Do life events always lead to change in purchase? The mediating role of change in consumer innovativeness, the variety seeking tendency, and price consciousness

Abstract

Consumers can experience major life events (e.g., the birth of a child or retirement) that have key strategic managerial implications for firms in terms of creating new market segments as well as preventing defection from existing brands. Therefore, in the context of a consumer-based strategy, this study investigates whether life events change actual purchase behavior as well as how three important and managerially actionable consumer difference variables (consumer innovativeness, the variety seeking tendency, and price consciousness) mediate this link. Purchase records of an individual-level consumer panel, combined with demographic and survey data over a three-year period, indicate that there is a direct link between life events and changes in share of wallet (SOW) and share of units (SOU) for the preferred brand in a product category. Further, experiencing a life event leads to an increase in consumer innovativeness that, in turn, decreases SOW/SOU for the preferred brand for some purchases, while at the same time leading to a decrease in consumers’ variety seeking tendency and price consciousness for others that, in turn, lead to an increase in SOW/SOU. These findings suggest a paradox of change that can both enhance and inhibit purchasing new brands. Finally, the effects of first-time life events (i.e., significant markers in the course of life that occur for the first time) are stronger than the effects of repeated life events, and life events with a positive economic impact have a strong negative effect on change in price consciousness.