Michaelís Consumer Column
I began studying consumer behavior about 25 years ago. I quickly learned that the best way to understand how people really use products and what they really think about them is to get involved in an activity together. I've waxed side tables with consumers in their living rooms, applied lotion to their hands at cosmetics counters, and eaten their favorite soups and stews with them in their kitchens—talking with them and listening to them all the time.
By listening to consumers talk about what they buy and why they buy it, I've learned that people always have a rationale for every purchase they make. Even for small items, like a burger or a tube of toothpaste, their buying decisions are premeditated and creatively conceived. For big-ticket purchases, like a fridge or a car, people don't buy until they have a comprehensive understanding of the technical and functional benefits of several different models.
Today's consumers are smart, well-educated, discerning, and focused—and they have an incredible range of products and services to choose from. Commodity goods, including clothes and food and household products, are available at very low prices and are of much better quality than even a few years ago. There is also an amazing array of premium goods in every category, from cars to personal-care products to wine.
As a result, most consumers—especially those with average incomes—are constantly making careful choices and complex tradeoffs when it comes to how to spend their money. They often trade down, buying the quality they need at the lowest price they can find. Occasionally they trade up, splurging on certain things that have a lot of meaning and value for them. Now and again they'll settle for something in the middle.
These consumer behaviors have created whole new patterns of spending and saving. People save a little in one category so they can spend a little more in another. They make an important purchase and opt out of purchases in several other categories to pay for it.
Consuming has become a treasure hunt.
Each Monday morning for the next few weeks, I'll be talking in this space about a different aspect of the treasure hunt phenomenon—and how it affects consumers, the goods they buy, and the companies that make them.
I hope you'll join me!