The evolution of the buying process
And what it means for brands
Back in the day, ‘shopping’ meant going to a shop, looking at the branded options on the shelf, selecting the product that had promoted itself best in the media, pop it in the basket, and buy it with cash. End of story. Today, we check out a myriad of options and reviews on our phones, select the brand recommended by friends or others on web forums, buy it online without moving from our chairs, and either promote it or trash it on social media afterwards. What does this mean for brand owners today – is traditional retail and branding dead, or has it just changed focus?
Imagine this, it’s the late 1800s, you’re a dressmaker with a small shop in your town, and pride yourself on creating custom-made dresses for your small but loyal clientele. Your customers are local, the only options they consider are the ones you propose, and they accept your slow turnaround and high prices, because you’re the only game in town. And in every high street up and down the country, this is how business is done.
Seemingly overnight a multi-storey department store pops up across the street, selling all manner of items including mass-produced, ready-to-wear dresses. The choices are mind-boggling, the prices are low, and the products are available immediately. Instantly you lose clientele, and your staff leave too, because you can’t afford to pay them. Your well-established business closes, because your customers have all been lured away by more choice, faster service and better prices. And you can’t compete.
That’s how the first and second industrial revolutions transformed the retail landscape in the late 19th and early 20th centuries. And it wasn’t just big stores and mass production that came to drive the consumer buying process, but also big brands, marketing and advertising. A process that held sway pretty much for the next 100 years, until about two decades ago when the latest industrial revolution happened, triggered by the internet. Now we have an equally transformative event changing the consumer buying process, called the digital revolution. But before we get into all of that, let’s take a closer look at the process that shaped the purchase process up until very recently.
Consumer buying before the digital revolution
Before the internet, we shopped on a physical street, where we had much less choice and far less information. What we bought was limited by availability and geographical proximity, and we relied on the brands themselves to tell us about their products, and reassure us that we were making a good choice.
In this era, marketing professionals described the consumer decision-making process as a purchase funnel. To put it simply, the purchase funnel is a series of shrinking stages through which consumers pass when they want to buy a product. At the widest end of the funnel, consumers gather information about a wide selection of alternatives, and evaluate which is the best. Finally, at the narrow end of the funnel they make a choice and buy a particular product.
Source: ‘The New Smart Customers’, presentation, Sapient Nitro
The process was very linear, and relatively inflexible. And the job of the brand owner was to direct marketing messages at the consumer as they move through the funnel, so that they emerge at the end having chosen their product. The goal of branding and marketing strategy in this model, therefore, was to reach consumers at the moments that most influence their decisions.
For example, a shopper wants to buy a new bag. Before this point she’s been made aware of the various brands around, based on the marketing and advertising she’s been exposed to in the media, and people she has seen sporting them. Perhaps she’s seen them in adverts in women’s magazines, or used by famous TV personalities. She makes a shortlist of her preferred options, and then travels to the various stores offering them, to compare prices and ‘fit’. For the first time she really gets to see, touch and experience the product in reality. She zeroes in on her favourite store, and a canny shop assistant promotes the final few options, to make a sale.
Also influenced by the brand design such as the display and packaging of the product, the shopper makes her choice, buys a bag, and goes home. She starts using it, but whether the bag lives up to its brand promise may not matter. She’s paid her money and lives with the result. Particularly if the brand owner has done a good job of promoting the brand, because the perception of ‘owning’ the brand image might be enough. If it doesn’t perform, she may not buy another product from this brand and not become loyal to it, but it goes no further than that.
It’s a process where the brand ‘pushes’ messages about the brand to the consumer, and has a lot of control in shaping and influencing the consumer’s image of it, through every touch point. From adverts creating initial awareness of the brand, to point of sale promotions in-store, to the customer service, loyalty programmes and product packaging. The brand owner is managing and controlling all the brand communications, not the customer.
The new ‘consumer journey’ model
Enter the Internet. Much like the industrial revolution disrupted the consumer buying process in the late 19th century, so the digital revolution has transformed it again in our age.
