The Consumer Evolution and How To Make Sense of Behavior Change

The Consumer Evolution and How To Make Sense of Behavior Change

A Suzy Report

July 2022

Table of Contents 3

Introduction: Consumers Are Evolving

4

The Cost of Making Assumptions About Consumers

5

What is Consumer Behavior?

8

The Three Drivers of Behavior Change

11

How to Track Behavior Change Drivers

15

Future-Proofing and Anticipating Changes for the Future

16

Making the Investment in Consumer Research

17

Moving Into the Future With Consumer Research

Introduction: Consumers Are Evolving Their behaviors, attitudes, habits, choices, beliefs, and expectations shift nearly constantly. We can thank the unprecedented upheaval of the last few years: the COVID-19 pandemic, plunging and skyrocketing interest rates, inflation, a potential recession, The Great Resignation, and the rise of remote work, and migration from cities and into suburbs and rural areas. It’s also thanks to the rise of technology, the shift towards ecommerce, the impact of influencers, and the advent of the metaverse.

It’s all made a huge impact on our world.

With more events, more options, and more challenges unfolding for consumers, it’s only natural for their behaviors to change.

That, of course, makes it difficult to understand consumers.

What we knew about them (past purchasing behaviors, for example) is less and less valuable and continues to be less predictive of what they will do in the future.

Brand understanding needs to change. As consumer behavior changes, brands need to keep up.

What made your brand relevant to consumers last year may not hold true today. Whether it’s because they have to adapt to inflation issues or want to enter the metaverse, knowing what is going on in the world and how it might

change purchase behaviors is essential so you can stay on top of your business. In fact, the brands that understand what and how behavior changes can actually future-proof their business by anticipating coming shifts.

In this report, we will explore how market researchers can leverage the latest approaches to focus on the three main factors that drive consumers to try, repurchase, and even switch brands. We’ll explore how to leverage those insights into an agile yet robust consumer feedback loop that enables today’s researcher to: ● Build highly relevant innovation pipelines ● Create compelling creative assets and brand campaigns ● Track not just in-market performance but the ever-changing need, states, and perceptions that drive relevancy for your brand.

Let’s get started.

The Cost of Making Assumptions About Consumers It’s not cheap to invest in product innovation and development. When brands make assumptions about consumers and what they think they want and need, the chances of failure are high. The graveyard of failed products and ideas is not small by any means, and even major enterprises have a few headstones there.

Assumptions cause failures across the entire product lifecycle.

When Brands Make Assumptions Foundational Learning ●

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Fail to understand who their customer is, including demographics, attitudes, & behaviors Incorrectly measure the business “size of prize” Can’t create the types of products consumers really want and need

Innovation Pipeline ●

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Campaign Development

Guess the wrong flavors, fragrances, features, and packaging

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Develop prototypes, names that fall flat

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Fail to understand how consumers experience your products

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Misunderstand purchase intent and the benefits that will drive awareness Fail to develop and launch campaigns that drive demand, awareness, and brand equity among target consumers

Shopper / Tracking Support ●

Fail to create effective GTM strategies

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Misunderstand where consumers prefer to shop

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Ineffectively distribute brand offerings

Miscreate packaging and ads

Assumptions about consumers have to stop. For real success, brands need to not only invest in product development but also in fundamentally understanding consumer behavior, motivations, and attitudes through always-on market research.

If you don’t keep up with consumer behavior changes, you won’t stay relevant.

What is Consumer Behavior?

To understand how changing consumer behavior can both create and block growth opportunities for brands, we first have to look at a few principles about behavior.

Consumer Behavior / kən-soomər bi-ha-vyər / Consumer beliefs, attitudes, expectations, and experiences all work together to form the framework for consumer behaviors—what they actually do.

1

Studying consumer behavior means exploring what consumers do or don’t buy and why. It includes how they research products and services and how they make the decision to choose products or services. It also covers what they think about alternatives to their choice.

In short, consumer behavior explores what motivates consumers to purchase. It helps researchers understand how to:

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Drive someone to use your brand in your product category.

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Inspire brand loyalty.

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Get users to buy your brand more frequently.

Today’s Behavioral Research Many of the research methodologies we use today were first developed in the 1970s. But things weren't changing the way they are now back then. There weren’t as many media channels or as many different types of demographic changes. They also didn’t have this many commercial channels.

