Consumer habits and their importance for companies
If your company is looking for the reason why a person prefers your product or that of your competitors, chances are you can find the answer in consumer habits.
Why is this? The short answer is a process of repetition and association that consumers generate, both individually and collectively.
It is thanks to these factors that we build habits that structure our behavior, helping us to reduce the amount of conscious decisions and internal deliberations we must process each day.
For instance, to get to the office or to a friend or family member's house, it is not necessary to have a route plan. Generally, we know how long it will take us to get there and what the most efficient route is, even if there is traffic.
In the same way, there are those of us who cannot start the day without a cup of coffee or do not forgive dessert after lunch.
Thus, through repetition (frequently visiting a place) and association (relating the taste and smell of a drink to the start of the day), we generate these patterns that we call habits.
This, of course, is a very simplified way of explaining this phenomenon. If we wanted to make a deeper analysis, we would have to explore other factors, such as economic, cultural, aesthetic, and even political.
Nevertheless, the above serves as a starting point to understand that some of these habits that are connected to shape our daily lives are sometimes closely related to products, services or brands.
Perhaps we prefer to buy a certain brand of coffee in the supermarket, or buy it prepared in a particular chain, for example.
And certainly, as the size of the purchase scales, so do the factors that influence the purchase decision (it is certainly not the same for an average consumer to decide on a brand of coffee as it is for a brand of automobile).
Therefore, it is pertinent to know them in detail: how do they adapt according to the context, as well as the value and function of the purchase?
But before we get there, let's take a closer look at some essential terms.
What are consumer habits?
In order to define precisely what consumer habits are, it is worth answering a more general question.
If we were to relate it to a larger category, consumer habits pertain to general consumer behavior. One could think that consumption habits, together with other elements such as purchasing power and buying culture, among others, make up consumer behavior.
In short, this refers to the study of how both individuals and organizations satisfy their needs and desires through the choice, purchase, use and disuse of goods and services.
Let's look at these elements:
- The choice and purchase are the moments when the consumer discriminates a product from a category, while the purchase is the way in which he pays for the product. Going back to our example, you may pay for a coffee with cash or debit, while for a car you will probably resort to a financing plan.
- Use is the way in which each consumer uses the products he/she buys. Again, in the case of coffee, the consumer may buy a particular type depending on the extraction method or may prefer soluble coffee to save time.
- Product disuse refers to how long a person uses a product and whether they discard, recycle or sell it once they have finished using it. Used coffee, for example, can be used as fertilizer for plants, or the jar in which it is packaged can be reused to store another product.
We could do as many iterations of this exercise as there are products available on the market because each category follows a particular cycle. The specific ways in which each consumer carries out this cycle are what we call consumer habits.
Thus, consumer habits are the actions that structure the triggers, stimuli, and references that guide the way people consume.
According to this frame of reference, we can analyze the way in which these habits adapt according to the purchase context.
Types of consumer habits: what criteria do consumers use to make a purchase?
Although a deep insight into the consumer habits of a particular market is undoubtedly a competitive advantage for any company, the truth is that it is not a crystal ball.
Estimates can be made and strategies can be chosen that risk creating or modifying deep-rooted consumer habits, but it is also possible to opt for a safer path that seeks to take advantage of some of these more established buying habits.
The decision on either possibility depends on the brand's overall product strategy. The analysis of consumer habits is part of this, and generally acts as part of the construction of a buyer persona on which the company focuses.
However, it is possible to broadly categorize consumption habits based on the type of purchase consumers make. Let's look at some examples.
Daily consumer habits
It may seem redundant to talk about daily habits, but it helps us to distinguish them from others. It is probably the strongest consumption habit because the consumer does it almost unconsciously.
Generally, these are items of daily consumption, such as milk, cereal, detergent, and toothpaste, among others. The brands that consumers choose are their "trusted brands" and are difficult to change.
The factors that influence the construction of this habit range from tradition (they buy the same detergent that their parents used) to trust (the formula has not changed since they started using it).
Variety consumption habits
The flip side of the above: the variety consumption habit is the one that people use when they do not yet have a "trusted brand" for a certain category, or because experimenting with different offers enriches their experience. For example, restaurants or bars.
