Key Influences on Consumer Decision Making
In additional to demographic and social influences, we also examine some of the situational factors that influence consumer decision making, such as the design and presentation of a retail environment. While many retailers seek to maximize sales and grow their customer base, “taking care” of the customer is something retailers are also becoming more focused on today. Creating comfortable, accessible, and pleasant retail environments that help customers achieve their shopping goals is a win-win for retailers and customers alike. And yes, the price-conscious consumer may be less concerned with the tidiness of a change room or the careful folding pattern of shirts, but nonetheless, it is still important for retailers to take care of their customers. Whether they are limited due to time (shopping on a lunch break) or patience (have you ever shopped with a toddler?), customers are influenced by nearly everything around them when they are immersed in the retail experience.
The science of consumer behavior describes and even defines how you shop and, more importantly, why you buy. Smart retailers study consumer behavior patterns and lay out their stores and merchandise accordingly. For example, did you know that 86 percent of women look at price tags when they shop, while only 72 percent of men do (Underhill, 1999)? And did you know that the average shopper doesn’t actually notice anything that’s in the entrance of a store?
Situational Influences on Consumer Decision Making
Shopping. It’s the national pastime for some but a detested necessity for others. Whether you love shopping (“Oh, that is sooooooo cute!”) or do everything to avoid it (“I’m not going to the mall, no matter what”), it is a major source of spending. But what makes you stop and pick up one sweater but not another? What makes you buy a pair of jeans you weren’t even looking for? What makes you walk out of the store spending more than you had planned?
Shopping experiences involve customers interacting with tangible and intangible aspects of a shopping environment. Some of the most significant influences on our decisions to buy are: atmospherics; crowding; location; layout; time; and, mood.
The effects of store atmospherics on shopping behaviour have been explored since the 1960s (Turley & Millman, 2000). Kotler (1973) was the first to use and define the term . He argues that consciously controlled and designed consumption space can influence the emotional state of the customers, which increase their likelihood of making purchases (Kotler, 1973). The set of controllable characteristics of environmental cues are “atmospherics”.
More recently, researchers have contextualized atmospheric cues such as music, lighting, colour and crowding in retail settings, and investigated how these various atmospheric variables contribute to shopping outcomes such as approach/avoidance, affective response, merchandise/retailer evaluations, shopping satisfaction, and intention to purchase (Plunkett, 2013).
Based on a review of empirical studies of atmospheric effects on shopping behaviour, Turley & Milliman (2000) created a comprehensive table that systematically categorizes the variables into five groups: external variables; general interior variables; layout and design variables; point of purchase (POP) and decoration variables; and, human variables. Please refer to the table below for more details.
Store Atmospherics Variables
|External Variables||General Interior Variables||Layout & Design Variables||POP & Decoration Variables||Human Variables|
|Exterior signage||Flooring & carpet||Space design & allocation||Point of purchase displays||Employee characteristics|
|Entrances||Colour scheme||Placement of merchandise||Signs & cards||Employee uniforms|
|Exterior display windows||Lighting||Grouping of merchandise||Wall decorations||Crowding|
|Heights of building||Music||Work station placement||Degrees & certificates||Customer characteristics|
|Size of building||Scents||Placement of equipment||Pictures||Privacy|
|Colour of building||Width of aisles||Placement of cash registers||Artwork|
|Surrounding stores||Wall composition||Waiting areas||Product displays|
|Laws & gardens||Paint & wallpaper||Waiting rooms||Usage instructions|
|Address & location||Ceiling composition||Department locations||Price displays|
|Architectural style||Merchandise||Traffic flow||Technology|
|Surrounding area||Racks & cases|
|Parking availability||Waiting queues|
|Congestion & traffic||Furniture|
|Exterior walls||Dead areas|
Among the five groups of variables, external variables are those mostly determined when a store location is selected and are most challenging to change after the store opens. However, there are still aspects that are within the control of a retailer, but oftentimes overlooked. For example, exterior signage, entrances and exterior display windows are all important elements that can make positive first impressions on shoppers and entice them to enter the store. These variables are integral to a retailer’s brand image and should reflect a retailer’s overall business strategy.
