Being in the payments space for over a year now, I have a newfound interest in how people buy (credit, debit, cash) and what drives consumer purchases (sales, coupons, convenience, loyalty etc.). As I continue to research and observe others, I’ve also began to take an introspective approach to what drives me to buy and when I buy, how I like to pay. Ask anyone I know – I’m very ‘Type A’ and loyal to the brands I love, traits that definitely lead to a more routine, yet time-efficient lifestyle. And, I also appreciate a great deal, with little to no interest in paying full-price if I believe I can get the item for less elsewhere – especially if it’s a ‘want to have’ and not ‘need to have’ purchase.
Let’s begin with the ‘how I buy’, specifically the wallet. If I have cash I spend it, so for years I’ve been the person who carries literally one or two dollars in their wallet at any given time – and because you can’t get much for one or two dollars today - those singles typically remain in my wallet for days or even months without being used. On the other hand, I have one credit card that I succinctly prefer, possibly because of the value tied to it in terms of the points I earn or the support they’ve provided to me since I became a member. Of course, because not everyone accepts it, I have other ‘back-up cards’, but I would conservatively estimate that over 90 percent of my purchases are through my preferred card. Ironically, I write one check a month (for a group I know would be far too confused by electronic checks issued directly from my bank).
So, while credit is definitely part of ‘how I buy’, the physicality of shopping is also relevant to the how – essentially am I buying in-person or remotely and if it’s the latter, is the purchase stemming from a PC, laptop, or mobile device (smartphone or tablet). I mentioned it earlier – I love a deal and I value value! And, I’m not sure if it’s my demographic (hint – Gen X) or me personally, but when I see something in a store – especially if it’s not a ‘need’ item, my first instinct is that I can find it for less online. To me online shopping equates to having a broader choice of retailers and thus to a better deal. Plus, with sites like ebates and others, I have another method of saving online that I don’t have in-store. Call it the thrill of the deal, but I would estimate that over 50 percent of my purchases are made online.
Now, let’s move to the ‘why I buy’. Sometimes, it’s obviously for ‘need’, like trips to Target, BJs and Whole Foods, but more often than not, it’s based on ‘want’ or a special occasion like the holidays. Even when I am on a ‘need’ mission, I’m often tempted to make impulse purchases. Having worked in retail for a bit right outside of college, I understand the impact of end caps, side caps and, most of all, sales/discounts. Even with that insight I am captivated and motivated to buy when I see something interesting and relevant at a good price. Granted, it’s not all of the time, but when an item is presented right, priced to sell and fits my lifestyle, more times than not, I will at least consider a purchase.
Still within the ‘why I buy’ but in the ‘want’ and not ‘need’ category are the key drivers behind regular purchases, and the vast majority are based on value. Percentage off, additional discounts, limited sales from sites like RueLaLa, Gilt and HauteLook, and loyalty rewards are all key drivers for me personally around buying commitment for items I definitely don’t need, but really want. And, while it’s not an astounding amount of money spent annually, these are the definitive drivers – the difference makers between me saying ‘yes’ and passing the item by. Less than one percent of the time, I’ll walk into a store and buy something full price that I don’t absolutely need – in all actuality, it’s more like a fraction of a percent.
Granted, I may – and likely am – in the minority here, but something says to me that I’m more in the majority than I think. After all, there are a slew of new discount aggregators popping up every day online (and in mobile apps) with an incrementally growing number of retailers (large and small) investing in mobile applications, mobile couponing and digitalizing their loyalty offering. For me, the ‘how and why’ I buy is based on value and convenience – those retailers, mobile wallet and mobile commerce applications that deliver that will be the first ones on my list to use and promote to friends and family.