Now the funnel model of the buying process has been replaced by a kind of continuous cycle. Today we have seen an explosion of product choices and digital channels, coupled with the emergence of an increasingly discerning, well-informed consumer. From social media to mobile devices, technologies have given consumers unprecedented power to compare features, find the best deals, and read the best reviews. This tipping of the balance of power in favour of consumers has been evident for years.
Source: McKinsey and Norman Cescut
Today the traditional funnel model has been supplanted by what some marketing professionals call “the consumer decision journey.” This journey sees shoppers leverage technology to evaluate products and services more actively, adding and subtracting choices over time. They explore and evaluate a wide array of brands through various channels that are beyond the brand owner’s control. Often expanding their pool of choices before narrowing it and making the purchase. After the sale these consumers may remain engaged, evaluating and reviewing the product on social media.
In this way they pressure brands to perform and deliver a superior experience. If they like it they become loyal advocates. If they don’t they become vocal detractors. This kind of engagement by the modern consumer not only helps brands to make more sales, it also shapes their development.
To look at this new buying process at a granular level, let’s return to our lady shopper who wants to get a new bag. Instead of seeing it in a magazine advert or on TV, and then popping into a store to buy it, the shopper now goes on their mobile phone, watches a stack of Youtube videos, looks online at multiple storefronts and reviews, compares prices and searches for promotions and discounts, before deciding whether to buy. She may do that online, but just as likely, she’ll still go to a store so she can see how the bag looks in real life. But she won’t need to consult the shop assistant – oh no, she’ll still be looking at customer reviews on her phone in the shop, while standing right in front of the product. She’ll do a final alternative search before making the decision to buy. Either in-store or, if the price is lower online, she’ll buy it on her phone… and soon it might be delivered by drone!
After making the purchase, she’ll continue to evaluate the bag, and if she’s satisfied with it she’ll take Instagram photos and add comments about it, sharing them with her friends. Some of them may then go and buy the product themselves. Or if it fails her evaluation, she’ll condemn it on social media and none of her circle will buy it.
This is how the digital revolution has transformed the buying process. Among other things it’s created a more discerning consumer, who is able to step outside the brand’s sphere of influence in the traditional model, and create their own brand influence instead. So brand loyalty is harder than ever to gain in this era, especially with the younger generation. But according to a report on customer loyalty by KPMG, if a brand does gain a customer’s loyalty, 86% will recommend the brand to their social circle, 59% are likely to feel a strong connection with it, and 46% will remain loyal, even after a bad experience.
So how can brands adapt?
So what does this new ‘consumer journey’ model mean not just for traditional retail, but also for owner-sourced branding and marketing? Traditional retail may appear to be dying on its feet, but that doesn’t mean the end of the physical retail space. Likewise, brands may increasingly be shaped by their consumers, but that doesn’t mean traditional branding is dead. It’s about learning the tricky art of moving with the times, without ‘throwing the baby out with the bathwater’.
As we see it there are four things brand owners need to bear in mind as they face this rapidly changing marketplace, moving forward:
1. Customers are now driving the purchase process, not brands
As we said in our previous blogpost ‘What is the future of branding?’, nowadays customers increasingly shape and ‘own’ the brand, and drive the purchasing process. Empowered by social media, now the customer has more control than ever over the brands they buy. In today’s purchase decision journey, rather than ‘pushing’ marketing messages at potential customers as they consider their product choices, customers actively “pull” information that will help them make their choice from other customers – in the form of their reviews. Research by McKinsey has shown that internet reviews and word-of-mouth recommendations from friends and family often form the greatest influence over purchasing decisions.
Traditional marketing from brand owners remains important, but the change in the way consumers make decisions means that brand owners must move decisively beyond push-style communication, and learn how to influence consumer-driven touch points such as word-of-mouth and internet forums.
And there’s another aspect to this that is incredibly important – the role of values and sustainability in the purchasing decision. Now more than ever before, what a brand stands for in terms of values is really important – particularly for younger generations like Millenials and GenZ, but increasingly for older customers too. Before, a purchase decision was just about the price and performance of the product. Now it’s still about that, but also how much the brand owner cares about the planet. Because modern customers want their brands to reflect their moral values, as well as their material ones. So brand owners need to factor this into the mix when they communicate what their brand is about.