General interior variables are within the control of a retailer, but they are unlikely to be changed regularly unless a remodeling project is done. The lifespan of a remodel is driven by market competition, but generally speaking, many retailers have programs which call for a minor renovation every five years and a full remodel every ten years (Avis, 2012). Among the general interior variables, music, scents, temperature and cleanliness should be carefully controlled and monitored on a regular basis. Retailers have full control over layout and design variables and point-of-purchase (POP) and decoration variables, all of which directly contribute to customers’ shopping experiences. Human variables should be included in retailers’ operation strategies.
Physical factors that firms can control, such as the layout of a store, music played at stores, the lighting, temperature, and even the smells you experience are called atmospherics. Perhaps you’ve visited the office of an apartment complex and noticed how great it looked and even smelled. It’s no coincidence. The managers of the complex were trying to get you to stay for a while and have a look at their facilities. Research shows that “strategic fragrancing” results in customers staying in stores longer, buying more, and leaving with better impressions of the quality of stores’ services and products. Mirrors near hotel elevators are another example. Hotel operators have found that when people are busy looking at themselves in the mirrors, they don’t feel like they are waiting as long for their elevators (Moore, 2008).
is another situational factor. Have you ever left a store and not purchased anything because it was just too crowded? Some studies have shown that consumers feel better about retailers who attempt to prevent overcrowding in their stores. However, other studies have shown that to a certain extent, crowding can have a positive impact on a person’s buying experience. The phenomenon is often referred to as “herd behavior” (Gaumer & Leif, 2005).
Retailers have traditionally provided consumers with access to their goods and services through retail stores. decisions are critical to the ultimate success of the retail enterprise.
Good locations allow ready access, attract large numbers of customers and increase the potential sales of retail outlets… even slight differences in location can have significant effects on market share and profitability (ghosh & McLafferty, 1987).
While many elements of retail and service strategy are dynamic and fast-changing, location decisions are by contrast traditionally long-term and binding. For example, it is relatively straightforward for a retailer or service provider to change pricing, product/service assortment or advertising. However, the physical “bricks-and-mortar” of store locations are a form of grounded capital that cannot be easily altered or quickly changed. As such, there is an underlying inertia to retail location decisions; once made, the organization usually must live with the decision for many years to come.
Store locations also influence behavior. Starbucks has done a good job in terms of locating its stores. It has the process down to a science; you can scarcely drive a few miles down the road without passing a Starbucks. You can also buy cups of Starbucks coffee at many grocery stores and in airports—virtually any place where there is foot traffic.
Have you ever been in a department story and couldn’t find your way out? No, you aren’t necessarily directionally challenged. Marketing professionals take physical factors such as a store’s design and into account when they are designing their facilities. Presumably, the longer you wander around a facility, the more you will spend. Grocery stores frequently place bread and milk products on the opposite ends of the stores because people often need both types of products. To buy both, they have to walk around an entire store, which of course, is loaded with other items they might see and purchase.
Think about the last time you went into a grocery store or drug store; you might not have noticed anything until you were well inside the store, which means that the merchandise and signs that were displayed in the area before you got your bearings were virtually invisible to you (Underhill, 1999). Based on consumer research, there’s a high likelihood that you turned right when you entered the store. Take note the next time you go shopping; chances are, you’ll turn right after you walk in (Underhill, 1999).
According to Paco Underhill, famous marketer, CEO and founder of EnviroSell, and author of the book, Why We Buy: The Science of Shopping, consumers don’t actually begin shopping until a certain point after they enter the store. That’s why smart retailers include a “” at the entry to their store; it allows customers to get their bearings and choose their shopping paths. In other words, products, signs, and displays that are in the very front of the store might not be seen if there is not a transition for the customers when they enter. In the case of Abercrombie & Fitch, the transition is the space just inside the entrance that includes the humongous photo of an Abercrombie model. When you go into Hollister, it’s the outside porch that serves the same purpose; it’s a transition that allows you to get your focus and plot your course in the store, even if you don’t consciously realize it.
Some retail environments have taken great care to design and support a comfortable and intuitive shopping experience for their customers: a smooth transition zone at the front of the store; a basket or bag located in the transition zone so customers can collect and hang on to their selections easily; wide aisles that allow for multi-directional traffic, but also wheelchairs and baby strollers; easy access to items that customers want to reach and examine closely in their hands; and, clean and tidy change rooms that make customers feel comfortable getting undressed in.
