3 - The New Path to Purchase

A few decades ago, the common model for consumer goods companies was ART - awareness, trial, and repeat. That is, marketing would be done to get the customer to "try" a product and, if they found it satisfactory in one instance, would be willing to "try" it again. This has the benefit of avoiding the arrogance and neglect of taking for granted that a one-time customer will become a regular automatically - but it swings too far in the opposite direction, treating customers as I they are strangers every time you meet.

Over time, marketers departed from this model to better understand the process that consumers use, deliberately or intuitively, in selecting and purchasing products. Most significantly, the processes of shopping, buying, and consuming were recognized to be two different things, with the shopping being of the greatest concern because it leads to the decision of what product and brand to purchase, whereas buying and consumption are in the aftermath of the decision.

(EN: I can think of an exception: rather a brilliant practice by a local grocery store is to give away a store-brand product when you buy a national brand. This causes the customer to revisit the choice of which to consume at the moment of consumption, when it can be made in a more leisurely manner, and in any case gets their product into the customer's home for evaluation in that environment.)

When register systems became computerized, retailers began collecting the data they needed to make more timely and better informed decisions. Specifically, they were better able to understand consumption patterns for products, and consumption patterns of customers, setting a stage for a new and more informed approach to marketing.

When retail went online, it was able to track every interaction a customer had in the purchasing process, and this gave rise to the "funnel" paradigm of purchasing behavior - which further separated the actions undertaken in the shopping process from those in the buying process. This technique was applied to other channels as well, as the path-to-purchase model that tracks the behavior of the shopper in greater detail than before.

The New Age of Shopper Marketing

The author suggests that technology is revealing some problems with the funnel model.

Primarily, the funnel model is linear - it assumes that shoppers go through a predefined sequence of steps in a logical and methodical order, on a straight-line path to making a purchase. Especially in the online channel, we see that the linear channel does not work: shoppers get information from a range of sources, not just a vendor website, and their reason to choose one option and reject others may have nothing to do with their use of the vendor site. They jump into the middle, skip about in an unpredictable manner, and bypass the intended "path" to suit their own convenience.

Shipping behavior is accommodated by an array of technologies, such as third-party price comparison services. In the physical world, comparing prices among several merchants would require a great deal of time and effort. Online, it can be done in minutes, and there are applications that enable it to be done in seconds. It can even be done using a mobile device while visiting a physical store.

The real-world behavior of shoppers defies the attempt to schematize them into a simple linear model - such that decisions made by that model may be entirely ineffective and possibly inappropriate to use as a basis of decision-making.

It's suggested that shopper "currencies" can be more useful to marketing, enabling firms to track what is actually done, and provide incentives to guide it toward the register, rather than presuming there to be a fixed process.

Moments of Truth and "Store Back"

The author refers to the P&G concept of the "moment of truth" when the shopper in the store was deciding whether to pick up an item and put it in her basket. This fails to consider the decision was likely made before the shopper entered the store - and there are only a few instances in which a customer will revisit their decision during the purchasing process (e.g., the desired brand is out of stock and the buyer still wants the product).

In practice, this meant that marketers used a "matching luggage" approach, in which media campaigns attempted to be consistent with in-store promotion - and marketing began from the store back, carrying the tactics that were effective in influencing a decision that most buyers don't make to the majority of potential buyers who had yet to make the decision.

As online shopping grew and patterns of actual consumer behavior became evident, it was noticed that shoppers search for deals and product information prior to visiting a store or site, and recognized that the "moment of truth" happened much earlier.

As an aside P&G considers two significant moments - the moment that the customer adds the item to their cart, as described above, and the moment of consumption in which the consumer evaluates whether the product satisfies the needs for which it is purchased, which is assumed to be the primary factor in a repurchase decision.

Google's analysis of shopping behavior proclaims a "zero moment of truth" and demonstrates that 83% of shoppers know what product or brand they intend to purchase before entering the store, and 76% compile a shopping list that guides them during their store visit. This behavior became exaggerated, focused largely on price, during the recent economic downturn. The "preshopping" information gathering is so entrenched that it is, in fact, a shopping behavior.

The author speaks of a neighbor, whose grocery shopping behavior was routine visits (four or five a week), and she was frustrated by the amount she was spending. Since the recession, she began doing more research before going to the store, using the Internet to read reviews, find deals, print coupons, and plan means for a week - and reduced the trips she makes to the market to one or two a week. The net result is that she saves $200 to $250 per week, and states her intent to follow in this patter.

