Consumer Behaviour Megatrends for Postmodern Consumers
Sustainability and digitalization
The global risk landscape is defined as an uncertain event or condition that can cause significant negative impact for different countries or industries within the next 10 years. 750 experts and decision-makers in the World Economic Forum’s multistakeholder communities responded to this year’s Global Risk Perception Survey. Respondents arrive from different business academia, civil society, and the public sector and deal with different areas of expertise, geographies, and age groups.
There is the necessity to reach sustainable development: it is a development that meets the needs (physiological, safety needs, love and belonging, esteem, self-actualization) of the present without compromising the ability of future generations to meet their own needs. Sustainable development has three main pillars: economic sustainability, social sustainability, and environmental sustainability.
Human activities are probably responsible for critical changes in the natural environment. In modern times, awareness emerged in relation to demographic dynamics. The earlier sustainable development concept focuses on the equilibrium between the use of resources, carrying capacity of the environment, and social expectations and needs. Many actors are involved in achieving sustainability, such as policymakers, businesses, consumers and citizens, investors, etc.
Corporate social responsibility (CSR) is based on normative and ethical premises, postulating the responsibility of directors and managers for the social and environmental consequences of their decisions. Stakeholder theory, agency theory, and legitimacy theory provide organizational rationale for CSR, from ethical to strategic perspectives.
- Stakeholder theory: Stakeholders are those groups without whose support the organization would not exist. Stakeholders pressure the company on economic, social, and environmental performance, similarly to the shareholders' pressures about financial performances.
- Agency theory: The agents, directors, and managers, behave in their own interest. This includes the elimination of legal risks due to environmental and social damages following their decisions and to which the shareholders are not subject.
- Legitimacy theory: Businesses are bound to social trust and social acceptance, meaning legitimacy. Legitimacy is related to coherence between acknowledged values and actual behaviors. The spread of socio-environmental values puts directors and managers in front of a new source of legitimacy, in contrast with the traditional profit-oriented source of legitimacy.
At the institutional level, there are different initiatives aimed to hinder the impacts of human activities on the environment, ensuring a path that is socially, economically, and environmentally sustainable.
- At the global level: Agenda 2030 (UN sustainable development goals).
- At the communitarian level: EU 20-20-20; EU Green Deal; Next Gen EU.
- At the national level: PNRR.
Public authorities at local, national, and international levels set directives and regulations according to a top-down approach. The 2030 Agenda is the new global sustainable development agenda. At the core of the 2030 Agenda is a list of 17 SDGs and 169 related targets to end poverty, protect the planet, and ensure prosperity and peace. The Agenda also calls for a revitalized global partnership to ensure its implementation.
The Covid-19 pandemic came at a time when the need to adapt the current economic model towards greater environmental and social sustainability was already evident and shared. In December 2019, the President of the European Commission, Ursula von der Leyen, presented the European Green Deal, which aims to make Europe the first continent with zero climate impact by 2050.
The pandemic and the ensuing economic crisis have prompted the EU to formulate a coordinated response at both the cyclical level, with the suspension of the Stability Pact and substantial economic support packages adopted by individual Member States, particularly with the launch in July 2020 of the Next Generation EU (NGEU) programme. The NGEU marks an epochal change for the EU. The amount of resources deployed to boost growth, investment, and reform amounts to EUR 750 billion, of which more than half, EUR 390 billion, is made up of grants.
Three megatrends characterize today's world
- Postmodern consumer
- Digitalization
- Sustainability
What is a digital platform? In business enterprise terms, a digital platform can be thought of as the total sum of a place for exchanges of information, goods, or services to occur between producers and consumers, as well as the community that interacts with said platform. Without the community, the digital platform has very little inherent value.
Digital marketing is a family of marketing techniques (both for products and services) using digital technologies (www, mobile phones, any digital medium). The term social media marketing (SMM) refers to the use of social media and social networks to market a company's products and services. Social media marketing provides companies with a way to engage with existing customers and reach new ones.
Frameworks and methods
Social psychology perspective
Who are the sustainable consumers? Ethical consumerism derives from green consumerism but is different as it covers a broader range of issues and a more complex decision-making process. It extends the definition of green consumerism with a focus on the people perspective, including wider ethical issues that go from labor standards to fair trade. Consumers' behavior, intentions, and habits are affected by different factors regarding the individual sphere, the rational sphere, and the contextual sphere.
There are some theories dedicated to consumers’ actions and behaviors:
- Theory of reasoned action (Ajzen & Fishbein, 1975, 1980)
- Theory of planned behavior (Ajzen, 1991): Habits can be integrated into the TPB framework, though with a marginal role.