Things have changed and will continue to change.

Fundamental Rules of Behavioral Research

When it comes to any type of behavioral research (including market research), researchers should never ask questions about behaviors that can be observed.

Relevant information is more important than accurate information.

More data doesn’t necessarily mean “more insight.”

Do the research that gets the data that matters: data about behaviors that are important to the brand (like purchase behaviors) and the experiences and perceptions that lead up to those behaviors.

Today, researchers don’t have to ask consumers what they are buying. Instead, they need to create effective learning plans that follow the fundamental rules of behavioral research. These learning plans should study important behaviors, like purchase behavior and brand perceptions, that led up to the desired behavior.

Purchase Behaviors to Study:

First-Time Category Purchase

First-Time Brand Purchase

Brand Switching

Brand Advocacy

Repurchase (Brand Loyalty)

Category Expansion (adding oa products t ) repertoire

Your learning plans need to have approaches that ask consumers about their purchase behaviors that are: ●

Relevant to the consumption of a brand’s product category

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Easy for respondents to answer with accuracy

That’s easier said than done. If a consumer isn’t fully aware of the reasons they choose one brand over others, it’s unreasonable to expect them to be able to explain their choices with any accuracy.

The need-states, brand perceptions, and marketing touchpoints a consumer experiences throughout the purchase cycle all influence a consumer’s purchase behavior. But consumers can’t accurately tell us about their purchase behavior because they are unaware of any experiences that subconsciously influenced them. They can evaluate something, but they can't always articulate why they evaluated something the way that they did because there are so many subconscious components that they're unaware of.

The Power of Experience Since language is shaped by direct experience, people are only able to think (and speak) most effectively about those experiences. To understand the drivers of behavior, researchers need to focus on the things that consumers are good at telling us, like:

Do they agree about the quality of an experience?

How do they evaluate brand imagery and needs?

What led up to their experience?

Build your questionnaires on the foundation of consumer experience.

For example, let’s explore the consumer experience of a first-time brand purchase using this approach.

Your questions should focus on: ●

Physical and emotional experiences they had leading up to that moment

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Category and brand-specific experiences that shape their perceptions of your brand and the competitive set

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The marketing touchpoints they experienced, and the perceived relevancy of those brand moments

When you get measurements on these types of experiences, and you know that a consumer bought something, you can then derive what actually drove that behavior.

The Three Drivers of Behavior Change When it comes to understanding consumer behavior, let’s take a look at the three main factors that influence it: consumer needs, states, and perceptions.

The Power of Experience Human Needs Self Actualization Aesthetic Esteem Love and Belonging Safety Physiological

At the bottom of the list are arguably the most basic needs.

Physiological and safety needs include having enough to eat and being able to pay rent. The needs at the top are often just as important and include feeling like a unique and important individual, being recognized, and becoming the best version of themselves.

The point of the hierarchy is that if the bottom-most needs are not met, humans can’t even begin to think about the needs on the higher end. When something impacts consumers and changes their immediate needs, their behavior changes too.

Let’s use supply chain issues, inflation, and the COVID-19 pandemic as an example. Because the supply chain is hampering some Americans and their physiological needs (baby formula), their aesthetic needs (new clothing trends) may fall to the wayside. Similarly, physiological needs may change the way consumers purchase items may change too. For example, in early 2022, over a third (33%) of consumers said they planned to start using coupons due to inflation. During the pandemic, 65% of consumers said that they have become more likely to buy healthier foods, illustrating a consumer need for safety.

States Tying in closely to their needs, consumer states are another major factor for behavior change. Their personal, psychological, and social factors all impact their attitudes, beliefs, and choices.

Three Major Human States Personal Factors Psychological Factors Social Factors

Personal factors: Demographics Demographic information includes age, gender, location, education level, employment status and income level, household size, parenting and relationship statuses, and ethnicity.

This information helps brands paint a picture of their consumer.

While demographics may seem basic, they’re actually really important to consider for behavior change.

Take, for example, the shift in relationship status and household size for a person who has just gotten married. They no longer have a need for wedding planning or wedding products and instead may need to think about shopping for two instead of just one. Or let’s say someone recently got promoted and their income level increased. That person may be more inclined to purchase luxury products or travel now that they can afford it.

Psychological Factors: External Experiences What consumers experience externally creates the perceptions and attitudes that have a major impact on what they do. How they experience the world influences everything from the types of products they buy to where and when they want to shop.

