Decoding Retail Buyers: Insights Into Customer Psychology

Feb 25

Author: Rachel Morgan
February 25, 2024

If you want to improve your sales, it starts with a focus on your customer experience and consumer psychology.

Why? In a study conducted both by Deloitte and American Express, they found that customers are likely to spend 140% more after a positive experience than customers who report a negative experience (Deloitte). Moreover, a staggering 70% of Americans will spend more money to do business with a company that offers great service (American Express).

These statistics underscore the immense value and importance of understanding your customers and delivering exceptional experiences.

NAILING THE CUSTOMER EXPERIENCE

So, how do we nail the customer experience? It begins with a deep understanding of your customers, their needs, and their thought process. Analyzing customer behavior involves diving into sales psychology to discern patterns to illuminate each customer’s journey through your doors. After all, the goal is to do more of what customers love and less of what they don’t.

The challenge with sales lies in recognizing that no two customers are the same. This necessitates an approach that is as diverse as the customers who walk through your doors.

Diving into the realm of sales psychology opens doors (no pun intended) to understanding the intricacies of customer behavior. Sales psychology delves into the study of customers and the myriad of factors influencing why, how, and how much they spend. It’s a powerful tool for retailers and salespeople, offering insights that elevate sales, cultivate loyalty, and enhance the overall shopping experience for everyone involved.

THE ESSENCE OF SALES PSYCHOLOGY

Sales psychology is rooted in deciphering the motivations behind consumer behavior and decisions. It enables retailers to comprehend what their customers enjoy, love, and seek in a shopping experience, both in-store and online. An intriguing aspect of sales psychology is its examination of the customer experience through verbal and non-verbal communication, providing a deeper understanding of effective communication strategies. This, in turn, aids in creating a more meaningful connection.

Breaking it down, sales psychology helps answer critical questions about consumer behavior:

How and why shoppers choose a specific brand
What emotions customers experience when entering a store
What motivates consumers to purchase
What factors and behaviors influence purchasing decisions
How to create a meaningful connections

Knowing the answers to these questions enhances the ability to connect and communicate effectively with prospects and customers, resulting in a more positive interaction and a better shopping experience.

UNRAVELING CONSUMER BEHAVIOR & TAILORING APPROACHES

Recognizing that consumer behavior is influenced not only by age, but also by life experiences, cultural backgrounds, access to technology, and generational characteristics, is essential. This complexity makes understanding consumer behavior both interesting and fascinating, significantly influencing sales approaches and communication strategies.

In my early days in the fine jewelry industry, I initially believed that mastering a set of magical words would be sufficient enough to approach customers successfully. However, I soon realized that each customer responded differently, even if I approach every single on the same way. Some were open and interactive, while others were more reserved and closed-off. This revelation led me to understand the importance of adapting my approach to each individual. People are nuanced and it was essential to avoid a “one size fits all” mentality.

It’s crucial to overcome the inclination to approach customers the way we prefer to be approached. Being a millennial myself, doesn’t mean that every customer desires interaction tailored to my own, millennial preferences. Adaptation and a genuine desire to assist customers is key.

Let’s explore what it looks like to work with and approach each generation. Please keep in mind that these are simply patterns and do not reflect everyone. There can be will be differences.

GEN Z (1997-2012)

As Gen Z enters their teenage and early adulthood years, mostly failing between 12 and 27 years old as of 2024, their shopping behavior is distinct. This generation tends to not be a very talkative shopper and might not immediately engage with you.

Being impressionable, they are much more likely to be drawn towards what’s popular and trending. This is important to note when showing and discussing products and services! Using verbiage that says “this was recently featured on X” can be enough to pique interest. So make sure to stay up to date on what’s relevant!

Gen Z often favors self-expression through style and wardrobe. Approaching them with genuine compliments about their style can be effective to getting them to open up, connect with you, and feel comfortable.

This might sound like, “I love how you did your hair! Did you do it yourself?”

However, I must caution - only compliment if it’s genuine and sincere. Everyone knows when it’s not.

Some other key things to note is that Gen Z values social causes, sustainability, and individualism. You’ll want to be well-prepared with knowledge of popular online trends, influencers your company may use or relate to, and how your products are sustainable so that you can easily speak to this. This can and will also help you be strategic in how you display products and services throughout your store and what’s important to discuss.

