OpenBrand

How to Analyze & Understand Consumer Buying Behavior: The Value of Effective Insights

In business, the value of genuinely understanding the consumer is multidimensional. 

Through deepened awareness of what our consumers want and how they feel, we are better prepared to make informed decisions on everything from product development to sales pitches, merchandising, marketing, customer experience, and more. Further, when we are able to meet consumer demand and appeal to them in an authentic manner, we increase brand loyalty among our consumers.

For retailers and manufacturers, this is where the analysis of consumer buying behavior comes into play as a critical component in helping them better understand the consumers who buy their products. Read on to learn about the key components of completing a consumer shopping behavior analysis, including the role of consumer data, the metrics that can be tracked, and the various applications that can be implemented to improve business.

What is shopping behavior analysis?

In short, shopping behavior analysis is the act of better understanding consumers through the collection and review of data on consumer shopping habits, preferences, and buyer motivations.

This analysis allows for the identification of patterns in consumer behavior, answering questions around what consumers are purchasing, when they are purchasing, where they shop, and more. 

Analyze consumer buying behavior in 3 core steps

While the analysis process may deviate based on elements specific to a given campaign, industry, or audience, the following three steps are fundamental to any effective shopping behavior analysis:

1. Gather and organize necessary shopper data
2. Analyze and interpret data
3. Identify buying behavior trends and patterns

Step 1. Gather and organize necessary shopper data

Shopper data is where we gain insight into consumer attitudes, preferences, motivations, and trends. 

Depending on the insights you hope to find, this step could involve collecting survey data, transactional data from point-of-sale systems, social media data, or even website interaction data. 

Given the vast variety of data options available, to understand how to gather your data, you will first need to understand the type(s) of data you want to collect. 

Understanding the different types of consumer data

From first-party to attitudinal, there are various types of consumer data – and even more ways in which that data can be collected. As technology moves steadily toward a cookieless future and a privacy-first perspective on how we gather information about consumers, it’s important to understand how to distinguish between the nuances in types of consumer data. 

What is “____-party” data?

Zero-, first-, second-, or third-party data generally refers to the method by which data was collected. The higher the number, the more privacy-invasive. In other words, zero-party data is direct from the user and voluntarily given, whereas third-party data is collected from an outside data provider, usually using cookies or “stealth” tracking methods, and often purchased. 

Standard data types

The four standard data types include basic, interaction, behavioral, and attitudinal. 

• Basic (or identity) data is information that has been collected or provided on an individual person using your product. This is the information typically stored with your company’s CRM, the majority of which falls under the Personally Identifiable Information (PII) category. This data will fall under privacy and protection laws. 
• Interaction (or transactional) data is derived from how consumers engage with your brand, whether in-store,  on your website, in an ecommerce shop, on social media, etc. Common metrics in this category include products purchased, basket analysis, clickthrough rates, time spent on page, social “likes,” and more. 
• Behavioral data is specifically about how users experience and engage with your product. Since this data is often stored digitally, it can be found in client usage reports within SaaS platforms or brand apps. Technology industry products gather this data directly from digital user interactions. However, for industries like consumer durables to collect data, user surveys reporting their behavior and usage are often required. 
• Attitudinal data includes information on consumer attitudes, preferences, and motivations. This data is often qualitative and gathered from reviews, satisfaction surveys, focus groups etc. 

Using consumer data types to understand shopping behavior 

Each of these data types will deliver a different level of insight into consumer behavior. Companies with a data lake may even have the ability to combine different data types to generate additional insights. An example of this combination may be combining behavioral data with transactional data to identify purchase patterns and increase total spend. When selecting the types of data you want to gather for your analysis, you will want to ensure the data maps to your desired outcome. 

Selecting the right types of consumer data

In understanding buying behavior, identity (or PII) data will be far less important than interaction, behavioral, or attitudinal data, as you will be less concerned with the actions of individual purchasers and more interested in the collective. Similarly, interaction data is important and can be easily extracted from your internal tracking tools or the individual platforms. 

Collecting behavioral and attitudinal data

To collect behavioral and attitudinal data that delivers insight into shopping behavior, businesses typically gather information through intentional effort. 

Traditionally, organizations have used consumer surveys as a way to ask specific questions about consumer behavior and gather detailed responses, such as why consumers make certain purchasing decisions. That information is then used to inform improvements in product development or business operations. For example, a consumer survey might reveal that a large percentage of consumers are not satisfied with the selection of products offered by a particular store or brand, which could inform the product assortment strategy.

