Internal Factors Influencing Consumer Decision Process - the UK Asos.com - Case Study Example

Internal Factors Influencing Consumer Decision Process Author’s Name Grade course Institution Tutor Date Industry Overview asos.com is an online fashion store in the UK that engages in the business of online fashion retail as well as beauty products (Asos.com 2014). The company was incorporated in 1998 and has its headquarters based in London, United Kingdom. It boasts of the biggest online fashion retail market share in the UK. asos.com offers a wide array of branded as well as own label products from menswear, womenswear, footwear, jewelry, and footwear (Bloomerg Businessweek 2014). Basically, in the company website, one can find all sorts of men and women clothing, beauty products and accessories. asos.com has over 9000 products available online at any given time and in order to keep customers visiting the website, approximately 450 new items are added every week (Bloomerg Businessweek 2014). The online retail fashion store targets different demographics in different countries and has developed websites for the markets in the United Kingdom, Spain, Russia, Australia, Italy, Germany and France. In all these markets, the company’s target market is the more fashion conscious demography between the ages of 16-34 (Bloomerg Businessweek 2014). Due to this broad customer base, asos.com receives about 3.3 million unique shoppers monthly and boasts of 1.8 million registered shoppers (Asos.com 2014). At the helm of the asos.com company is a board that consists five executive directors, two of whom are non-executive while the other three are executive directors. The two-non executive directors do not have a role to play in the day to day running of the business and only take part in the board due to the fact that they bring with them expertise and experience that has played a huge role in guiding the strategic direction of the company (Bloomerg Businessweek 2014). Asos.com has enjoyed strategic steady growth ever since its inception and this has been shown in its results (Ruddick 2012). It has been able to meet increased customer demands thereby increasing its market share in the industry. The company has managed to leverage on the availability of the internet to consumers and this has been the primary reason for the company’s rapid growth (Ruddick 2012). It has been able to effectively tap into the growing online retailing market. For instance, in 2007, roughly seven years after its incorporation, Interactive Media in Retail Group carried out a research on asos.com that showed that: Online shopping in the UK had reached the £30 billion mark in 2006. The number of online shoppers in the UK had grown by 56% in just under four years; 16 million in 2003 to 25 million in 2006. In the same four year period, internet access had grown by 45% with a whooping 42 million people having access to the internet in 2006, up from 29 million in 2003. Broadband connections over the same four year period tripled with more than 12.7 million broadband connections being reported in 2006. The retail industry, where asos.com is part of, has over the years contributed a lot towards the economy of the United Kingdom. For instance, the retail industry contributed £152 billion to the United Kingdom economy in 2011 alone (Rhodes 2013, p. 3). This accounted for a massive 11.3% of the total economic output by all industries. Online sales have contributed massively towards the retail economic contribution as it rose from 2.7% in January 2007 to 9.7%b in January 2013 (Rhodes 2013, p. 6). The average weekly online retail sales in December 2012 had peaked at £844 million. This increase in online sales can be attributed partly to a shift in online stores because in 2008, online businesses accounted for 3.4% of all businesses in the retail industry in the UK. This number rose to 6.8% in 2011. The figure below shows the steady growth of online shopping/sales from 2007-2013 (Rhodes 2013, p. 6). Fig 1. UK internet sales as a % of total retail sales. Courtesy of Library, House of Commons. In just over a decade in operations, the growth of asos.com since it began its online store has been remarkable. Articulate planning has enabled asos.com to satisfy customer demands and business growth. Market share has been expanding exponentially as a result of heavy investment in two of its most important resources; technology human resources. Internal Factors influencing Consumer Decision Process in Online Shopping Consumer decision making process refers to the steps that a consumer takes before deciding to buy or not to buy a product or service (Wells and Foxall 2012, p. 47). It is characterized by identification of a need, gathering of information, evaluation of available options, making a purchasing decision and finally making a post purchase evaluation. These steps thus require unique strategies for a business to remain competitive (Quester, Pettigrew, Kopanidis, Rao & Hawkins 2014). Certain internal factors play a major role in this process and they include perception, attitude, motivation and learning. Perception Perception refers to the cognitive process whereby people select, organize, and interpret information in order to create a meaningful picture of the surrounding (Quester et.al. 2014, p. 228). With the rise in internet connections, UK consumers are today continuously bombarded with information regarding possible best online fashion retail stores. As such, the processing of this information is susceptible to perceptual defenses which are selective attention, selective perception and selective retention (Mullen, Johnson and Johnson 2013, p. 42). Because it is nearly impossible to allocate equal time and effort in addressing every piece of information, consumers employ selective attention. Attention thus occurs when a stimulus received stimulates one or more receptor nerves with the consequence of experienced sensations going to the brain for further processing (Jansson-Boyd 2010, p. 79). Triggering of stimuli is important in perception as it acts to grab the attention of possible consumers who visit online retail stores. One important factor in perception, and particularly in selective attention, is stimuli which act to attract consumer attention (Mullen, Johnson and Johnson 2013, p. 46). One such stimuli that asos.com has employed is the use of colour on the website as well as movement. When one visits the website, he/she is met with pictures of models wearing colourful clothing, accessories and footwear that are well coordinated (King 2013). Once these pictures and movements on asos.com have been received by the brain, consumers interpret