Transactional vs. Relational Purchasing for your Apparel Brand

Billions of purchases are made around the world every day. These purchases fall into two major categories: transactional and relational. Read on to understand the differences between these purchases and what they mean for your organization.

Understanding Transactional Purchases

Transactional purchases are the most straightforward. When shoppers make these types of transactions, they focus only on acquiring their goods in the moment rather than future transactions. Transactional shoppers typically shop around and negotiate prices to ensure they get the best deals. For example, a transactional shopper might want a black dress. The potential customer would compare the prices and quality of black dresses in several retailers to find the one representing the best value. Logic and reason drive transactional purchases.

Understanding Relational Purchases

Making relational purchases is a more emotional process. Relational shoppers are more forward-thinking, and see each purchase as the latest in a series of transactions with a specific retailer. While they might want a particular product such as a black dress, they're more concerned with finding the right store to buy it from. They can imagine buying other apparel items from that store later to make a cohesive style statement. Relational purchases are guided by emotion.

Meeting Customer Needs

Transactional and relational shoppers look for different things from retailers. Apparel businesses should be aware of these differences to ensure they're meeting the needs of all customers.

Transactional shoppers expect value for their money. They're attracted to sales and promotions, including reduced prices and free gifts with purchases, but they also want to know they're buying quality products. A fashion house might appeal to transactional shoppers by explaining its apparel quality control measures and offering manufacturer's guarantees.

Relational shoppers want to feel the store is an expert they can trust rather than a means to an end. They fear making the wrong purchase decision and look to retailers to make them feel more confident during the transaction.

Converting Transactional Shoppers to Relational Ones

Studies suggest relational shoppers make up just 20 percent of most retailers' customers. However, they represent a larger share of sales, account for higher than average sales, and boost profit margins to a greater degree. For these reasons, retailers should work to convert transactional shoppers to relational ones.

Research cited in "Principles of Customer Relationship Management" noted transactional shoppers often become relational shoppers through participation in rewards programs and loyalty schemes. These initiatives satisfy the transactional shoppers' desire for affordably priced products while encouraging them to make the repeat purchases characteristic of relational shoppers. Over time, this behavior can lead transactional shoppers to transition to the more valuable relational consumer demographic.

Studies also show retailers can encourage repeat business from a transactional shopper by reducing prices to an equal or lesser value than the price originally paid for the same goods. Transactional shoppers remember how much they paid the first time and are reluctant to spend more even if the product satisfied their needs. Until they become relational shoppers, price sensitivity is important.

While all purchases are valuable for apparel companies, the value of relational purchases goes beyond the immediate dollars and cents. For this reason, businesses should always strive to turn transactional purchases to relational ones. Contact The Apparel Logistics Group to find out how we can help streamline your supply chain so you can focus on your brand’s apparel expertise.

Posted: 1/4/2017 3:09:31 PM by Global Administrator | with 0 comments

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