Many successful retailers and manufacturers even conduct routine satisfaction surveys that can regularly provide some of these insights. However, businesses seeking a specific set of insights would need to initiate a new outreach to gather the data needed for the analysis. The planning and execution of which can be time consuming and pricey to get right. 

Modern data collection: consumer insights solutions

Rather than conducting dozens of individual research studies, businesses today are turning to insights solutions like TraQline, which are designed to deliver shopper behavior data with ease, right when users need it — saving hundreds of hours. TraQline users specifically gain access to thousands of consumer insights that span 10 years of behavioral and attitudinal data, as well as market share, all at the click of a button.

Step 2. Analyze and interpret data

Once you have  collected and organized the data, the next step is to identify trends and patterns within the data. Analyzing the data may involve using a statistical analysis software or other tool to help understand the insights available within the dataset(s) provided. 

Key shopping behavior metrics that businesses could track or pull from the data include consideration rate, conversion rate, number of stores shopped, seasonal purchasing habits, reasons for buying a specific product, etc. 

With a consumer insights tool, highlighting these metrics is typically an integrated piece of the platform. As an example, TraQline Durable IQ highlights significant changes (positive or negative) in a given metric for all variables, as well as exportable charts that depict the insights visually. 

Reasons Purchased (2022 data)
Small Appliance Brand: Cuisinart

Behavioral Metrics such as 'reason purchased' are
a key metric in a consumer insights platform

Step 3. Identify buying behavior trends and patterns 

The final key step in understanding consumer behavior is to look at the insights over time in order to highlight trends and patterns. This is a crucial step, as YOY or period-over-period can paint a picture of buying behavior that single year or quarter data may not reveal or may misconstrue. 

This may involve uncovering patterns in the data that show certain products appearing more popular at certain times each year or that specific demographics tend to make purchases online versus in-store. 

For example, in the chart below, which shows 2022 units purchased for select small appliances brands from Durable IQ, there’s a noticeable lift in purchase rates for all these brands from Q3 to Q4. 

2022 Share Growth (by units sold)
Select Small Appliance Brands

This Q4 lift may indicate a seasonal trend, led by holiday sales and gift purchases, or it may indicate something specific to that quarter alone. One way to determine which is the reason would be to compare the same selection YOY to see if the trend persists. If it does, it’s a seasonal trend, likely still worth drilling down further for additional insights – such as the growth of KitchenAid, for instance, which jumps from lowest to highest of the selected brands between Q3 and Q4. If it does not, then determining what could have caused the quarter lift would be worth investigating. 

As you can see below, in this instance, the Q3 to Q4 lift appears to be a seasonal trend, with the same growth seen over the past three years.

2020-2022 Share Growth (by units sold)
Select Small Appliance Brands

For more great insights like these, fill out the form below to get a demo of the TraQline consumer insights platform or connect with an expert on our team.

Applications of consumer buying behavior insights

Both the short-term insights and long-term trends and patterns can help inform consumer understanding and be used by businesses to inform strategies for purchasing, marketing, sales, and beyond. Let’s take a look at a few specific examples where shopping behavior analysis can improve business performance.

Identify opportunities to enrich the customer experience

The customer experience can easily make or break a sale. Poorly designed planograms, customer service that fails to meet expectations, difficulty with site navigation, and/or confusion in product differences can solicit a response in consumers that has them searching another brand or shopping another store. 

As a more nuanced example, if a shopping behavior analysis reveals that a high percentage of online shoppers abandon their cart before completing a purchase, this may indicate a need to improve the checkout process, offer promotions, or integrate more payment options.

Optimize product assortments and pricing strategies

Consumer buying behavior insights can reveal trends around needs and preferences, allowing businesses to optimize their product assortments and pricing strategies to align with their target market. Having the right data at our fingertips helps ensure we understand how our own product lineup compares to that of our competition. 

Insights from platforms like TraQline SKU Metrix deliver comprehensive, searchable product libraries. These libraries not only collect daily information about products available at key retailers, but they also allow the user to compare and filter products based on features — all while providing product pricing updated several times per week.

For example, the data might show that a particular feature is becoming more prominent in the marketplace, which could prompt a business to integrate that feature into product development moving forward.

Develop consumer-targeted marketing campaigns

Through consumer shopping trend data, businesses can uncover insights that allow them to create marketing campaigns tailored to the specific needs and interests of their target audience – or even discover new audience segments to target. 