Consumer habits by complexity
When consumers consider making an expensive or infrequent purchase, they generally make their consumption habits more complex. In other words, they conduct a thorough investigation of the purchase process: they evaluate means of payment, durability, brand reputation, and advice from friends and family.
The classic example that illustrates this habit is real estate or a car, but it can also happen with certain appliances, tools, and furniture, among others. Usually, these types of purchases are made in physical stores, although online purchases can be encouraged through promotions.
Now that we know the main types of consumption habits that guide people when making purchases, let's go to a higher level of granularity to understand how these habits vary between generations.
What are the consumption habits of the new (and not so new) generations?
Although today the amount of data and information we can gather on consumer behavior is more than we could have imagined 20 years ago, sometimes this increases the difficulty of understanding why a person buys, repurchases, or -the holy grail- recommends a product.
According to a study conducted by the consulting firm Llorente y Cuenca on consumer behavior and habits in Latin America, the economic crisis scenario in the region, preceded by the pandemic, drastically changed the way people consume services and products.
The following are some of the findings of this study, according to behavior and observable trends between generations.
Consumer habits of Generation Z
Also known as Centennials (born between 1996 and 2012) are beginning to make inroads in the workplace and generate purchasing power. As the consumers of the future, understanding their habits is fundamental for any company.
- They seek to spend their free time outdoors: After confinement, they are eager to spend time outdoors, so they favor experiences in open spaces.
- A generation in a downturn: Deeply scarred by both the 2008 crisis and the current one, they show a broad interest in financial literacy. They are looking for safe savings methods, although they do not rule out taking risks and investing part of their income (it is the generation that shows the highest adoption of cryptocurrencies, for example).
- Travel is blurring their appeal: Although they enjoy spending time away from home and in open spaces, the rising cost of travel is making them evaluate whether allocating a portion of their income to travel is a good decision for their finances.
- Point-of-sale shopping and commitment: This generation is looking for a return to physical stores and for brands to show commitment to social or environmental causes.
Gen Y's consumption habits
Millennials (born between 1981 and 1995) are, in many cases, key breadwinners or already independent. However, due to the string of recessions and the rising cost of living, they have experienced slower economic growth since entering the job market than past generations, even though they have higher levels of education than their parents.
- Prefer indoors: Unlike Centennials, this generation revalued the possibility of spending their free time at home, even after confinement. Getting out of the house is now more related to the idea of mental and physical well-being, and is no longer exclusively about recreation and fun.
- Inability to save: The pandemic forced this generation to use part of their newly found savings to cope with the economic impact, so they are lagging behind in financial prevention. They shy away from risk, so investments are not attractive options in all cases.
- They want to make the world a better place: Although the economic outlook is discouraging for this generation, they are interested in fighting against social inequality and gender inequity, as well as in favor of mental health.
- They are looking for commitment: They are able to speak out if a company engages in bad practices, and they have no qualms about abandoning "trusted brands" if this happens. This is an opportunity for companies convinced of supporting values and causes on this generation's agenda.
Consumer habits of Gen X
Born between 1969 and 1980, this generation grew up without any digital resources, but now understands the need to participate in the digital world to stay active socially and even economically.
This meant that faced with confinement, they solved problems such as jobs migrating to online modalities and continuing to care for their families.
- Unhappy with the new normal: On average, this generation was the most reluctant to follow health precautionary measures, so now that the measures are relaxed, they yearn to return to the "old normal" where they felt more comfortable.
- Hope for the future: This generation is hopeful that the economic future will be positive, especially since many of them have pensions or savings funds that enable them to seek a return to their old lifestyle. However, they do not trust new investment alternatives, preferring to rely on tried and tested methods.
- They want to travel: Among these Gen Xers, there is a growing interest in traveling and seeing the world, derived from the perspective that confinement gave them. Since they have resources, they consider it a good opportunity to explore new spaces.
- They look for solutions, not changes: From brands, they expect products to work properly and simplify their daily lives. Although during the pandemic they raised awareness about the environmental impact of their consumption habits, this did not necessarily translate into a demand for companies to make social or environmental commitments.
Understanding the consumer habits of a generation can help companies explore new business alternatives, modify their messages, and even adapt their products to new market demands.