Mobile shopping apps, rewards programs, and digital marketing tactics can all be used to close the gap in these spaces. They can guide consumers to products, make them more appealing for purchase and help them stand out among competitors in the shopping aisle. By leveraging these tools to direct consumers, brands can close sales and increase their market share.
How Digital Marketing Impacts the Factors Influencing Consumer Decision Making
Factors within traditional marketing that influence consumer decision making have not changed very much, but the way brands leverage them has—thanks to advancements in digital technology. In the past, brands would rely on celebrity endorsements, new and improved product formulas, premium shelf space, and steep discounts to drive sales. However, these all have drawbacks as they often fail to offer a reasonable ROI based on their overall expense.
Digital spaces help brands enhance all parts of their marketing mix through more cost-effective strategies. Traditional discounts are offset by rewards. Everyday shopper recommendations on social media provide word-of-mouth marketing that outperforms celebrity endorsements. Mobile apps can direct consumers to products in the aisle and brands can differentiate their products not by changing them, but by marketing them in a new way. Here are four ways that brands can use technology to leverage the factors influencing consumer decision making.
#1: Reduce Reliance on Discount-Based Pricing With Rewards
While price will likely always be a vital factor that drives purchase decisions, it’s not the only component consumers take into consideration. Quality, sustainability, and convenience are also crucial motivators that encourage consumers to buy. Aside from that, steep discounts actually have some opposite effects when it comes to improving sales. Some to consider include:
Competing with white-label or private-label brands is often a challenge for most large, household name CPG companies looking for long-term, sustainable results. Brand-name companies typically have higher overhead costs, meaning it’s not as easy to offer cut-rates on products and maintain profitability.
Reduced perceived quality:
There is a direct correlation between price and quality perception. Typically, the lower the price, the lower consumers view the quality of a product. Often, quality is a deciding factor for consumers choosing CPG brands, so using steep discounts could actually deter them from buying.
Discounts may be good for gaining one-time users, but they’re not typically strong for creating ongoing customer relationships. Discount-driven consumers will usually switch to a cheaper product as soon as the price goes back to normal.
#2: Direct Consumers to the Right Place With Mobile Apps
Approximately 96% of consumers who visit a mass merchandiser or grocery store make at least one CPG purchase. This makes shelf space and visibility absolutely imperative in gaining sales. However, premium shelf space is finite and can be expensive when dealing with retailers who use “slotting fee” systems where brands must pay for their space in the store. An alternative to paying those high fees or fighting for space is to use mobile shopping apps to direct consumers to products.
Gamifies the consumer experience:
Gamification, or turning an everyday exercise into a game, engages consumers during their shopping journey and encourages them to participate. In Shopkick’s case, the app works like a digital scavenger hunt. This makes the experience fun and keeps user retention high.
Rewards them for participating:
Rewards need to tread a thin line between offering affordability for the brand while providing enough of an incentive that the consumer believes the app is worth it. If consumers feel it is too hard to obtain these rewards, they’ll likely stop using the app.
Engages them with pre-trip ads:
While most purchase decisions are made in the shopping aisle, brands must still prime consumers for sale before they reach the store to gain the best results. Using an app that allows them to view digital content like mobile video can ensure the brand is top-of-mind both before and during the consumer’s shopping trip.
#3: Carefully Cultivate Influencers to Promote Products
In the age of social media, brands are now turning to influencers to help endorse their products. These individuals have massive online followings, which many brands leverage to drive sales of their products. The assumption is that the right product recommendation from an influencer can garner hundreds of thousands of sales. In some cases, if the relationship is carefully cultivated, this is true. In others, the ROI fails to meet expectations as there wasn’t enough leg work done in selecting the influencer.
Follower count vs. comments:
Often, if an influencer is buying followers, their comment count won’t correlate to their overall follower count. If they have a million likes but only one or two comments, it’s a likely sign that their numbers are inflated. Even if the numbers are genuine, the lack of comments indicates a lack of engagement that will result in poor sales.
Brands should do a thorough review of the influencer’s content not just to see if they’ll represent the brand well, but if there will be conflicts. For example, if the influencer has been touting the benefits of Brand A since they started their channel on YouTube, viewers will likely be suspicious when they suddenly switch camps and start endorsing Brand B. It’s best to find influencers that are already actually using branded products, or ones without existing preferences.
There’s a certain lifecycle to consider in gaining the right influencers as their popularity window is shorter than that of a mainstream celebrity like a movie star or professional athlete. Ideally, brands want to connect with someone before their fame reaches their peak to get the best endorsement deal and benefit as the individual’s clout in the market grows.
#4: Differentiate Products With Digital Value-Adds
CPG brands are challenged by the ability to differentiate their product in a crowded marketplace. About 30,000 new consumer products are launched every year and the vast majority fail to gain a following. Standing out in this marketplace isn’t a matter of creating an entirely new product. Instead, it’s about finding methods to offer old products in new ways. This is a strategy that many challenger brands have leveraged with great success.