Why it Matters:

• Retailers need to identify and understand their target audience to effectively appeal to them.

• This knowledge helps tailor products, marketing strategies, and store experiences to resonate with the right customers.

Understanding Your Customers:

• Demographics: Objective data like age, income, education, and household size. Understanding demographics helps you identify potential customer segments.

• Lifestyles: How consumers live, spend time, and money. This includes factors like social circles, hobbies, and values. Analyzing lifestyles allows you to target your offerings and store environment to their preferences.

  • Social Factors: Culture, social class, reference groups, family life cycle, and time utilization all influence buying decisions.

  • Psychological Factors: Personality, attitudes, perceived risk (of buying something they won't like), and how status-conscious they are.

• Examples of Different Consumer Segments:

  • In-home shoppers: Value convenience and prioritize time. Often affluent and well-educated.

  • Online shoppers: Utilize the internet for research and purchases. Convenience is key, and they tend to have higher incomes and education levels.

  • Outshoppers: Travel to shop, often for unique experiences or specialty items. Can vary in income and education levels.

• Consumer Attitudes: How people feel about shopping can impact their behavior. Understanding these attitudes helps tailor the shopping experience.

  • Reasons for leaving stores without buying: This includes factors like lack of desired styles, poor fit, bad service, and negative in-store experience.

• Shopping Behavior: This refers to the process a customer goes through when making a purchase.

  • The Consumer Decision Process: A series of steps including problem recognition, information search, evaluation of alternatives, purchase decision, and post-purchase evaluation.

  • Cross-shopping: Visiting multiple stores of the same type or different types during a shopping trip.

Targeting Strategies:

• Types of Consumer Decisions: The level of involvement a consumer has in a purchase decision can vary depending on perceived risk and time constraints. (High-risk = extended decision making, Low-risk = routine purchases).

• Impulse Purchases: Unplanned buying decisions can be triggered by various factors like product placement and attractive displays.

• Retailer Targeting Approaches: There are different marketing strategies depending on how broadly you want to target your audience.

  • Mass marketing: Targeting everyone (ex: Kohl's).

  • Concentrated marketing: Focusing on a specific customer segment (ex: Family Dollar).

  • Differentiated marketing: Offering different products or experiences to various customer segments (ex: Foot Locker).

External Influences:

• Environmental factors like the economy, competition, and regulations can all impact consumer shopping habits.

By understanding these aspects of consumer behavior, retailers can make data-driven decisions to improve customer satisfaction, loyalty, and ultimately, sales.