Consumer Buyer Behaviour: Part 1 - Factors influencing online shopping
Ecommerce retailers can influence online consumer buyer behaviour in a similar way to their offline counterparts despite working in a more physically restrained space. They do this by tapping into our subconscious minds, and I know everyone reading has been a culprit of one of these purchases.
Influencing buyer behaviour through discounts
“The single most motivating factor for an impulse buy (88%) is a sale price” (MediaScopeInc.)
When browsing through many online stores, promotions and price discounts are never far away. It's unsurprising, given the competition within retail and that these are key levers within the Marketing Mix. Providing a everyday low price or an X% off introductory promotion are tried and tested mechanics. But what about product price cuts? Communicating a discount on individual product can have a massive impact on buyer behaviour.
One site that does this really well is Amazon.
Of the two speakers in the picture above, which one would you choose?!
Amazon is doing 3 things here to influence the consumer:
- Forcing a value for money conclusion by combining the discounted price with the % discount shown. Some of us don't work well with percentages, but the good thing about them is they create a level playing field in our assessment of value.
- Giving social proof that other consumers have bought the same deal (see section below on social proof)
- Creating urgency by giving a time frame in which to claim the deal. this is another proven way to influence the consumer to take action now. It's proven that if we see a clock ticking down it is more likely to make us take action.
Most of the time you'd buy the more expensive Logitech speakers because:
- you get a product that is perceived to be of higher quality (based on it's higher selling price. Of course some other retailers show the price before discount to make it easier to see the discount in monetary terms) at a greater discount,
- because a higher proportion of other consumers bought it
- and because you have more time to buy it, but still have a set limit to make the purchase.
Note that it's important to act fairly when it comes to pricing practices. For example the UK Government guidelines on price comparisons with the trader's own previous price stipulate that:
"...the basis of a price comparison should be reasonable in terms of time, and what is reasonable will depend on the circumstances. But where the basis of the comparison is not set out explicitly;
(a) A price used as a basis for comparison should have been your most recent price available for 28 consecutive days or more;
(b) The period of time for which the new (lower) price will be available should not be so long that the comparison becomes misleading. How long this will be will depend on all the circumstances. But as a general guideline which could be applied to cases in which there are no specific circumstances which might mean that a longer period would not be misleading, it is suggested that the period of time for which the new (lower) price will be available should not be more than that for which the old (higher) price was available; and
(c) Comparisons should not be made with prices last offered more than six months ago. For more information..."
So be clear on what principles you need to follow to avoid misleading consumers.
Another example of an online subconscious purchase is when you buy more items than anticipated just because they were subtly “suggested” or “recommended” to you.
Surfstitch, one of the world’s largest online action sports and youth apparel retailer is no exception. Even when you purchase a specialised product such as a wetsuit, they still manage to have a suggestion box for you.
Leading retailers use predictive insights to make personalised product recommendations onsite and through other communication channels using advanced machine-learning algorithms which take into account individual's previous behaviours as opposed to what the retailer thinks they might like.
Social Proof (Word-of Mouth)
Philip Graves, the author of Consumer.ology, states that,
“…despite what most of us would like to tell ourselves, at an unconscious level, we aren’t individual pioneers, we’re sheep.”
When the word gets out about a product it tends to spread. When a friend with similar interests/beliefs to you recommends a product, you become curious about it and want to find out more. Or, say you have a celebrity crush on someone famous. If they wear a certain brand, don’t you want that brand a little more?
Social proof has a huge impact on the subconscious mind. We don’t always know the quality of the product we are shopping for, unless we have previously viewed it in a store. If you haven’t, you will be evaluating the product differently. Perceived risks are higher when ambiguity is involved. The risk factor is minimal but it comes down to the “what-ifs.” What if it isn’t what was described on the website and therefore have to send it back, costing us extra time and potentially money. This is where social proof comes into play. If we want to buy a product because our Twitter feed continues to suggest it to us, or our Facebook pages keep raving about it, the first place we will go to before clicking on that “add to cart” button is the customer reviews. This way we can see if previous consumers were satisfied with the product or not.
People are going crazy about this “Teatox”, which is supposed to help you slim down. Skinnymint's marketing campaign is based almost exclusively on social media, especially Facebook and Instagram where anybody (including a good amount of celebrities) can share pictures of their slender silhouette after a Skinnymint detox. The entire Skinnymint movement is built on word-of-mouth (or should we say here "check-out-my-selfie"). Seeing average people as well as celebrities spontaneously promoting the tea allowed the company to established trust with its customers. SkinnyMint is also using social media as a tool to answer customers’ enquiries rather quickly, proof of their great sense of customer service. SkinnyMint is an example of successful marketing campaign using social proof as a sale catalyst.
When you enter into the world of online marketing there are different ways to stand out within your target market. One of the most effective ways is presenting an attractive logo. This allows past consumers to recognize your brand, while also building credibility for future sales. A memorable logo used across all channels makes recall much easier. When someone sees that logo again they will associate it with your brand and store. This becomes extremely valuable when re-targeting.
One of our clients has quite an attractive and self-explanatory logo don’t you think?
Re-Targeting’s Persuasion Power
Re-targeting is when companies use previous interest that did not result in a sale to reach out again. There are many reasons someone might abandon a cart or a product search. Maybe they were strapped for cash then. Maybe they just got distracted by something more pressing. Using retargeting allows the retailer to influence buyer behaviour through a gentle reminder to come back in.
The American-Made Short retailer is one among many examples of successful cart abandonment email strategy. The friendliness and slick layout of their emails helped the company to significantly reduce their cart abandonment rate.
Colours and Graphic design
Another tactic marketers need to take into consideration are the internal details within their advertisements. By this I mean the colours, fonts, sizes, etc. in order to make impressions memorable. In an article that Meredith Barrett wrote on Brain-to-Brain Marketing she states,
“Subconscious judgments are made within the first minute and a half, with up to 90% of the judgements based on color.”
Having said this, do you think that you’ve chosen a product or service based on the color of the logo or background? I guess it’s hard to say, because most of us would say they don’t think that they are affected by this, but how would we actually know if it’s our subconscious mind that is tricking us into it?
Example: Lily’s kitchen
Another one of our client's is specialised in high quality pet food. Lily’s kitchen proves that a well-chosen colour range in accordance with the concept of their brand: natural ingredients to create balanced super-healthy meals for your pets, can make an impact. You notice the colours chosen (from the packaging to their website layout) are very natural and bright, enhancing the freshness of ingredients selected for every recipe.