••• covid-19
Pandemic shifts purchase drivers from health to happiness
Data from a tracking study conducted by Chicago research firm InsightsNow shows that consumer purchase motivators shifted to satisfy psychological mood lifters and sensorial cravings as the coronavirus pandemic continued. While functional health and safety were found to be important during early stages of the pandemic, those motivators decreased in importance as consumers reported seeking out experiences to change their mood. For example, at the end of June 2020, the study showed 61% of increased consumer product purchases were driven by a desire to lift mood or to satisfy craving for specific sensory experiences, up from 6% in March 2020. Functional health and safety motivators dropped to 54% of increased purchases in late June, down from 84% in March 2020. Social motivators associated with providing healthy alternatives for family members or to respond to recommendations from friends also increased to 44% at the end of June from 24% in March 2020.
Study participants are from the firm’s Clean Label Enthusiasts (CLE) consumer research community, with research techniques using proprietary behavioral research frameworks. “Just like the stages of grief, we are now finding consumer behavior to follow predictable stages in motivations,” says InsightsNow Chief Research Officer Greg Stucky. “Our COVID-19 tracker has discovered a range of opportunities for CPG companies to launch line extensions and to reposition existing products to align with what consumers are seeking.”
••• e-commerce research
Are daily-deal sites a win for merchants?
A study of the bargaining process between daily-deal platforms Groupon and LivingSocial and merchants found that while merchants may have less leverage and sacrifice certain net profits for the short term when selling their goods or services on the larger platforms, they can win in the long run by adding new customers and creating the opportunity for future sales to a larger customer base.
The research study, Price Bargaining and Competition in Online Platforms: An Empirical Analysis of the Daily Deal Market, was published in the July edition of the INFORMS journal Marketing Science.
Researchers Lingling Zhang and Doug J. Chung found that, while smaller platforms cannot offer access to a consumer market as well as larger platforms, they are willing to leave more room for merchants on profit-splitting. So, the long-term results of working with smaller platforms can be better for some merchants.
“We compared Groupon, the larger online platform, to LivingSocial, the smaller one, and found that LivingSocial can compensate for its smaller size by offering higher share of profit to merchants,” says Zhang. “For some merchants, the trade-off works in a way that choosing the smaller daily-deal platform can be an effective way to maximize profits.”