How Retailers Can Capitalize on the 5 Types of Shoppers
No two customers are the same, yet they share many of the same goals and behaviors. An insightful, 18-month-long study of critical purchasing patterns discovered that shoppers fall into five categories: the investigative consumer, the frivolous spender, the experience-driven buyer, the fluctuant shopper, and the conscious consumer.
1. Investigative Consumers
Often referred to as the thoughtful bargain shopper, these people see their purchases as investments and will research accordingly to find the best discounts and quality. This shopper type is the most prevalent — especially today with inflation and economic uncertainty.
They also want to conduct research online before making a purchase. There should be plenty of detailed product information on your website for them to read, such as ratings, reviews, competitive pricing, etc.
Likewise, equip your employees (particularly contact center agents) with all the data they need to satisfy these inquisitive buyers. Monitor competitors and market changes closely and assign a team to resolve customer issues to reduce negative reviews.
2. Frivolous Spenders
Characterized by impulsiveness, this type of consumer loves to shop and is not price sensitive. Although these consumers are the minority of the five, they're a significant revenue source and shouldn't be overlooked. These consumers are drawn to rarity, and retailers should accommodate them with limited- and special-edition items. Similarly, try to find ways to create more bucket-buying opportunities; loyalty programs and membership perks are also highly tempting to these spenders.
3. Experience Driven
For this type of shopper, the experience is everything. Travel, culture and trying new things are the main pulls that will get them to spend. Moreover, they also enjoy the opportunity to tangibly test-run products in-store. Retailers can use physical stores and virtual channels as places or avenues to provide unique and memorable experiences. It’s also helpful to frame products in an experiential context, highlighting them in natural use cases.
4. Fluctuant Shoppers
Much like frivolous spenders, this type of shopper can be open to making big purchases — however, other times they can be much more frugal, depending on the circumstance. The challenge for retailers is to capitalize on the shopper’s good days.
Rather than predicting when the customer will be more apt to spend, brands should offer shopping experiences that make the person more inclined to purchase. Likewise, retailers should use data and analytics to pinpoint the scenarios when these customers make purchases and then look to replicate these features appropriately. Staying top of mind is also important. When the customer is ready to make a purchase, ensure your business is their first choice.
5. Conscious Consumers
This type embodies the phrase “vote with your wallet.” These people are distinctly aware of how they spend their money and want to express their values through their purchases.
Retailers must know what their shoppers stand for, whether that's the environmental impact or ethically made products. Transparency is also key to success, including helpful information like where the product comes from or how the proceeds from a purchase will support a particular community. Furthermore, ethical retailing is becoming not just an exception but an expectation — this type of consumer is just as likely to boycott as they are to buy.
As stated at the onset, consumers don't always fit neatly into one of these categories. Nevertheless, in today’s competitive retail environment, brands must leverage these distinct shopper behaviors to appeal effectively to the needs of their customers.
Dan Smythe is vice president of retail and hospitality at EPAM Continuum, a company that fuses integrated consulting with engineering, design, operations management and tech optimization to future-proof your business. Cameron Davis is the head of digital strategy at Best Buy.
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Daniel Smythe is vice president of retail and hospitality at EPAM Continuum. With more than 20 years of consulting experience, Daniel has led complex transformation programs at leading companies, including Walmart, Target, Marriott, and Delta Air Lines. His expertise lies in growth strategy, business model innovation, cost optimization, organizational restructuring, channel integration, merchandising, and supply chain transformation.