Gen Z also prefers direct shopping from brands and will often shop e-commerce (i.e. website) and social commerce (i.e. Tiktok, Instagram, etc) when making a purchase. To understand what this means, you may notice that they often start their shopping journey online, will reference something they’ve seen, have screenshots, utilize in-store pickups, and expect more instant gratification during their shopping experience.

MILLENNIAL (1981-1996)

As of 2024, Millennials, aged between 28 and 43, are starting to advance in their careers, start families, and becoming home owners.

As a generation, millennials embrace e-commerce like Gen Z for it’s convenience and will often shop and research online first. They tend to prioritize customer service, experiences, and emotional connection when they decide to buy.

When interacting with millennials, delivering an excellent customer experience and building an emotional connection is crucial. This may sound like, “How is your day going?” or “what fun things have you been up to today?” This allows them to share their experiences with you, which will excite them.

Millennials rely on social circles for product recommendations and will consider customer reviews when purchasing. As a salesperson, you can enhance their shopping experience by involving their friends or asking a coworker for feedback while they’re shopping and deciding. It can be as simple as asking, “What do you think?” and waiting to hear what they have to say.

Lastly, millennials are open to trying new products. So don’t be afraid to recommend something you feel may better meet their needs! In fact, this may increase their perception of the interaction in their eyes when you can guide them to a better product or service.

Although, I caution that you only show products you believe will actually meet their needs! Showing for the sake of showing isn’t an effective sales technique. You’ll lose their interest.

GEN X (1965-1980)

Gen X, aged between 44 and 59 in 2024, is mostly comprised of parents who value transparency, product quality, and practicality.

They tend to be less swayed by current trends and seek products that meet their needs with straightforwardness. So make sure to be direct in how something meets their needs. And keep in mind - what meets their needs may not necessarily be “what’s in” online, so make sure to ask lots of questions to find the best solution. Leading with a statement such as, “this is really popular online or on social right now” may not resonate with them as much as it would with a Gen Z shopper.

This generation tends to shop more in-store versus online and is still influenced by traditional advertising, especially TV ads. They may also start their research process in-store versus online.

Gen X is highly motivated by customer experience and customer service and will not return to shop at a business if they are left disappointed. Just like Millennials, a great approach with Gen X is to ask them how their day is going and what they’ve found on their shopping trip.

BABY BOOMERS (1946-1964)

Baby Boomers, aged between 60 and 78 in 2024, prefer to shop in-store, valuing face-to-face interactions and human experience. As a shopper, they prioritize product quality, customer service, and loyalty. Not easily influenced by social media, they appreciate tried-and-true products and tend to stick with familiar choices.

As a salesperson, this is important to note when showing products and services. This generation may be less receptive to seeing “what’s new” because they’re more inclined to stick to something they know works and has has worked for them in the past. Therefore, you want to focus on demonstrating how new products and services align with their familiar choices.

Baby Boomers respond positively to questions about daily deals and are often influenced by saving opportunities and getting the best “bang for their buck.”

When approaching this generation, I recommend leading with an observation about what bags they have and asking if they’ve seen any good deals that day. When presenting and showing products and services, let them know about any savings or opportunities to save. It may just motivate them to say yes!

Building a positive experience and acknowledging their loyalty can turn them into brand advocates and repeat buyers.

LET’S CREATE LASTING IMPRESSIONS

In the ever-evolving landscape of retail, incorporating sales psychology into your sales approach not only boosts sales but also creates lasting connections with customers across diverse generations. The art of sales lies in the ability to understand, adapt, and connect with customers on a profound level. By leveraging sales psychology, retailers and salespeople can navigate the nuances of consumer behavior, ensuring each customer feels seen, valued, and heard. The results end up not just being a transaction, but a meaningful and lasting relationship that transcends generations and long-term customers.

ABOUT THE AUTHOR

With more than 13 years of experience in luxury retail, Rachel now helps luxury retailers with their customer service, training sales teams, and improving sales performance using consultative selling techniques. She currently serves the Greater Seattle area.