them as products that would meet their needs and the prior expectations that they had about them. This, coupled with the creation of value for money, has enabled consumers to continue purchasing at asos.com for the very simple fact that they perceive the service they get exceeds the amount of money they pay (King 2013). Learning Learning refers to the procedure whereby the memory and behaviour of a consumer are altered as a consequence of conscious and unconscious information processing (Quester et.al. 2014, p. 268). Learning can be both cognitive and behavioral and they both play a significant role for online store marketers when it comes to understanding what consumers know. Having a clear and concise knowledge about a product is important in the decision making process before purchasing online (Quester et.al. 2014, p. 274). Asos.com has tried to incorporate as much information as possible that they think would be helpful to consumers (King 2013). Information such as shipping, online payment security, safety of the website as well as product review has ensured that consumers are well familiar with asos.com, its safety and the products it has to offer (King 2013). With this in mind, decision to purchase from asos.com has been made easy and many UK fashion enthusiasts have continued to purchase from this online fashion retail store (Harradine and Ross 2007, p. 196). Additionally, learning that purchase through asos.com can be made from anywhere and at anytime comes in handy for first time consumers and therefore increases consumer involvement with the online retail store. Asos.com has also incorporated a section in their website where consumers can learn what other accessories can accompany the product that they intend to purchase (King 2013). By learning the various ways one can accessorize or match his/her clothing purchase, it becomes easy to make a purchase decision at asos.com. Attitude Attitude in marketing refers to the favourable or unfavourable orientation that consumers have toward products, concepts and situations (Quester et.al. 2014, p. 338). Attitudes have become important in predicting consumer behaviour and decision making. For asos.com, the company believes that social influences are of importance when it comes to attitudes (King 2013). This has been supported by the theory of reasoned action which states that behavioural intentions can be determined by attitudes or subjective norm. asos.com has continued to rely on reference groups to build on positive attitudes of consumers. Most consumers have a lot of positive things to say about asos.com including their international free shipping, the great variety of products available, fast delivery and the many sales discounts (King 2013). These have greatly contributed to the company’s brand name and products getting positive attitudes from consumers. This is evident from the 3.3 million monthly online shoppers to the company’s website (King 2013). Direct experience has been an important source of positive attitudes for asos.com (King 2013). Most often than not, attitudes towards a product or service are formed when one has direct experience with that specific product or service. With 1.8 million registered users, it would be fair to conclude that these users are repeat customers who are satisfied with the company’s products and service. Having a positive attitude on asos.com products and services, many of the 1.8 million registered shoppers find it easy making purchase decisions at asos.com (King 2013). Motivation Motivation generally refers to an internal force that is not observable that stimulates a behavioural response and offers an accurate direction towards that response (Quester et.al. 2014, p. 302). In a consumer’s point of view, motivation may be to satisfy a need or a want. Online marketers understand that once a need or want has been satisfied, the particular need or want will no longer motivate a consumer (Quester et.al. 2014, p. 319). Asos.com has managed to work around this by offering fashion advice and posting pictures of how a clothing one consumer want to purchase will match another clothing or accessory (King 2013). For instance, when a male consumer wants to purchase a scarf, he might be motivated to buy a cardigan that goes with it as well as the pair of jean by just seeing a picture of how all these outfits complement each other. Simultaneous need satisfaction is also another aspect of online retailing that asos.com has mastered and knows how to accomplish (King 2013). Fashion consumers usually have more than one need they want to satisfy when thinking of purchasing a fashion product. For instance, a consumer may want to buy a sweater to keep away the cold which is also fashionable. Products at asos.com are both fashionable and convenient at the same time and as such, are able to satisfy consumers’ psychological, social as well as self esteem needs (King 2013). References Quester, P., Pettigrew, S., Kopanidis, F., Rao Hill, S., & Hawkins, D. (2014). Consumer Behaviour - Implications for Marketing Strategy. Sydney : McGraw-Hill Education (Australia) Pty Ltd. Asos.com. (2014). About ASOS. Retrieved from http://www.asos.com/au/infopages/pgeaboutus.aspx?xr=1&mk=VOID&r=3 King, J. (2013). The Marketing Activity of ASOS.com. Retrieved from http://prezi.com/heb2- wvtirrk/the-marketing-activity-of-asoscom/ Sumeet, G., and Hee-Woong, K. (2010). Value Driven Internet Shopping: The Mental Accounting Theory Perspective. Psychology and Marketing, 27(1), 13-35. Harradine, R., and Ross, J. (2007). Branding: A Generation Gap? Journal of Fashion Marketing and Management, 11(2), 189-200 Bloomerg Businessweek. (2014). Internet and Catalog Retail: Company Overview of Asos.com Limited. Retrieved from http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=46569 461 Jansson-Boyd, V. (2010). Consumer Psychology. Maidenhead: Open University Press. Ramesh, K. D. (2009). Consumer Behaviour and Branding: Concepts, Readings and Cases. New Delhi: Pearson Education. Mullen, B, Johnson, C, Johnson, C. (2013). The Psychology of Consumer Behavior. East Sussex: Psychology Press Library, House of Commons. (2013). The Retail Industry. (SN/EP/06186). London , United Kingdom: Chris Rhodes. Ruddick, G. (2012, September 19). Asos growth accelerates in the UK: The online fashion retailer has accelerated its growth in the UK despite pressure on the high street from the recession. The Telegraph. Retrieved from http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9554077/Asos- growth-accelerates-in-the-UK.html Wells, V., & Foxall, G. R. (2012). Handbook of Developments in Consumer Behaviour. Cheltenham: Edward Elgar Publishing. Read More