2. Change the focus of your messaging to a more collaborative approach
When brand owners understand the new ‘consumer journey’ model, and direct their spending and messaging to the moments of maximum influence in that journey, they stand a much greater chance of reaching consumers in the right place, at the right time, with the right message.
The difficult part is identifying the most influential touch points, and focusing brand messaging on those. In many cases a fundamental change of focus is required, from pumping out brand advertising at the initial-consideration phase, to developing content that will help consumers understand the product better when they want to evaluate it. Because consumers are now driving the purchase process, so rather than brand owners trying to push products on customers, they should be providing them with the information, support, and experience they need to make decisions themselves.
It’s also about building a collaborative relationship with customers not only before and during the purchase process, but also after it in the post-purchase evaluation stage. It’s when a customer is using the product that brands should reach out to them and discover what’s working and what’s not. And when you follow through by improving or creating a new product based on their feedback, a bond is created and loyalty is cemented. It’s all about creating a connection with your customers, and building your products and your brand in a collaborative way with them.
3. Physical retail and human connection still matters
We all crave connection. The brands who understand this, are the ones who have loyal customers. In our blog post ‘What is the future of branding’, we said that ‘the human experience is making a comeback’. Although recent years have seen a decline of the bricks and mortar store in favour of online retail, now we’re seeing a resurgence of the physical space, particularly among Generation Z customers, the newest retail demographic. They look at retail as an always-on, non-binary thing, where their phone is the central device and physical retail is part of a holistic experience where they explore and buy products. Sometimes they buy online, sometimes they buy in-store. Sometimes they research online and then buy in-store, and sometimes they do the opposite.
A big part of this phenomenon is about the resurgence of ‘retail as therapy’ and connecting with people as a social activity. Another part is about enjoying a curated experience around the brand. So physical retail is certainly not dead, it is simply changing its focus. The future of retail lies in being an ‘experience’ centre which is an integral part of the buying process. Because people can’t truly understand what a brand is like, unless they can experience how it feels, smells, tastes and looks. Only a physical environment can offer this.
4. Traditional brand building remains important
McKinsey research has shown that faced with the mind-boggling array of choices on the market, and the confusion of reviews and marketing messages they are bombarded with, consumers tend to reduce the number of brands they consider at the start of the purchasing journey. They fall back on the limited set of brands that made an impression on them before. Every day, people form impressions of brands from various sources such as adverts, news media, recommendations, and product experiences. Those impressions build an image of the brand in consumer’s minds. Which is crucial, because then these impressions determine the small selection of brands consumers consider as potential purchasing options.
Conclusion? Building brand awareness really matters – research has shown that brands in the initial shortlist can be up to three times more likely to be purchased, than brands that aren’t.
Bearing in mind the previous point about the importance of physical retail, the same principle applies with in-store branding. McKinsey research has shown that one consequence of the profusion of product choices is that more and more customers are holding off their final purchase decision until they’re in a store. Traditional merchandising and packaging therefore remain very important selling factors. Up to 40 percent of consumers will change their minds about a product purchase in-store, because of the brand’s packaging design, placement, or interactions with sales people.
Rounding it all up
Drawing it all together, one key learning for how to build your brand in the new consumer buying journey, is to create multi-channels for how your customers interact with your brand. Consumers are no longer interacting with brands through a single channel. And make sure that you offer a seamless experience for your customers, whether it’s shopping in store or online, and providing customer support in person or over the phone. It’s about creating a compelling brand proposition, then delivering a holistic brand experience through every single touch point, leveraging technology where necessary to offer a break-through impact. Because we believe a brand must speak with the same voice, wherever and whenever the customer comes into contact with it.
Traditional retail and brand building are not dead. They simply need to change focus, adapt to a new environment, and realise that the famous marketing mantra – ‘the consumer is king’ – has finally come into its own.
Please note: We understand the challenges facing brand owners and with our unrivalled expertise in brand development strategy and identity design, are able to craft inspiring brands and a holistic brand experience, across all channels. And to help your brand succeed, our capabilities include effective go-to-market strategies. If anything we have written above in the blogpost strikes a chord and you need our assistance, do get in touch with us here.