Come, let’s go shopping together. Image you’re walking into the mall and heading straight towards your favourite clothing store—Nike, Aritzia, Lululemon, Zara, The Gap. You enter the store, pause for a few moments to get the lay of the land, then pick up a shopping basket on your right (you’re a serious shopper and have come to buy…spring is just around the corner, after all). You start moving through the right hand side of the store first, picking up a few items and adding them to your basket. You touch everything that catches your eye: feeling the denim to see if it’s soft and stretchy; the shirts to see if they’re cotton or linen; the dress to see if the fabric falls freely or is stiff and rigid. What you don’t bother with are the clothes folded on the low shelf at the bottom of a table display: they’re awkward to get to and you would have to bend down and set your basket aside just to pull one out. If you’re on the petite side, you also don’t bother with the items that are displayed up high (the sales staff are scarce and already helping other customers so you skip past that area).
You avoid the narrow aisles because getting past someone standing and looking through some shirts will bring you into close contact with them—no thanks! A few minutes later someone brushes past your backside just as you are reaching for some shorts and you come close to leaving the store!
Now you’re making your way to the back of the store: the change rooms are here. You take a look to see how clean and/or crowded they are. Long line up? Forget it. No mirror in the room? Not a chance! You look to see if there’s a chair or stool and some hooks to hang up your coat and bags. You will also decide on whether or not a different size is worth asking for if the staff are friendly and promise to make themselves available to you. After you try your items on, the cash can be found in the middle of the store. Purchase made, you exit the store and head to find some shoes to match your new spring clothes.
Research shows that customers shop in different types of stores with varying expectations for their shopping experiences. Based on empirical findings, Yoon (2013) reported that department store shoppers preferred affective experiences the most, whereas discount store and online shoppers preferred rational experiences. The author reasoned that department stores tend to draw customers with lifestyle products and pleasant store atmospherics, therefore, customers expect to derive a , which involves pure enjoyment, excitement, captivation, escapism, and spontaneity beyond the purchase of product itself (Babin, Darden, & Griffin, 1994).
In contrast, customers shopping in discount stores and online usually are mostly value seekers who focus on price or functionality of products. Therefore, they expect utilitarian value when they shop. The customers may evaluate their shopping experience exclusively on the tangible attributes of goods and services acquired from their shopping trips (Holbrook, 1986), as well as on whether a purchase is made in a deliberate and efficient manner (Babin, Darden, & Griffin, 1994).
Store designs should aim to satisfy the types of shopping experience customers are looking for. Permanent stores, department stores, specialty stores and boutiques should strive to reflect more on customers’ need for sensory and experiential shopping attributes, while discount stores, dollar stores, hypermarkets, outlet stores, warehouse stores and thrift stores need to highlight the value proposition that customers are seeking.
The time of day, time of year, and how much time consumers feel like they have to shop affect what they buy. Researchers have even discovered whether someone is a “morning person” or “evening person” affects shopping patterns. Have you ever gone to the grocery store when you are hungry or after pay day when you have cash in your pocket? When you are hungry or have cash, you may purchase more than you would at other times.
Seven-Eleven Japan is a company that’s extremely in tune to time and how it affects buyers. The company’s point-of-sale systems at its checkout counters monitor what is selling well and when, and stores are restocked with those items immediately—sometimes via motorcycle deliveries that zip in and out of traffic along Japan’s crowded streets. The goal is to get the products on the shelves when and where consumers want them. Seven-Eleven Japan also knows that, like Americans, its customers are “.” Shoppers can pay their utility bills, local taxes, and insurance or pension premiums at Seven-Eleven Japan stores, and even make photocopies (Bird, 2002).
Companies worldwide are aware of people’s lack of time and are finding ways to accommodate them. Some doctors’ offices offer drive-through shots for patients who are in a hurry and for elderly patients who find it difficult to get out of their cars. Tickets.com allows companies to sell tickets by sending them to customers’ mobile phones when they call in. The phones’ displays are then read by barcode scanners when the ticket purchasers arrive at the events they’re attending. Likewise, if you need customer service from Amazon.com, there’s no need to wait on the telephone. If you have an account with Amazon, you just click a button on the company’s Web site and an Amazon representative calls you immediately.