The data may show that a particular product, feature, or price is more popular with Gen Z or is purchased heavily within one region, which could inform the decision to target that demographic with marketing efforts. 

Better understand your consumer shopping trends

Undeniably, shopping behavior analysis is a valuable tool for understanding consumer trends and identifying opportunities for improvement. 

By collecting and analyzing various types of data and tracking key metrics over time, businesses can gain a better understanding of consumer behavior and use this information to inform their marketing and sales strategies.

If you’d like to learn more about how TraQline Durable IQ can help you better understand your target market, inspire loyalty, and uncover trends in consumer durables with ease and efficiency, connect with us below!

 

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by OpenBrand

TraQline Tracks the Trends in Average Price Paid During the Pandemic

Between the pandemic, supply chain challenges, and changes in consumer demand, it feels like prices everywhere have been increasing. Even with manufacturers and retailers trying to absorb some of the rising costs, costs incurred by buyers have been going up. In fact, TraQline has seen a 13% increase in average price paid between Spring 2019 and Spring 2022 across all categories. What does that mean for the brands and retailers selling in the Home Improvement Industry? Here’s a look at how the market has been affected.

Which categories of products saw the highest rate of change for Average Price Paid?

Certain categories have faced much higher pressure over the past few years. Perhaps unsurprisingly, many of these products rely on lumber costs to determine the price consumers will ultimately pay. The categories in TraQline that saw the highest rate of change include:

• Windows & Doors (36% increase between the average price pre and post pandemic)
• Kitchen Cabinets & Countertops (34%)
• Building Materials (32%)
• Flooring (25%)

What factors contributed to these stark increases in average price paid?

Building materials were significantly affected by the challenges created by the global Covid-19 pandemic. This category includes products such as drywall and gypsum, lumber and plywood, insulation, roofing, and gutters. Among these products, roofing and composite decking materials represented the two categories with the highest average price paid. However, the products that saw the largest rate of change in this category are lumber and plywood. Costs had been holding steady in 2018-2019, but Q1 2020 signaled the beginning of an increase in average prices. This increase in lumber costs reverberated throughout the home improvement industry. According to the IMF: “Truck drivers and ship crews couldn’t cross borders because of public health restrictions. Pent-up demand from huge stimulus programs during extended lockdowns overwhelmed the capacity of supply chains. Besides causing delays in getting goods to customers, the cost of getting them there surged.”  In addition, tariffs on lumber from Canada complicated an already challenging manufacturing environment for companies manufacturing wood-based products.

For kitchen cabinets and countertops, the price consumers paid initially fell during the height of the pandemic in 2020. However, by Q1 2021, product prices were back on the rise. The kitchen cabinet and countertop industry faced the same challenges as other home improvement industries, including labor shortages, increased transportation costs, and lumber tariffs. The increased demand left mills unable to cope, driving the cost to consumers higher than ever.

Even though the flooring industry has seen a 25% increase in average price paid, demand for new flooring has been on an uptick among consumers who are eager to remodel their homes after having been stuck in them for the better part of two years. As with other categories dependent on lumber, hardwood flooring has seen the most volatile price changes over the course of the pandemic. There are also increases, although less remarkable, in prices paid for laminate, vinyl, and ceramic flooring. However, laminate and vinyl may see future costs start to fall as manufacturers have been investing in US factories for these products.

How have these prices affected consumer shopping behavior?

For the windows and doors market, the most notable – but expected – change has been in the number of buyers looking at other, smaller outlets rather than big box retailers such as Home Depot or making purchases through contractors. This change extends not only to purchases, but also to how consumers shop. While it may seem counterintuitive, consumers were more willing to shop around (online or in store) at two or more stores during the pandemic in order to find product in stock. As restrictions have eased and supply has started to return to pre-pandemic levels, consumers are shopping around less.

In the kitchen cabinets and countertop category, despite the average price paid in 2022 being 34% higher than it was in 2019, TraQline data does not show any real upheaval in how consumers shop. They’re going to the same places at the same rates and aren’t shopping any more stores than they did pre-pandemic.

Flooring retailers with a smaller percentage of the overall market (such as Menards, Walmart, Amazon, and Costco) saw a boost in their flooring sales during the pandemic.  However, TraQline data shows that consumers went to the same number of stores as they did pre-pandemic.

