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06.21.2002

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The Emotional Baggage That Is Price - Part Two

NOTES FROM THE FRONT LINE: Current Threads on Consumer Price Behavior

In last week's article, Emotional Baggage that is Price, I noted the significant disconnect between consumer behavior and sentiment with regard to price. The short story is that even though most of us swear we're preoccupied with getting the best price whenever possible, our behavior generally indicates otherwise. Despite our best efforts, we're all imperfect irrational creatures, at least in the marketplace. Surprisingly, though, it's just been in the past few years that analysts, researchers and others have begun to re-direct attention away from consumer sentiment and opinion and focus more closely at precisely how people behave in real world settings.

We at The Hartman Group have been studying the contextual basis of consumer shopping habits for several years now. To summarize most generally, it appears there are differing contexts or settings to consumer shopping experiences, contexts that appear to have an effect on one's purchase decision above and beyond any internal calculus with regard to price and quantity.

In one very particular context we find consumers engaged in so-called "weekly" shopping trips. In a style best characterized as "efficiency" shopping, attention is largely directed toward minimizing price while maximizing quantity, with often little regard for impulse or whim. Perhaps most important, consumers suggest these trips are less frequent, less spontaneous and more likely the result of careful planning. Think of this as the bi-monthly trip to Costco.

In an alternate context, what we refer to as "spontaneous" shopping, we find less regard to the ideological principles of thrift and an increased desire for outright and immediate pleasure, often at considerable price elasticity. In many instances, consumers rely on words such as "treat" or "comfort" to explain their selections. These shopping trips occur more frequently and often with little forethought. A grossly stereotyped example here would be the overworked professional who stops by his/her neighborhood specialty grocer after work and ends up with a nice, though not necessarily inexpensive, bottle of wine in his/her basket.

While the above dichotomy is admittedly generalized, the important thing to note here is that consumers rely on significantly different methods of internal calculation depending upon the context of their shopping excursions. In short, some (or perhaps most) of the consumers' behavior with regard to price has less to do with individual consumer beliefs, attitude or values than it does the setting within which the consumer resides.

This is but merely one small example that begins to help us address the long-standing gap between consumer sentiment and consumer behavior with regard to price.

Click here for Part One of The Emotional Baggage that Is Price

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