Have you ever felt like going on a shopping spree? At other times wild horses couldn’t drag you to a mall. People’s temporarily affect their spending patterns. Some people enjoy shopping. It’s entertaining for them. At the extreme are compulsive spenders who get a temporary “high” from spending.
A sour mood can spoil a consumer’s desire to shop. The crash of the U.S. stock market in 2008 left many people feeling poorer, leading to a dramatic downturn in consumer spending. Penny pinching came into vogue, and conspicuous spending was out. Costco and Walmart experienced heightened sales of their low-cost Kirkland Signature and Great Value brands as consumers scrimped. Saks Fifth Avenue wasn’t so lucky. Its annual release of spring fashions usually leads to a feeding frenzy among shoppers, but spring 2009 was different. “We’ve definitely seen a drop-off of this idea of shopping for entertainment,” says Kimberly Grabel, Saks Fifth Avenue’s senior vice president of marketing (Rosenbloom, 2009). To get buyers in the shopping mood, companies resorted to different measures. The upscale retailer Neiman Marcus began introducing more mid-priced brands. By studying customer’s loyalty cards, the French hypermarket Carrefour hoped to find ways to get its customers to purchase nonfood items that have higher profit margins.
The glum mood wasn’t bad for all businesses though. Discounters like Half-Priced books saw their sales surge. So did seed sellers as people began planting their own gardens. Finally, what about those products (Aqua Globes, Snuggies, and Ped Eggs) you see being hawked on television? Their sales were the best ever. Apparently, consumers too broke to go on vacation or shop at Saks were instead watching television and treating themselves to the products (Ward, 2009).
What stories will future marketers tell of what it was like to be a consumer during the Coronavirus pandemic? How will they make sense of the fierce run on hand sanitizer and toilet paper in the early months of 2020? Will they tell stories about consumers hoarding food (despite grocery stores remaining open and never closing) and emptying the store shelves, leaving nothing but the odd odd can of green beans? What stories will we all tell in the future about our mood and mental state going into grocery stores only to find random food items available, scratching our heads at how we were going to turn them into meals for a week?
Since May 2020, I’ve asked my students to reflect on what it is like to be a consumer during a pandemic. They have shared their personal experiences with me which I’ve found both comforting and fascinating.
Most of us have agreed that when the pandemic started, luxury purchases went out the window! The focus of our purchases have been on meeting our needs and ensuring our safety: masks, soap, and technology for remote working and learning were the principle types of purchases. Many also purchased items to take place of not going to the gym: weights, new runners, and other exercise equipment. Some purchases shifted; for example, the money my husband and I would normally spend on clothes to wear to the office (him) and the university (me) was now spent on “comfy” clothes like sweatshirts and jogging pants. We’ve saved money on dry-cleaning, but spent more on heating our home over the winter since we’re both working remotely.
We all had the same desire to make more purchases from home than to go to a store: most of us were buying items online that we’d never considered before, such as clothes, groceries, and household goods. Many of us found that online shopping not only kept us safe from exposure, but also helped make us feel less anxious: we could find what we needed and purchase it easier without having to go through the stress of lining up and possibly coming in contact with another infected person.
Perhaps one of the bigger challenges we’ve experienced as consumers is our inability to use our senses to help guide our consumer decision making: many students agreed that they missed being able to touch, smell, and see a product up close and in person and that buying online often felt like a “leap of faith”. Paco Underhill studies consumer behaviour and helps retailers design more efficient, respectful, and comfortable shopping environments for their consumers: Underhill states that, “virtually all unplanned purchases—and many planned ones too—come as a result of the shopper seeing, touching, selling, or tasting something that promises pleasure, if not total fulfillment” (1999). If the pandemic has reduced, and in some cases eliminated, our ability to use our senses, does this help explain why we are feeling so much less fulfilled these days?
Without a doubt, the extreme changes in lifestyle brought on by the pandemic has forced all of us to consumer less frequently, more carefully, and in the absence of the environmental and situational factors that normally have an enormous influence over what we buy: we’ve had to reorient our consumption choices so they are more aligned with our needs and less with our wants. We’ve opted for availability over brand preference, not to be practical, but because we haven’t had a choice in the matter! We have also prioritized our health—both physical and mental—which is a good thing for consumers now and forever.
