Changes in consumer behavior are a result of the world’s rising globalization. Learn about the many effects of globalization on consumer behavior and how businesses can benefit from it.
Introduction
The world’s increasing globalization has been progressively altering consumer behavior for many years. This is due to the increased idea and experience sharing across cultural boundaries, which has changed how individuals think and behave.
The growth of e-commerce is responsible for some of the most apparent changes in consumer behavior. Before globalization, most purchases were made in actual storefronts, where buyers spoke with salespeople. But as internet shopping gained popularity, consumers started making purchases without face-to-face interaction.
Consumerism
Despite driving the global economy for centuries, consumerism is experiencing significant difficulties today. However, the globalization of the economy has dramatically expanded the number of global consumers in recent years. This has caused a considerable change in how people act regarding their consumption patterns.
Consumers nowadays are exposed to more brands and products than ever before on a global scale. As a result, they have been more demanding, and ASP (average selling price) prices for different products have also increased dramatically.
Globalization drawbacks
Consumers have seen numerous adverse effects of the globalization of the economy. Some of the most significant are listed below:
- Price Gouging: To keep afloat during the global recession, businesses are more prone to turn to price gouging. This implies that they will drastically raise the cost of their goods, regardless of whether or not they are worthwhile. This is particularly typical in fields with intense rivalry (like food).
- Lack of Choice: The globalization of the world economy has led to the introduction of previously unheard-of flavors and alternatives in numerous products. Because consumers no longer have any control over what they eat, this might, however, also result in unhappiness.
- Imitation vs. Innovation: As more businesses strive to copy one another’s successful ideas, it gets harder for each side to innovate on its behalf. Instead of creating something original and creative, people frequently turn to replicate what has previously been done.
The Impact of Globalization on Consumers
The world economy’s globalization has had a significant impact on consumer behavior.
People worldwide may access a growing number of goods and services as nations become more connected. As a result, consumer perceptions of companies and purchasing behavior have changed.
For instance, buyers in the past would only think about purchasing a product if they were sure their local retailer carried it. However, this is no longer the case due to globalization. Consumers today are more willing to purchase a product even if it is not offered in their neighborhood shop. They do so because they know it is available online or on other shelves worldwide.
People’s decreased brand loyalty illustrates how globalization has altered consumer behavior. Customers used to remain loyal to a single brand for years or even decades, regardless of whatever flaws or faults the business may have made. However, today’s consumer is much more receptive and eager to test out various items and brands in search of the one that best matches them.
Benefits to business from Globalization
Numerous advantages have resulted from the globalization of the economy for both large and small firms. Here are a few examples:
- Greater access to a wider variety of goods and services: Businesses have access to a broader array of products and are better equipped to compete in the market as goods and services become more widely available worldwide.
- Reduced costs of goods: Manufacturers can cut the cost of their goods by exporting them to countries with lower wages, thanks to globalization. As a result, consumers can afford to buy more because they are more reasonably priced.
- Increased competition: Companies must improve their products even further if they wish to keep their market share in an environment with more options and lower pricing. As a result, creativity is stimulated, and consumer satisfaction levels are raised.
- Better communication: As people from many cultures interact through commerce, they discover new ways to think and conduct business that wasn’t previously feasible. Everyone engaged ultimately gains as a result of the enhanced communication between nationalities.