- Norm-activation-model (Schwartz, 1977): Personal norms are feelings of moral obligation to perform and act, or avoid doing so. Two variables activate personal norms: awareness of consequences and ascription of responsibility.
- Value-belief-norm theory (Stern et al., 1999): Values are concerned with desirable end states that transcend specific situations, guiding the selection and evaluation of behaviors.
Habits
Habits are represented as links between a goal and actions that are instrumental in attaining this goal. Habits represent a form of goal-directed behavior. The strength of such a link is dependent on the frequent co-activation of the goal and the relevant action in the past. Habits can be seen also as repeated behaviors that have become automatic responses in recurrent and stable contexts.
The Attitude-Behaviour-Context (ABC) model (Guagnano et al., 1995; Stern, 2000) is based on the dichotomy between attitudinal and contextual factors, which will lead to a weaker attitude-behavior link. The four variables contained in the ABC model are attitudinal factors (for example values, norms, etc.), contextual forces such as incentives, external influences, etc., personal capabilities, and habits. The relative relevance of each variable in guiding responsible behaviors can vary: for instance, travel mode choice is influenced more by policies and habits, while purchasing is mainly influenced by factors such as knowledge or skills.
Also, the Comprehensive Action Determination Model (CADM) (Klöckner & Blöbaum, 2010) supports the integration of different approaches since sustainable behavior can be influenced by intentional, habitual, and situational sources. According to CADM, intentional and habitual determinants can be in turn influenced by normative processes such as social norms.
The Habit Discontinuity Hypothesis (Verplanken et al., 2008) states that behavior changes, so interventions may thus be more effective when they happen in the context of major habit disruptions, such as those related to life course changes. In this scenario, individuals are more willing to search for further information about alternative courses of action and are more open to change. When these discontinuities take place, individuals are somehow motivated to reconsider the way they do things and willing to look for information about alternative opportunities. It is when these windows of opportunity open that agents interested in framing new behavioral patterns should deploy interventions.
Many external factors can influence our behaviors. Let’s consider incentives:
- A supermarket is selling both traditional products and ecological products. Two main strategies can be used to push green products: monetary inducements and non-monetary incentives (praise rewards).
- Monetary inducements: For instance, green products can be sold for a limited period of time with a 20% discount to be more appealing to consumers, or they can be sold adopting the typical “pay 2, get 3” scheme.
- Non-monetary incentives (praise rewards): Such as awareness and praise-based messages in and out of store; for instance, messages focusing on the benefits (both for the self and for the environment) of green products, like the healthiness of organic products or the contribution to the environmental cause.
According to Self Determination Theory (Deci & Ryan, 1985, 1991), intentions represent the closest antecedent of behaviors: people are motivated as long as they intend to do something, to perform a specific activity, to choose a given behavior. Motivated behaviors are thus actions that are mediated by intentions. Motivation can be in turn labeled as intrinsic or extrinsic, according to the different reasons giving rise to an action: the most basic distinction is between intrinsic motivation, which refers to doing something because it is inherently interesting or enjoyable, and extrinsic motivation, which refers to doing something because it leads to a separable outcome.
Behaviors are interrelated, creating in this way a spillover effect. Spillover is the phenomenon, and related mechanisms, for which adopting an environmentally sound behavior in one domain spills over into different environmental domains.
People can investigate how consumers perceive the attributes of a product/service using the Kano Model. The Kano Model is an insightful way of understanding, categorizing, and prioritizing five types of Customer Requirements (or potential Features) for new products and services. These customer requirements are analyzed with functional or dysfunctional questions like: must-be, neutral, live with, dislike.
Consumer behaviour surveys
Consumer behavior research: taxonomy and some basic rules.
- Primary research: Involves collecting fresh data, gathered for the first time. For example, you perform a survey.
- Secondary research: It is a research method that involves the use of data, already collected through primary research. For example, you analyze data collected by others.
Validity of the study: It collects the appropriate data, does the study actually measure what it is intended to measure?
Reliability of the study: It measures whether results would be likely the same if the study is performed on another sample representative of the same population.
Primary research includes cross-sectional and longitudinal studies, and qualitative and quantitative analysis. Qualitative analysis includes in-depth interviews, focus groups, ethnographic, qualitative surveys, etc. Quantitative analysis includes, for example, quantitative surveys and experimentation.
- Cross-sectional study: Data is collected to study a population and a phenomenon at a single point in time, to examine the relationship between variables.
- Longitudinal study: Data is gathered from the same sample more than once, at different points in time. The benefit of conducting a longitudinal study is that researchers can make notes of the changes, make observations, and detect any changes in the characteristics of their participants.
Companies study consumer behavior to learn how consumers respond to or use products (services/technologies, etc.). Collecting data about consumer behavior helps companies better understand consumer preferences.
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