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Factors That Can Influence Consumer Behaviour
Darren GilbertMar 19, 2018 4:45:37 PM8 min read

5 Factors That Can Influence Consumer Behaviour

There is the argument that says consumer behaviour is nothing more than the study of how people make decisions when buying a product. On one level that’s true. However, there is so much more to it. It also refers to the totality of your customer’s decisions, concerning the purchasing, consuming and disposing of goods over time.

That said, to understand your customer is to pose several questions that focus on their behaviour and buying habits. These questions range from ‘What do they purchase?’ and ‘Why do they purchase?’ to ‘When do they purchase?’ and ‘Where do they purchase?’

In knowing the answers to these questions, you’re better placed to offer your customers what they need and want. More importantly, you can provide them with these products when they want them. Of course, it’s important to note that your customers buy for different reasons, some of which aren’t because of your offering.

Fortunately, there are a few factors that you can control. By managing these factors, you can influence your customers to come back to your store.

Your pricing can influence consumer behaviour

The first factor that can influence consumer behaviour is your pricing. Unfortunately, this is one of the more difficult strategies to master. That’s because you need to find the balance between looking after your business’ bottom line while also catering for your customers' needs.

There is also the perception that the price points you choose create.

On the one hand, if your price points are too high, you’ll encourage your customers to shop elsewhere. That’ll also happen if your customers believe that your pricing doesn’t match the quality of the products you have on offer. On the other hand, if you price your products too low, not only do you give away valuable margin but your customers will also question the quality of your products.

What makes it even more of a challenge is that there is no specific formula for calculating your retail price. Instead, you should do a full analysis of customer behaviour, past sales records and your projected expenses. Retail analytics can play a role here.

You’d also need to consider both economic and market conditions to calculate an appropriate price. And don’t forget the breakeven point of your business - the point at which the cost of expense and revenue are equal.

Once you have the above in place, you can set about implementing your chosen pricing strategies. For example, if you want to offer value and reasonable prices, a strategy such as everyday low pricing could work. If you’re a store that stocks general merchandise, you might be better off following a High/Low Pricing strategy.

Just to note, whichever pricing strategy you do choose, you need to ensure it speaks to your retail strategy, its end goals and the image that you want to portray. After all, one of the last things you’d want to do is implement a strategy that fails to deliver any value.

Your product assortment can influence consumer behaviour

When determining which products to range in your stores, there is no doubt that you need to consider your target customers.

That said, you also need to consider how your customers view your stores. By that, we mean you need to look at your specific retail format and then match your product assortment to the expectations of your customers.

For example, a customer who walks into a convenience store might expect to find Cereal, which they’ll also see in your standard hypermarket. But they’ll know that because they’ve walked into a convenience store, the range won’t be as extensive. Thus, unless your goal for the category is to be the store of choice, and you’ve advertised yourself as such, you won’t necessarily push them away.


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However, the same can’t be said if you are a hypermarket and your goal for the category is to become a Destination Store.

Of course, there is more at stake here than choosing the correct role for your categories. If you don’t range the right products, you stand a good chance of sitting at the end of each month (or week depending on your supply chain) with products that you can’t sell.

Also known as obsolete inventory or dead stock, it’s difficult to manage once it happens. There is also the fact that not having proper control of your stock can influence your customer's decision on whether or not to shop in your stores.

Thus, when creating your assortments, it’s also a good idea to do a store clustering exercise. There are two distinct ways of clustering your stores - store-based vs category-based - and which you choose depends largely on your retail strategy.

Your product placement can influence consumer behaviour

While the price of your products as well as your range can influence customer behaviour, you also need to consider how you present them.

In short, how do you plan on merchandising your products? The reason why it’s so critical should be apparent: The way you choose to present your products can either please or frustrate your customers.

For example, when you merchandise your products correctly, it means they are not only easy to access but easy to see. More than that, you create stores that are aesthetically pleasing to a point where shoppers spend more time in them than they had initially expected.

On the other hand, by not merchandising correctly, your products are hard to find. They’re either in the wrong place on the shelf, out of reach or even out of stock. Since your customers are all pressed for time, you want to ensure that their shopping experience is as comfortable as possible.

They’ll most likely know what they want when they walk into your store, and if you can’t make their shopping as easy as possible, you’ll soon lose them to your competition.

Just a note of warning: when choosing your merchandising technique, you need to ensure it matches the category (and products). You can read this piece about the four different techniques where we unpack them all and explain the advantages and disadvantages of each.

There is also the point that in doing this correctly, you’ll have the right products in the right place in the right quantities and at the right time for your customer.

Your store location can entice customers to visit

As we noted in a previous piece, picking the right store location isn’t only about finding a place with the most foot traffic. That’s because foot traffic doesn’t automatically amount to customers.

Instead, you need to choose a location that is accessible to your target market. For example, if your target market is a lower Living Standard Measure (LSM), you would want to find out where they live, work and shop and then place a store in an area that they can reach without fuss. You’d also have to consider their restrictions as well such as the fact that they might need to use public transport to get to your store.

If you do understand your target market inside out, you’ll know where to position yourself. More importantly, you’ll know which products to offer them. That’s because the location of your store plays a big part in helping you to choose your product assortment.

Let us explain.

Let’s say you have two different stores, and each is in a different part of a city. Better yet, one is in town, and the other is in a farming area. You wouldn’t range the same type of products in both stores since each caters to a different consumer. Instead, you’d look at the past retail data to see what sells in each store and then plan your assortment accordingly.

On the other hand, when choosing a location, you also need to look at your competitors. For example, if you place your store in an area saturated with similar stores - your competition - the chances of thriving and profiting are slim.

Your store promotions can influence shoppers to buy

Store promotions are an excellent opportunity to entice shoppers in, and when used effectively, can keep your customers in your stores for longer. More than that, they can attract new customers, who wouldn’t have thought of coming in, and spike excitement. A display with high visual impact can work wonders here.

That said, it’s not merely the fact that you should run promotions, as much as you should think about where you place them. After all, if you want them to work, they need to be seen by your shoppers. Window displays can entice your customers in while gondola ends and dump bins can draw them through your stores.

It’s also worth creating various hotspots throughout your stores. Just a note of warning here: spread your hotspots out evenly across your store so that you don’t suffer from floor congestion.


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Of course, the promotions that you do decide to run depend on your budget, the message you want to communicate, seasonality, your target market, and the actual product. This includes making decisions yourself around the timing and frequency of the promotion and analysing its effectiveness.

Also, since promotions are appealing because they promise the possibility of saving money, you need to keep tabs on your competitors. The last thing you’d want is to find out that your chief competitor offers the same bundle of products at a lower rate.


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Darren Gilbert

Darren Gilbert joined in 2017 and is the content manager. He has a Bachelor of Arts in International Studies from the University of Stellenbosch.