As consumers get anxious about how much they pay at the gas pump, they may begin looking for alternative ways to travel.

That could influence everything from marketing ad placements (radio/podcast ads vs. bus stop ads) to the types of products they need (car mats vs. a commuter backpack).

Alternatively, a consumer may find out that a brand is offering more sustainable deodorant packaging compared to the product they currently use. Because being sustainable is more in line with their values, the consumer may switch to the new brand.

Social Factors: External Economics and Shifting Trends The world at large impacts consumer behavior in both large and small ways.

The internet changed consumer behavior, including how people gather information about a product, how they interact with other people, and how they find entertainment.

The metaverse is posed to change even more, from how consumers purchase property to how they work from home.

Other trends, like the shared economy, social commerce, and the creation of the consignment and rental retail market, shift the way consumers think about the goods and services they buy.

Brand Perceptions Finally, it is the perception of the brand itself that can change behavior. Brand loyalty is hard to win but easy to lose. It could be as simple as a brand launching a product that wasn’t well-researched and doesn’t match what their target consumer wants or needs. That consumer may begin to think that that brand isn’t for them anymore and begin to take their money elsewhere.

How to Track Behavior Change Drivers Brands can track a lot of things: brand awareness, consumer satisfaction, and sentiment, how well a particular ad works, and how likely consumers are to buy a certain product or service. While this is all worth tracking and provides valuable information, it doesn’t get at the heart of consumer behavior.

The gap between what consumers “say” and “do” has long been a challenge for market researchers. It’s not because consumers are being dishonest—it’s because consumers are unaware of the subconscious mechanisms that actually shape their behavior. Because of this, crafting survey questions that actually get at why consumers do what they do can be challenging.

Quantitative

To truly understand how and when consumer behavior will change, you need to build your research around specific behaviors and the experiences associated with those behaviors.

This research will help you identify and measure the relationship between the perceptions and experiences to the behaviors. Then, you can understand what levers to pull to best drive those behaviors.

So, how can researchers keep track of and measure consumer behavior? It’s going to take both quantitative and qualitative analysis to understand and track the three drivers of behavior change. Let’s break down the types of methodologies researchers should use to monitor these drivers.

Qualitative

Tools for Tracking Consumer Behavior At Suzy, we’re constantly tracking consumer behavior. With our State of the Consumer webinars, blog articles, whitepapers, and micro-reports, we consistently report on trends and changes in macro consumer behavior. While this doesn’t always get into the nitty-gritty of your unique consumer, it can help to get a bird’s eye view of shifts in consumer behavior. We offer a variety of tools to our clients to help them track consumer behavior as it happens, including Drivers Analysis and Dynamic Segmentation.

Drivers Analysis Understanding what defines and influences your market is known as category drivers. It’s important to look at why consumers make the purchasing decisions that they do within your category, measuring their attitudes, motives, perceptions, satisfaction,

and loyalty against any stated purchase intentions they may make.

This establishes the true drivers of behavior behind their actions. With this information, you can make better business decisions that will result in purchase and satisfaction.

Dynamic Segmentation Developing segments is critical to understanding who your consumers are, what drives their behavior, and how to grow your brand. When done accurately, it can help create ideas, products, and messages that are relevant to your segments and that they may be more likely to respond to.

Dynamic Segmentation takes it a step further by keeping segments super fresh. Traditionally, most companies run an expensive segmentation study every three to four years. But with consumer behavior changing much faster than

that, brands need to adjust how and how often they profile their audiences.

Dynamic Market Segmentation from Suzy is a faster and more cost-efficient method to segment audiences. Using a proprietary machine-learning algorithm, Suzy can help researchers create accurate segments that inform a consumer’s intent and drivers based on a number of dependent variables, like loyalty and satisfaction. With up-to-date segments, you can survey consumers on a regular basis and stay on top of behavior changes.

Tracking Consumer Needs Start tracking consumers on a quarterly basis by surveying them based on their needs. This is an opportunity to tap into both qualitative and quantitative insights. Quantitative research will let you know how many consumers are having certain needs met and how many are not, while qualitative data will help you understand why.

With that information, you can either activate consumers into new levels of the hierarchy of needs. For example, once someone’s love and belonging needs are met, they may be ready to explore their needs for esteem. Alternatively, if someone is struggling with their physiological needs, you’ll know it’s time to scale back on certain messaging and take steps to help them meet those needs.