- The sections under “Atmospherics in a Variety of Contexts”; “Crowding”; “Winning the Location Game”; the first paragraph under “Layout”; “Time”; and, the three paragraphs under “Mood” are adapted from Principles of Marketing by University of Minnesota which is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.
- The second opening paragraph; the first paragraph under “Situational Factors That Influence Decision Making”; and, the 2nd & 3rd paragraphs under “Layout” are adapted from Section 6.1 in Buying 101, which is licensed under CC BY-NC-SA 3.0.
- The section under “Atmospherics”; the last 3 paragraphs under “Layout”; and, the section under “Location” are adapted from Pop-Up Retail Strategies in an Omnichanel Context by Ryerson University, which is licensed under CC BY.
Avis, E. (2012, August 20). How Much is a Facelift Worth? Retail Leader. https://retailleader.com/how-much-facelift-worth-0.
Babin, B. J., Darden, W. R., & Griffin, M. (1994). Work and/or fun: Measuring hedonic and utilitarian shopping value. Journal of Consumer Research, 20, 644–656.
Bird, A. (2002). “Retail Industry,” Encyclopedia of Japanese Business and Management. London: Routledge, 399–400.
Gaumer C. J. and William C. Leif. (2005). Social Facilitation: Affect and Application in Consumer Buying Situations. Journal of Food Products Marketing 11, no. 1, 75–82.
Ghosh, A.& McLafferty, S.L. (1987). Location strategies for retail and service firms. Lexington, MA: Lexington Book Publishing.
Holbrook, M. B. (1986). Emotion in the consumption experience: Toward a new model of human consumer. In R. A. Peterson, W. D. Hoyer, & W. R. Wilson (Eds.), The role of affect in consumer behavior: Emerging theories and applications, 17–52. Lexington, MA: Heath.
Kotler, P. (1973). Atmospherics as a marketing tool. Journal of Retailing, 64(49), 48–64.
Moore, P. (2008, February). “Smells Sell”. NZ Business, 26–27.
Plunkett, J. W. (2013). Plunkett’s retail industry almanac 2014: the only comprehensive guide to the retail industry. Plunkett Research Ltd.
Rosenbloom S. (2009, March 18). “Where Have All the Shoppers Gone?” Fort Worth Star-Telegram.
Turley, L. W., & Milliman, R. E. (2000). Atmospheric effects on shopping behavior: A review of the experimental evidence. Journal of Business Research, 49(2), 193–211. https://www.sciencedirect.com/science/article/abs/pii/S0148296399000107.
Underhill, P. (1999). Why We Buy: The Science of Shopping. New York: Touchstone.
Ward C. B. and Thuhang, T. (2007). “Consumer Gifting Behaviors: One for You, One for Me?” Services Marketing Quarterly, 29(2), 1–17.
Yoon, S. (2013). Antecedents and consequences of in‐store experiences based on an experiential typology. European Journal of Marketing, 47(5/6), 693–714. https://www.emeraldinsight.com/doi/abs/10.1108/03090561311306660.
A situational factor/influence on consumer decision making, atmospherics is the sum total of all physical aspects in a retail environment that the retailer controls and should monitor to create a pleasing shopping experience for customers.
A situational factor/influence on decision making, a crowded store may result in a lower number of visitors converting to buyers, but it may also create "herd behaviour" in which some customers are more likely to purchase when part of a crowd.
Store location is a situational factor/influence on decision making. Retailers who are located where consumers expect and want them to be, such as in high pedestrian traffic zones, tend to enjoy a higher volume of customers.
An interior variable, the layout refers to the design of the space inside a store as well as the placement of displays and other items customers come in contact with.
The space immediately inside a retail store where customers pass through before engaging with merchandise and sales representatives. The transition zone serves as a place where customers can orient themselves and plan their route in the store.
The family lifecycle represents the various stages we pass through from early adulthood to retirement. At each stage of the lifecycle consumer preferences are defined by different needs and wants and influenced by different forces.
A term related to the situational factor/influence on decision making, "time", it conveys a sense of customer urgency to make purchases quickly and efficiently to meet their entire set of needs.
A situational factor/influence on decision making, a consumer's mood expresses a temporary state of mind and feeling at a particular moment. It can also be expressed as the predominant emotion we are feeling.