Consumer Buying Trends

Consumer buying trends are affected by three main reasons: Consumer confidence, economy, and product changes. Most trends fluctuate because of emotions and attitudes, but consumers can be influenced by peers, third-party reviews, and celebrities. Let's look more in-depth to consumer buying trends.

Why do you buy? Do you need something? Do you want something? More importantly, how urgent is your purchase? Consumers by nature are suspicious of manufacturers because buyers often feel they just want money and don't care about the customer's thoughts and feelings. Some consumers have a wait-and-see approach in terms of pricing: they wait and see if prices drop over time before buying a product. Things like that lower the consumer confidence in almost any type of industry. If the consumer can't trust the maker of a product, then there is no confidence to buy from them, or even a competitor.

On the other hand, consumers who love this or that company or must have this or that product help consumer confidence by placing trust in the industry. The more people see that this company is doing better with a certain product, then the more people that will trust that product and will purchase it.

Celebrity endorsements drive confidence. Companies place a lot of trust in celebrities so that they can bring trust in from the consumer. Another influence is your own peers and friends. How often did you buy something that your friend recommended or that a co-worker touted was phenomenal? Probably more often than you realize.

The economy is the biggest factor in consumer buying trends. When the economy is strong, then consumers will go out and purchase more, which includes not only needs, but also wants. People have more disposable income and therefore will put more of that money back into the market. Certain industries will fair better than others, like the car industry and housing market, but when it comes to spending money during an economic upturn, consumers will go for electronics like Plasma TVs and home theater equipment. Some consumers spend disposable income on vacations and trips, which helps the travel industry.

When there is a downturn, people will hold their money back, saving it for only needs. That's not to say that those who still have disposable income won't buy frivolities, but the majority of consumers don't fall into that category. During a time like this, food purchases and do-it-yourself store often succeed.

Many consumers have to have the latest and greatest, no matter if it pertains to technology, clothes, or other products. Companies know this play it to their advantage. You'll find that there is a slight upturn in purchasing when a new product is released. For example, consumers line up for each new incarnation of iPods because they know Apple products and want the latest. Product changes are a fact and there's no way around it. Improvements and innovation create competition, which could improve or hurt consumer buying trends. Products drive much of the economy and if we had bad products, the trend would die. Good products means good trends.

Now many of the trends can get lost in the details. For instance, finding out that the restaurant industry takes a 12 percent drop in sales is just too much data to really have an impact. If you are interested in following the buying trends of consumers, then stick with some of the basics:

• If you are focused on one industry, keep track of how much an individual or family spends per year on the industry. Or you can even narrow it down by month or quarter.

• Nationally, track the Gross National Product and the Confidence Index as well as the stock market. Pay close attention to the particular stocks of the companies that are in your realm of interest.

• Globally, you want to watch the import and export numbers to find consumer buying trends.

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