Tracking Consumer States Understanding consumers’ personal, psychological, and social states requires a mixed-method approach with both quantitative and qualitative research. Screeners and surveys can help you gather the important demographic information you need. It’s also a good idea to run Dynamic Segmentation studies with Driver Analysis to really understand your target consumers and the segments within, each of which may have unique behavior.

Studying psychological factors digs deeper into the why. Bringing qualitative research in through online focus groups and remote in-depth interviews (IDIs), as well as open-ended survey interview questions, can help you understand what consumers are thinking and feeling.

Tracking Brand Perception With quantitative surveys, you can track how satisfied consumers are with your brand and how they perceive the imagery around your brand. It’s always a good idea to add qualitative research to expand upon why consumers do or do not perceive your brand positively.

Brand tracking studies are a key tool for understanding brand perception.

These studies can help you understand brand performance in the market and against competitors. You can learn how aware consumers are of your brand and how likely they are to purchase your products. By running brand tracking studies, you can quickly see any changes in consumer perceptions of the brand and, in turn, evolve and adapt products to meet ever-changing consumer needs.

Understanding Behavior Change With a Consumer Feedback Loop Always-on insights are key for brands that want to get ahead of consumer behavior changes. From your foundation research to your innovation pipeline to campaign development to tracking, consistently surveying consumers can help you understand and anticipate their behaviors.

For example, during the innovation phase, you can start to develop your product ideas specifically for the consumer groups that you've identified that are designed around the needs and drivers of purchase behavior. You can diagnose the performance of these ideas through concept testing based on those drivers so that you can quickly iterate and refine.

When it comes to developing campaigns, you can target the groups of consumers you want to win and design a range of messages and articulations around their unique drivers. Finally, tracking beyond just consumption, it's the perceptions of the brands and how they address consumer needs that are most relevant during fast times. You can use consumer research to learn if the brand is losing its relevance or if consumer needs are fundamentally changing.

Doing research through this process can help you recognize things that you should be aware of before it happens or as it's happening instead of after the fact.

From there, it’s key to rinse and repeat. With Suzy, you can retarget the same customers over and over again and continue learning from them through a feedback loop. That can help you truly deliver what they need just as their behavior changes.

Future-Proofing and Anticipating Changes We know by now that consumer behavior isn’t static. As a brand, there are things you can control and things you can’t. Uncertain times can be difficult to anticipate. After all, no one expected COVID-19 to stretch into a years-long pandemic. Nor did we expect the crazy rise and fall of the economy during this period of time.

Uncertainty doesn’t just encompass current events, either. It might happen when you expand into a new market, perhaps internationally.

Different cultures may experience your valuable prop differently.

Understanding behavior change isn’t just beneficial for the present, but it can also help you anticipate what consumers will do in the future.

Predicting what consumers will do can help you get ahead of the curve and make business decisions that will have an impact down the line while maintaining your current brand equity.

Making the Investment in Consumer Research Brands that survey consumers once every few years will not keep up with ever-changing consumer behavior. Instead, consumer research and the consumer feedback loop need to be a fundamental part of the business. Getting these insights helps to protect other investments that the brand makes in product innovation and development and helps brands create what consumers really want and need.

Meet Suzy Suzy is an end-to-end consumer insights platform that integrates quant, qual, and high-quality audiences into a single connected research cloud. Suzy lets teams conduct iterative research, with agency-quality rigor, in hours, not weeks, and at a fraction of the cost.

Ready to unleash the power of research? Visit Suzy.com

Moving Into the Future With Consumer Research Studying and understanding consumer behavior isn’t simple, but it’s why a field like market research exists. In the past, brands would conduct massive studies to understand their target consumers and the segments within that market to understand the opportunities and size of prize. But when consumers are changing so rapidly, the studies of yesterday don’t deliver the kinds of rapid insights brands need to move when consumers do.

Instead, brands need to be constantly surveying and studying consumers in order to keep up with their behavior changes. To do so:

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Brands must understand their specific consumers and their specific behaviors.

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Brands need to track consumer behavior with a feedback loop.

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Brands need to continually rinse and repeat the process.

Only by constantly connecting with and surveying consumers can brands understand them and their behavior changes, cut through the complexity of the modern marketplace and stay relevant.