5 Factors That Influence Retail Consumer Spending

The primary objective for most retail store owners is to increase their revenue through more sales. Common sense should tell you that a higher number of sales translates into more revenue and ultimately more profits. But how exactly do you encourage customers to buy more of your product? First and foremost, you should familiarize yourself with the different factors that influence retail consumer spending.

#1 - Product Price

Product price is arguably the single most influential factor in a consumer's decision to make a purchase. If a consumer comes across a rock-bottom price that seems just too good to pass up, they'll likely make a purchase even if they don't need the item. You can use this to your advantage by offering exclusive sales discounts and promotions on products in your store.

#2 - Customer Service

You might be surprised to learn just how much of an effect customer service has on consumer spending. The fact is that people simply don't want to spend their hard-earned money in stores with poor or nonexistent customer service. On the other hand, you can make customers feel more comfortable making purchases in your store by going the extra mile. When a customer walks in through the door, have an employee greet them with a friendly "Hello." Also, make sure you are there to help customers find what they need while they are shopping in your store.

#3 - Economy

The nation's economic downfall has affected practically every business and industry, including retail. Consumers are more cautious of spending money in retail stores due to the nation's recent economic troubles. Although it's not quite over, the good news is that sales and confidence has picked up among consumers.

#4 - Credit

Consumers' credit standing/history is another factor that influences their purchasing decision. If the consumer is reaching his or her credit limit, they'll be less likely to purchase products from a retail store.

#5 - Marketing

A fifth and final factor that's known to influence consumers' purchasing decisions in a retail store is marketing. If the store markets their product exceptionally well, consumers will naturally be more likely to make a purchase. This is why it's important for store owners to constantly work on improving their product displays. A well designed product display will capture the consumer's attention while enticing them to make a purchase.