The Path to Purchase Ends at Advocacy

Traditional approaches to marketing begin with identifying prospects and end with the completion of a sale. While this culminates in the firm's objective, it is inefficient in that the process must start completely over the next time, ignoring the lingering effects (positive or negative) of the previous cycle.

Largely, this was an effect of the inability in brick-and-mortar channels to identify individual customers and recognize the difference between a first-time or one-time customer and a regular, loyal customer. This, too, was challenged by the digital channel in which it was relatively simple to identify an individual over a series of purchases.

This results in the appreciation (as in "ability to perceive") of a circular cycle that flows from awareness, consideration, selection, purchase, and advocacy. The more the brand succeeded in satisfying expectations, the more likely the shopper would take a shortcut, eliminating all but the last two steps.

(EN: My sense is that the "wheel" approach mischaracterizes advocacy, which is important to pursue, but should be wholly separate from the purchasing cycle. A buyer does not necessarily advocate at all; if they do advocate, it is not only after a purchase; and some people advocate without buying - consider the number of people who advocate for luxury brands they have never owned, or critics who publicly promote brands after an artificial consideration-selection process.)

The author suggests that, even though this is now recognized, advocacy and loyalty are still largely treated as "afterthoughts bolded onto a marketing program" rather than adequately considered and fully built into the marketing strategy of a firm. This neglects the encouragement of shopper behaviors that have genuine financial value for the firm and can have a direct impact on future revenue streams.

A Purchase Model for the Shopper Economy

There are a number of purchase-cycle models in existence, and the author recognized the need to include one as a basis for discussion - and so has synthesized and modified a few different ideas to develop her own "wheel" diagram.

  1. Awareness. This is the conventional starting point for a shopper who has not purchased a brand. It's undeniable that a person cannot purchase something they are unaware of, but it is also possible for awareness to occur an instant before purchase. (EN: it may also be utterly absent: when a diner orders coffee in a restaurant, he may be entirely unaware of what brand he is consuming.)
  2. Consideration. Consideration occurs when the shopper is aware of multiple brands that have the potential to fill a need. The group of brands of which the shopper is aware is the "consideration set." Sometimes, the shopper relies on previous experience, in other instances the shopper proactively does research to collect options to consider.
  3. Evaluation. Evaluation is a process applied to the available options identified in the consideration phase. It can be very shallow, made in an instant, or very deep, by a deliberate process of considering criteria, gathering information, and scoring alternatives.
  4. Navigation. The author considers navigation to be a separate step, performed when the shopper has identified the product they wish to purchase, but not the retailer or channel through which they will purchase it. A "store-loyal" customer may perform this step before consideration and evaluation, preferring to buy from a merchant and select among that merchant's offerings.
  5. Selection. Given that customers do research in advance and arrive with a shopping list. "selection" is the mere physical act of gathering items for purchase, reflecting the decision that was already made. Unless there is a problem or ambiguity, there is not much mental engagement in this process, and it represents buying rather than shopping behavior.
  6. Purchasing. This, likewise, is a largely automatic process of engaging in the financial transaction. Virtually no shopping decisions are made at the register, unless the buyer recognizes and corrects a mistake or gets an unpleasant surprise.
  7. Consumption. Consumption is generally taken to involve the use of the product - but it also includes related steps such as gifting, storage, and disposal. What's important to the marketer is whether the consumption of the product satisfied the need that motivated the purchase - but that needs a bit of refinement in two regards: First, it is not the evaluation itself, but the memories that result from consumption that are critical, which may be a subset of the experience and may even be confabulatory. Second, that ancillary factors are not consequential: the fact that a frozen pizza was awkward to store in the freezer may trump the memory of its taste, or the fact that the consumer loved the scent of a shampoo may be superseded by the fact that her husband hated it.
  8. Advocacy. This phase represents the "final step on the new path to purchase," in which a customer speaks positively about their experience with a brand to others, placing it in their consideration sets and encouraging them to purchase. This can be a verbal remark, a review posted online, or even sharing a coupon.

The author acknowledges that her model, like any other, likely oversimplifies the process - that real-world behavior is a great deal more organic, skipping steps or performing them out of order, but for academic reasons it's useful to employ a simple and linear model.

Interview With Ken Barnett, CEO, Mars Advertising

The author presents a few QA exchanges with the CEO of Mars Advertising, an agency devoted to consumer packaged goods marketing. (EN: which is a bit random and unstructured, so I'm cutting out some bullet points rather than annotating the interview)