, hobbies and major home improvement projects (Gfk Roper online survey of 2,000 American adults; Ad Age magazine, 12/1/08).

FACT: Reasons holiday shoppers chose a specific store (National Retail Federation's 2008 Holiday Consumer Intentions and Actions Survey; conducted by BIGresearch, 10/16/08):

  • A whopping 40% of consumers say they decide where to do their holiday shopping based on sales or promotions.
  • 21.5% say product selection.
  • 13.4% say merchandise quality.
  • 12.6% say everyday low prices made the difference.
  • Only 5.6% of people say they are make buying decisions based on a store's location.
  • And fewer still (5.2%) say they base their decision on helpful customer service.

FACT: The Direct Marketing Association says a single consumer must see a display advertisement at least nine times before even considering making a purchase (The Globe and Mail, no date).

FACT: Since 2006, the National Retail Federation's annual holiday survey has shown that approximately one-third of consumers turn to the Internet to browse for holiday gifts and research products (National Retail Federation's 2008 Holiday Consumer Intentions and Actions Survey; conducted by BIGresearch, 10/16/08).

FACT: Reasons consumers return products (Wall St. Journal, 5/8/08):

  • 68% - didn't understand how to use the product.
  • 27% - buyer's remorse.
  • 5% - defective product.

FACT: 60% of people say word-of-mouth has the greatest influence on their purchasing decision, 47% of people say advertising is the most influential, 43% say online information is the most influential (Accenture survey of 600 consumers, 4/4/07).

FACT: 64% of people learn about new products via TV; 47% learn about them via word-of-mouth; 37% learn about them via print ads (Accenture survey of 600 consumers, 4/4/07).

FACT: Most shoppers instinctively turn right upon entering a store (retail consultant quoted on the Today Show, 10/17/06).

FACT: At the store, consumers view only about 50% of all brands on display in a category (Ad Age magazine, 10/16/06).

FACT: Reasons consumers cited for buying a brand (Ad Age magazine, 11/20/06):

  1. Past experience with the brand (83%).
  2. High quality, compared to other brands (63%).
  3. Reasonably priced (56%).
  4. Personally recommended by others (48%).
  5. Manufacturer's reputation for quality (46%).
  6. Well-known/well-advertised (21%).
  7. How rated in Consumer Reports (15%).
  8. Manufacturer's efforts to cut pollution (8%).
  9. Manufacturer's trade policies (5%).
  10. How manufacturer deals with union labor (5%).

FACT: Consumers will pay up to 25% more for celebrity-branded products (CBS Sunday Morning News, 2/25/07).

FACT: Reasons consumers cited for visiting retailer (Retail Advertising and Marketing Association survey; Direct magazine, 1/07):

  • 38.7% said coupon.
  • 34.9% said newspaper insert.
  • 29% said word-of-mouth.
  • 19.4% said direct-mail.
  • 16.9% said TV ad.

PSYCHOGRAPHICS

FACT: Retailers with looser return policies experience far higher return rates, but also have better sales, profits and word-of-mouth than stricter competitors (study published in the Sloan Management Review; Wall St. Journal, 12/27/10). “Psychologically, people perceive less risk in buying from retailers with more relaxed policies; it makes people buy more,” says Georgia State University professor V. Kumar.

FACT: "Holiday shoppers spent an average of $689 on gifs, cards, food and decorations this season, a slight rise from last year’s $682, but lower than $755 in 2007" (National Retail Federation holiday survey, Wall St. Journal, 11/24/10).

FACT: More than 64% of employed U.S. adults say they find printed materials “easier” and “more comfortable” to read than anything on a computer screen (Harris Interactive study; Deliver magazine, 3/10).

FACT: Accepted rule of thumb: Women are responsible for more than 80% of household spending (Ad Age magazine, 8/27/09).

FACT: Percentage of "online American adults" who say the following advertising mediums are "annoying" (Gfk Roper online survey of 2,000 American adults; Ad Age magazine, 12/1/08):

  • 70% say mobile phone ads.
  • 70% say the ads that play before a video.
  • 54% say marketing e-mail.
  • 52% say direct mail.
  • 53% say TV commercials.
  • 48% say search ads.
  • 12% say newspaper and magazine ads.
  • 12% say free samples.

FACT: Typically, there's just a 1% to 3% difference in product prices between Target and Wal-mart, yet 87% of people believe Wal-mart offers better pricing (Citigroup Global Markets survey; Wall St. Journal, 2/27/08).

FACT: According to a recent government survey, households earning $150,000 or more per year are responsible for about 40% of all overall consumer spending (Associated Press article in Seattle Times, 1/29/08).

FACT: Surveys continue to show Hispanics to be much more brand-loyal than other racial segments of the U.S. population (Promo magazine, 8/08).

FACT: Consumers are willing to spend significantly more money when using a credit card instead of cash. How much more is up for debate. On on 12/12/06, NBC's Today Show said consumers spend 10% to 30% more. But more recently (8/8/07), NBC Evening News said consumers spend about twice as much when using credit cards.

FACT: According to the National Restaurant Association, approximately 11% of restaurant consumers ordered their meals online in 2005 (McClatchy Newspapers, 1/28/08).

FACT: The amount of money the average American college student has available to spend dropped 7% in 2008 to $599.38 per year (Promo magazine, 8/08).

FACT: According to "Mail and the Internet," a 2006 United States Postal Service study, consumers who interact with brands over multiple channels spend 30% more than those who shop using a single media channel (International Communications Research, 8/10/07).

FACT: According to the U.S. Postal Service, 14.2% of the American public moves to a new address each year. For younger people, people in lower economic brackets and people who live in apartments, that figure jumps to 20% or more (U.S. Postal Service figures; DM News magazine, 4/5/07).

FACT: 70% of consumers who have a positive shopping experience are likely to tell others about it (2.5 other people, on average). National Retail Federation Foundation survey; Seattle Times 3/25/07.

FACT: The person who has a satisfactory experience with a company typically tells no one. If they receive superior service, they may tell one other person. Should they have a bad experience, they tell nine people on average (MIT engineering lecturer Steve Spier; CBS Sunday Morning News, 1/14/07).

FACT: An estimated 80% of new residents (people who recently moved to a new address) will try new products and services from local business during the first 24 months after a move. On average, these new residents spend $7,100 for goods directly attributable to their relocation (U.S. Postal Service figures, quoted in the report "How to Overcome Retail-Customer Erosion by Capturing New Residents," created by the direct-marketing firm Moving Targets; DM News magazine, 7/21/06).

FACT: 92% of women and 87% of men say they're likely to tell others about a product or service they've tried (Ad Age magazine, 11/20/06).

FACT: Starbucks customers are only willing to travel (by foot or car) for two minutes to get a cup of coffee - six to eight minutes at the most (Wall St. Journal, 4/3/07).

FACT: Approximately one of every seven people move to a new home every year (Mayflower Transit relocation study; Direct magazine, 3/07).

FACT: While 77% of American consumers claim to "always look for ways to save money," 36% say they still find a way to "spend more than we can afford" (Pew Research study "We Try Hard. We Fall Short. Americans Assess Their Savings Habits," 2007).

FACT: The average consumer spends 13 hours shopping for Christmas gifts each year (retail consultant quoted on CBS News, 12/3/06).

FACT: Approximately 75% of meals out are purchased at fast food restaurants (Today Show, 7/24/06).

 

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