Consumerist: Consumer Behavior

Why Retailers Like It When You Subscribe

Chris Walters — Mon, 12 Oct 2009 16:47:10 EDT

You know what's great about subscriptions? You forget to cancel them. You also pay more over time than you would if you were forced to buy items individually. Yeah, that's awesome—for companies. The New York Times looks at current research on how consumers think about subscriptions, and why companies want to push them more than ever.

"Looking at Life as One Big Subscription" [New York Times]
(Photo: Dominic)

Survey Says: You Love Ads And Think They Help You

Ben Popken — Fri, 17 Jul 2009 14:28:51 EDT

A new surveys find that not only do you like ads, you believe it provides you with information allowing you to make better consumer choices. Who knew you were so stupid? [ADWEEK] (Photo: dno1967)

Walgreens says declining home values and ...

Meg Marco — Mon, 22 Jun 2009 11:58:34 EDT

Walgreens says declining home values and rising unemployment are causing consumers to cut back on everything but essentials like soap and milk. Consequently, the drugstore chain is having to spend money revamping its merchandise selection to match the trend. It's back to basics if you want to make money. [Bloomberg]

Consumer Confidence Is Up. Wait, Compared To What?

Laura Northrup — Tue, 26 May 2009 10:36:18 EDT

Do you feel more confident? According to the Conference Board, consumer confidence is up to its highest level in eight months, and made its biggest increase in six years.

Fewer Americans said jobs were "hard to get," the survey found, with that measure slipping to 44.7 percent from 46.6 percent. Those saying jobs were plentiful climbed to a still meager 5.7 percent, but that was still higher than April's 4.9 percent.

"Consumers are considerably less pessimistic than they were earlier this year," said Lynn Franco, director of The Conference Board's Consumer Research Center.

Respondents claiming that "jobs are plentiful" were reached during a tropical cruise in Alaska. On a boat full of mermaids and unicorns.

U.S. consumer confidence sees biggest jump in 6 years [Reuters]

(Photo: dooleymtv)

Q: Why Aren't You Buying New Cars? A: There's Nothing Wrong With The Old Ones

Meg Marco — Thu, 08 Jan 2009 14:34:34 EST

There have been a lot of theories about why consumers abruptly stopped buying cars — and not just American cars but all kinds of cars. Fingers have been pointed at poor fuel economy, lack of available financing, and if Hyundai is to be believed — concern about losing your job. But a new survey found that the most popular reason for not buying a new car — is that there's nothing wrong with the old one.

A Consumer Reports study says that the top three reasons people are delaying the purchase of a new car are:

1) The existing vehicle is still in good shape (39 percent)

2) Vehicles have become too expensive (30 percent)

3) General concern for the weak economy (30 percent)

Only 11% said they were concerned about losing their job, and 13% said they couldn't get financing. Among households making over $50,000 a year, financing was even less of an issue — only 8% cited it as the reason they were delaying a purchase.

The survey also found that about half of the country says they're going to delay a new car purchase. So, why aren't you buying a new car? Does this survey match your own experience? Do you even buy "new" cars?

Consumer Reports: Nearly Half of Americans Have Delayed Purchasing a New Car [Consumer Reports]

Walmart: 6 "Disturbing Behaviors" Exhibited By Consumers

Meg Marco — Wed, 22 Oct 2008 15:33:35 EDT

9 of 10 American families shop at Walmart at least once a year, says USAToday, which puts the retailer in an excellent position to tell us something about consumer behavior. So, what has Walmart been observing? "Disturbing behavior."

6 "Disturbing Behaviors" Walmart has noticed:

Cash-strapped consumers are buying baby formula at the beginning of the month, when they have more money.
A double digit decline in the use of credit cards in the second quarter.
80% of consumers surveyed by Walmart say "personal financial security" is their top concern. Formerly, it was the price of gasoline.
Purchases of generics have doubled.
Shoppers are changing how often they visit the store. Some come more often because they have less money and can only afford small purchases. Some come less often to save gas.
Walmart now sees a 2.5% sales increase in the middle of the month, when paychecks are handed out.

Wal-Mart sees shifts in shoppers' buying habits [USAToday]
(Photo: genebob )

America's 15 Hardest Drinking Cities

Meg Marco — Mon, 11 Aug 2008 09:04:48 EDT

Ah, Consumer Behavior. Forbes took a look at the CDC's 2007 Behavioral Risk Factor Surveillance System Survey (BRFSS) and ranked 33 cities based on their resident's answers to three survey questions:

whether they had at least one drink of alcohol within the past 30 days; whether men had more than two drinks per day or women one drink per day; and whether they had five or more drinks on one occasion. In each case, higher-ranking cities reported larger percentages of their population answering in the affirmative.

Of course, as Forbes notes, a better "hard drinkin'" rank doesn't mean your city is a "den of debauchery," and "just downing a few cold ones doesn't make a person irresponsible." Well, like, duh...

Forbes' 15 Hardest Drinking Cities

1. Austin, TX
2. Milwaukee, WI
3. San Francisco, CA
4. Providence, R.I.
5. Chicago, IL
8. (tie) Seattle, WA, Cleveland, OH, St. Louis, MO
9. Boston, MA
10. Cincinnati, OH
11. Pittsburgh,PA
12. Virginia Beach, VA
13. Portland, OR
14. Jacksonville, FL
15. Detroit, MI

America's Hard-Drinking Cities [Forbes]
(Photo: Paxton Holley )

Retailers Exploit Natural Human Stupidity To Get You To Buy More

Chris Walters — Mon, 10 Dec 2007 11:20:41 EST

The Chicago Tribune recaps the findings of some recent consumer behavior studies—for instance, we're irrational buyers, prone to shoddy math and emotional decision making. The studies might be paid for by advertisers so they can better manipulate us, but as the Tribune notes, they're useful for us too because they "can help shoppers make better spending decisions if they understand themselves better."

Consider the concept of "shopping momentum": "During a shopping trip, making a first purchase, even a minor one, can open the floodgates of buying."

Shopping has two phases: deliberation and buying. Once they buy, consumers tend to continue buying without returning to the deliberation stage for future purchases.

In an experiment, researchers found shopping momentum was broken when consumers paid from different envelopes, apparently forcing them to return to the deliberation phase and think more about whether the purchase was a good idea.

That suggests a reason for the success of the longtime tip to budget with an envelope system — that is, spending cash from envelopes designated for such purchases as food, clothing and entertainment.

Also, "buying a guilt-inducing luxury item first during shopping curbed buying momentum."

The "disrupt-then-reframe" sales technique preys on the human brain's natural desire to seek "cognitive closure" when confused:

Researchers found that by presenting a confusing sales pitch to consumers and then restating the pitch in a more familiar way, they were able to increase sales.

Another common trick is the "double discount" offer—e.g., Barnes & Noble's coupon and membership discounts, which are applied consecutively instead of all at once.

"Consumers easily confused, manipulated" [Chicago Tribune]
(Photo: Getty)

Most Ebay Bidders Prefer Paying More for Free Shipping

popkin — Tue, 28 Feb 2006 12:04:55 EST

A new study shows that most Ebay shoppers would rather pay less and pay for shipping than pay more and have free shipping.

80 auctions of new CD's and Xbox games were held. Opening bid prices and shipping costs were manipulated on identical titles.

The researchers found that lowering the opening bid while raising shipping costs attracted more bidders faster and generated higher profits than the reverse.

Here's a pdf of the research results.

Let the buyer beware, of himself?

[via Marginal Revolution]