Understanding how online shoppers search, browse and select the things they want to buy, as well as knowing what it takes to clinch the sale and avoid abandoned carts can help retailers present their offerings and approach in the right way to win customers and repeat sales.
Consumer psychology is widely used by big online brands like Netflix, who employ psychologists within their Consumer Insights Division to help boost viewer figures and extend viewing times. The basic principles of applied consumer psychology are highly scalable and can help even the smallest of start-ups to increase their revenue.
The origins of consumer psychology
Consumer psychology is a study to uncover what people want to buy, and why they want to buy. The core principle of consumer psychology has its roots in the study of behaviourism, or the ways in which external factors can influence and drive an individual’s purchasing decisions.
Today, consumer psychology is utilised to great effect by well-known brands across all manner of niches and industries, like Kleenex. Netflix is one of the biggest and best-known companies that integrate consumer psychology into their platform to keep viewers engaged and returning for more. The application of consumer psychology is responsible for those auto-play countdowns to the next episode of your show, the selection of shows recommended for you to watch next, and even the specific thumbnails used for each show, which are personalised to appeal to different types of viewers and may vary from person to person depending on their interests.
How the psychology of shopping is applied in successful real-world retail units
We witness the incorporation of consumer psychology into business models of real-world retail units every day. Let’s look at local chain supermarkets as examples of applied consumer psychology in action.
Have you ever wondered why the fruit and vegetable section is the first area you pass through when you enter a supermarket? Or why the aisle arrangement changes from month to month, or how the smell of freshly baked bread permeates most large supermarkets throughout the day? This is all due to the application of consumer psychology.
Displaying green produce at the entrance of the store gives the shopper an impression of freshness. Changing aisle arrangements often annoys repeat customers as they are tasked to look for new locations of their favourite products, but this increases their coverage throughout the store, which also means there are opportunities for a new sell.
That delicious fresh aroma of freshly baked bread is deliberately vented to permeate the entrance of the supermarket to appeal to the sense of comfort and helps increase impulse sales and the purchase of more goods.
The arrangement of products on your supermarket shelves are not without purpose either. Premium and high-value branded products are displayed at eye level, whilst store brands and budget lines will be showcased lower or higher up on the shelves.
When it comes to products marketed to children like certain breakfast cereals, you might well find that these will be situated closer to a child’s line of sight than that of an adult – and that the eyes of characters used on the packaging are large, and generally slanted downwards to catch the attention of children, not adults.
Many supermarkets and other stores deliberately channel shoppers via a certain route, something that Swedish furniture giant Ikea is well known for. Some supermarkets paint large bright-coloured arrows on the floor to guide customers where to walk. Shoppers tend to follow these arrows as that is what arrows are supposed to do – show the way. This ensures that the store maximises the number of products that they can showcase to their shoppers, albeit sometimes at the cost of alienating and annoying their customers.
The similarities and differences between online and offline sales psychology
Applying the psychology of consumer behaviourism into online marketing and sales is different from managing a consumer’s journey through a real-world store, but the core principles remain the same.
Knowing audience demographics is the building block for increasing sales. This principle is shared between both real-world and virtual stores, but how this information is applied in practice is very different when targeting online audiences. If an online store is bringing in traffic but failing to achieve the targeted level of sales, the application of online shopping psychology can help.
Here are two most common angles, which work well for both online SMEs as well as for big brands.
Subtly directing the customer journey
Keeping the site’s navigation easy and intuitive to use is vital. Suggestions and links should be made available throughout the browsing experience, without going overboard and presenting the dilemma of “too much choice” or competing stimulus. For example, integrate thumbnails of suggested accessories or alternative products within the item page and promote and highlight trending or popular products.
Creating the illusion of scarcity is a powerful tool for online stores, and one that remains highly effective. For instance, rather than showing stats on how many people have purchased a certain type of item, instead show how many are left available to buy when this drops below a certain threshold, to provide that final push to complete a purchase.
Vision is mission! The placement or positioning of items is crucial to lead customers’ focus. Because we read left to right and top to bottom, product images and thumbnails displayed to the left and centre of the viewer’s screen are those most likely to draw the eye and retain the viewer’s attention.
Avoiding abandoned shopping carts
Abandoned shopping carts are the bane of online retailers. Understanding the consumer psyche when it comes to abandoned carts will help sellers reduce the number of abandoned carts incidences. For reasons unclear, shipping charges are perhaps the best-known cause of abandoned carts.
We all know that post and packing costs money, and objectively, customers know this too – but consumer psychology is concerned with how shoppers think and feel on an instinctive and emotional level rather than solely a logical one, and shipping costs are one of the first casualties of emotional buying decisions. Overly high or disproportionate shipping costs will discourage prospects, even if flat shipping rates are offered (online retailers usually ship at a loss). If a prospect only wants to buy one or two low-value items and the shipping cost significantly increases the final price, they will probably decide that they can do without it or wait to purchase another time when their order value better justifies the shipping cost.
It is common knowledge that free shipping is not really free (shipping cost already included in the product price), but it can be a huge incentive that can help land bigger, more regular orders and so is often a price worth paying. Again, it is about consumer’s emotional level – knowing that something is free. Similarly, offering free shipping for orders over a certain price and a minimal or token postage fee below this value improves customer’s perception of the overall value offered by their purchase.
There is also value in following up with shoppers who abandon their carts before checkout, and there are several ways that this is done. If the shopper has previously registered with the site and logged in while browsing, an automated email reminder or prompt to them within a day of their visit can incentivise them to return and complete their purchase.
A small percentage discount within the email and ensuring shoppers that they can find their cart in the state that they left it, can provide the added push to eventually complete the purchase.
The psychology of consumer behaviour is a fascinating field of study, and one that is very well understood today, even by marketing-savvy laypersons – at least as far as traditional real-world retail sales are concerned.