Top building materials retailers, such as Home Depot and Lowe’s, have retained their positions despite the challenges that the pandemic has presented. However, purchases made through a contractor have had a lift since 2020. It’s likely that this is due to two reasons:

1. Homeowners have been bullish on remodeling. In that case, it would be prudent to make orders through contractors since they’re doing the work already.
2. There have been long lead times and limited availability of products such as 2x4s and plywood. Some pros indicate that their timelines are long, and will continue to be so since lockdown restrictions have lifted and as homeowners feel more at ease letting strangers come in to work in their homes.

These products have seen some of the most extreme increases in average price paid among our available data. However, other categories are not seeing such dramatic increases.

Not all increases are equal: Categories that saw smaller price increases when comparing post-pandemic prices to pre-pandemic prices

There are TraQline categories that saw moderate average price paid changes when comparing pre- and post-pandemic prices. Some of those categories include:

• Major Appliances (7% price increase between the average price paid pre- and post-pandemic)
• Nursery (7%)
• Lawn Power Equipment (5%)
• Heating/AC (4%)

What factors contributed to these price increases?

For consumers purchasing a major appliance, there were a variety of changes to their shopping experience. While most products saw a steady increase in average price paid, many consumers noticed supply side issues leading to low stock, long lead times, and the virtual elimination of the on-sale appliance. Some of the products with the most noteworthy increases include wall ovens, refrigerators, and built-in ranges. Major appliances have been hit particularly hard by the semiconductor shortage. These products rely on chips for vital functions, whether or not they are “smart” products. The ongoing chip shortage has affected production times, which is exacerbating the long wait times consumers now face to receive their products.

Nursery and lawn power equipment have likely seen increases in demand as homeowners have invested in outdoor living due to the pandemic. With outdoor gatherings being deemed safest, many consumers have prioritized spending more money and time on their outdoor spaces, whether that’s adding new plants to a yard or buying equipment needed to care for their space.

Have these price changes affected consumer shopping behavior?

For major appliances, more than half of all buyers shop only one store. Like all products that were hard to find in stores during the height of the pandemic, major appliances were also in short supply. As a result, there was an increase in shoppers visiting three or more stores, but that has tapered off in the past year. Lowe’s and Home Depot remain in the top positions, but outlets such as Costco and Amazon have seen increases in their appliance sales over the course of the pandemic. However, as restrictions have eased and more consumers are feeling comfortable going to brick-and-mortar stores, Amazon has lost some of the share it gained in 2020 and 2021.

Major retailers such as Home Depot and Lowe’s have been able to keep their place at the top for lawn power equipment, but since the start of the pandemic, Ace Hardware has experienced significant growth. Amazon also saw a lift in 2021, but its growth rate has slowed as pandemic restrictions have eased across the country. While the majority of lawn power equipment products are purchased in retail stores, online sales saw a significant lift during the pandemic that has remained high even as more consumers are willing to go out to shop again. Despite a rise in costs, consumers don’t appear to be eager to shop around, either. Nearly 62% of consumers shopped only one store.

Which categories have seen prices increase more slowly in the post-pandemic period?

Despite most categories seeing price increases, some products have had price declines over the past two years. It is important to note that these price changes have not been equal. Categories that saw decreased average price paid include:

• Tool Accessories (10% decrease between the average price paid pre- and post-pandemic)
• Cleaning Chemicals (4%)
• Personal Comfort – a category that includes humidifiers and air purifiers (2%)

What could be contributing to this decline in costs?

Cleaning chemicals and personal comfort products saw a surge in demand during the pandemic, and companies were able to rise to the challenge. Many companies were able to shift focus to new product categories, increasing competition and filling store shelves with new products. Some highlights include distilleries that were able to convert some of their product to hand sanitizer and other disinfectants.

Have these price changes affected consumer shopping behavior?

While Walmart remained the top retailer for personal comfort products, Amazon continued to gain steady ground during the pandemic, as did retailers with smaller shares of the market, including both Costco and Best Buy. Some of Amazon’s increase may be due to the rate at which consumers switched to purchasing online. While rates have fallen some, online shopping rates are still 10 points higher than they were pre-pandemic.

Conclusion

The past few years have caused both businesses and consumers to recalibrate to a new normal. For consumers, at least, part of that new normal is higher prices. While there are a variety of causes—from supply chain issues to staffing shortages to overall inflation—consumers have largely not changed their shopping behavior, except in being more willing to purchase online. However, savvy retailers and manufacturers can keep an eye on trends that matter to consumers. For more information on the “whys behind the buys” of home improvement shoppers, contact TraQline today!

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by OpenBrand